As Hahn sees it, L.A. won't be seen as a good place to do business if the city government can't pay its bills on time. His administration not only has stepped up pressure on agency managers to get bills paid but has set up training for the accounts-payable staff. In addition, new purchasing and inventory software is expected to help.
Overdue bills also cost L.A. money: The city passes up $2.1 million a year in discounts it could receive by paying bills on time. In addition, the city's deadbeat reputation likely costs an incalculable amount in higher bids on contracts from vendors who don't expect to get paid promptly.
Agencies are making slow but steady progress on the city's mountain of unpaid bills. As of November, Los Angeles had at least 11,500 bills that had gone unpaid for a month, including 3,450 that were more than three months overdue. Once the backlog is cleared, agencies will be required to pay vendors within 30 days of receiving a bill.
"It's an absolutely solvable problem," says City Controller Laura Chick. "There are ways to eliminate unnecessary steps and make sure that bills don't get stuck in people's in-baskets."
