UPDATE: The Recreation and Parks Commission decided to maintain the status quo on the golf cart contract Wednesday, leaving Kishi on a month-to-month contrac,t, but sought to uphold a fair and transparent process going forward.
When they write the obituary for the City of Los Angeles and it fell into bankruptcy and decline, there surely will be extensive discussion to the role of unions, lobbyists and influential insiders and how the political leadership did their bidding at great cost to the public interest.
The way the city’s golf courses have been run is a prime example of why the city doesn’t have enough money to pay its bills and why services are so poor and getting worse.
Last month, city officials moved to raise the price of playing a round of golf by as much as 27 percent, rates that already are higher than at county-run public courses.
Today, the Recreation and Parks Commission is all but certain to turn its back on hundreds of thousands of dollars a year in added revenue along with rebuilding of golf cart paths and replacement of worn-out old electric golf carts with brand new ones with GPS.
This will mark the fourth time in seven years that the city has failed to award a contract for the golf cart concession.
That failure has left the concession on a month-to-month basis in the hands of J.H. Kishi, a well-connected company that got a 12-year lease back in 1991 and has kept the business despite reports, audits, staff findings and commission recommendations that the public would be better served and the city get more money if the contract was awarded to Michael Bernbach’s Ready Golf, the company that runs the Encino-Balboa driving range.
How elaborate processes were derailed and common sense ignored is a prime example of what goes on all the time at City Hall: The public interest is sold out by our elected officials to special interests in back room deals, resulting in worse services at higher costs and less revenue to the city.
Last September, the City Council by a one-vote margin rejected the Rec and Parks Board recommendation in favor of Ready Golf despite an elaborate vetting process by staff and an outside consultant that gave the Encino company the highest marks and found serious fault with Kishi’s operations.
“Politics of the ugliest variety trumped public process of the highest order,” Craig Kessler, executive director of the Public Links Golf Association, wrote in the LA Business Journal.
“Lobbyists, political operatives and family connections carried the
day over rational business analysis, reasoned discourse and objectivity.
And in the process, a lot more was lost than the simple endurance of
substandard, dangerous golf cart service. Public integrity was lost.”
David Zahniser in the LA Times described what was going on this way: “For those who fear that government always moves at a glacial pace, the
city of Los Angeles may be poised to provide a new poster child: golf
More than an inability to make a decision was going on.
Kishi, represented by heavy-handed lobbyist-political consultant Harvey Englander, and Michael Yamaki, a lawyer prominent in the Asian-American community whose ties to City Hall go back the era of Mayor Tom Bradley. Yamaki, a relative of the president of Kishi, was named to the Police Commission the same year Kishi got its 12-year contract and has remained a City Hall insider ever since.
On two previous occasions dating back to 2003, Ready Golf had beaten out Kishi but failed to get the contract because of the company’s behind-the-scenes influence and the role of the SEIU that represents golf course workers and wants to take over the entire operation of the city’s seven 18-hole courses itself.
The SEIU successfully blocked awarding the contract by invoking what’s called a 1022 provision that allows city officials to consider union-run costs and benefits before contracting out services.
“We want them to do it over,” Julie Butcher, the union’s regional
director, said last August. “Our preference . . . is for Recreation and Parks to decide
that they can do this work themselves…It’s cheaper than contracting it out because the city gets to keep all
of that money.”
That isn’t what the consultants or city financial analysts determined in recommending Ready Golf after 13 months of study last year.
But then the mayor’s lawyer,
Thomas Saenz, moved in and Councilwoman Jan Perry picked up the Kishi
torch, arguing: “Kishi has a long record of service, dating back to when
Bradley was in office,. I think they should be given great
weight and consideration because of that.”
At the time she was
talking, city auditors were taking a hard look at Kishi’s operations and
finding a number of problems from failure to have health certificates
for employees to an inadequate system of receipts.
importantly, there was the problem of the missing $564,556.11.
reconciliation of the concession’s reported gross receipts and its bank
account records disclosed that the reported gross receipts were
understated…(that) resulted in the rental payment deficiency (to the
city) of $265,341.37,” according to the draft audit that has been
suppressed for nine months.
Kishi was unresponsive to questions
about the missing money at first and then offered several different
explanations for the discrepancy. Still, the auditors said that “by
grossly understating the revenues resulting in substantial loss of
Income to the City, we strongly suggest that the Administrative
Resources Section sternly warn the Concessionaire to discontinue this
practice for which appropriate sanctions may be imposed.”
than sanctions, city officials have extended the Kishi contract for the
last nine months and the Rec & Parks Commission is likely to do so
yet again today by invoking the 1022 process to look at a union-run
The goal of City Hall, after all, is to protect the
jobs of city workers and to keep the cash flowing into campaign coffers
from special interests and the “gifts” flowing to the mayor so he can
live like the multi-millionaires who so envies and adores.
golf cart concession is small potatoes, worth only $1.5 million to the
city from Kishi, $2 million or more from Ready Golf. But it’s typical of
what goes on in hundreds of deals after year that add up to the
difference between solvency and bankruptcy, between a city that works
for its people and one that is deteriorating by the day.