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Grand Jury says one-third of LA cities failed to adopt better management

The Los Angeles County Grand Jury's annual report said one-third of the county's 88 cities failed to implement better financial management practices it recommended they adopt one year ago.
The Los Angeles County Grand Jury's annual report said one-third of the county's 88 cities failed to implement better financial management practices it recommended they adopt one year ago.
Los Angeles County Grand Jury

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Some city officials are disputing a new Los Angeles County Civil Grand Jury report that 29 of the county's 88 cities failed to implement financial controls it recommended they adopt a year ago. The report, out this week, is intended to help cities avoid the management deficiencies that got Bell city officials into criminal trouble.

It caught several city managers by surprise. Bellflower City Manager Jeff Stewart said he responded to the grand jury's criticisms a year ago with a letter showing it had complied with recommendations.

"I remember when that came out, we took it pretty seriously," Stewart said.

He and Bell Gardens City Manager Philip Wagner disputed the Grand Jury's conclusion that their cities failed to form a committee to oversee its outside auditor.  Both said a committee was not needed because their city council and management teams handle that oversight.

"Why would the civil grand jury be involved in how we operate?" Wagner said.

Why indeed? Call it the Bell hangover, a lingering mistrust of local city governments following the 2011 exposure of deep-rooted civic corruption in Bell, a small city in southeastern Los Angeles.

Former Bell City Manager Robert Rizzo, his assistant city manager and several council members were convicted of felony corruption charges after it was discovered they were receiving outsized salaries. Rizzo ran the city with an iron hand and little transparency. The overpayments were a closely held secret until exposed by reporters of the Los Angeles Times.

Last year, inspired by Bell's problems, the civil grand jury conducted a systematic study of the risk factors among the county's 88 cities. It ranked cities from best to worst in order of the soundness of their internal controls on money and management practices. Top scores went to Long Beach, Culver City and Glendale. The lowest-scoring cities were West Covina, San Fernando, Industry and Cudahy.

The Los Angeles County Civil Grand Jury is a band of 23 county residents selected, after some screening and interviews, in a random draw by the Superior Court presiding judge to investigate county departments and other local governments.

It labors out of public view for the one-year term of its members' appointments. They investigate complaints filed by the public and they also decide which agencies to investigate. Each July, as members' terms are ending, the jury reports its findings.

Wagner said the grand jury has focused on cities since 2011 because of the abuses in Bell: "I think it might be based on the issues that have taken place in a few local governments, especially out here, one in particular in the Southeast."

The grand jury last year asked cities to do things like create a rainy day fund if they didn't have one, switch up their independent auditor every few years, create a committee to oversee their auditor, and adopt some standard measures of performance.

When the grand jury tells a city to improve its management, it is required by state law to respond to the report within 90 days. The city can agree, but it can also ignore the recommendation without incurring any penalty. The civil grand jury doesn't bring criminal charges, although it can refer potential criminal cases to the District Attorney, said Mark Hoffman, the grand jury administrator.

Agoura Hills City Manager Greg Ramirez said he recently implemented all the changes the grand jury sought, so his city shouldn't be on the non-compliant list. While he said it was good that the grand jury was keeping its eye on cities, its methods might be lacking.  He said it was difficult for the grand jury to use the same standards to evaluate small cities like Agoura Hills and mega-cities like Los Angeles and Long Beach.

" I don't know that they are overreaching," Ramirez said. "I think it's just very difficult to measure organizations that are very different in many ways with the same process."

In this year's follow-up report it appeared that 29 of the county's 88 cities had not adopted one or more of the grand jury's recommendations.

They were Agoura Hills, Arcadia, Bell, Bell Gardens, Bellflower, Covina, Diamond Bar, Downey, Duarte, Glendora, Hawaiian Gardens, Hidden Hills (refused to implement 10 recommendations),  Huntington Park, Inglewood, Irwindale, La Habra Heights, Lawndale, Lomita, Manhattan Beach, Montebello, Monterey Park, Norwalk, Palos Verdes Estates, Pomona, San Fernando, Santa Clarita, South Pasadena, West Covina, and West Hollywood.

DOCUMENT: Excerpt from L.A. County grand jury report on fiscal controls of cities