By Connie Acosta PlanCheck Neighborhood Council member
East Los Angeles— On Saturday morning, March 12, at the Police Station Community Room in Boyle Heights, L.A. City Controller Ron Galperin shared —with members of Plan Check NC— Planning and Land Use Audits, reports to be up soon at ControlPanel LA.
Development Impact Fees Audit
“We conducted an audit on Development Impact Fees, fees the city charges per state law,” explained City Controller Ron Galperin.
Galperin started with an overview of an audit where 17 different funds with a balance of $50-Million have been sitting stagnant for the last 3 years in the city treasury. Each fund has its own rules and uses that are so narrow the money can’t be spent he said.
“We identified the funds that were more stagnant and looked at some of the issues that were a blockage for spending that money,”
Galperin worked with the City Attorney’s Office when the audit was released to change the interpretation of the rules governing those funds. Now those funds can be put to use. “It creates a liability for the city to collect money and do nothing with it,” he said.
He said that when we do audits, I require my auditors to benchmark as best as they possibly can. In 2013 -2014, we compared Los Angeles to other cities and found that:
- “San Francisco had $3.6 Billion in permitted construction and collected $96 Million in impact Fees.”
- “Portland had $1.5 Billion in permitted construction, and collected $31 Million in Impact Fees.”
- “Los Angeles had $5.3 Billion in permitted construction and collected $5 million in Impact Fees.”
“I’m not suggesting that we should ‘sock it’ to developers nor make it so expensive to build that we don’t see anything created,” said Galperin. “I am suggesting that we look at the practices of other cities, so we can have the money we so desperately need for mitigation purposes, for doing the things we need in the city of Los Angeles. It’s reasonable to see what other’s charge.”
“Watch for this coming to the PLUM committee in the near future,” he added.
Density Bonuses Audit
“There are a lot of questions about Density Bonuses that are asked,” said Ron Galperin.
Auditors from the City Controller Office are working on a Density Bonuses audit, to be completed soon. Galperin said that there are a variety of requirements that a developer needs to do in exchange for a Density Bonus. But, what has the follow-up been to those requirements?
“I don’t need to tell you that it’s been poor at best, and sometimes nonexistent,” he said.
The controller office has gone back to review the Density Bonuses that were granted and will give an analysis of what has occurred.
“I think you will find that quite interesting,“ Galperin emphasized
We could just analyze what occurred and use the findings to get answers to, “Why did you do it!” Galperin clarified that instead we begin to understand what are the systems that are not in place but need to be in place, so we can get answers and be transparent for everyone to see.
Subvention Agreements Audit
The City Controller Office will be finishing up an audit in the near future on Subvention Agreements—agreements that the City entered into with developers in terms of subsidies and incentives such as tax reliefs—notably for hotels and other projects that include Warner Center.
“Part of it, is what does and doesn’t get built. Part of it, is the way this whole thing is calculated— whether we’re getting a good deal or not, and what kind of follow-up is there?” said Galperin.
“I’ve had some real issues and problems with some of these subvention agreements because there has been a lot of money that’s been given away.”
On the other hand, Galperin noted that if a project is one that’s going to be of real benefit to the community and will not otherwise happen without the city providing an incentive, “then I’m very open to us doing that. There needs to be a real high and meaningful threshold for that to be the case and needless to say that has not occurred,” he said.
How Can Audits have Legs?
“I ‘ve focused not on having as many recommendations in an audit as possible but on how to make them as meaningful as they possibly can be,” said the city controller.
Galperin gave an example of when he hired an established accounting firm to look at “change orders” at the L.A. Airport. The firm ranked the departments by their adherence to the rules of “change orders”. One recommendation was for the departments to follow the rules with much more accuracy.
“I took issue with that recommendation,” Galperin said. If a construction project is in progress and an excavation problem arises on Friday requiring a “change order,” and if the problem is more than $10,000 —comparisons are required with other comparable jobs to find reasonable costs. So to save $500 you might stop construction for two weeks, increasing the cost to $50,000. “I have been focused on making the recommendations as business-like and as practical as possible,” said Galperin.
Online at https://controllerdata.lacity.org/ there is an Audit section where recommendations can be tracked.
City Controller Ron Galperin, who has tallied 7 million public page views since ControlPanel LA went up, was pleased to say: “This tells me, people are interested in this data.” He considers himself to be the luckiest person he knows doing a job he loves.
He concluded, “It’s endlessly interesting. I get to stick my nose into a lot of things. There are many opportunities to improve the way that our City operates.