COMMON SENSE MUST RULE L.A. BREAKUP LAFCO SHOULD USE PERCENTAGE FORMULA TO DIVVY UP CITY'S ASSETS.

Byline: Walter N. Prince Local View

ONE of the biggest battles concerning the potential divorce of the San Fernando Valley, Hollywood and Harbor areas from the rest of Los Angeles involves the fair division of ``community property'' paid for by all of us and liabilities that are the responsibility of each of us.

At the root of the problem is the fact that the secession petitioners have not come up with a universally acceptable method for parceling out the assets, and the LAFCO consultants have pretty much failed the issue as well.

Adding to the problem is the hard fact that the city has not yet furnished LAFCO with a complete inventory of all its assets, so the consultants can never be sure if their recommendations will be fair to all parties concerned.

It is understandable that there is no quick answer to these problems.

Although it is relatively simple to place a value on the remodeled City Hall, or on the gas-guzzling SUVs driven by some of our elected officials, how do you determine the worth of ``intellectual property'' such as the hundreds of specialized computer programs purchased or developed by the city over the past umpteen years? How do you value thousands of pieces of real estate that were acquired before any of us were born, and which have never been appraised since then?

The Local Agency Formation Commission and its consultants should not continue to use up valuable consulting time on this issue.

It is not likely that the city will ever admit that it has a moral and legal obligation to turn over a fair share of what we all paid for, and LAFCO may have a difficult time trying to convince the secessionists that they cannot cherry-pick through the assets and take only what they want, including items that really should be jointly owned and/or operated by all residents of the new and old cities.

What LAFCO must do instead is develop a simple formula that nobody can object to, and which will leave it up to the cities themselves to hash out a way to divvy up the possessions they all want so badly.

Such a formula already exists. It is called common sense.

It is abundantly clear that whether Los Angeles reorganizes into two, three or four pieces, each city should be entitled to its fair share of the assets acquired before the reorganization, and each should be responsible to pay its fair share of the debt incurred during the same time period.

Until now, LAFCO has spent a good deal of time trying to decide which specific assets will belong to which city (who gets the new fire trucks, and who gets the old ones), and which city is responsible for specific liabilities (who pays for the new Valley police station, and who pays for the new areawide emergency system).

LAFCO should ignore these specifics and instead should concentrate on simply determining an actual percentage of assets and liabilities to be allocated to each of the new cities. This percentage can be based on population, or geographic area, or revenue produced, or some combination of these or other factors.

When fair percentages are determined, each city must live with them.

If, for example, LAFCO determines the Valley's share at 30 percent, Hollywood's at 15 percent, Harbor's at 5 percent, and the rest of Los Angeles at 50 percent, then so be it. Each side is entitled to its percentage of the total assets, and each side will be responsible to pay its share of the total liabilities.

Later, if the November 2002 vote actually results in the creation of the new communities, a group of officials from each city can then sit down and figure the actual dollar value of all the assets and liabilities. Some items may require appraisals, some may not. But eventually the real values will be determined and a total dollar amount will be agreed upon.

At that point, the cities can haggle over the fine details of who gets which specific library books, who will pay for which police station and areawide emergency system, and the costs of one city leasing facilities from another.

This may take years to complete, but that won't matter so long as the final dollar amounts to be credited or debited to each city cannot exceed the percentages previously decided by LAFCO.

A percentage allocation also provides a solution to the question as to whether, and how, certain services should be split or jointly controlled by all the cities. With known percentages of ownership, it will be a simple matter to leave the service (or other asset) in place, but with a new set of directors, commissioners or other policy-makers based on the percentage of their ownership.

LAFCO's consultants should start now to develop the percentage formula and apply it equally to everyone involved in the reorganization process. If it is discovered later that the city neglected to report everything it owns, adjustments can be made using the same percentages.

But time is short, and the consultants must act immediately so the secession question can be placed on next year's November ballot.

HEARINGS

LAFCO is planning six public hearings to get resident input before issuing its final report as to how the breakup process will work. Two will be in the Valley:

--Valley College on Oct. 11 at 7 p.m.

--CSUN on Oct. 13 at 9:30 a.m.

LAFCO can be contacted directly at [phone].

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HEARINGS (see text)