Charter Reform and Finance Organization in the City of Los Angeles.

Like most large cities, the City of Los Angeles is governed by a City Charter that is adopted by the voters. In June 1999, the voters of Los Angeles adopted a new City Charter to replace the old Charter from 1925. The finance functions were still largely an artifact of that earlier era.

The new Charter took effect on July 1, 2000. The finance functions were one of the last areas to be resolved, and then only took effect after the mayor's veto of an alternative approach was sustained.

This article is the story of how the finance functions were perceived and reorganized, and of how power disputes were resolved during nearly four years of continuous charter reform debate and implementation. As most readers would suspect, the process is still underway and will be for years.

Los Angeles before Charter Reform

Before the adoption of the 1999 City Charter, the City of Los Angeles had a weak mayor, weak manager, and strong council form of government. Finance functions were widely dispersed, with budget offices in both the mayor's office and a city administrative office (which reported to both the mayor and council and possessed very little real power). There was a stand-alone city treasurer; an elected city controller with vague audit powers (from the original 1925 Charter language); tax collection under the city clerk with no centralized collections office; and many independent and independent-minded city departments with their own budget, finance, collections, and accounting staff. There was neither a finance director nor an Office of Finance.

The Government Finance Officers Association (GFOA) played a significant role in framing the debate in Los Angeles on how best to reorganize the finance functions of the second largest city in the United States. One of the major reference documents used by all sides in the debate was a report by the GFOA Research Center commissioned in 1997 and issued in February 1998 entitled "Organizing the Finance Functions for the City of Los Angeles of the 21st Century."

The GFOA report found a "lack of clear lines of authority," "inefficiency caused by duplication and redundancy," and "a pervasive sense of concern that the current structure will not enable city officials to effectively deal with the great challenges" facing the city. And while finance issues were neither the sole nor even the major impetus for charter reform, they became one of the most contentious matters from the beginning until the end of the debate over implementation.