By Emily Alpert Reyes

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‹he¹s 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 ³full cost recovery² 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, ³that¹s the
decision for policymakers, not the bureau,² James said. ³Putting the
fault and the burden on the bureau is inaccurate … This is not anything
it can change.²

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 ³fleet and materials
testing services, which directly support Š pavement preservation
activities.² 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.

³A number of these recommendations are very helpful to us,² 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 it¹s been rolled
out,² particularly the way the findings were summarized for media and the

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 ³damn the department or the city,² 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 ³infrastructure
crisis² 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.