July 12, 2004 - From the October, 2001 issue

City Of L.A.'s Newest Financial Watchdog Controller Laura Chick's Outlines Her Agenda

As we finally begin to settle back into our everyday lives, one begins to wonder what the lasting fiscal implications of 9/11 will be. After all, not only did we shut down almost all lines of trade and commerce into and out of L.A. for almost a week, but we continue to have overtime shifts of police officers patroling our streets. At some point that cost begins to affect a City's bottom line. However, to combat rampant spending and mismanagement, enter former Councilwoman and current City Controller Laura Chick. MIR was pleased to talk with Laura and hash out her first 100 days in office, what she's finding from this new vantage and what she believes the local outcomes of 9/11 will be.


Laura Chick

Laura, the Daily News recently called you, "an aggressive articulate champion for public tax dollars." Why don't you flesh out for our readers what that description really responds to? What is it about your agenda and your approach to the duties of the Controller's Office that makes their assessment relevant and applicable to your new City responsibilites?

The City Controller's main focus is to be mindful of the dollars coming in and the dollars going out. And for eight years on the Council I did a lot of that same work.

From my former vantage, I watched city departments deliver services to my district. Because of that, I gained an incredible base of knowledge and experience essential in determining which departments need scrutiny, what I should be looking for and most importantly, how to implement the requisite changes. It's one thing to be able to identify and recommend, it's quite another to get recommendations actually implemented.

The background that I had on the Council as well as my focus on stretching and saving the taxpayer's dollars are the perfect platform for this job.

We've done a series of interviews about the impact of Charter reform on City governance. You've come into this position post implementation of Charter reform. In our interview with your predecessor, Rick Tuttle, he predicted four major changes to the Controller's Office as a result of the voters adoption of the new Charter: 1) Increased financial and performance audits, 2) Expanded duties regarding proprietary departments, 3) Debt monitoring, and 4) A modification to the payment process. Are those still the major changes in responsibility and focus of this new City Controller's Office, in your opinion?

I would agree with Rick's assessment of the new office and go so far as to add one more to that list-increased public scrutiny. At present, this office has an enormous amount of information that would be helpful to organizations, voters, residents and workers in this city. In the past, that information was not only difficult to access, but difficult to understand. My job will be to not only disseminate this information, but to translate the sometimes oblique and complicated data so that the public can better understand it.

With your mention of increased public access to financial data and having just done an interview with Councilwoman Cindy Miscikowski, the City's new LAFCO representative, in our sister-publication The Planning Report, isn't it fair to assume that financial issues will be the critical factor in whether there can be a successful election for secession. What role, if any, will the Controller's Office play in calculating the financial value of city assests and assessing fiscal responsibility and the capacity of seceeding parts of the city to meet agreed upon obligatons?

I'm part of the team working with the Chief Legislative Analyst, Chief Administrative Officer and others in the City Council and Mayor's office. The Controller's Office is a repository of a lot of fiscal data and I'm here to share it in a very open and accurate way with both the city and LAFCO.

The particular issue that we're looking at is debt and divvying up responsibility for it, if there's a split. I'm not a key member of the team, I'm a key member of the working group assisting the team.

In our August issue of TPR, Mark Siegel commented on the new responsibilities of the City Controller's Office. He said, "The structure of the current system, while it may not be abused by its current officeholder, holds the potential of politicizing the management audit function somewhere down the line." Can you comment on Mark's view of the Controller's office?

Mark's statement is true now and it was true under the old Charter. The structure of an office does not make it increasingly political, the person and the personality of an elected does. We've certainly had examples of L.A. City Controllers at both ends of the spectrum.

Irrespective of that fact, it is very important that the audits and recommendations that come from this office are focused on one thing only-making the city work better and spending taxpayer dollars wisely. It's not about advancing political careers or agendas. It might be wishful thinking, but that's the way I'm approaching this job.

Haven't you already begun to use some of these powers. One of your first public displays of fiscal watchdog resolve was your decision to holdup former Councilman Alatorre's consulting payment until DWP provided documentation as to his contractual obligations, their oversight and his goal attainment. Can you give us a sense of how this example of fiscal oversight reverberates in City Hall. What are the ramifications for how business will be done with the City? What are the likely long-term reactions of contractors with City Department and agencies?

I've noticed that people get very nervous and upset when the answer coming from the City Controller on paying a contract is "no." But the message that I'm delivering, both behind the scenes and in front is, "Don't ask me to sign a check and authorize money for something that doesn't make good sense for the everyday people of the city."

Alatorre's contract is just one of several examples that have popped up already. I've denied requests for a $10,000-$20,000 going-away party for Councilman Wachs. And I turned down some travel requests because they've been unreasonable. I've made it very clear that I will only sign checks that I am totally comfortable with.

The criteria for me is simple, "Does this expenditure bring added value to the City of Los Angeles?" And if I can't look a taxpayer in they eye and say, "This is a good use of your dollars," I'm not going to approve the expenditure.

In order to draw the line clearer for our readers, you're not going to intervene in the letting of such city concession contracts as the Greek Theater. You're not advocating that the Controller is a "super councilwoman.," are you?

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That's true. I'm not looking to intervene in the normal legislative process. But, I do plan to use my role as City Controller to comment on some issues.

With regard to the Greek Theater, I am watching that issue very closely. One thing that I am going to be interested in looking at and most likely commenting on is what was on the table in the first RFP response that wasn't accepted, as compared to what's on the table now. Did the city come out ahead or behind? And if we're coming out behind, I will at least rhetorically pose the question, "Why did this happen? And how?"

Your point is even more interesting in light of the most recent Mayor appointee to the City's Recreation and Parks Commission, Mike Roos, a staunch and veteran defender of Nederlander interests. What should be the role of the Controller's office when a fiscal decision is made by a city commission which is not in the City's financial best interest?

Unfortunately in certain instances, I have the power to publicly comment and use the bully pulpit, but not to force action or change decisions. But sometimes just the ability to comment and raise public consciousness will be significant.

With respect to raising public consciousness, it that the purpose of your recent statements in favor of not giving Staples Phase Two a public subsidy. Could you address the role that you see yourself playing in this negotiation.

We just came out with three audits on the Convention Center that I think highlighted some important lessons to be learned. And we need to be very thoughtful and analytical in looking at a range of scenarios.

In the initial public subsidy allocation the negative scenarios were not adequately scrutinized. And that subsidy is putting a significantly larger tax on the General Fund than we originally planned.

Also, if the Staples Center has been as successful as everyone says and the city is getting added dollars into its revenue stream, I would question why the developer needs a public subsidy. If they can't make it pencil out, what makes it a good deal for the city?

Lastly, if we're going to put in up-front dollars because we think there are gains to be reaped further down the line, I want to see those resources put into efficiency and improved performance measures like technology, so that we can do things much cheaper and more cost-effectively, rather than giving dollars to the private sector for development.

You mention the Convention Center audits. You've completed a number of audits in your first months as the City Controller. Give our readers a sense of what you've found and are finding?

In the handful of audits that have come out since I've been in the Controller's Office, it's very clear that there are some significant themes prevalent in all departments of the City. Our city departments do not have adequate business policies, practices or systems in place. They often do not have written procedures. They often have no criteria upon which policy decisions are based. And they don't have state-of-the-art equipment, they don't even have 2001-level technology systems. From an operational sense, the city has some major improving to do.

Another aspect that City Departments neglect is accountability. There are things that General Managers should keep their eyes on-worker's compensation, preventing accidents and where the money is going. From our most recent audits, that last factor is most important. Almost every department in the city collects revenues. But the way that each of them collects that money leaves a lot to be desired. Our audits are finding that there is a lot of money owed to the city that is just sitting outstanding.

Let's conclude, Laura, by asking you your thoughts on the significance of 9/11 re the city, people's view of government, and the challenges, fiscally, that the city is going to have to deal with as we clearly fall into a recession. We have a President who is not in favor of big government, now advocating for big government. People, coincidentally, have begun quickly to realize that government no longer a trivial function. How does that ripple politically through City Hall, in terms of how public officials will lead and citizens will engage? Is such thinking rippling through the offices and Chambers of City Hall?

Because we are in an international crisis and entering economic hard times, my message as City Controller is, now more than ever, to become a city that is extremely well-run. The dollars that we have are now even more precious. Because of that, the occurrences of wasting and squandering those dollars must be eliminated.

My worry is that as we focus on these very serious and frightening issues on a national/international scale, we will lose the political will and focus that is needed to solve the concrete problems facing us at the local level-housing, transportation, public safety, education, etc. I see my role as city controller to keep saying, "Wait a minute." We have to pay attention to what's going on here, as well as to what's going on in the air, with terrorism and throughout the nation and the world. We've got our own local struggle to win.

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