**PRESS RELEASE**
COUNCIL ADVANCES BLUMENFIELD EFFORT TO PAY CITY’S BILLS ON TIME
Long overdue payments strain non-profits and vendors and discourage them from doing business with the City
LOS ANGELES, CA – Last Friday, the Los Angeles City Council approved Councilmember Bob Blumenfield’s motion aimed at addressing the incredibly long time it takes for the City of Los Angeles to pay contractors and vendors. Currently many local and smaller companies refuse to do business with the City of Los Angeles as they can’t wait more than half a year to get paid.
“The City expecting vendors to wait months for payments has been going on for years and it’s simply absurd,” said Councilmember Blumenfield. “I’m tired of the finger pointing and it’s time that every department involved in paying vendors gets together and finally fixes this long lasting problem- we have to improve the speed of processing and paying invoices.”
While there are vendors who are willing to wait months for payment, this is a serious deterrent if LA wants to ensure that the best local companies, owned and operated by Angelenos, and/or Minority/Women-owned Business Enterprises (MWBE), have an opportunity to work with their city. Blumenfield noted, “Many of the City’s MWBE incentive programs are neutered by the City’s unfair necessity that small businesses and non-profits float vast sums of money for the privilege of doing business with the City.”
Registered vendors support many different efforts from portable restrooms at city events to important office functions like paying for email services to communicate with constituents. In practically every case, it takes the city many months to pay those who rendered their services and sometimes services are suspended due to lack of payment.
"We applaud the work of Councilmember Blumenfield in advancing this issue and look forward to working with the Council to streamline the process further. The LA Area Chamber is pleased the LA City Council is working to expedite payments to the community of government vendors,” said Patricia Torres Bruno, Senior VP and Chief Policy Officer of the LA Area Chamber. “Currently, the payment process is inefficient and may leave vendors at risk for missing payroll. If the City is looking to offer more procurement opportunities for small businesses and non-profits they must expedite the payment process."
“Chrysalis applauds Councilmember Blumenfield’s leadership on an issue that is of crucial importance to all Community Based Organizations that contract with the City of Los Angeles. While we welcome the opportunity to partner with the City to address the many challenges that our community faces, when we experience significant delays in payment, we are put in the difficult position of using our limited cash resources or lines of credit to cover outstanding City bills,” said Mark Loranger, President and CEO of Chrysalis. “Rather than focusing on our mission, we spend considerable time tracking down payments and managing a complicated accounts receivable process. This is not sustainable. We look forward to working with the City to find meaningful solutions.”’
City departments and City Council offices also engage in contracts with local non-profits. For example, the LA Conservation Corps has a Clean and Green team under Public Works Community Beautification which helps with clean up projects, bulky item pick up, and so many community improvement projects throughout the West Valley and citywide. Arts organizations contract with the Department of Cultural Affairs for festivals and programming. Homeless service non-profit organizations, such as About My Father’s Business, support efforts including outreach and an innovative storage program to help unsheltered people get into housing. Small nonprofits especially struggle with delayed payments.
"The LA Conservation Corps is very grateful to Councilmember Blumenfield and his colleagues on the Council for supporting the Corps and our Corpsmembers and for advocating for prompt payment of services that nonprofits like ours provide to the City,” said Wendy Butts, CEO of the LA Conservation Corps. “We value our partnership with the City of LA; paying us up front or within a reasonable timeframe is an important step to ensuring the success of our work together for all Angelenos."
“Achieving progress towards big issues like homelessness and livability demands powerful partnerships across all sectors, including contractual ones between City departments and local organizations. Unlocking new innovative partnerships is only possible if doing business with the City is worthwhile,” said Nella McOsker, CEO of Central City Association of Los Angeles. “On behalf of the hundreds of businesses and nonprofit organizations in CCA’s membership, we thank Councilmember Blumenfield for recognizing the severe consequences of the City failing to fulfill its contracts in a timely manner, for taking action and expecting better from local government in the service of all Angelenos.”
Whether more funding is needed for department staff or software upgrades, or whatever it may be, the City owes it to constituents and the incredible businesses and nonprofits that are the backbone of LA, to figure out how to pay its bills in a timely manner.
Blumenfield’s motion specifically calls on the City Controller and City Clerk, in consultation with the City Administrative Officer and Office of Finance, to report within 90 days on the current process of paying city vendors, best practices of the County of LA and other municipal governments and advise what must happen to expedite this process and ensure that invoices are paid within 30-90 days maximum.
###