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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Los Angeles County Grand Jury • 1990-1991

Arts and Entertainment Committee

40 pages
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Note: Missing finding numbers detected: F10, F13

Findings 13 findings

F1
Parks Department. The city's Zoo Director, who is appointed by the General Manager of the city's Department of Recreation and Parks, manages 175 city employees. The Zoo Director reports to an Assistant General Manager of the department. The head of the department is the five member Board of Recreation and Parks Commissioners, who are appointed and can be removed by the Mayor, subject to confirmation by the City Council. The city is searching for a Zoo Director at this time. The Department of Recreation and Parks will seek to have the Zoo Director exempt from Civil Service provisions of the City Charter. Under Section 111 of the Charter, the Department can ask the 10 City Council and Civil Service Commission for the exemption, if the candidate possesses scientific, technical, or professional qualifications necessary for the position.
F2
Los Angeles city government provides the bulk of support to operate the zoo. Virtually the entire $7.2 million annual cost to operate the zoo is funded by the city, through the Department of Recreation and Parks and City General Fund. Because of the age of its facilities, the zoo requires substantial maintenance and redevelopment. The city's fiscal year is July 1 through June 30. Please see Appendix E, for a three- year summary of city budgets for the zoo.
F3
GLAZA provides substantial support to the Los Angeles Zoo. GLAZA is a nonprofit corporation formed in 1963 for the express purpose of establishing, developing, beautifying, and improving the Los Angeles Zoo. GLAZA is governed by a Board of Trustees consisting of over 40 volunteer members. Membership of GLAZA has grown from 31,000 households in 1987 to about 50,000 households in 1991, according to the President/Chief Executive Officer (CEO) of GLAZA. Hundreds of volunteers donate their time on behalf of GLAZA activities, such as the docent program. GLAZA's full time President/CEO who is paid in excess of $100,000 annually, was hired in 1988. He manages 47 full-time staff and 18 part-time employees. Another 100 seasonal employees work in concession operations at the zoo. In GLAZA's fiscal 1989, total revenue amounted to about $9.9 million. The fiscal year of GLAZA is the same as the calendar year. Please see Appendix H, for a three-year summary of GLAZA's revenues and expenditures. In addition to payments to the city for the right to operate concessions, GLAZA has contributed a total of about $17.5 million to the zoo, since August 1, 1965. These contributions by GLAZA include $5.57 million for equipment; $8.55 million for the Adventure Island exhibit; $1.86 million for animal acquisitions, and $1.26 million for GLAZA's administration building at the zoo. GLAZA's growth in membership and revenue can be attributed, in part, to the
F4
city's support of GLAZA. The city has given GLAZA valuable land within the zoo to locate the administration building of GLAZA. The city allowed GLAZA to construct this building from funds that might otherwise have gone into other capital projects at the zoo. Since 1966, the city has given GLAZA the sole right to operate all concessions at the zoo. In addition, members of GLAZA receive free admission to the zoo. Based on information from the city's 1990 attendance records, this equals about 250,000 free admissions annually. This amounts to about $1.5 million in foregone admission revenue. Income from GLAZA's operation of concessions and donations represent a
F5
fraction of revenue needed for the zoo. GLAZA pays the city ten percent of the gross receipts from GLAZA's operation of concessions at the zoo. In calendar year 1990, concession fees paid by GLAZA to the city were about $449,000. This is less than six percent of the $7.2 million the city must budget annually to run the entire Z00. Aside from GLAZA's payment of concession fees, donations from GLAZA help to pay for capital improvements at the zoo. Though GLAZA's donations have risen in the last few years, the total amount of $17.47 million donated by GLAZA over the last 24 years represents only a fraction of the $85.3 million needed to fund the zoo's top priority capital projects.
F6
GLAZA's contribution to zoo operating and capital costs has been less than one might expect, given years of city support and the resources of GLAZA. This impression should be weighed against the actual performance of GLAZA and performance of similar concession operators and support groups. The city and GLAZA have not developed performance standards. This is not to discount the value of GLAZA or the considerable effort of GLAZA's leadership in developing its membership. An evaluation of GLAZA's overall performance was not within the scope of this audit. Analysis of Operating and Concession Agreements
F7
Some provisions of the operating and concession agreements are contradictory and may be unworkable. Problems with the operating agreement can be summarized as follows: Provisions on dispute resolution are weak because they refer to settling disputes in court. The duties of the Public Information Committee are undefined and could be interpreted to overlap those of the Education Committee. The provisions giving GLAZA "primary responsibility" for education programs seems contradictory to provisions that give the Zoo Director control over zoo operations. Implementation of operating agreement provisions concerning education
F8
programs and public information has led to duplication of effort and conflicts. The emphasis of the zoo's activities has changed in the years since the agreements were approved. Ten years ago, the zoo was managed as a recreational attraction with educational value, and responsibilities for conservation. Today's management of the zoo is oriented toward education and conservation, with recreation as a byproduct. Both the city and GLAZA have become increasingly involved in educational activities. The city's Zoo Education and Information Services Unit has 12 full-time staff, GLAZA has an Education Coordinator and four staff positions devoted to education. 12
F9
Some provisions of operating and concession agreements are not followed. Following is a summary of practices that indicate the agreements are not being fully implemented: The joint committee system to coordinate relations between the city and GLAZA does not appear to be operating as required by the operating agreement. Neither the Public Information Committee nor the Zoo Development Committee have been meeting as required. Several committees have been formed that are not specifically authorized by the agreement. For example, there is an ad hoc committee (Zoo Task Force) consisting of two city Recreation and Parks Commissioners, Department of Recreation and Parks management, and GLAZA representatives. The purpose of this committee is to address zoo management issues that arise. Occasionally, GLAZA makes lump sum advance payments to the city and withholds regular monthly payment of concession fees (rent) until the advance is repaid. Though the Department of Recreation and Parks asks for the advance payments and consents to withholding, the auditors found that this practice is not specifically authorized under terms of the concession agreement. The city's Department of Recreation and Parks is not exercising its authority to audit and monitor concession operations of GLAZA. The department does not systematically or regularly audit the financial statements submitted by GLAZA. Also, the department does not independently audit concession receipts and GLAZA's accounting of concession revenue and expenditures. Failure to audit gross receipts and accounting practices could be costly to the city.
F11
The Department of Recreation and Parks has not prepared itself to offer constructive suggestions for improvements in concession operations. Reportedly, city zoo staff frequently visit concession operations to evaluate performance. Apparently, these visits are not regular, nor are evaluations based on documented criteria. The city has not developed standards by which it can systematically evaluate and offer suggestions to improve concession operations. 13
F12
The city has been without a Zoo Director since January 4, 1991 and the level of compensation is an issue in recruitment. The Zoo's Director of 16 years retired. A nationwide search for his replacement is in progress. It is anticipated that the preferred candidate will be identified by the Department of Recreation and Parks by June 30,
F14
Some conflicts between the city and GLAZA may have arisen from the lack of a visible plan and direction from those who manage of the Department of Recreation and Parks. According to a 1984 management audit by the CAO: "The department and GLAZA have not worked together to develop a coordinated program for the operation and development of the zoo. This has limited the effectiveness of both organizations and has been a detriment to providing a truly first class zoo . . . both organizations operate with a significant degree of autonomy" The Grand Jury's auditors observed that this has been a continuing problem. The draft Los Angeles Zoo Master Plan states that difficulties in tracing the existing zoo infrastructure can be traced to a lack of coordination between the city and GLAZA. The joint process to develop the Zoo Master Plan as a positive step in correcting the lack or coordination in capital planning.
F15
The department does not have a zoo management plan to coordinate capital and operating goals and implementation strategies. Inadequate financial management information and reports are among the barriers facing the city's Zoo Director in developing a comprehensive management plan. The city does not have the power to order GLAZA to transfer funds to the city, 14

Recommendations 14