Editor, Jason Schaff It all sounds so simple. The City of Los Angeles has hundreds of millions of dollars in money owed to it from all types of people and companies. The city also has a couple hundred million dollar budget deficit. Make an aggressive effort to go after the deadbeats and we’ll get enough money to fill much of this hole. Well, I guess this isn’t so easy because the city has been painfully terrible in collecting unpaid debts – over $500 million currently is outstanding. Reporter Mark Madler has taken a look at city collections and he’s written a couple stories about it in this issue (see the top of page 1). Of the $223 million owed to the Fire Department, for instance, only 4 percent is in the hands of a collection agency. Although an ad hoc committee is looking at the issue right now and hopefully will make some recommendations on how to improve it in about six months, it looks like once again structural problems in city government may be the reason for all this. There haven’t been any streamlined procedures for collections and what’s really frightening is that apparently one of the reasons for the poor results on collections is that city staff didn’t want to anger those owing money. In other words, I guess this means that they do business with these people and don’t want to ruffle feathers. So my first response is why do you continue to do business with deadbeats? I’m no expert on collections and the ins and outs of running a department at city hall so I don’t want to make hasty judgments but I can comment as to why the Business Journal cares about this matter: This is a half-billion dollars we’re talking about here. That amount could plug the budget deficit and the shortfall shows that city departments could be much more efficient. What if a business was that bad on collections? Wouldn’t be good. It’s just a bad way of doing business. I know a city is not a business (it has many more public service things to keep track of) but it should at least aspire to be somewhat efficient for the sake of the taxpayers who fund their operations. And this includes businesses, of course. The larger issue here is how did this unpaid debt get so out of control? It could be a lack of accountability on the part of city hired staff and city elected officials. It could be that city government is just too big and we should just learn to expect things like this. It could be that as long as there’s enough money coming into city coffers, there’s really not a priority to make things more efficient. Now after the economic downturn we’re in crisis mode and we’ll start to look at anything that will make things more efficient and bring the city more money. Perhaps it’s a mixture of all of these. Whatever, it’s all bad. I will repeat, this is a lot of money in unpaid debts that we are talking about. How could things be so loose that it got that bad? But the troubling thing is that this has been an issue before city officials and the public for a few years now. But there was never any traction to resolve the problem. Why? Shouldn’t a half-billion dollars raise a flag that this is something that needs to be dealt with? As Mark Madler points out in his story, there has been improvement in collections in the 10 years that Antoinette Christovale has headed the Finance Department in the city. But it’s still way short. It’s good that the commission looking into the collection process only has a life of six months. The deadline will keep the group laser focused, I hope, to really get a grasp on the issue. Things often move way too slowly in government with little to show after years of study and talk. At least after six months, when the commission’s life expires, the issue will be at the forefront for better or worse. Business Journal Editor Jason Schaff can be reached at (818) 316-3125 or at firstname.lastname@example.org.