The Financial State of California Cities 2024

California, New York and Texas each have more state debt than the 75 cities combined

75 of the largest American cities owned a total of $307.4 billion of assets to pay $595.3 billion in liabilities at the end of fiscal year 2022.

The 75 largest cities in America were collectively $288 billion in debt, Adam Andrzejewski at RealClearInvestigations reported. You may recognize Andrzejewski’s name as he created OpenTheBooks and exposes spending at every level of government, which the Globe frequently uses.

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The cities’ debt includes $175.9 billion for upcoming employee pensions and $135.2 billion for other retiree benefits, according to think tank Truth in Accounting.

The stunner is that California, New York and Texas each have more state debt than the 75 cities combined, Andrzejewski reported.

Notably, nearly all of the cities used outdated pension data.

How did California’s cities do?

San Francisco – D grade

“San Francisco’s financial condition deteriorated, switching it from having a Taxpayer SurplusTM to a Taxpayer BurdenTM. Despite increased tax collections
and federal COVID relief funds, the city’s pension investment values decreased. This created a per Taxpayer Burden of $8,800, earning it a “D” grade from Truth in Accounting.”

San Francisco had set aside only 92 cents for every dollar of promised pension benefits and 17 cents for every dollar of promised retiree health care benefits.

San Francisco would need $8,800 from each of its taxpayers to pay all of its outstanding bills.

San Diego – C grade

“San Diego’s financial condition worsened by $457.5 million, resulting in a Taxpayer BurdenTM of $4,100, earning it a “C” grade from Truth in Accounting.

“According to the city’s 2022 financial report, the city continued to spend federal COVID-19 relief funds, and as the U.S. economy reopened, the city took in additional tax revenue. Such economic gains were offset by increases in the city’s pension liability. Over the past few years, investment market values have swung dramatically.

San Diego had set aside only 78 cents for every dollar of promised pension benefits and only 25 cents for every dollar of promised retiree health care benefits.”

Sacramento – B grade

“Sacramento’s financial condition appeared to improve, switching it from having a Taxpayer BurdenTM to a Taxpayer SurplusTM of $300, earning it a “B” grade from Truth in Accounting. Sacramento was sneaky – the improvement is deceiving because the city used outdated pension data.

While this report indicates the city’s financial condition improved due in part to COVID relief funds and increased taxes, this might be overly optimistic because the city used outdated pension data.

According to the city’s 2022 financial report, Sacramento continued to spend federal COVID-19 relief funds, and as the U.S. economy reopened, the city took in additional tax revenue. The city’s pension liability is calculated by subtracting earned and promised benefits from the market value of pension investments. Unfortunately, the city used 2021 data when determining its pension debt. Because 2021 was an exceptionally good market year, pension investment values were high. The result was a dramatic decrease in the city’s pension liability and a corresponding decrease in the money needed to pay bills.”

Los Angeles – C grade

  • Los Angeles had $19.8 billion available to pay $21.8 billion worth of bills.
  • The outcome was a $2 billion shortfall and a burden of $1,500 per taxpayer. Last year the city had a surplus of $6.3 billion.
  • Despite receiving almost $2 billion in grant funds and $5.6 billion in tax revenue, its unfunded pension promises increased significantly due to declines in the value of pension investments.

“Los Angeles’ financial condition deteriorated, switching it from having a Taxpayer SurplusTM to a Taxpayer BurdenTM. Despite increased tax collections and federal COVID relief funds, the city’s pension investment values decreased. This created a Taxpayer Burden of $1,500, earning it a “C” grade from Truth in Accounting.

“According to the city’s 2022 financial report, Los Angeles continued to spend large amounts of federal COVID-19 relief funds, and as the U.S. economy reopened
the city took in additional tax revenue. Such economic gains were offset by significant decreases in the value of the city’s pension investments. Over the past few years investment market values have swung dramatically. In 2022 this volatility negatively impacted the city’s pension liability and financial condition, which demonstrates the risk to taxpayers when their city offers defined pension benefits to its employees.

Los Angeles had set aside only 88 cents for every dollar of promised pension benefits and 90 cents for every dollar of promised retiree health care benefits.”

Fresno – B grade

“Fresno’s financial condition deteriorated, yet the city retained a Taxpayer SurplusTM of $2,300, earning it a “B” grade from Truth in Accounting.

According to the city’s 2022 financial report, Fresno continued to spend federal COVID-19 relief funds and as the U.S. economy reopened, the city took in additional tax revenue. Such economic gains were offset by decreases in the value of the city’s pension investments. Over the past few years investment market values have swung dramatically. In 2022 this volatility negatively impacted the city’s pension investments and financial condition, demonstrating the risk to taxpayers when their city offers defined pension benefits to its employees.

Fresno had set aside 108 cents for every dollar of promised pension benefits and no money set aside for promised retiree health care benefits.”

Oakland – D grade

“Oakland’s financial condition appeared to improve due in part to increased tax collections and federal COVID relief funds. Despite the good news, they still had a Taxpayer BurdenTM of $7,300, earning it a “D” grade from Truth in Accounting. But the improvement is deceiving, because the city used outdated pension data.

According to the city’s 2022 financial report, the city continued to spend federal COVID-19 relief funds, and as the U.S. economy reopened the city took in additional tax revenue. The pension debt included in this report and the city’s financial report is based using 2021 data when pension investments were performing well. If the city’s pension investments experienced the same major decrease that most other cities experienced in 2022, Oakland’s pension debt would be higher. Over the past few years investment market values have swung dramatically. This volatility demonstrates the risk to taxpayers when their city offers defined pension benefits to its employees.

Oakland had set aside only 78 cents for every dollar of promised pension benefits and 20 cents for every dollar of promised retiree health care benefits.”

San Jose – D grade

San Jose’s financial condition worsened by $720.3 million, resulting in a Taxpayer BurdenTM of $8,700, and earning it a “D” grade from Truth in Accounting.

Click here to read the full article in the California Globe

California criminal justice battle intensifies with reformers’ counteroffensive

Groups that have fought to downgrade drug and property sentences are defending those changes.

Criminal justice reform advocates are mobilizing to thwart a ballot initiative that would reverse California’s recent turn away from tougher criminal penalties.

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The counteroffensive signals that those advocates fear the initiative to crack down drug and property crimes, backed by prosecutors and major retailers, has a strong chance of landing on the November ballot. If it does, it could unravel a series of recent political victories seeking to overhaul sentencing and incarceration.

A six-figure digital advertising campaign, funded by some of the same groups and people that have championed lighter criminal penalties, urges Californians to reject the tough-on-crime ballot measure and instead push for changes in the Legislature. It notes that the campaign has been funded by major corporations like Target, Home Depot, and Walmart, and backed by Republicans like Rep. Kevin Kiley.

“It’s a dangerous scam that will not work,” the group said in a statement. “It will only set California’s progress back decades, making us less safe.”

A newly launched committee supporting the advertising campaign has reported donations from Quinn Delaney and Stacy Schusterman, who have together poured millions into California prosecutor and crime ballot measure campaigns, and an organization whose leader, Tinisch Hollins, has championed efforts to reduce criminal penalties.

The escalating battle marks another chapter in California’s long struggle over criminal justice. After setting the tone for a national era of mass incarceration, the increasingly liberal state has shifted markedly in the other direction over the last decade.

Voters passed ballot initiatives in 2014 and 2016 that downgraded some drug and property crimes to misdemeanors and allowed for earlier releases from prison, and in 2020 they rejected a ballot measure that sought to restore some of those penalties. Gov. Gavin Newsom urged voters to vote no on that measure, and his current chief of staff ran the opposition campaign.

More recently, Newsom and Democratic lawmakers have rebuffed calls to revisit those past ballot initiatives, instead advancing a package of bills targeting repeat or organized retail theft, enhancing penalties for selling fentanyl, and making it easier to prosecute car thieves.

Click here to read the full article in Politico

Bay Area congressman proposes renaming Florida prison after Donald Trump

WASHINGTON — Rep. John Garamendi, D-Fairfield, and two other House Democrats want to name the Miami federal prison after former President Donald Trump.

The legislation, which has little chance of passing, would change the Federal Correctional Institution Miami’s name to the Donald J. Trump Federal Correctional Institution. The prison, located about 90 miles from Trump’s Mar-a-Lago resort, is a low-security facility that holds about 1,000 men convicted of federal crimes. 

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Former Trump adviser Peter Navarro is serving a four-month sentence at FCI Miami for contempt of Congress after refusing to comply with a subpoena. Right-wing internet personality Anthime Gionet, known as Baked Alaska, was incarcerated in the same facility for two months in 2023 after pleading guilty to unlawfully protesting inside the U.S. Capitol during the Jan. 6, 2021, insurrection.

The legislation proposal came days after seven House Republicans introduced a bill to rename the Washington Dulles International Airport after Trump. (No California Republicans have signed onto the bill.)

“MAGA Republicans have proven themselves unwilling to solve real problems that face our country. I cannot think of a more fitting tribute to our former president, Donald J. Trump, than renaming the closest federal prison to Mar-a-Lago in his honor,” Garamendi said in a statement. “As always, my Democratic colleagues and I remain willing to work with anyone on common sense solutions to real world problems.”

Click here to read that the full article in the SF Chronicle

California-based 99 Cents Only Stores is closing down, citing COVID, inflation and product theft

SAN FRANCISCO (AP) — California-based 99 Cents Only Stores said Friday it will close all 371 of its outlets, ending the chain’s 42-year run of selling an assortment of bargain-basement merchandise.

The company has stores across California, Arizona, Nevada and Texas that will begin will selling off their merchandise, as well as fixtures, furnishings and equipment.

Interim CEO Mike Simoncic said in a statement that the retailer has struggled for years as a result of the COVID-19 pandemic, changes in consumer demand, inflation and rising levels of product “shrink” — a measure that encompasses losses from employee theft, shoplifting, damage, administrative errors and more.

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“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” said Simoncic, who will be stepping down. “Unfortunately, the last several years have presented significant and lasting challenges in the retail environment.”

The shuttering of 99 Cents Only Stores comes after fellow discount retailer Dollar Tree last month said it was closing 1,000 stores.

99 Cents Only Stores was founded in 1982 by Dave Gold, who opened its first store in Los Angeles at the age of 50, according to his 2013 obituary in the Los Angeles Times. Gold, who had been working at a liquor store owned by his father, found that marking down surplus items to 99 cents caused them to sell out “in no time,” fueling his desire to launch a new spin on the dollar store.

“I realized it was a magic number,” he told the Times. “I thought, wouldn’t it be fun to have a store where everything was good quality and everything was 99 cents?”

Brushing off doubting friends and family members, Gold forged ahead. His idea caught on quickly, even in middle-class and upscale neighborhoods, allowing the company to go public on the New York Stock Exchange in 1996. It was later sold for roughly $1.6 billion in 2011.

Click here to read the full article in AP News

Newsom, lawmakers agree to first $17 billion in cuts

Gov. Gavin Newsom and leaders of the Senate and Assembly announced an agreement Thursday to cut $17 billion from the state budget in April, providing the first details of their plan to begin to tackle California’s massive deficit.

The plan calls for delaying $1 billion in grant funding for transit and intercity rail projects, saving $762.5 million by pausing hiring for open state jobs and pulling back $500 million from a program to help districts pay for K-12 building projects, among other proposals to trim the shortfall now before additional cuts are made this summer.

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“We are able to meet this challenge thanks to our responsible fiscal stewardship over the past years, including record budget reserves of close to $38 billion,” Newsom said in a statement. “There is still work to do as we finalize the budget and I look forward to the work ahead together to continue building the California of the future.”

The agreement marks a redo of a fumbled budget announcement made last month when Newsom and legislative leaders heralded a premature deal without disclosing an exact amount of funding they intended to cut or detailing a single program that would be affected.

Lawmakers and the governor are scrambling to reduce California’s budget deficit, which Newsom estimated at $37.9 billion in January, before the fiscal forecast is updated in the coming weeks to likely show California in an even deeper budget hole. Estimates from the Legislative Analyst’s Office have suggested the deficit next year could be nearly twice as high as Newsom’s forecast.

Lower than expected revenues, delayed tax deadlines and overspending based on inaccurate budget projections created California’s grim financial picture. The state budget relies heavily on capital gains taxes paid by California’s highest earners, making state revenues subject to volatility in the stock market.

Republicans have criticized the lack of transparency in state budget negotiations and contend Democrats created the fiscal crisis by continuing to fund expensive programs, such as the expansion of Medi-Cal to all low-income immigrants, even as state revenues drop.

Assembly Republican Leader James Gallagher (R-Yuba City) called the budget deal “a swing and a miss from Democrats.”

The first round of cuts could be voted on as early as next Thursday.

Democrats also agreed to pull $12.2 billion from state reserve accounts to cover the shortfall when the final budget is approved later on. The early cuts combined with the planned dip into the reserves will trim $29.5 billion off the deficit.

“We are all committed to delivering an on-time balanced budget, and this early action agreement is a critical first step to shrink the state’s shortfall,” said Senate President Pro Tem Mike McGuire (D-Healdsburg).

Because the shortfall this year is so large, Newsom has urged the Legislature to take “early action” to begin to whittle away at the deficit now, long before the June 15 deadline to pass a budget.

The cuts Democrats agreed to make this month are largely considered the easier choices, allowing them to focus on tougher deliberations that will come later on this spring. Reducing the deficit before Newsom unveils his revised budget proposal in May could also lessen the public perception of the state’s fiscal woes by trimming the deficit figure before it is expected to grow.

The struggle to reach a consensus up until this point foreshadows the difficult work ahead in May and June for a Legislature and governor with little experience leading through a fiscal crisis as they weigh challenging choices that affect millions of Californians.

The agreement announced Thursday largely mirrors a plan the Senate put forward weeks ago to “shrink the shortfall” by $17 billion, which aligned with many of Newsom’s proposals to begin to offset the deficit.

The Assembly, where Democrats hold 62 of 80 seats under a new speaker, took a little longer to reach a consensus. This week, the lower house said it pushed back on some of the governor’s proposed cuts to housing and homelessness programs, which were ultimately left out of the early action deal. At the Assembly’s urging, the agreement also authorizes the administration to pause one-time spending from previous budget years that has not yet been dispersed.

Assembly Speaker Robert Rivas (D-Hollister) said his chamber’s approach was the “right way to come at closing such a massive shortfall” and that he expects Newsom “to deliver challenging budget proposals next month to reduce the deficit in the long-term.”

The agreement, according to Newsom and legislative leaders, includes:

Saving $762.5 million by declining to fill vacant state positions.

Cutting $500 million from the School Facility Aid Program, which funds K-12 building projects.

Click here to read the full article in the LA Times

What Texas can teach California about curbing homelessness

L.A. and San Francisco continue to struggle while big cities elsewhere make progress. But there’s hope.

Rent is surging nationwide. Homelessness rates rose an astonishing 15% on average in major cities last year. It seems like the rest of the United States is waking up to what California has been living for decades.

But underneath these headlines emerges a more hopeful story as some metropolitan areas make significant progress to render homelessness rare and brief. Raleigh, N.C., led major U.S. cities in reducing homelessness by 40% between 2022 and 2023. Texas cities also stand out: Last year, the Houston metropolitan area achieved the lowest rate of homelessness of any major U.S. city, with just 52 people per 100,000 residents experiencing homelessness (compared to 734 people per 100,000 in Los Angeles). Even Austin, which has a higher homelessness rate than other cities in the state, reduced homelessness by 25% in one year.

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Meanwhile, five of the top 10 major cities with the highest rates of homelessness nationally are in California: San Francisco, Long Beach, Los Angeles, Oakland and Sacramento, in that order. In 2022, the homelessness rate in San Francisco was nearly 20 times higher than in Houston, and Los Angeles’ was almost 14 times higher. Over the longer term, homelessness in Los Angeles rose 56% between 2015 and 2022, while it declined in Houston by 32%.

So what is making the difference in Texas and elsewhere? Can progress reach big cities in California, the state that is home to 28% of the entire country’s homeless population?

First and foremost, other places are building more housing of all types. The Houston, Dallas-Fort Worth and Austin metro areas are all in the top 10 for housing production, while San Francisco, Los Angeles and San Jose are all in the back half of the pack. These metro areas are also working together on a regional approach to homelessness that differs from California’s largely fragmented response. For example, in Houston, one planning body — called a continuum of care — coordinates federal dollars and homelessness response across the metropolitan area. In California, every county and also some municipalities have separate continua of care.

The Golden State has treated the housing shortage with urgency and adopted reforms to the Regional Housing Needs Allocation planning process to increase housing supply, including affordable housing for qualifying households, dramatically by 2030. Such a plan is necessary. But it will of course take years to complete.

In the meantime, our leaders have a moral, political and economic mandate to reduce the harm that homelessness inflicts on individuals, families and communities. And there are more solutions California cities can adopt today to address homelessness. While some may dismiss temporary interventions such as safe camping, parking and shelter as mere window dressing compared to long-term solutions, the reality is that people experiencing homelessness struggle every day to find somewhere to rest.

First, localities should recognize that an ounce of prevention is worth a pound of cure. Just 3.6% of Los Angeles County’s 2022-2023 homelessness spending was devoted to prevention such as emergency rental assistance, eviction defense and direct payments. But the recent availability of once-in-a-generation federal aid during the pandemic created a natural experiment that showed the potential of spending more on preventing people from becoming homeless in the first place.

Just to the north in Santa Clara County, for instance, homelessness grew by 31% between 2017 and 2019. Then, during the pandemic, the county reached an estimated 16,000 vulnerable households with prevention assistance, and homelessness grew by only 3% between 2019 and 2022.

California’s biggest metro areas can also improve their approach to the overlap between mental health and homelessness. Texas cities including Houston and Dallas have had success with the Housing First model that focuses on getting people into housing before tackling other issues they face, such as addiction. Bad-faith attacks against this strategy, in California and elsewhere, aren’t backed by real evidence.

We also need better ways to respond to people with behavioral health and substance abuse emergencies that do not automatically expose them to police while also respecting everyone’s right to be safe. Models from Denver and other cities provide a roadmap to do so. One study found that Denver’s use of emergency mental health professionals reduced crime and cost less than a traditional police response.

Los Angeles has already begun implementing an alternative crisis response model, but staffing challenges have hampered its effectiveness, indicating a need for workforce development. Those efforts can complement the county’s Office of Diversion and Reentry Housing program, which has had success disrupting the cycle of incarceration and homelessness (about a quarter of the county jail population is homeless).

Click here to read the full article in the LA Times

How Asian American Voters in 5 States Can Seal Trump’s 2024 Victory

After $14.4 billion spent, more than 159 million votes cast, and two years of 24-7 news coverage, the 2020 presidential election was decided by just 21,460 Biden voters in three states. 

Let that sink in. 

If 10,342 Biden voters in Wisconsin, 5,890 Biden voters in Georgia, and 5,229 Biden voters in Arizona changed their votes, President Trump would have secured an Electoral College tie and won reelection with a tie-breaking vote in the House of Representatives.

It’s no wonder why so many Republicans feel aggrieved by the 2020 election. The race came down to a few hundredths of a percent of the total votes cast. 

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The 2024 Biden-Trump rematch is expected to be just as close – with 71 electoral votes in five key states expected to decide the outcome: Wisconsin, Michigan, Pennsylvania, Georgia, and Arizona. Biden won each of these five states in 2020 by less than 3 percent of the vote. President Trump can return to the White House by adding any three of these five states to his electoral coalition.

Asian American voters in these five swing states are the greatest untapped demographic for the Trump campaign. Collectively, there are more than 1.2 million eligible Asian American and Pacific Islander, or AAPI voters, in these five battleground states, including 655,321 foreign born citizens. Historically, the Republican Party has largely conceded Asian American voters to Democrats. Two-thirds of AAPI voters say that they received no contact or couldn’t remember being contacted by Republicans, according to the 2022 Asian American Voter Survey.

“For years, I’ve urged Republicans to engage with Asian American communities in Georgia,” says Sunny Park, a member of the Georgia Republican Party’s Asian Pacific American Advisory Board. “Asian American communities, in particular the Korean American community, are an untapped and receptive audience to President Trump’s message. In 2020, Georgia’s airwaves were flooded with political ads, but non-English language media were completely ignored by GOP campaigns.”

With little contact from the Republican Party, AAPI voters backed Biden by a nearly 2-to-1 margin in 2020, according to national exit polls.

“On Election Night, Pennsylvania Republicans brace as vote tallies come in from Philadelphia,” explains David Oh, a former Republican member of the Philadelphia City Council, President and CEO of the Asian American Chamber of Commerce of Greater Philadelphia. “Yet Republican candidates spend little to no time talking with like-minded voters in Philadelphia. For example, most Asian American voters are outraged by the overwhelming violence and lawlessness caused in large part by the disregard of common-sense law enforcement and the failing economic policies of those in power. But given a choice between a candidate they know and a candidate they don’t, they either vote for the candidate they know or don’t vote at all.”

Asian Americans communities represent a small but meaningful share of the electorate in each of these five swing states. Republicans can reach these communities through non-English language advertising in Asian American media. There are active Chinese radio stations, Korean TV programs, and Vietnamese newspapers that reach a nationwide audience. And the cost of advertising on these channels is substantially lower and more efficient than mainstream media.

Filipino-Americans, the largest Asian American community in Arizona, are large enough to swing a state that Biden carried by 0.31 percent of the vote. Georgia’s active Korean American Christian community could turn the tide for President Trump.  In Wisconsin, Hmong voters let down by the Biden administration can flex their political muscle. 

Click here to read the full article in Downhill

California schools forced to compete with fast food industry for workers after minimum wage hike

SACRAMENTO, Calif. (AP) — Lost in the hubbub surrounding California’s new $20-per-hour minimum wage for fast food workers is how that raise could impact public schools, forcing districts to compete with the likes of McDonald’s and Wendy’s for cafeteria workers amid a state budget crunch.

The minimum wage law that took effect Monday guarantees at least $20-per-hour for workers at fast food restaurant chains with at least 60 locations nationwide. That doesn’t include school food service workers, historically some of the lowest-paid workers in public education.

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Yet demand for school meals is higher than ever in California, the first state to guarantee free meals for all students regardless of their family’s income. And demand is projected to fuel an increase of more than 70 million extra meals in California schools this year compared to 2018, according to the state Department of Education.

But these jobs typically have lots of turnover and are harder to fill. The minimum wage boost for fast food workers could make that even more difficult.

“They are all very worried about it. Most are saying they anticipate it will be harder and harder to hire employees,” said Carrie Bogdanovich, president of the California School Nutrition Association.

Statewide, some districts have already taken steps to compete in the new reality. Last year, the Sacramento Unified School District — anticipating the law’s passage — agreed to a 10% increase for its food service workers and other low-paying jobs, followed by another 6% increase July 1 of this year to bump their wages up to $20 per hour.

Cancy McArn, the district’s chief human resources officer, said it was the largest single raise in the district in nearly three decades.

“We are looking not only at competing with districts and comparing with districts, we’re also looking at fast food places,” McArn said.

In Southern California, San Luis Coastal Unified doubled its food service staff to 40 people after seeing a 52% increase in the number of students eating school meals. The district prepares 8,500 meals daily for 7,600 students across 15 school sites — breakfast, lunch and even supper options for youth in after-school sports and activities.

The district has since limited the number of its entry-level positions, which are the hardest to fill, while seeking to hire more for complex roles like “culinary lead” and “central kitchen supervisor” that require more skills and hours — making them more attractive to job seekers.

“That’s allowed us to be more competitive,” said Erin Primer, director of food and nutrition services for the San Luis Coastal Unified School District.

Tia Orr, executive director of the Services Employees International Union California — which represents both school food service workers and fast food employees — said school districts and other service industries must consider raising wages because of this new law.

“This is a good thing, and it is long overdue,” she said.

But some districts are limited in what they can do. In the Lynwood Unified School District in Los Angeles County, the starting salary for food service workers is $17.70 per hour and maxes out at $21.51 per hour, according to Gretchen Janson, the district’s assistant superintendent of business services. She said these workers only work three hours per day, meaning they aren’t eligible for health benefits.

Janson says the district is waiting to see how employees react, adding: “We just don’t have the increase in revenue to be able to provide additional funding for staff.”

Nuria Alvarenga has worked food service in the Lynwood School District for 20 years. She makes $21 per hour now, but said she could likely earn more in fast food.

While she said several co-workers were considering finding other jobs, she hasn’t decided yet what she will do. She normally works at an elementary school, but has been filling in recently at a high school where she enjoys seeing former students recognize her as they stand in line for lunch.

“I’m so glad they still remember me,” she said.

School food service workers have gotten more support in recent years under a state push to expand school meals and make them more nutritious. That included $720 million in recent years for upgrades to school kitchens to better prepare fresh meals, plus $45 million to create an apprenticeship program to professionalize the industry.

It would be difficult for lawmakers to mandate a raise for school food workers given the complexities of the state’s school funding formula. That’s why some advocacy groups, including the Chef Ann Foundation, proposed a state-funded incentive program that would have given school food workers who completed an apprenticeship program a $25,000 bonus payable over five years.

That idea didn’t make it into Democratic Gov. Gavin Newsom’s budget proposal released in January. The state is facing a multibillion dollar budget deficit, limiting new spending.

Click here to read the full article in AP News

In one of L.A.’s largest cash heists, burglars steal as much as $30 million in elaborate operation

In one of the largest cash heists in Los Angeles history, thieves made off with as much as $30 million in an Easter Sunday burglary at a San Fernando Valley money storage facility, an L.A. police official said.

The burglary occurred Sunday night at a facility in Sylmar where cash from businesses across the region is handled and stored, said L.A. Police Department Cmdr. Elaine Morales.

The thieves were able to breach the building as well as the safe where the money was stored, Morales said. Law enforcement sources said the burglary was among the largest in city history when it comes to cash, and the total also surpassed any armored-car heist in the city.

Mystery surrounds the break-in.

Sources familiar with the investigation told The Times that a burglary crew broke through the roof of the Gardaworld building on Roxford Street to gain access to the vault. But it is unclear how they avoided the alarm system.

The Canada-based security company has not responded to requests for comment.

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The operators of the business did not discover the massive theft until they opened the vault Monday. An ABC-7 TV news helicopter video showed a large cut on the side of the building covered by a piece of plywood.

Authorities were alerted, and detectives from the LAPD’s Mission Division station responded to the crime scene to gather evidence.

A law enforcement source confirmed to The Times there was an effort to breach the side of the cash-holding building in addition to the roof. At least one alarm was triggered during the crime, but it was not connected to local law enforcement, according to a source familiar with the investigation who was not authorized to discuss it publicly.

Further adding to the intrigue is that very few individuals would have known of the huge sums of cash being kept in that safe, according to law enforcement sources.

The break-in was described as elaborate and suggested an experienced crew who knew how to gain entry to a secure facility and go unnoticed.

Scott Selby, author of “Flawless: Inside the Largest Diamond Heist in History,” said that the theft has “all the markings of a really well-thought-out job” that was done by a “professional crew,” adding that based on other major heists of this nature, it is likely that the thieves had some inside intelligence.

He said investigators will be “looking around the globe for crimes with a similar M.O.”

As to whether the money is traceable, Selby said it depends on whether there are records of serial numbers or the cash that was collected is already in circulation. It is hard to hide ill-gotten gains and launder traceable bills, he said.

“As technology progresses and the world gets small, there are a lot of ways you can mess up and get caught,” Selby said. “With touch DNA, the slightest mistake can expose the identity of a member of the crew, leading authorities to eventually identify their associates.”

An FBI spokeswoman confirmed Wednesday night that the agency and the LAPD are investigating the theft.

A federal source said investigators were trying to complete a full accounting of the missing cash, but said it could be the largest cash heist in L.A.’s history.

The prior largest cash robbery in Los Angeles was on Sept. 12, 1997, with the theft of $18.9 million from the former site of the Dunbar Armored facility on Mateo Street. Those behind the incident were eventually caught.

Sunday’s theft comes nearly two years after the multimillion-dollar heist of jewelry from a Brink’s big rig at a Grapevine truck stop.

As much as $100 million in jewels and valuables was taken from the truck.

In that case, thieves made off with the goods at 3 a.m. on July 11, 2022, stuffing more than 20 large bags with jewelry, gems and other items that the Brink’s tractor-trailer had been transporting to the L.A. area from the International Gem and Jewelry Show in San Mateo.

The heist occurred during a 27-minute window in which one driver slept in the vehicle’s sleeper berth and another ate a meal at the Flying J, a sprawling truck stop just off Interstate 5’s sinuous Grapevine in Lebec, Calif.

That crime remains unsolved.

Click here to read the full article in the LA Times

S.F. homeless housing nonprofit blasted for misusing taxpayer funds

One of San Francisco’s largest providers of housing for formerly homeless people “misused” taxpayer funds, lacked key financial controls and engaged in other problematic practices that “heightened the risk of fraud,” according to a city report released Tuesday.

“(T)he breadth and magnitude of financial and compliance problems we found at HomeRise is concerning,” wrote Sjoberg Evashenk Consulting Inc., an independent firm the city hired to audit the nonprofit.

Janéa Jackson, CEO of HomeRise, said Tuesday afternoon that the nonprofit’s leadership is “100% committed” to resolving the issues noted in the audit. Jackson, who took over as head of the nonprofit in June 2023, said she has already addressed several of the concerns. 

San Francisco nonprofits receive hundreds of millions of dollars to provide services to the city’s most vulnerable residents — whether unhoused or struggling with mental illness or substance abuse. But nonprofits have come under increasing scrutiny in recent years as local organizations have been accused of financial mismanagement, or worse. 

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HomeRise was the subject of controversy last week after one of the nonprofit’s complexes in Mission Bay was criticized during a hearing at City Hall where residents complained it was contributing to violent and disturbing incidents in the neighborhood, a characterization the city rejected.

The revelations in the report on HomeRise follow a slew of scandals at nonprofits that contract with San Francisco over the past three years. The executive director of a Bayview food bank was accused of using city funds to enrich herself. Other nonprofits were accused of labor violations and overspending their budget. And a public-safety-focused nonprofit fired its executive director after finding it spent nearly $80,000 in grant money on ineligible expenses, including a Lake Tahoe trip, luxury gift boxes and limo service.  

HomeRise operates more than 1,500 units at 19 properties across the city, with an annual budget of about $34 million and some 250 employees. The city’s current agreements with HomeRise total more than $240 million in loans, grants and subsidies. That includes $110 million in loans to develop or rehabilitate properties, $90 million for operations and maintenance, and more than $40 million in grants for support services.

Auditors found “unallowable, imprudent, or questionable spending” by HomeRise that was inconsistent with the terms of its agreement, such as using city dollars for fundraising, paying staff bonuses, and providing lunches and gifts to its staff.  

As of January 2023, the nonprofit had 118 active credit cards in use — equivalent to roughly half of its workforce — of which more than a third had credit limits of $10,000 or higher, according to the audit. HomeRise did not have sufficient controls on the credit cards to prevent risk of fraudulent expenses, waste or other abuse going undetected, the report found. 

Jackson said Tuesday that the organization has recently reduced its number of corporate credit cards to about 30 and that most now have a limit of $2,500.

The audit also uncovered that the nonprofit gave out “signing” bonuses to employees who had been working for HomeRise for two to 13 years. Through job promotions, one HomeRise official’s salary allegedly increased more than $87,000, or 74%, in the span of just nine months. More than $200,000 in bonuses were “unplanned and unbudgeted,” worsening cash flow problems, the report stated.

The large raises and bonuses were handed out despite the nonprofit reportedly losing millions of dollars a year due to high vacancy rates in its buildings. In July 2023, more than 14% of units across the nonprofit’s properties were empty, the report found. Two of the nonprofit’s oldest buildings, the San Cristina at 1000 Market St. and the Senator Hotel at 519 Ellis St., had vacancy rates of 34.5% and 29.2% respectively.

The audit stated that the vacancies not only reduce the nonprofit’s potential rental revenue, but, “More importantly, vacant units represent missed opportunities to provide unhoused people with permanent, supportive housing.”

At the same time, the nonprofit had questionable costs including more than $100,000 in temporary rental charges, $96,000 for salaries paid to tenant program services staff and $12,500 for a social event.

The report criticized the lack of leadership and accountability at the organization, which was partly due to an “alarming rate of turnover” in key corporate positions, the document noted. 

The controller’s office could not determine the total magnitude of HomeRise’s inappropriate spending or unallowable charges because, in most cases, there was no supporting documentation.

After trying and failing to work with HomeRise to address growing concerns, the homelessness department and the Mayor’s Office of Housing and Community Development, or MOHCD, requested the audit in 2022. 

Formerly known as Community Housing Partnership, HomeRise was founded in 1990 as a partnership between the Coalition on Homelessness and a group of nonprofit housing developers called the Council of Community Housing Organizations. To this day, the coalition and council each get to appoint four members to the organization’s board of directors. 

Six months after a city department issued a notice of default at one of HomeRise’s properties, the city controller placed HomeRise on “elevated concern status” due to its financial instability. 

HomeRise remains on that elevated concern status. 

Click here to read the full article in the SF Chronicle