In business, we use budgets as our road map for successfully managing our organizations. Unfortunately, that’s not how bureaucrats see budgets. To them, a budget is one more tool to convince, coerce and cajole taxpayers to ante up again and again and again. Bureaucrats use budgets so that they can overspend and look for ways to scare taxpayers into paying more money for fewer services. The most successful scare tactic, and it works almost every time, is to suggest that a budget crunch will cause us to lay off the most important and valuable public employees: police officers, firefighters and teachers. No more taxes, they imply, will cause crime to run rampant in our streets, buildings ablaze to be ignored, and our children to be unable to read or write. In the City of Los Angeles we are fortunate; we have a Mayor who is intent on keeping his promise not to cut public safety. The Los Angeles Unified School District, which has no truly effective leadership, is using this same old tactic of threatening to lay off teachers. They are using the media to blame the State for their own budget problems. They are yelling “foul” loud and clear in spite of the fact that their revenues are up and enrollment is down. They continue to find new ways to waste money in the name of “administration” and refuse to put resources into the classrooms, where it will do some good. If one of our so-called school district leaders were to tour the LAUSD headquarters building from top to bottom, this person would note employees shopping on the Internet, guarding the drinking fountain and coffee machines, and just sitting around talking all day long. Productivity, if it ever existed at the LAUSD, appears to be a thing of the past. If this leader brought a box of pink slips on this tour, and handed them out to these less-than-industrious people in their own headquarters, he/she would soon run out of pink slips and save enough money to be able to avoid laying off any teachers. The chance of that happening: nil at best. Look at the LAUSD’s record of spending hundreds of millions of hard-earned taxpayer dollars. They construct a school building on a toxic waste site and continue to throw good money after bad trying to resurrect a failed project. Their next fiasco was to overpay for a new headquarters… and then spend millions more to try to make it safe for the district’s highly-paid bureaucratic administrators. Successful developers try to acquire land at optimum locations for the best price. They then hire contractors with the best of reputations and qualification to erect a building based on a well-thoughtout set of plans. They then pay for this with long term financing at the most competitive rates. The LAUSD does just the opposite. They overpay for property; work with the same inept contractors who underbid a job to get it and then profit handsomely on “change orders;” and have no financial strategy in place in advance. There is no reason for the LAUSD to pay hundreds of millions of dollars for buildings that will be outdated in 30 years. These properties could be built to the specifications of the school district and then leased to them for 30 years at a fixed rental rate. This immediate cash savings could be used for smaller classrooms, better school books, and higher wages for the teachers. Remember, these are the people who are teaching our next generation of skilled workers. This is a simple solution to a major problem. The newest, and possibly the best, example of waste is the LAUSD’s spectacle of creating a new payroll system. Their ill-conceived idea to reinvent the wheel cost taxpayers hundreds of millions of dollars and still cannot pay its teachers their proper salaries. Who hired these payroll system-creating people? Who looked at their backgrounds and experience? Who is responsible for this newest humiliation? And best of all: they re-hired the same accounting firm to fix the problems they caused at millions of dollars more! School districts and municipalities across the nation have working payroll systems. Couldn’t a system that works in New York City, Boston or Philadelphia work for our school district? Why not just pay them a fee to duplicate their existing system? Has anyone ever heard of a major corporation creating a payroll system that does not work? Additionally, there are many large corporations with more employees than LAUSD who use thirdparty vendors for their payroll, at a fraction of the cost. Why does the Los Angeles Unified School District need to be in the construction business, the real estate business and the computer software business? Maybe I am mistaken, but I thought they were in the education business. Rickey M. Gelb is managing general partner of Gelb Enterprises, a real estate development and propertymanagement company.
