Shocker! Greuel's 'waste, fraud and abuse' numbers are suspect

The City Controller claims that as mayor she would be on top of the city's management challenges because her office has identified $160 million in "waste, fraud and abuse." But even if that number were accurate - and her opponents claim otherwise - it doesn't address L.A.'s systemic fiscal problems. As in, steadily higher pension and health care costs, and sluggish revenue growth. Not enough coming in and too much going out. We can all agree that the city isn't run very efficiently, and that a sizable amount of money could be saved. But it's not a game changer. It's political grandstanding. Even if you can identify the losses, recouping them is often impossible. And now, the LAT even raises questions about that $160 million figure Greuel has been touting in her campaign ads:

Half of Greuel's $160 million -- as broken down on her campaign website -- comes from a single audit on unrealized revenue from a "street furniture" contract between the city and a company called CBS Decaux. That 2012 audit said the city lost $23.1 million because the company has not paid enough for the right to place advertising on bus shelters, newsstands, public restrooms and kiosks. Another $57 million "could be lost" in the future if Los Angeles does not improve the contract -- for a total shortfall of $80.1 million, Greuel's office contended. But CBS Decaux said it would come nowhere near the $150 million it had promised to pay the city over 20 years because bureaucrats, and especially city council members, disapproved of many of the locations where the company wanted to put shelters and advertising "pillars," the latter of which it said were key to making the program profitable. Given those delays, the city's Bureau of Street Services, the chief legislative analyst and the city attorney all agreed that the advertising company had properly paid the city at a reduced rate. Greuel's audit acknowledged $8.2 million was "not recoverable," given that understanding between city officials and the contractor.

More by Mark Lacter:
American-US Air settlement with DOJ includes small tweak at LAX
Socal housing market going nowhere fast
Amazon keeps pushing for faster L.A. delivery
Another rugged quarter for Tribune Co. papers
How does Stanford compete with the big boys?
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Further fallout from airport shootings
Crazy opening for Twitter*
Should Twitter be valued at $18 billion?
Recent Campaign 2013 stories:
Shallman and Carrick on 'Which Way, LA?' tonight
Greuel consultant blames the LA Times
Morning Buzz: Friday 5.24.13
Campaign 2013 photo gallery by Gary Leonard
Election post-mortem in quotes (some very pointed)

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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