If you want to know why the city teeters on the brink of bankruptcy, why city services are being slashed and employees losing their jobs, why business, labor and the community as whole have lost confidence in theCity, tune into the joint Personnel/Public Safety Committee meeting at 9:45 a.m. today and the joint Budget/Audits Committee meeting at 1 p.m. today.
You can get there online or by telephone ((213) 621-2489) but first you need to take a look at the documents linked from the agenda, documents that prove beyond a reasonable doubt, beyond a shadow of doubt that the nation’s highest paid city officials weren’t worth the minimum wage at any time during the last 20 years.
If you knew, and were repeatedly reminded, that half the money you were owed every year wasn’t being collected because you had dozens of billing systems and bank accounts, each managed by different people who never communicated with each other, used entirely different accounting systems and rarely followed up on anything, wouldn’t you do something about it before it was too late to save your enterprise?
You would, of course, have taken steps long ago but then you aren’t one of the preening and posturing elected officials of the City of Los Angeles.
“Independent studies performed over the last 20 years regarding City receivables all suggest that centralization of collections in some form will create efficiencies by standardizing process and procedures; standardizing billing formats; and establishing a single point of accountability, yet to date, no action has been taken to implement any such proposal,” says one of the Council motions on today’s agenda.
The sudden concern of Council members was triggered by Controller Wendy Greuel’s recent audit that found the city collect only $293 millionshows of the $553.4 million billed by city departments, most of it involving parking tickets and ambulance services.
That’s a 53 percent collection rate — an increase from the 52 percent rate revealed three years ago by then Controller Laura Chick whose long list of recommendations was haphazardly followed at best, ignored at worst.
“How can the City of Los Angeles, that has so many unmet needs and demands for services, not care about collecting ALL the money legitimately owed it? Chick asked in 2007. “How can we ask taxpayers for more money or continue to complain about inadequate funds, when untold millions of dollars remain uncollected?”
Chick traced the Council’s failure back two decades, ignoring its own motions to replace outmoded financial practices like firefighters using paper forms to report ambulance services and the department often not getting around to billing people for months, if ever.
The loss alone from uncollected ambulance services runs around $1 million a week, month after month, year after year.
Long-term contracts for computerized services with Scan Health and ADP to fix this particular problem come before the Personnel/Public Safety Committee meeting today eight years after then Mayor James Hahn ordered a study that led to a report that led to hiring a consultant and more studies and more reports.
But no action.
Last November, in the midst of fiscal calamty fand with Ron Galperin’s ad hoc Committee on Revenue Enhancement digging into the details and driving reform, the Fire Commission approved the contracts to outsource the ambulance services collections but it’s taken until now for the Council to even consider them.
As concerned citizens of LA, you have to ask yourself why nothing was done for so long?
It’s a softball question. Outsourcing means creating jobs in the private sector when the goal of a mayor and Council elected with lavish amounts of union money is to create city jobs no matter what the cost, no matter how inefficient.
It’s why Greuel, who was part of the problem during her eight years on the Council, concluded in her follow-up audit: “The City remains stuck in the mud.”
“Collecting more money wouldn’t close the entire budget deficit, but it would help save the City money and protect critical services for Angelenos,” Greuel said.
“I don’t know of any business that would stand for such a low collection rate, particularly
a business the size of the City of Los Angeles. It’s simply not sustainable, and the City
cannot and should not allow this to continue. The Mayor and the City Council now have two audits and a consultant’s report to guide them to centralizing the billing process, which will save the City millions of dollars each year.”
Just how serious the city’s financial situation is comes clear in a report being considered today at the Audits/Budget Committee meeting.
Administrative Officer Miguel Santana reports that the sale of $1.2
billion in short-term debt will provide $726 million to keep the employee
pension funds at least for this year and $450
million to meet payroll at least through April.
Santana happily reports his trip
to New York got the city “the highest short-term debt
Fitch and Moody’s with repayments scheduled monthly from March to June..
There was only one problem. Almost a quarter of the borrowing,
$252 million, went unsold and had to be eaten by J.P. Morgan at much
higher interest rates because of skepticism about the city’s ability to
meet the repayments in May and June.
concerns related to recently published articles and opinion pieces
a variety of City financial issues,” Santana reported. “Investors also
have raised the specter of additional borrowing that would be needed
from special funds after the last Monday of April.”
problem as perceived inside the bubble of City Hall’s false
consciousness isn’t the long-term failure of our elected officials to
spend our money wisely and manage the affairs of the city efficiently.
It’s the fault of the media and the fact that the public now knows how
our officials have failed us.
But I digress. The critical problem
in the whole uncollected debt owed the city — enough money if it could
actually be collected to avoid layoffs, service cuts and bankruptcy –
is the lack of a single centralized billing and collection system for
The need for such a system has been clear for
most of the last 20 years and was highlighted in Chick’s 2007 audit.
Macias Consulting Group eventually was hired to study what needed
to be done and completed its report Dec. 11, 2009.
It took two
more months for its implementation plan to be forwarded from the Finance
Department to the Council and five months more for a Council committee
to finally take it up today.
Clearly, it will take years and
cost tens of millions of dollars the city doesn’t have to actually
become a reality — unless they decide it’s better to use paper and
pencil and keep file clerks busy moving bills
from the 45-day delinquent drawer to the six-month drawer to the too old
to matter drawer without actually getting any of them paid.
Finally, in this whirlwind of panicked action, the committee will take up the
proposal the Council asked for last November for creating the
of Economic Analysis so that our leaders can get financial facts needed to make rational decisions on labor contracts,
staffing and public policy.
This isn’t exactly a new idea. San
Francisco created such an office six years ago to identify and report
“on all legislation that might have a material economic impact on the
City. It analyzes the likely impacts of legislation on business
attraction and retention, job creation, tax and fee revenues to the
City, and other matters relating to the overall economic health of the
Imagine that. It’s such a modern way of doing business
based on hard facts and good analysis instead of letting a mayor and 15
Council members who know next to nothing about anything and fly by the
seat of political self-interest.
“Given the severity of the
City’s current economic crisis and the continuing prospect of employee
layoffs, any option that involves adding staff or increasing General
expenditures would have to be considered in the context and
constraints of our current budget
crisis,” CAO Santana and Chief
Legislative Analyst Gerry Miller say in their report.
highly specialized nature of economic analysis and the training required
perform that function, additional resources — either with City
personnel or independent
contractors — would need to be added to the
Offices of the Controller or the CAO. “
It’s hard to believe
with the armies of bureaucrats, accountants and financial analysts
scattered through various offices nobody has the skill set needed to do
Miller and Santana recommend not even trying
themselves, preferring to create a “pilot project” in the Economic
Development Department, an agency de facto Mayor Austin Beutner wants to
create at considerable cost so he can control the flow of subsidies and
favors to developers, businesses and other special interests that live
so profitably off the public.
If you read the documents that are
linked from the agendas today, you will find a litany of remarkable
incompetence and conclude, as I have, that the people who caused this
mess and done nothing for so long to clean it up, are incapable of
carrying out the policies needed to bring modern and efficient
government to L.A.
There must be accountability for the massive
failures of the past so that we can have a credible leadership to move
forward. Visit lacleansweep.com and learn what you can do to elect
better leaders for a greater L.A..