MOTION-- When the COVID-19 pandemic began, the city had to curtail congregate meals to the elderly in neighborhood senior centers. To address this loss of life-saving nutrition services, the city engaged a unique partnership with restaurants, taxicab companies and elder care organizations to prepare and deliver hot meals to seniors in need. The innovative program was a lifeline for seniors in need, and also for the local restaurant and taxi businesses that were so devastated by the pandemic. One of the taxicab operators that delivered these senior meals is still owed nearly $60,000 for services it rendered in this program. Both the Department of Aging and the Office of Finance authorized the Controller to issue that payment, and a check was issued. However, the check was sent to the wrong address and apparently was illegally cashed by someone to whom it was not issued.
The city does not dispute that the amount is owed and does not dispute that the contract or never received the payment to which it is entitled, and acknowledges that the check was misdirected. Nonetheless, despite the error, the Controller has failed to reissue the payment to the contractor for the work that it performed on behalf of the city,
The city's bank is conducting an investigation to identify who stole the funds from the original check and recover them. In the meantime, a city contractor that acted in good faith and performed services at the city's request should not have to wait months to receive payment because of the city's own error in misdirecting the check.
Local businesses consistently express frustration with bureaucratic hurdles that make it difficult to work with the city. Delays in payment by the city can be devastating, especially for small businesses, when the contractor has paid out-of-pocket for its own costs in performing services for the city. Such delays damage the city's reputation as a business partner and result in fewer local businesses being willing to accept city contracts, causing less competition, higher costs to taxpayers, and less opportunity to create local jobs and revenues through procurement.
I THEREFORE MOVE that the Council REQUEST that the City Controller immediately reissue a check for the already approved outstanding invoice to LA City Cab, LLC for services that it delivered to seniors during the pandemic.
I FURTHER MOVE that the Council INSTRUCT the Office of Finance and the Office of the City Controller, in consultation with the City Attorney, to develop and adopt city policies covering misdirected or misappropriated payments to ensure that the city makes timely payments to vendors while still preserving all of its rights and working to recover lost funds, and to report on those policies to the Council within 60 days.
I FURTHER MOVE that the Council instruct the Office of Finance and the Controller to report to the Council within 60 days on steps that those offices can take to reduce the risk of such misdirected or misappropriated payments, and to reduce delays in payment to vendors, including but not limited to increase paper checks.