Consultants’ Tab Adds Up: $81 Million

Sparking concern that Los Angeles City Hall is turning into an overcrowded research lab, a new survey shows city government is under the microscopes of 111 private consultants, each searching for ways to save taxpayer dollars.

Total tab: $81 million.

“It’s a full employment program for professional consultants,” quipped Councilman Richard Alatorre, chairman of the Budget Committee. “It appears to be somewhat excessive.”

The projects range from a pro bono “in-depth analysis of custodial cleaning products” to a top-to-bottom review of the Department of Water and Power whose price tag is pegged at $26.2 million over two years.

In between, there is a $300,000 evaluation of the city’s hiring system; an $825,000 attempt to “accurately identify and describe the existing processes of the tax and permit division,” a $2.1-million redesign of the city’s purchasing process and a “comprehensive review of all major Harbor Department functions,” which costs more than $800,000.

And then there is the latest council-approved project, too new to even be included in the inventory: $100,000 to assess the city’s photocopying needs.

“It takes my breath away. It’s frightening,” said Councilwoman Laura Chick, who requested the survey by the city administrative office and plans to introduce a motion today calling for a new system to track implementation of consultants’ recommendations.

While Chick and other council members requested some of the studies themselves--and voted to approve nearly all of them--they now say what appears to be an unprecedented influx of consultants reflects Mayor Richard J. Riordan’s private-sector bent; some accuse the chief executive of using the consultants as a crutch to support preconceived plans to slash the city work force.

They are concerned that the proliferation of outsiders analyzing the bureaucracy could crush city workers’ morale, and that there are scarce dollars to implement consultants’ recommendations, let alone pay their bills. Perhaps most worrisome, they say, is the notion that nobody is tracking who is studying what and whether their recommendations are adopted.

“You do need to take a look at how can we make things more efficient, but not everything at once,” Chick said. “Here’s what I envision, and what would give me a nightmare: giant stacks of paper with recommendations sitting on a shelf gathering dust.”

But City Administrative Officer Keith Comrie says the massive increase in consultants mirrors a nationwide trend in both the public and private sector over the past decade. With huge databases of information about how thousands of organizations handle tasks--everything from copying to computerization--private consultants offer instant expertise on a one-time basis to help the city adapt to changing technologies and shrinking budgets, Comrie said.

“You couldn’t do those in-house,” said Comrie, who oversaw the city’s own management audit team of six workers, which Riordan dismantled after his 1993 election. “The city is taking a good, healthy look at how it does business. If you look at any CEO in town they’re doing the same thing. Any well-run business is going to draw on [consultants’] expertise.”

Riordan could not be reached for comment, but mayoral budget director Christopher O’Donnell said the CAO’s inventory is misleading because it includes consultants who are providing services as well as those who are analyzing city operations.

A breakdown shows that about $10 million is being spent on technology, another $17 million on environmental or engineering consultants and $5 million on public education campaigns. That leaves about $50 million--including the $26.2-million DWP project--for re-engineering or “benchmarking” studies: projects, essentially, where consultants check out what city employees do compared to other organizations and divine ways they could do it better or cheaper.

To O’Donnell, this type of review is long overdue.

“What we’re trying to do is train the managers and give them the tools. Without these sorts of studies, we’re dooming city employees to be inefficient,” he said. “We’re trying to make the city as efficient as possible, trying to make sure there’s not a waste of taxpayer dollars.”

Most on the 15-member council agree that consultants are the best way to help the city approach a complex problem, particularly those relating to technology. But when the mayor’s office recently asked for a new study of attrition at the Police Department--an issue that had just been the topic of an LAPD task force--followed by the photocopy-study proposal, Chick and others began to wonder if things had gotten out of hand.

Part of the problem uncovered by the CAO’s inventory is that no one entity keeps track of consultants. Most studies require the council’s approval, but others are ordered by general managers or civilian commissions. Many are launched by the mayor.

The CAO study also found that many contracts can spin out of control with contract “change orders,” with additions of $25,000 or $50,000 for unanticipated projects that crop up mid-study. A $500,000 contract at the Police Department to help implement bond-funded projects has had $600,000 tacked on in change orders, according to the CAO survey. What started as a $100,000 contract to advise the workers’ compensation system has ballooned to $225,000 with change orders.

“I think we may have broken the bank,” Councilwoman Jackie Goldberg said when told the results of the inventory. “I knew it was a high-ticket item. If you’d asked me to guess, I would have said $30 million--so $80 million is outrageous.”

Julie Butcher, spokeswoman for the largest union of city employees, said the city should ask its workers and managers to review their operations and come up with innovations rather than keep padding the pockets of outsiders. Not only would this boost morale, Butcher said, it would save time because city employees already know the intimate details of their departments.

O’Donnell noted that the mayor recently solicited workers’ budget-cutting ideas, offering a free lunch with Riordan to the winner. One suggestion, consolidating use of heavy equipment across departments, mirrored one of the recommendations in a recently completed fleet-management study that cost $300,000.

That, Butcher said, is exactly her point.

“None of this is rocket science,” Butcher said of the many studies that have come out recently concerning the workers she represents. “Many of these are things the union, the workers, the CAO’s office, the council have been saying for years. You don’t need to pay somebody a lot of money just because they wear a tie to work.”

Now that the survey is complete, Chick wants to establish clear guidelines for when the city should hire outsiders, and start a system to make sure their reports see daylight.

Councilman Joel Wachs, who chairs the Government Efficiency Committee, said he is happy to take a closer look at the consultant issue but that the projects he is familiar with have been a big boon to the city.

A $2.1-million review of the city’s purchasing processes, he noted, promises to save $279 million. The $26.2-million DWP review (which really is an implementation of recommendations that grew out of a $500,000 analysis) predicts that costs at the utility could be cut $100 million every year.

“The questions that are raised are valid, and we’re going to take a hard look to make sure all the studies are justified,” Wachs said. “The ones that I know of . . . have produced savings 100 times over the cost of the studies. Do they all do that? I don’t know.”