Audit Faults Agency in Charge of Olvera Street

The birthplace of Los Angeles is “teetering on the brink of financial disaster,” and bad management is to blame, according to a new audit by City Controller Laura Chick.

Chick, whose highly critical audits of the city’s airport and port departments have fueled criminal probes in recent months, has now turned her attention to the city’s Department of El Pueblo, which operates Olvera Street, the colorful strip of restaurants, shops and museums north of City Hall and the Hollywood Freeway.

“This was a business that ... is falling apart,” Chick said.

After receiving a tip in January, the controller said, her office sent in auditors, who found an operation in disarray: scores of unpaid bills, unsecured cash sitting in offices and “creditors knocking at the door.”

Four of the department’s five parking lots had no automatic ticket dispensers, and the department didn’t safeguard the parking money it did take in, according to the audit. Nor did it make any parking payments to the city, the report said.

More than 80% of the tenants on the street had no signed lease agreements, and the rates the city was charging were far lower than at other nearby locations.

Olvera Street is considered Los Angeles’ birthplace and draws 2 million visitors a year. The bustling pedestrian corridor is lined with 27 historic buildings, shops and cafes.

Councilman Antonio Villaraigosa, who represents the area, said he would introduce a motion today directing the El Pueblo Department to put in place the recommendations in Chick’s audit.

Villaraigosa also said he would also ask the department to make quarterly reports to the council.