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L.A. is Owed More than a Half Billion, Why Aren't We Collecting?

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Photo by okarol via LAist Featured Photos on Flickr


Photo by okarol via LAist Featured Photos on Flickr
Los Angeles has been dealing with a severe budget crisis this past year, forcing elected officials to make draconian cuts to the workforce and services. To name a few of the effects, libraries are now closed two days a week, employees across the board must take furloughs and the LAPD has had to make adjustments to how it deploys officers. Part of the budget gap -- okay, a major part -- is what the city is owed in non-tax receivables, things such as unpaid parking tickets, ambulance billings and housing penalties. When all totaled up, L.A. is missing out on $541.1 million. That's a number that could fix the current budget deficit and more (and keep in mind, this number does not include unpaid taxes, intergovernmental dollars and unbilled services).

Today a city commission dedicated to revenue efficiency released the eye-opening “Blueprint for Reform of City Collections.” One key finding is -- and we quote -- "collections in Los Angeles is a mess."

Why?

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"A staggering 76.6% of the City’s $541.1 million in non-tax receivables are more than 120 days past due," stated the report, "with 42.5% more than 2 years past due - and now mostly uncollectible." Of those accounts eligible for collection agency referral, only 48.5% are actually referred.

Ouch.

“I created this commission because it is unacceptable for bureaucracy and inefficiency to stand in the way of the people of Los Angeles collecting money that is owed to them," said City Council President Eric Garcetti today. "It is time to clear away the red tape. This is common sense - let’s prioritize collections over cuts. Unpaid bills shouldn’t stand in the way of providing full police, fire, library and other critical services. This crisis has presented an opportunity to fundamentally reform City Hall."

The report recommends 65 ways to reform collections, including creating an inspector general position, making it easier to pay, modernize billing for fire department paramedic billings and centralizing collections revenues.

If the city follows through with the recommendations, the commission predicts a boost of $100 million or more annually starting in two or three years.