Los Angeles could have saved $700,000 on commodity purchases made in 2010 if it had made better spending decisions, according to a report from the city controller’s office.
The additional cost on more than $400 million in commodities came out to $700,000 that the city could have saved by making different choices, Controller Wendy Greuel said in the report.
“What’s clear is that the city does not always obtain the best price for goods, which ultimately impacts the city’s bottom line and wastes taxpayer dollars,” Greuel said. “With the city of Los Angeles facing up to a $200 million budget deficit next year, every penny of potential savings needs to be accounted for.”
The report released Tuesday by Greuel’s office compared purchases made by the city’s Department of General Services to seven other jurisdictions including Chicago, Detroit, Oakland and Phoenix, and three city agencies including the Los Angeles Department of Water and Power.
Annually, Los Angeles spends over $460 million on commodity purchases and has over 500 active commodity contracts, according to the report.
The city, which has 32,000 employees and four million residents, has significant purchasing power and should make use of that to get the best pricing from suppliers, according to Greuel, who added that her review reveals that has not been the case.
In a letter to the mayor and City Council that accompanied the report, Greuel — who is running for mayor — recommended city leaders take a hard look at purchasing decisions before they lay off more people to solve budget woes.