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DWP slow to spend federal stimulus money, L.A. controller finds [Updated]

March 3, 2011 |  4:34 pm

The DWP works to repair a water main break in Van Nuys.

Los Angeles City Controller Wendy Greuel found that the city’s utility had been slow to spend its $112.7-million share of federal stimulus dollars and that the department’s initial estimates of jobs created in the program may not have been accurate and lacked documentation.

The city received about $630 million in stimulus grants and loans, but Los Angeles officials have struggled to spend the money quickly because of extensive employee furloughs and the city’s lengthy processes for awarding grants and contracts.

Though President Obama signed the American Recovery and Reinvestment Act launching the program in February 2009, Greuel’s new audit found that Los Angeles had only spent about a third of its stimulus money by the end of 2010. The city’s spending rate has lagged behind that of other big cities such as New York, Chicago and Minneapolis, according to its own analysis.

The city’s Department of Water and Power, which is the largest publicly owned water and power utility in the nation, received about 18% of the city’s share for upgrades of major water pipelines, energy efficiency programs and a demonstration project to help modernize the city’s electrical grid.
   
Greuel found that delays in starting some of the Energy Efficiency and Conservation Block Grant projects -- which include energy retrofits of nonprofit organizations and renewable energy projects for residences -- have created a risk that the department will not be able to meet the guidelines set by the federal government for spending the money.

Utility officials said they would comment on Greuel’s report sometime Thursday.

[Updated at 4:27 p.m.: City officials said the Department of Water and Power had spent about $39.5 million of its stimulus money--about 35% of money allocated to department--by the end of January. DWP spokesman Joe Ramallo said the controller’s audit had helped the department streamline its procedures for handling federal grants.

“We worked closely with the controller on this review and found it helpful in establishing new procedures for handling the federal ARRA grant funds,”  Ramallo said. “We have corrected the deficiencies noted in the audit and we have made significant progress since the review period in spending additional funds.”]

The controller also found inconsistencies with stimulus job counts, as she has in other city departments. There was considerable confusion about how jobs should be counted early in the program and federal officials ultimately changed the guidelines — recovery act jobs are now based on totaling up the number of hours employees work on a stimulus project.

Greuel’s report said DWP officials initially counted the jobs created on the city’s Smart Grid Demonstration Project, a joint effort with several area universities, based on estimates instead of hours worked. Utility officials told Greuel they had addressed that problem by the second quarter of 2010, and have corrected other issues mentioned in the audit.

The report was Greuel’s fourth tracking progress on stimulus spending “and unfortunately all of the audits bring up similar problems,” she said.

“While I am hopeful that the new [stimulus] coordinator brought on by the Mayor’s office will help expedite this money being spent, actions speak louder than words,” Greuel wrote in her report.

RELATED:

Los Angeles' economic growth will be ‘slow and sluggish,’ City Controller Wendy Greuel predicts

-- Maeve Reston at Los Angeles City Hall

Photo: The DWP works to repair a water main break in Van Nuys that caused two families to be displaced on Feb. 27, 2011. Credit: Anne Cusack / Los Angeles Times

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