L.A. losing millions in uncollected parking tickets and fines

Los Angeles receives barely half of the tens of millions of dollars it is owed in parking citations each year, according to an audit released Thursday that called for more aggressive collection efforts.

The audit, by City Controller Wendy Greuel, found the city is collecting only 53% of the money owed on parking citations. The annual haul still totals a hefty $130 million — a major revenue source for a city mired in a budget crisis that has forced layoffs and deep service cuts.

However, the audit called the 53% collection rate poor and recommended various steps to improve a system that fails to capture millions in parking fines and other payments, such as fees for city services and permits. The parking ticket finding was part of a broader audit of six departments—police, fire, housing, transportation and building and safety.

“I don’t know of any business that would stand for such a low collection rate,” Gruel said. “It’s simply not sustainable, and the city cannot and should not allow this to continue.”

The audit was unveiled on a day when Los Angeles laid off more than 200 employees, the most recent casualties of a budget crunch that also seen services slashed and more than 2,000 city workers take early retirement.

City officials said they were unable to determine how Los Angeles’ collection rates on parking tickets and other revenue sources compare with figures in other cities. But the controller called L.A.'s results unacceptable, especially during the current fiscal crisis.

“Regardless of what other cities are doing, we should be doing a better job,” Greuel said.

During the first quarter of the most recent fiscal year, the audit found, unpaid parking tickets totaled $210 million. Of that total, about $91 million had been pending for more than two years.

Currently, the audit noted, the private vendor that bills and collects payments on parking tickets is not required to refer delinquent accounts to any of the city’s outside collection agencies. The audit recommended a more vigorous collection scheme.

Bruce Gillman, a spokesman for the city Department of Transportation, defended the collection rate on the 3 million parking tickets issued annually. He said more than 80% of tickets issued were paid. The audit, he said, represented a “cumulative” amount including “very difficult to collect citations” that end up with additional penalties and may never be paid. Such unpaid tickets do not come off the books for five years, said Gillman, who added that transportation officials were looking at the audit.

“We have not had the opportunity to review the report fully and verify the figures and percentages,” said Gillman, who cited two other mechanisms designed to get tickets paid.

Violators are reported to the California Department of Motor Vehicles and cannot renew their vehicle registrations until the parking tickets are paid, Gillman noted. In addition, he said that scofflaws who do not pay five or more tickets are subject to having their vehicles booted and towed.

The audit, which looked at fiscal year 2008-09, showed that only 53% of some $553 million in overall city billings in the six departments were collected. That’s a loss of $260 million annually — enough, said City Councilman Paul Koretz, to have helped fill a budget gap that has led to hundreds of layoffs, reduced library hours and other service cuts.

“We need to do better, because otherwise the situation is grim,” said Koretz, who chairs the council’s audits and governmental efficiency committee and joined Greuel at a news conference outside City Hall. “There’s a sword of Damocles that hangs heavy over countless city employees who fear their jobs might be the next ones lost.”

The audit released Thursday is a follow-up to a similar study three years ago. The city controller found some improvement but said it was “outrageous and unacceptable” that Los Angeles had not made more progress.

Under-collection of revenue is a problem at every level of government, and officials acknowledge that not all billings are ultimately collectable. For instance, some vehicle owners may move out of state and will never pay their tickets, while indigent patients may never reimburse the city for ambulance fees.

However, Greuel advocated several reforms. Among her recommendations were the creation of a centralized billing process and a mandate that police and fire departments expeditiously refer delinquent accounts to outside collection agencies.