Conflicting Pressures Put City Agency at Crossroads : Reform: Some seek to trim role of General Services after fatal crash. Others say it can play key part in cost cutting.

Welcome to the city of Los Angeles General Services Department--the bureaucracy within the bureaucracy. Or, some critics would say, the hole in the middle of the too-fat doughnut.

This is the agency where the former budget chief improperly claimed $95,000 in overtime. This is the agency with a “hellish” record of sometimes delivering goods to other city departments months late. This is the agency where employees preoccupied with paperwork often miss the best buys on equipment and supplies. And it is the agency that early this month allowed a broken-down trash truck onto the streets, triggering an accident that killed two schoolboys.

Such a trail of bad news and biting audits typically lands a government agency before elected officials, with civil servants nervously explaining themselves under the bright lights of a public hearing. In the aftermath of the fatal collision with a Los Angeles Unified School District bus, City Council members held such a forum and some suggested removing maintenance of trash trucks from the General Services Department.

But the long-term outcome is likely to be much different. Economic and political events at City Hall, in fact, are pushing toward even greater centralization of operations within the little-known, often-criticized General Services Department.

The recession-driven shrinkage of government and Mayor Richard Riordan’s penchant for business-minded administration are the key elements in the consolidation push. But city leaders say the reforms cannot work without an overhaul of the department that will persuade more of about 40 other city bureaucracies to put their faith in the agency to buy their supplies, maintain their offices and service their cars and trucks.

What it lacks in sex appeal, the reform of the General Services Department makes up for in importance.

“We are talking about saving hundreds of millions of dollars citywide by consolidating functions under this department,” said one top city bureaucrat. “But some other departments are fighting it. Either we have to instill confidence, or we can’t continue this push toward centralization and consolidation.”

Little Attention

The aptly if obscurely named General Services Department was formed in 1978 by Los Angeles officials who thought they could save money by combining the common operations of many agencies. The sprawling agency with a $172-million annual budget is seldom encountered by the public but serves as grease monkey to the city’s vehicles, landlord to its buildings and supply sergeant for its storerooms.

Its background role means the department will seldom attract attention unless it is failing. And at budget time, it has little public support or political cachet--factors that have led to a nearly 20% decrease in its staff, to 1,759 workers, over the past five years.

The reductions, though, are not enough to explain the department’s performance, says City Controller Rick Tuttle, a frequent critic. “They’ve had more than their share of problems,” said Tuttle, whose recent audits have found:

* The city’s buyers were too preoccupied with paperwork to find the best deals on supplies and equipment. The review also found that the department failed to remove non-performing vendors from an active list of city contractors and didn’t get the best price because it ordered inadequate quantities. Tuttle blamed top department management, including General Manager Randall Bacon.

* Warehouse supplies were unaccounted for, and paperwork left the whereabouts of 3,000 truck tires unclear. Some supply centers were overstocked while others were understocked. (Department officials later said the tires were used, not new, and many were retreaded at a saving. The accounting system has been revamped to prevent confusion.)

* A failure to properly oversee a contract with a private security firm, hired to protect city offices and the Barnsdall Art Park. Guards from the security company were accused of sleeping on the job, arriving late and sometimes neglecting to lock the historic Frank Lloyd Wright-designed Hollyhock House in Hollywood.

* A failure to collect thousands of dollars in reimbursement from employees in city departments who made improper calls to 976 lines, often used for phone-sex services.

Bacon did not respond to several requests for comment on those findings or on his performance.

The department suffered another embarrassment in late 1992 when its No. 2 official and budget director, James D. Bisetti, resigned after accusations that he improperly authorized $95,000 in overtime pay for himself. Bisetti, ironically, had been put in charge of reining in excessive overtime pay.

An underling who signed for some of the overtime was suspended but he, in turn, blamed department head Bacon for being unaware of the excessive overtime. An official in the controller’s office recently called Bacon “asleep at the switch” during the controversy.

Bacon said at the time of Bisetti’s resignation that he had no way of knowing his assistant was paying himself for overtime.

The Dec. 6 failure of city trash truck No. 70, which killed Brian Serrano and Francisco Mata near downtown Los Angeles, made the General Services problems of more than bureaucratic concern. It exposed a General Services maintenance operation heavily reliant on a few individuals and an outdated trail of paper warnings.

A driver properly had reported the breakdown of a trash compacting “ram” on the truck, but his maintenance supervisor forgot to put the truck on the hold list of vehicles that should not go out the next day. A source said the problem was compounded when the next day’s supervisor--who usually checked the hold list to avoid any oversights--called in sick with an injury. The replacement did not know the system.

Such snafus were possible in a system where workers must often walk the pink trouble reports on trash trucks the length of a football field to deposit them in an in box stuffed with past reports that are weeks or sometimes months old, employees say.

City Council members, in hindsight, suggested that simply parking problem trucks in a separate yard would have been a safer way to keep them off the road. But maintenance officials say their lots are already so overcrowded--there are 160 trucks crammed into a space allotted for 110 in the north-central lot--that there is simply no room to segregate the vehicles. “It’s a system that needs fixing,” said one city maintenance employee.

“It’s just too bad that there hasn’t been some tightening up before this,” Tuttle said. “It’s a management problem--management has failed to follow through.”

Helicopter Crash

The tragedy raised the specter of another General Services-related accident--the 1991 crash of a Los Angeles Police Department helicopter that killed two officers on board and a man on the ground in Southwest Los Angeles. Bacon conceded in a memo after the incident that “our maintenance staff is still using sloppy and inadequate methods of maintaining helicopter maintenance records, even though there have been two audits within the last two years identifying the problem.” He went on to report that the poor record-keeping was unrelated to the accident.

The copter crash led to four years of litigation in which the city claimed that a manufacturer shipped a faulty engine and the manufacturer, in turn, claimed that General Services maintenance employees ignored bulletins alerting them to make needed repairs. Most of the issues in the case have been resolved, but the city attorney’s office did not respond to a request for information on the settlement.

While the trash truck tragedy exposed glitches in the city’s fleet maintenance program, it came just a few months before the shortcoming probably would have been revealed to city officials. A $364,000 study by David M. Griffith & Associates, due at the end of March, is expected to recommend both safety and efficiency improvements for the car and truck fleets of General Services, Police, Fire and four other departments.

Some City Council members have been calling for less centralization since the accident--for leaving maintenance of vehicles with the departments that drive them. Riordan Administration officials expect the efficiency study to recommend the opposite--placing even more of the city’s vehicles under General Services supervision. But with key reforms anticipated: Mechanics no longer would be able to simply slide out from under a car and into a supervisor’s chair; they would receive management training, the official said. And a computer system would be installed to track vehicles and repairs.

“The benchmark should always be the private sector, where there are equivalent pressures for efficiency,” said Michael Keeley, the mayor’s chief operating officer. “We don’t see UPS trucks mangling people on the freeways, so clearly people have figured out how to improve efficiency without sacrificing safety.”

Consolidation also appears to be the order of the moment in another part of the General Services empire--purchasing. The accounting firm of Deloitte & Touche estimated that all of the city’s departments combined could save $248 million or more over five years through greater consolidation. Much of the savings is expected to come through eliminating the kind of duplication that now finds 60 city warehouses carrying double-A batteries and the city Department of Water and Power and General Services Department keeping downtown warehouses just four blocks apart, both largely stocked with the same office supplies.

City officials predict that many of the 174 warehouses maintained by myriad departments will be closed and more items shipped directly from private firms to city offices.

A similar approach is expected in the maintaining of offices and other facilities, where the city has been poorly served by multiple leases, according to the mayor’s office. In one case, the city leases 85% of an office building, but through six or seven leases by separate departments, instead of one cheaper master lease.

Despite the remaking of the General Services Department, its seven-year chief, Bacon, has largely skirted criticism by the city’s political leaders, except for Tuttle. Deputy Mayor Michael Keeley, Riordan’s efficiency guru, called Bacon “a very cooperative and responsive manager.” He blamed “capricious” budget cuts, not poor management, for many of the woes in the department.

Councilman Joel Wachs, chairman of the council’s Governmental Efficiency Committee, has bashed the department for spending too much for goods and services, but praised its management for responding to the complaints quickly. Wachs’ staff noted that Bacon has hired two new assistant general managers, who are driving many of the reforms.

Other changes began in earnest last April, when voters approved an amendment to the City Charter that allows the city to buy equipment and supplies in combination with the state, county and other public agencies. The ballot measure also allows negotiated contracts, rather than strict bidding, and increased freedom for employees to make small purchases without layers of bureaucratic approval. An initial saving from the new measures came last month, when the city piggybacked on a county contract for auto body parts, saving an estimated $26,000 a year.

Ending Duplication

A consultant soon will be hired to push the so-called “procurement re-engineering” ahead. The study’s recommendations will be implemented by Jon K. Mukri, one of Bacon’s assistants and a former Navy administrator who directed the streamlining of procurement for Naval air stations throughout the Southwest.

He calls the current duplication among city departments “astounding” and says General Services is learning to treat its fellow departments with a more customer-friendly attitude. “We are taking way to long to deliver things and that is probably the most hellish thing,” Mukri said. “By the time we procure something, the end user may have forgotten his need or fulfilled it some other way.”

When such delays occur, the man on the hot seat is often Don Littlefield, a principal storekeeper in the city’s cavernous central warehouse at Piper Technical Center near downtown. Littlefield recently eyed a backlog of 45 orders clipped inside an “in” basket and complained that the city’s warehousing staff has shrunk by nearly one-third in five years.

Bouncing nervously on his toes, he explained that he doesn’t have enough people to both pull the orders from shelves and deliver them to as many as 700 different locations around the 465-square-mile city. An ongoing hiring freeze has reduced his delivery staff, forcing Littlefield to put warehouse workers into delivery trucks.

“Now, it’s either the shipping is delayed or the warehousing is delayed,” Littlefield said. “It’s one or the other.”

But Littlefield and his supervisor, Stores Supt. James K. McCloskey, are sick of their department being accused of inefficiency. And they are doing more than whining about it.

In the last year, they quietly were able to push through an item in the budget to build a computer room right on the warehouse floor, where two-story-high, orange metal shelving used to stand. In what is now a nearly empty, plain, carpeted room, they soon hope to install computer terminals that will allow them to receive and send orders electronically--meaning that many goods will be delivered directly by private firms, without ever seeing the warehouse.

“This is where we can make it all happen,” Littlefield says with conviction, punching his hand in the air. “If you just give us the equipment, we can do it.”

Times staff writer Jodi Wilgoren and correspondent Geoffrey Mohan contributed to this story.