Costly Mix-Up Fuels Battle Over Control of L.A. Funds

Los Angeles taxpayers have been overcharged roughly $12 million for fire and paramedic services and equipment, a mix-up that Mayor Richard Riordan and City Controller Rick Tuttle denounced Monday even as they used it to argue in favor of changes to the City Charter that they say will make a reoccurrence unlikely.

“This is unacceptable and intolerable,” Riordan said at an afternoon news conference. “Our financial structure has been in a mess for many, many years.”

Riordan said his upcoming budget would provide for a refund of the overcharge--about $12 to $18 per taxpayer--but mostly emphasized that the mistake proved that the City Council should reject a proposal to preserve the existing city financial operations even under the new charter.

Councilwoman Laura Chick, among others, has questioned whether the council should consolidate a wide number of finance functions in a single office of finance under the supervision of the mayor.

Voters approved that consolidation as part of last year’s charter reform package, but council members and the mayor sharply disagree over how far consolidation should go--and how quickly.

Riordan administration officials also clashed Monday with council members and other officials who complained that Riordan was trying to claim credit for a discovery that others had made. According to various officials, the issue first came to light when Steve Rubin, a member of Riordan’s budget staff, asked the city administrative office to look into the status of various special funds as part of the annual budget review.

The office found the overcharge and recommended returning the money to taxpayers, officials said. But before authorizing that course, Riordan aides consulted with the city attorney’s office to be sure that they were acting legally and appropriately. The city attorney’s office completed its work last week, clearing the way for Monday’s announcement.

On Monday, Riordan and mayoral supporters credited his office with clearing up the problem. Riordan critics said that was unfair and instead gave the credit to the city administrative office, under the direction of City Administrative Officer Bill Fujioka--whose job hangs in the balance as a result of a series of disagreements with Riordan.

That brief flurry--evidence more of the unending antipathy between the mayor’s office and council than of the discovery or refund notion--threatened to obscure the larger debate over the proposed reorganization of finance operations under the new charter, most of which takes effect on July 1.

On Monday, Riordan said the diffuse financial operations of the city make it impossible to hold any single official accountable for mistakes such as the overcharge or what he described as a $20-million excess bill for expenses relating to the government’s move from City Hall into temporary quarters while the historic tower is retrofitted for earthquake safety.

“You see mistake after mistake in this city,” Riordan said. “To this day, I have no idea who made that decision” regarding the City Hall move.

According to Riordan and Tuttle--an unusual pairing, given that the two men often are at odds--a number of offices arguably share in the responsibility for the overcharge on the fire safety and paramedic bond, which voters approved in 1988.

Their research suggests that the original error in computing the amount of tax that would be needed to pay the interest and principal on the $65-million bond was made by someone in the city administrative office. Over the years, many people failed to catch the problem, but no one person or agency had the authority or responsibility to supervise the bond, Riordan said.

That squares with a dominant theme of Riordan’s administration: Authority in city government is so diffuse that it is nearly impossible to hold any single person accountable for a mistake. The new charter, Riordan and others argue, will help eliminate that problem by clarifying responsibilities.

Some council members, many of whom opposed the new charter when it was on the ballot, are wary of consolidating power in the mayor’s office but are constrained by the language of the document itself.