City Leaving Millions Uncollected

The City of Los Angeles failed to collect nearly $300 million owed to it in 2008-09, according to an audit from the City Controller’s office released July 1. The city has not improved its collection rate on fees and fines since the last audit in 2007, which was unacceptable, said Controller Wendy Greuel. City departments surveyed by the controller’s office showed billings totaling $553.4 million for fiscal year 2008-09 but only $293 million had been collected. Cited as having among the lowest collection rates were parking citations and billings for ambulance transportation. “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. The lackadaisical collections process has been the subject of numerous studies and reports over the years. The recommended solution of a centralized collections process has been slowly implemented. The audit also found that the Police Commission and Fire Department were slow to refer delinquent accounts to the Office of Finance or outside collection agency; the Police Commission sat on nearly $500,000 worth of delinquent accounts, some ranging from two years to four years old; and the Fire Department never followed through on hiring a contractor to ensure accurate billing information. The Valley Industry & Commerce Association, which in the past has championed a centralized collections process, called the 53 percent collection rate appalling. “Any business that only collects 53 percent of what it is owed is on the fast track to insolvency,” said VICA President Stuart Waldman. In February, the City Council formed the Commission on Revenue Enhancement to look into ways to improve collections on money owed and find new sources to fill the city’s coffers. The commission is expected to release its recommendations in the next few weeks. The commission will recommend general and specific ways to change the collections process, said Chairman Ron Galperin. “We knew what the controller was gong to be finding; it is the same we are finding in the testimony we are hearing before us,” Galperin said. “It is more vital than ever to have the changes made.” Mark R. Madler