LA Has Spent Only A Quarter Of Its Federal Stimulus Money
LOS ANGELES (CBS) — Who said you had to spend money to make money? Apparently this is not the philosophy of Los Angeles city leaders. Of the nearly $630 million in federal stimulus funds the city of Los Angeles has received over the past two years, it has spent only about a quarter of the money, it was reported tonight.
Although the city received most of its stimulus money last March, by mid-October, it had completed just eight of 108 projects, the Los Angeles Times reported.
And according to The Times, other large cities have been spending their stimulus funds faster, indicating that the problem may be with the city's bureaucracy.
An audit conducted under City Controller Wendy Greuel found that four supposedly "shovel-ready" transportation projects -- including 85 left-turn signals and 25 new traffic lights -- were not put up for bid for seven months after they were given the go-ahead by state and federal officials in the summer of 2009.
A contract to finish the signal projects was finalized this month and the work is expected to be completed in a year.
Outgoing state Inspector General Laura Chick estimated that only about half of the state's $50-billion American Recovery and Reinvestment Act funds has been spent so far.
She told The times that one problem is that cities like Los Angeles applied for all kinds of stimulus funds, sometimes without specific plans for spending it.
"You hear this expression `shovel ready projects' -- there is no such thing," said Chick, whose position was recently cut by Gov.-elect Jerry Brown. "So in terms of judging the impact of the Recovery Act, it's not over yet."
Los Angeles officials have said they expect stimulus spending to peak next year.
Among the few projects Los Angeles had completed by the end of September were an $18.3-million program providing summer jobs for 9,416 youths, $900,000 of sidewalk and gutter improvements in Tujunga and a $1.8-million rainwater irrigation project in Mar Vista.
Greuel, who is considering running for mayor, said she is disappointed.
"Seven months to get out a bid was just criminal to me when we had a 12.5 percent unemployment rate and we were beginning to lay off (city workers)," she said. "We should have looked at this as an opportunity to streamline the process."
City officials said some of the biggest projects, such as a $100-million program to buy foreclosed homes, repair and sell them, are still in the early stages, but that none of the programs are at risk of losing funding.
Rushmore Cervantes, who heads a team in the mayor's office to cut red tape, told The Times the city has been warned that stimulus spending may get greater scrutiny than any other federal grant program.
"On the one hand we're being told that we're going to be monitored, on the other hand there's pressure to spend the money," he said. "We know that, but we also want to do it in a thoughtful manner, and that's what the city is doing."
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