Council Members Tap Accounts to Bolster Budget

Los Angeles City Council members officially reported spending $11.6 million last year, in line with their budgeted total for salaries and other expenses. But they actually spent nearly $680,000 more by dipping into the funds of other city departments.

The practice of quietly billing council expenses to accounts scattered through the city government was disclosed in a study of fiscal documents obtained by The Times through the Freedom of Information Act.

The inquiry showed that the City Council was immune from the budget-limiting policies of the rest of city government--including regular audits and the need to seek approval for exceeding budgets.

A review of city records showed that a system of financial transactions operated that blurred the flow of money to council offices.

“That system is not only deceptive, it’s dishonest” to conceal money sources, Councilwoman Joan Milke Flores said.

City Atty. James K. Hahn, a former city controller, said there should be tighter controls over council spending.

“If I’m running over budget, I have to go back to the City Council, and in public view, explain why I need more money. . . . It wouldn’t hurt them to go through the same thing that I have to go through,” Hahn said.

The final expenditure reports for the 1986-87 fiscal year, provided by the city clerk, showed that the 15-member council spent $8.4 million for office expenses, with each expected to stay close to a $558,000 limit.

From that came each council member’s $55,929-a-year salary, plus the pay of their staff members--the largest single expenditure. But some council members spend more than others for staff. Councilman Robert C. Farrell, for example, has the largest council staff with 21 employees, while Councilman Ernani Bernardi has the smallest with 12.

Council members also use their office expenditures to pay for office supplies, trips to conferences, newsletters and outside consultants. Last year, Councilman Bernardi and Councilwoman Gloria Molina also provided $70,000 and $100,000, respectively, from their office funds to pay for police overtime in their districts.

In addition, $2.3 million was set aside for the legislative analyst’s office, which provides advice to the council on the budget and other city policy matters. And $1 million was set aside for general spending and other council-related salaries.

But beyond that, the council dipped into funds of the huge General Services Department and other city departments for spending that was not reported in the year-end summary of council spending in the council fiscal file in the city clerk’s office.

Most of the unreported spending, $449,000, was for renovating or other work on council members’ district offices and offices at City Hall for themselves and the media. Another $180,000 went for office and home security systems that were paid for by other departments. More than $50,000 was spent to purchase city-owned cars for council members’ exclusive use, repairs and auto extras including cellular telephones, sunroofs and, in one case, a six-speaker concert stereo system.

Departmental funds, including those from the airport department, paid for business trips to Buenos Aires and Rio de Janeiro and other travels not included in the regular council budget. Additionally, the total costs of council members’ office telephones and computers and a portion of their postage costs were similarly absorbed by the General Services Department and not reported as council spending.

At times, some council members were unaware of details of some of their own office spending. Flores, for example, said she did not know her office was paying $460 a month for a telephone system she had inherited from another council member.

Councilman Zev Yaroslavsky said he was shocked, after he got the bill last year, to find that the cost to remodel his 2,600-square foot City Hall office had more than doubled from the original estimate of $130,700. The remodeling was financed with Department of General Services funds.

Calls Figure Padded

Yaroslavsky, chairman of the council’s fiscal committee, questioned the sharp increase and said the final figure was padded.

But a General Services official, who asked not to be identified, said that council members often ask for additional alterations, and department officials believe that they must comply.

Another council expenditure financed by the General Services Department and not reported in the council spending report is for automobiles.

Councilman Nate Holden drives a city-owned 1987 Buick Park Avenue equipped--also at city expense--with a four-note horn, a six-speaker concert sound system and a moon roof. Other council members’ cars are also fitted with various extras, from alarm systems to leather-wrapped steering wheels.

Holden said that he did not regard the costs of city cars as hidden expenses or an extravagance for council members. “I have no apologies about the car. . . . In fact, my brakes didn’t work when I got it, and it nearly killed me,” Holden said. He said the cars and other added expenses, including money to renovate offices, are essential to a council member’s job.

Council members’ cars are equipped with telephones, as are those of other city officials.

Aides Also Get Cars

Top council aides also drive cars supplied by the city, also not shown on reports of regular council members’ expenses. With the cars come city-provided gasoline at pumps under City Hall--or the officials can use a city-paid gasoline credit card.

Repair bills--which included $2,191 last year to fix Councilman Farrell’s 1970 Buick Electra after it had been stolen and recovered--are also absorbed in the General Services budget.

Another way council members exceed their budget allocations without public notice is to obtain help from colleagues who have unspent funds.

One such councilman was Joel Wachs, who last year found himself politically vulnerable after the council redrew district lines. Placed in a new northeast San Fernando Valley district only months before his reelection, Wachs acquainted himself with new voters by hiring more staff and flooding the district with mailings printed at city expense. The price tag for printing alone was nearly $92,000, including $20,000 for private printing companies.

Wachs lacked enough budgeted money to pay the bills. But Councilman John Ferraro rescued Wachs by transferring $72,000 from his own office funds that were left over from the previous year.

Backed for Presidency

Later, Wachs provided a critical vote to help Ferraro win the council presidency, although Wachs denied that he cast the vote to repay the debt. Records show that then-Council President Pat Russell had also authorized a transfer of $14,000 from the council general fund, as well as another $5,000 from an account she controlled that had been left unspent from the prior year’s budget, to aid Wachs.

As an example of how council members spend extra money without public notice, there is no record of the exchange between the council members in the City Council’s final expenditure reports provided by the city clerk.

“Anyone looking at this would never know that one council member had gone way over budget or that another council member had helped bail him out,” Councilwoman Flores said. “It makes you wonder just how many other expenses we aren’t aware of.”

There are few rules governing expenditures by council members. And council budgets are rarely--if ever--reviewed by any outside agency.

Controller Rick Tuttle reviews expenditures of the council when they are submitted to his office, but only to see if they comply with city guidelines and the budget.

Other Possible Abuses

It is also difficult to control possible abuses of other council expenses. For example, while city cars and gasoline are to be used only for city business, there is no method of checking whether the restriction is abused by elected officials. Unlike other city employees, elected officials are not required to document that their vehicles were used on the job.

City Administrative Officer Keith Comrie, whose auditors regularly investigate various city agencies, said his staff does not review council expenditures or efficiency unless invited. He said he believes that the election process is a safeguard, enabling voters to “audit” elected officials every four years.

However, City Atty. Hahn said he favors a more complete reporting of council expenditures. “I think it would be better for accountability if it were set up that way,” he said.

In reviewing contingency and travel expenses, the city controller’s office can turn down council expenditures, but that rarely occurs. One instance was last year when Farrell included payment for a $28 parking ticket as part of his contingency expenses, but the request was rejected.