Kevin James defends L.A. street agency against city audit criticism

The rollout of an audit of the Los Angeles agency responsible for fixing city streets has given Angelenos an “unfair” impression of its work, the president of the Board of Public Works argues.

“They think that the bureau is mismanaging money,” Kevin James said. “And the bureau is not.”

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FOR THE RECORD

An earlier version of this post misspelled the name of Wendy Greuel.

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James, who ran for mayor last year as a City Hall outsider, argued that the public “campaign” surrounding the recently released audit by Controller Ron Galperin failed to include key information that would soften criticism of the Bureau of Street Services.

Galperin unveiled the audit last week through a Los Angeles Times op-ed and a news conference at a city asphalt plant, where he stood alongside Street Services Director Nazario Sauceda. The report summary stated that Street Services had failed to collect or spend hundreds of millions of dollars, kept shoddy records and neglected to address the most heavily trafficked roads first.

Though the report itself said that Street Services representatives disagreed with some of the points in a draft version of the audit, Sauceda declined to comment on any specific findings last week. At the time, James also said he was still reviewing the final document and wasn’t available for an interview.

In recent days, however, James has outlined his objections before community groups and on talk radio—he’s a former talk-radio host—and in an interview with The Times. In some cases, he argued, Angelenos had gotten the wrong impression that Street Services was to blame for decisions outside its control.

For instance, James argued that though the report said the bureau had failed to collect $190 million in fees from utilities and others that cut into city streets, the fee instituted by lawmakers was not meant to ensure “full cost recovery” but simply to give companies an incentive to avoid slicing up pavement unnecessarily. Lawmakers already knew the city was not recovering all those costs, he said.

If the city wants to pursue more money through the fees, “that’s the decision for policymakers, not the bureau,” James said. “Putting the fault and the burden on the bureau is inaccurate ... This is not anything it can change.”

The report also said that $21 million earmarked for street repairs was sent back to funding sources. James said city budget officials had mandated that some of the money go unspent to help cover other city costs, while other funds were never supposed to be spent on pavement repair at all.

The audit noted that out of that $21 million, roughly $5.6 million was transferred to another department, but still used on “fleet and materials testing services, which directly support … pavement preservation activities.” But that nuance, James complained, was lost when Galperin announced his findings.

Many Angelenos were outraged to hear that the city was paying much more to make its own asphalt than it would if it bought the material from an outside vendor.

But James argued that if the city were to shutter its own plant, companies would ramp up their prices, since the city would have no alternative to turn to. Galperin did not recommend closing the plant, but James argued many Angelenos have jumped to that conclusion because of how prices were presented.

James also defended the way Street Services decides which roads to fix first and questioned a measurement of how much of employee pay goes directly into repair work—two other points raised in the audit. And he said the report lacked important context about how the department had performed in the face of staffing cuts.

“A number of these recommendations are very helpful to us,” James added, saying that one reason he ran for mayor was his concerns about road repairs. But he said he was concerned with “the way it’s been rolled out,” particularly the way the findings were summarized for media and the public.

Galperin was not available for an interview about James’ concerns Thursday. “We 100% stand by our findings and recommendations,” his spokesman Lowell Goodman said, disputing several points raised by James.

Goodman added, “It’s not clear to me why Commissioner James is choosing to defend the status quo, especially since our audit seems to endorse Mayor Garcetti’s back-to-basics agenda.

“The results speak for themselves -- and every Angeleno who drives the streets every day knows what those results are,” Goodman concluded.

The audit report itself noted that Street Services representatives said the fee for cutting into streets was not meant to recover costs, but to “change behavior by reducing street cuts.”

However, the report said that based on the information that city auditors gathered about the fees, their finding on the uncollected $190 million was valid. Goodman pointed to language in the original ordinance that created the fees, which said it was “imposed to recover the actual cost to the city” of added street resurfacing and reconstruction.

At a news conference Monday, Mayor Eric Garcetti called the uncollected money “one of the more troubling things” in the audit report.

When the report was released, Galperin told reporters that he was not trying to “damn the department or the city,” but the findings nonetheless spurred fresh criticism of Street Services and its operations.

City Councilman Joe Buscaino earlier said that well before the audit was released, word of the issues it raised was one reason that lawmakers tabled a plan for a sales tax increase to fund road repairs. Garcetti said Monday that he did not believe the time was ripe for a tax because the city needed to have “the best department that we can before we go to expanding their work program aggressively.”

“As I dug in my first year -- pun intended, I guess -- I wasn’t confident that we had that in place,” the mayor told reporters Monday.

James, a Republican who placed third behind Garcetti and then-City Controller Wendy Greuel in the mayoral primary, made the “infrastructure crisis” facing L.A. a key part of his campaign. He campaigned for Garcetti before the runoff and was later appointed by the mayor to the Board of Public Works, which oversees city services including street repair, trash collection and sewer maintenance.

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