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L.A. controller says two city departments have yet to create many jobs with federal stimulus money

September 16, 2010 |  1:07 pm

Two departments within the city of Los Angeles have received $111 million in federal stimulus funds, yet have created only 55 jobs so far, according to a pair of reports issued Thursday by City Controller Wendy Greuel.

The reports conclude that two agencies -- Public Works and Transportation -- have moved too slowly in spending the money, in part because of the time it takes to secure approval of government contracts. The two agencies plan to create or retain 264 jobs once all the money is spent, according to the reports.

Greuel said that with unemployment above 12%, city officials should move more urgently to spend the money and reduce red tape. “The process needs to be changed to make sure we get these projects out as quickly as possible,” she said.

A spokeswoman for Mayor Antonio Villaraigosa referred questions to City Administrative Officer Miguel Santana, the top budget official. Santana would not comment on the audit but offered his own set of figures for stimulus spending citywide, which were sharply different from Greuel’s.

“I haven’t seen her numbers,” he said. “I can tell you what I do know, which is that, in what we’ve spent so far, those dollars created 936 jobs in the month of June. And we’ve only spent 13% of what we’ve received,” he said. Santana said his numbers apply to every agency in the city, not just the two examined by the controller.

Greuel said in response that she spoke with Santana on Thursday and he did not disagree with the data contained in her audit.

The controller’s audit found that as of March 31, the city had secured $594 million from the American Recovery and Reinvestment Act, which was created to invigorate the economy by spending on an array of infrastructure projects. Of that total, nearly $71 million went to the city’s Department of Public Works, which plans to create or retain 238 jobs by resurfacing streets and bridges, rebuilding sidewalks and storm drains and adding bicycle safety grates to catch basins.

The public works agency has shielded 37 public employee jobs from elimination as a result of the city's ongoing budget crisis and created eight public or private jobs, the report said. Part of the problem, Greuel found, was that it took eight months to put together certain bid packages, review the bids and award the contracts.
 
Despite the strong words in her press statement, the language of Greuel’s audit was considerably more muted. The report on public works said that agency’s contracting processes “may not be sufficient” to ensure that federal money is spent quickly.

The second report looked at the Department of Transportation, which received seven grants worth nearly $41 million to purchase new buses, install traffic signals and upgrade railroad crossings. Although those projects were designed to support 26 jobs, nine have been created or retained so far, Greuel’s report said.

Greuel found that the department moved slowly to purchase 16 Commuter Express buses, a process that took from July 2009 -- the day the money was approved by the federal government -- to June 2010, when the City Council approved the expenditure. Greuel said in her report that department officials had overlooked the fact that the buses would need the council’s sign-off.

Four out of six contracts from the Federal Highway Administration, dealing mostly with installation and upgrades of traffic signals, also were slow in being awarded, the report said. The audit said the transportation agency’s bidding process, which is designed to make sure the city complies with local, state and federal contracting policies, “may not be the best approach” for stimulus funds.

The reports did not touch on other agencies that have received federal money, including the Department of Water and Power. Those agencies will be examined in coming weeks, Greuel said.

Cynthia Ruiz, president of the Board of Public Works, said her agency agreed with Greuel’s findings and has begun looking for ways of streamlining the contracting process. “We’re hoping to have some changes within the next six months,” she added.

-- David Zahniser at Los Angeles City Hall
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