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L.A. losing millions of dollars on uncollected parking tickets, other fines and fees, audit shows

July 1, 2010 | 12:50 pm

On a day when Los Angeles laid off more than 200 employees, a new audit released Thursday revealed that the city is losing tens of millions of dollars in revenue because of collection practices that barely capture half of parking ticket fines and other fees.

"I don't know of any business that would stand for such a low collection rate," said City Controller Wendy Greuel, who released the audit of six departments -- police, fire, housing, transportation, sanitation and building and safety. "It's simply not sustainable, and the city cannot and should not allow this to continue."

The audit, which looked at fiscal year 2008-09, showed that only 53% of some $553 million in city billings were collected. That's a loss of $260 million annually—enough, said City Councilman Paul Koretz, to have helped fill a budget gap that has led to hundreds of layoffs, reduced library hours and other service cuts.

Among the most "egregious" examples, the city auditor said, were parking citations and Emergency Management Services billing accounts. The city only collected 53% of the money it is owed on parking citations, the audit found, and 38% owed in emergency service billings.

"We need to do better, because otherwise the situation is grim," said Koretz, who chairs the council's audits and governmental efficiency committee and joined Greuel at a press conference outside City Hall. "There's a sword of Damocles that hangs heavy over countless city employees who fear their jobs might be the next ones lost."

The audit is a follow-up to a similar study three years ago. The city controller found some improvement, but said it was "outrageous and unacceptable" that Los Angeles had not made more progress.

Under-collection of revenue is a problem at every level of government, and officials acknowledge that not all billings are ultimately collectible. For instance, some vehicle owners will never pay their tickets, while indigent patients may never reimburse the city for ambulance fees. How Los Angeles' collection rate compares to other cities was not known, the controller said.

However, Greuel said there was ample room for improvement, and pushed for several reforms. Among her recommendations were the creation of a centralized billing process and a mandate that police and fire departments expeditiously refer delinquent accounts to outside collection agencies.

-- Patrick J. McDonnell

Photo by Al Seib / Los Angeles Times