Grading the Cities introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Los Angeles Revenue Rank: 2 Form of Government: Mayor-Council Mayor: Richard J. Riordan (took office 1993) City Council: 15 members, elected by district FINANCIAL MANAGEMENT: B- Los Angeles’ finances are well managed in a number of areas, including use of long-term liabilities and debt, cash management policies and financial reporting. The city has received the Government Finance Officers Certificate of Excellence for the past three years. Still, L.A.’s ability to estimate expenditures has been less than impressive, largely because it is forced to make supplemental appropriations for sanitation and fire costs nearly every year. In fire fighting, the issue has been “an overtime account that’s been skyrocketing,” explains James Sobject, chief administrative analyst. For a while, the city wasn’t hiring enough fire fighters because of a sexual harassment scandal. Now, they’re understaffed because attrition rates have been unexpectedly high. These factors have combined to force overtime out of control. The estimating process also tends to get politicized. “We go in,” Sobject says, “knowing that some of the budget numbers are probably low.” Fortunately, the city keeps close control over its expenditures during the year, so it quickly knows when estimates have gone awry. Curiously, even as the higher-ups play games with numbers, they hold their managers in fiscal manacles. Money is appropriated to very narrowly focused accounts. Printing and binding, for example, are separate line items. Any shifts in budgeted items require approval from the city administrator’s office. Changes over $31,000 require city council approval. HUMAN RESOURCES: C- Los Angeles’ ability to manage its work force is impaired by a kind of statistical malaise. Leaders don’t know the average age of the city’s work force, and they have no current figures for voluntary or involuntary departures. Asked whether training classes were sufficiently utilized, one official explained, “the majority are done through contractors, and we don’t know.” One thing that’s clear is that it takes too long to hire new people — three to six months in most cases, and sometimes even longer. Completing the necessary tests can take months all by itself. On the positive side, the city provides ample opportunity for employee feedback, and the pay structure is reasonably flexible. Pay for managers is tied closely to performance, with annual adjustments for managers ranging up to 11 percent in either direction. The city treasurer resigned last year after a job evaluation faulted him for lack of vision and caused his salary to be reduced. INFORMATION TECHNOLOGY: C- Los Angeles doesn’t really have an integrated human resources information system, other than for payroll functions. It was in the process of procuring one not long ago, but “the project stalled with technical problems and management problems,” according to Jim House, chief administrative analyst. As the year 2000 approached, it became clear that the planned system probably wouldn’t support the transaction volume expected in the city. The relationship with the vendor soured when the vendor refused to support the version of the software the city had originally contracted for. The bottom line is that L.A. has spent about $20 million, still has an antiquated HR information system, and hasn’t quite decided where to go from here. The city is generating its first genuine strategic plan for information technology. It’s also trying to drive departments toward standardization — and that’s good — but it’s on a rocky road. Many departments have the power to act independently, ignoring standards. This has made it difficult for the city to move toward an integrated financial management system. Obtaining new systems can be incredibly time-consuming in L.A., thanks to purchasing restrictions imposed by either the council or mayor. To buy anything, the city must be assured that the vendor pays all its employees sufficiently, has a reasonable child care policy and doesn’t do business in a proscribed foreign country, such as Myanmar (Burma). And on and on. CAPITAL MANAGEMENT: C+ Los Angeles tracks its new capital projects reasonably well. As they move forward, a monthly report is prepared describing progress as it relates to goals. Some ongoing changes should help, too, including the establishment of an internal project director for all projects and a Citizen’s Oversight Committee for capital projects. The city has a reasonable handle on its maintenance needs. Still, “we have neglected our infrastructure, especially roadways,” says Clark Robbins, acting deputy engineer. “The focus has been on new projects to entice new business as opposed to maintenance.” The city repaved only 220 miles of road in 1999, out of some 6,500 miles that it maintains. MANAGING FOR RESULTS: C- Los Angeles is adequate here, although not much more. Performance indicators are reported annually in the budget process, and all departments have “workload indicators,” in which comparisons are made between past and current performance. These run the gamut from “very good to totally worthless,” says the chief administrative analyst. Each year, during the budget process, the administrator’s office looks at the workload measures and uses them to help drive budgeting allocations. Goals and measures are not a real focus during budget hearings, however. And little is done to communicate the measures to the citizenry. Although there is no citywide strategic plan, on occasion Los Angeles does long-range planning for specific problems, such as slum clearance and earthquake recovery. Long-term goals are developed for each department through a collaborative process between elected officials and department managers. AVERAGE GRADE: C Copyright © 2000, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.