Posted: October 29th, 2007

Downtown News Editorial

Something is rotten in the Los Angeles Department of Recreation and Parks.

It’s a harsh assessment, but the mismanagement of Quimby fees - and we may never know how much it has cost the taxpayers - is so severe that it deserves the word. As well as a few others.

On Sept. 17, Los Angeles Downtown News broke the story that area players were furious over an increase in the Quimby fees for developers of adaptive reuse, live-work projects. The funds are collected by the Department of Recreation and Parks and are supposed to be used for park projects within two miles of where they are gathered. The concept is to put a bit of nature amidst the granite and steel.

Developers complained vigorously (one formally appealed the increase) that they have not seen any new parks or major upgrades to existing facilities, despite shelling out generally $3,000 to $9,000 per unit (all housing developers pay Quimby fees, not just those doing adaptive reuse projects). The situation prompted City Controller Laura Chick to launch an audit.

Then came the bombshell: In an Oct. 12 letter to Mayor Antonio Villaraigosa, Rec and Parks GM Jon Kirk Mukri said he has no effective way to track or spend funds for projects generated through Quimby fees.

“The Department has no single database that gives a true and real-time picture of how much in Quimby fees have been collected; what projects Quimby is funding; what projects are contemplated for Quimby fees; and, an accurate accounting of any unobligated balance of Quimby fees,” the letter read in part.

Perhaps the only thing worse than the lack of a system is the estimate of how much money we’re talking about. Rec and Parks, which had to be pressed for information, ultimately revealed that it has gathered about $120 million in Quimby fees since around 2002, and that $77.5 million remains un-allocated.

Of course, the exact number is almost certainly a great deal higher, given that Rec and Parks cannot provide a “a true and real-time picture.” While the Department said nearly $16 million has been collected in the Ninth Council District (which covers much of Downtown), the fact that more than 7,000 housing units have opened in the area in recent years could drive the figure up.

The poor record keeping means some money could, conceivably, disappear. If someone with questionable integrity is privy to the inner workings of Rec and Parks, and recognizes that the department has no effective way to track some $120 million, how do we know that money has not been skimmed? While there is no evidence of anything other than incompetence, after recent reports of improprieties in the L.A. Housing Authority the possibility must be considered. The money could also have been directed to favorite in-house projects beyond the two-mile requirement.

The point is, we don’t know, and we may never know, if the money is safe. The rotten tracking by Rec and Parks may harm the entire city at a time of a budget crunch, a time when local government is under fire and a time when the green pockets that could be provided by Quimby fees are sorely needed, not to mention that people ought to get what they pay for.

Fault can certainly be spread throughout the department, but Mukri must shoulder much of the blame, and should do more to describe how the situation has arisen. The fact that significant money has been pouring into the department via Quimby fees is not a surprise, and there was plenty of time for effective planning.

In fiscal year 2003-2004, according to the department, there was $9.6 million in Quimby revenue. That already is a significant sum, one that merits the hiring or allocating of fiscal experts. Additionally, with everyone recognizing that Downtown Los Angeles housing was mushrooming - meaning there was about to be a lot more Quimby revenue - building a system to collect, track and manage the fees should have been a priority.

The growth was bigger than anyone could have imagined: According to the department, citywide Quimby revenue in 2004-2005 was $18.2 million, and in 2005-2006, nearly $44 million.

If you take their side of it, which we don’t, Recreation and Parks is a massive department with a lot of moving parts: According to its website, it operates 180 recreation centers, 59 swimming pools and numerous other facilities and programs. Managing this behemoth is indisputably a challenge, and no one expects the entire department to run smoothly.

But the Quimby fees should be easy. Take the number of units. Collect a fee for each unit. Use an adding machine. Have a master list to figure out how much is available. Failing to have an effective system to track something that generates a number now claimed to be $120 million (but is probably much higher) is inexcusable.

We want Villaraigosa to take action. We want Chick to conduct the most thorough audit possible. But already, we fear the results.