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Audit finds Bell could have trouble providing basic services

An audit by the L.A. County's auditor-controller finds that the city could be $2.2 million in the red by the end of the fiscal year.

January 07, 2011|By Jeff Gottlieb and Ruben Vives, Los Angeles Times

Bell's precarious financial position could deepen to the point that the city could have difficulty providing even basic services for its residents, an audit released Thursday concluded.

A county review of the city's strained finances said that if the city continues spending at its current rate, it will end up $2.2 million in the red at the end of the current fiscal year. The audit recommended cutting city services and laying off employees and possibly disbanding its police force.

The audit, which examined city expenses and revenue over the last three years, was requested by the city and sponsored by Los Angeles County Supervisor Gloria Molina, whose office picked up the $100,000 cost of the financial analysis.

"The city of Bell does not have enough money," was the bleak conclusion of the review by the county auditor-controller.

Pedro Carrillo, Bell's interim chief administrative officer, said Thursday that he plans to present the City Council with a report that will explore ways to balance the budget.

"All options are on the table," he responded when asked if bankruptcy was a possibility. "We obviously have some very tough decisions and considerations to make."

The Times reported last month that the county audit would show the city was in serious financial straits and might be forced to make deep cuts to survive. The city has been buffeted by scandal since The Times revealed the enormous salaries of top officials in one of county's poorest cities.

At best, Bell is facing big cuts in city services. The audit recommended cutting city salaries, benefits, supplies and services, offering only "core services" and contracting out for other services. The report also says the city should find ways to increase revenue by attracting businesses.

The report spotlights the $1.73 million Bell spends on community services, mainly parks and recreation, and $8.47 million for police, a total of 71% of the city's roughly $13-million general fund. Bell police say the department's budget is about $6 million.

Neighboring Maywood, a slightly larger city, last year eliminated its police force and is paying the Los Angeles County Sheriff's Department $3.8 million to patrol the city.

Lt. Russ Hill of the sheriff's contract law enforcement bureau, said Bell officials have not contacted the department about performing police services for the city. The Sheriff's Department has contracts with 42 of the county's 88 cities.

"It's very clear some hard choices will need to be made," said Leo Briones, a political consultant working for the Bell Police Officers Assn.. "We're willing to negotiate with the city."

Briones said employees haven't received raises in three years, but officers would be open to taking pay cuts.

"The point is that everybody needs to take part in this," he said.

The City Council must approve budget cuts, although its members are themselves in a precarious position.

Bell will hold a recall and regular election in March that could bring in four new council members who will be forced to preside over a much smaller budget and a city devastated by scandal.

Any police cuts would generate a controversy, especially because the city's leading citizen activist group, BASTA, has received funding from the police officers association.

The report also lays out the possibility that Bell's financial situation could get worse, referring to "a number of potential legal claims and fees," pension obligations and possible refunds it could have to pay because of impound fees that may have been collected illegally from towed vehicles.

The county auditor's projections did not include $1.43 million in "extraordinary expenses" for the current fiscal year, mainly legal fees.

At the same time, the report says, the city could receive some relief from lawsuits it may file over high pensions claimed by former officials.

The financial review says that even though the city has cut the high salaries and benefits officials received under the leadership of former City Administrator Robert Rizzo, savings to the general fund are minimal because some of the expenses were improperly recorded.

Rizzo is one of eight current and former city officials charged with misappropriating of public funds.

jeff.gottlieb@latimes.com

ruben.vives@latimes.com

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