Suit Over Ticket Revenue Possible

Los Angeles city officials balked Wednesday at giving final approval to a five-year contract extension with a parking-ticket collection firm and instead threatened to sue the company to recover up to $23 million they believe is owed the city.

The council’s Transportation Committee met in closed session with its attorney over a possible lawsuit in its dispute with Affiliated Computer Services over the city’s share of fines for delinquent parking tickets.

“I believe the taxpayers are owed $23 million and I intend to see the city get every penny of it,” said Councilman Antonio Villaraigosa, chairman of the committee and a candidate for mayor.

The Times reported earlier this month that the city had failed to request its share of parking-fine revenue after agreeing to split a special fee for delinquent tickets with the contractor.

Villaraigosa said a settlement proposed by the Department of Transportation and the company would provide the city with radios, software and services worth about $4 million, which he said is not satisfactory.

Assistant City Atty. David Michaelson also questioned the proposed settlement Wednesday in a letter to attorney George Kieffer of the law firm Manatt, Phelps & Phillips, which has been representing ACS.

“In order for the city attorney to approve any settlement, it is imperative that the city be adequately reimbursed for funds that ACS was not contractually entitled to receive,” Michaelson wrote.

At issue is a contract approved in 1997 by the City Council with Lockheed Information Management Services to process and collect parking citations. That contract was taken over in 2002 by Affiliated Computer Services, which bought the information management unit from Lockheed.

In 1998, a city parking administrator approved an amendment to the contract that allowed Lockheed, and later ACS, to receive an 18% special collections fee on the funds collected when the city seized a vehicle having five or more unpaid citations.

Any money collected over $2.5 million per year was supposed to be credited to the city, which could purchase additional services equal in value to the surplus amount. City officials, however, failed during the last seven years to request services to cover the funds kept by Lockheed and later by ACS.

Wayne Tanda, Department of Transportation general manager, said three managers in charge of the contract retired or left city employment within a year of the agreement being approved.

Tanda told the council committee Wednesday that the 1998 agreement is not legally binding because it was not approved by the city attorney or the City Council.

“The department made errors in how it executed that agreement,” Tanda said.

Council members were furious that the contractors were able to take in a $23-million windfall because of city negligence.

Villaraigosa said the city attorney requested 45 days to either work out reimbursement or go to court.