REVISION ADDS TO VALLEY DEBT CITY WOULD BE $800 MILLION IN RED, L.A. SAYS.

Byline: Harrison Sheppard Staff Writer

If the San Fernando Valley becomes a separate city, Los Angeles city officials said Tuesday, it will have to assume more than $800 million in municipal debt from Los Angeles - more than $100 million above the city's estimate just four months ago.

The new figure reflects the city's recalculation of the Valley's share of the debt as well as almost $200 million in new debt incurred since the last estimate, officials said.

But Valley secession advocates said it adds to their suspicion the city wants to make secession as expensive as possible for the Valley.

``It is a concern,'' said Jeff Brain, president of Valley Voters Organized Toward Empowerment. ``That's why ultimately LAFCO (the Local Agency Formation Commission) is acting as an independent party to resolve these issues. Because when numbers change so significantly in a very short period of time, we have to wonder if the city's being up front with their figures.''

City Administrative Officer Bill Fujioka, whose office calculated the figure, said the objective was not to slant the negotiations, but to provide updated and more accurate information.

Fujioka said city officials are looking out for the interests of both the potential new Valley city and the remainder of Los Angeles.

``We have to ensure that the plan doesn't harm both the remaining city and the new city,'' Fujioka said. If issues relating to debt are not handled properly, he added, the bond ratings of both cities could be seriously harmed.

The city of Los Angeles currently has $2.4 billion in debt - $3.54 billion if future interest payments are included, according to Fujioka. The Valley city's portion of that would be $806 million, or $1.18 billion including future interest payments, he said.

Those figures are significantly higher than the ones produced by Fujioka's office in June as part of the city's 900-page response to LAFCO's initial study of secession. At that time, the CAO's office said the city's debt was $2.1 billion and the Valley's share was $693 million.

The new figures add a ``Sanitation Equipment Charge'' - essentially financed purchases of garbage trucks - to the debt calculations. The outstanding SEC was $100 million in June, and rose to $188 million in September, with the Valley's share now totaling $77 million.

Initially the CAO's Office did not think the SEC would be divided with the Valley, but has since realized that opinion was incorrect, according to Assistant CAO Ellen Sandt. The city has also incurred new debt for projects to build new fire stations, libraries and animal shelters, she said.

The debt figures do not include proprietary departments such as Los Angeles World Airports and the Department of Water and Power.

The City Council's ad hoc committee on secession Tuesday approved the CAO's recommendations for approaches to the upcoming negotiations between the city and secession advocates, including that the discussions should be held in public.