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Wanna Be Mayor Beutner Classifies City’s Accounting as Fraud

VANC REPORT - Austin Beutner, a mayoral candidate, investment banker and former volunteer deputy to Mayor Villaraigosa appeared before a packed room at the Valley Alliance of Neighborhood Councils on Thursday evening.
The crowd of fifty community leaders and activists may have come close to exceeding the maximum occupancy of the room, but were in good hands with three LAFD firefighters in attendance.

Unfortunately, the LA Budget Advocacy Group also scheduled a meeting for that evening, which kept a few key regulars from attending.  The scheduling snafu was not lost on the VANC members. They voted to send the Budget Advocates chair a letter reminding him that the VANC meeting regularly occurs on the second Thursday evening of every month.

You can always count on frank, intelligent questions from VANC attendees.  Mayor Villaraigosa, City Attorney Trutanich and Controller Greuel should face as tough a test from the press, but the media seems content to simply take notes.

Candidate Beutner did not dodge any questions. He was businesslike and his answers appeared genuine; he displayed confidence. His performance was certainly above the standard associated with the usual suspects from City Hall.

He started off by mentioning the almost two hours it had taken him to drive from his home in Pacific Palisades to the meeting.  He offered the experience as an example of a city that does not work.

Beutner offered other anecdotes indicative of a floundering bureaucracy. DWP is still using ancient COBOL software for its billing system and has to bring in a retiree from Palm Springs to resolve programming issues (the utility will convert to Oracle next year at his insistence).

No one can produce a list of the city’s top vendors – the IT chief could not even determine how much was paid to Microsoft (I bet Microsoft knows how much was received from the city for any given period). There is no standard chart of accounts, which makes it extremely difficult to track expenses – even the Controller’s office seemed to struggle with the concept of standard accounts.

I was not surprised by any of these disclosures.  Among other issues I’ve noted in this blog,  it takes the city almost a year to publish audited financial statements – one of the most essential and basic tasks of any organization -  a clear indication of inept management.

Beutner classified the city’s accounting as fraud. The budget is not balanced when overtime is deferred, when pension funding is based on an unrealistic earnings assumption of 8% and when infrastructure maintenance and replacement is ignored.

Regarding the City Council transferring the responsibility for $1.2 billion in sidewalk repairs to property owners he said, “The city is supposed to maintain infrastructure. That’s what we pay taxes for.”

He would like to pull the plug on the state’s High Speed Rail Project and instead invest in regional and local improvements to commuter rail and infrastructure.

When asked what he would do for education if elected, Beutner would use his office as a bully pulpit to point out mismanagement and lack of priorities at LAUSD.  As an example, he recently walked around a campus in Westchester and pointed out four flagpoles costing $100,000 each. Why did the school system spend so much  for them when other needs go unfulfilled?

On the possibility of municipal bankruptcy in the city’s future, he noted that the average resident does not know how dire the city’s financial state is.  “We cannot keep paying high labor costs,”  he emphasized.

VANC will invite each of the candidates in the months to come.

My advice to them: come prepared and be frank.

(Paul Hatfield is a CPA and serves as Treasurer for the Neighborhood Council Valley Village.  He blogs at Village to Village, contributes to CityWatch and can be reached at:  phinnoho@aol.com) –cw

Tags: Mayoral Election, Candidate for Mayor, Austin Beutner, City budget, City accounting, Valley Alliance of Neighborhood Councils, NC Budget Advocates, Paul Hatfield

Vol 10 Issue 5
Pub: Jan 17, 2012