L.A. City Controller Ron Galperin on Wednesday called for an overhaul of the city’s antiquated system of issuing police permits for movie theaters, pool halls, massage parlors, and more than 50 other types of businesses.

Galperin’s call for the overhaul came in an audit his department conducted of the police commercial permit system. The audit found that 49 of the permit categories were created before 1970, and there is no system to review them to determine if they are still necessary to deter or reduce crime. The report also noted that newer types of businesses – such as internet cafes – had not been issued any permits.

“We need to better align our permitting requirements with the realities of today’s businesses and with 21st century policing – which will mean getting rid of some categories while considering some new ones,” Galperin said in a statement accompanying the audit’s release. “The goal should be to focus our attention and resources on the businesses that pose the most risk to their customers and to the public, in order to promote public safety.”

The audit combed through Los Angeles Police Commission records and found that in 2015, 4,100 police permits were issued to 2,200 businesses, and nearly 2,300 permits were issued to individual employees of permitted businesses. The audit also found that for the current fiscal year ending June 30, the city is projected to collect $15.8 million in permit fees.

But the audit noted the city was failing to collect revenue from hundreds of businesses that should be registered with police permits. One example: nearly 62 percent of second-hand dealers in the city lacked required police permits.

The audit made several recommendations for reform, including better tracking of crime data to inform which businesses pose a risk and if any new business categories need to be added to permit rolls. The audit also suggested working with the city’s Office of Finance to identify non-compliant businesses and re-evaluating the justification for background checks of key employees at permitted businesses.

Public policy and energy reporter Howard Fine can be reached at hfine@labusinessjournal.com. Follow him on Twitter @howardafine.

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