Embarrassing News for Budget Watchers at LA City Hall
Millions of dollars that went un-spent was discovered in a union's review of city budgets
Organized labor has discovered millions of dollars, un-spent for years, that could be used for fixing potholes and sidewalks. The union would like to see the money sent back to the general fund, but the city administrative office is recommending the money be placed in a reserve or emergency fund. Conan Nolan reports from Downtown LA for the NBC4 News at 6 p.m. on February 4, 2013.
About $28 million in un-used money in various city departments’ budgets -- the city's equivalent of spare change found among seat cushions -- was discovered not by a council member or the city controller, but by a union.
Taking credit for the discovery, Service Employees International Local 721, representing thousands of city workers.
“We want to help the taxpayers, but we also want to help keep jobs for our members,” said Ted Rohrlich, research director for SEIU Local 721.
In the effort to help save city jobs, SEIU did its own review of city budgets and discovered $27.8 million in un-used funds.
“These are funds allocated at the start of the year but end up not being spent. Sometimes they carry over year to year,” said Rohrlich.
Budget hawks jumped on the issue.
“Why aren’t we looking at the seat cushions when we are talking about cutting services? This doesn’t make sense,” said LA City Councilman Mitch Englander.
The union would like to send the funds, called "encumbrances," back to the general fund for things like street services and fixing potholes. Departments have up to two years to spend the allocations, which then go back to the general fund.
The city administrative office is recommending the money be placed in a reserve emergency fund to help with an anticipated budget shortfall of nearly $200 million next year.
The newly found money is a fraction of the city’s $7 billion dollar budget deficit, but the discovery comes a month before voters are asked to raise the city sales tax.
“It makes you wonder what else is in the furniture. Why ask for more money when you don’t know where the money is that you already have,” said Jay Handal, of the West LA Neighborhood Council.
The council would have to approve any changes.