Audit: $111 Million in L.A. Stimulus Funds Creates Few Jobs

The two Los Angeles city departments that have received the largest chunk of federal stimulus dollars -- a combined $111 million -- created or retained only 55 jobs with the money, according to audits released Thursday.
  
``I'm disappointed,'' said City Controller Wendy Greuel, whose office conducted both audits. ``While it doesn't appear that the ARRA (American Recovery and Reinvestment Act) funds were misspent, the city needs to do a better job of expediting the process and creating jobs.''
  
The audit found that the Department of Public Works had received $70.65 million as of March to resurface streets and bridges, improve sidewalks and stormwater drainage systems and build bicycle safety grates.
  
The projects were intended to create or retain 238 jobs, but the audit found only about seven jobs created and 37 retained to date.
  
The Department of Transportation received $40.8 million to build traffic signals and left turn arrow signals, retrofit traffic signals with LED light bulbs, improve railroad crossing systems and buy 16 commuter express buses, according to the audit.
  
The money was supposed to create or retain 26 jobs, but the audit found only about 11 jobs created so far and none retained.
  
The numbers do not represent actual jobs, but hours that people work that equate to full-time positions, so it is unclear how many of the jobs may be part-time.
  
The audits noted that on several occasions, both departments waited seven or eight months after a project had been authorized before soliciting bids.
  
``With our local unemployment rate over 12 percent, we need to do a better job of cutting the red tape and putting Angelenos back to work,'' Greuel said.
  
Greuel's predecessor, Laura Chick, whom Gov. Arnold Schwarzenegger appointed as the state's inspector general to oversee federal stimulus spending, also criticized the city's slow job creation.
  
``It is distressing that the city of Los Angeles is bogged down in bureaucratic red tape and unable to spend the stimulus funds in a timely manner,'' Chick said. ``The state has worked to expedite getting the Recovery Act funds out to local communities, and those dollars were meant to create new jobs for people who desperately need them.
  
``As the controller's audits rely on job information from January and March of this year, my office will be looking at more recent numbers to determine if any progress is being made. I will be anxious to review the city department's 30-day responses to the audits to see their plans to speed up the process.''
  
According to the audits, stimulus projects are supposed to be started and completed expeditiously -- generally, the city is supposed to complete the projects within three years.
  
Department of Transportation spokesman Bruce Gillman said he could not address the findings of the audit, as the department has just received a copy of the report.
  
In a prepared statement, Gillman said, ``We cooperated with the controller's audit and look forward to reviewing the recommendations contained therein.
  
``LADOT continues to work on several ARRA-funded grants to improve safety conditions on city streets such as re-striping, left turn signals, LED bulb replacements in traffic signals, improvements at at-grade crossings and new DASH and Commuter Express buses,'' Gillman said.
  
Department of Water and Power officials did not immediately respond to requests for comment.
  
The city of Los Angeles requested $1.5 billion in federal stimulus funds, of which $594 million has been awarded.
  
``At a time when cities and states are facing massive budget deficits, this funding can serve as an important crutch to maintain critical services to the public if used quickly and properly,'' Greuel said.
  
``Unfortunately, it appears that the city initially struggled to use its crutch by not awarding contracts promptly and taking months to get projects up and running.''