In its efforts to protect redevelopment money officials feared would be co-opted by the state, the Los Angeles Redevelopment Agency played “fast and loose” with taxpayer money, city controller Wendy Greuel said Monday.
Greuel, who is running for mayor, said that the agency failed to account for $1.7 million in funds that it transferred to the city for a variety of upcoming projects.
“It was not a transparent and accountable process,” said Greuel, whose office released a 40-page report on the matter Monday. “I wouldn’t call it a scandal, but for us, it raised red flags.
The transfer of funds took place against the backdrop of efforts by Gov. Jerry Brown to kill redevelopment agencies throughout the state, and use the money generated by their projects to help balance the state budget.
Cities throughout the state, Los Angeles key among them, quickly moved to get projects started and earmark funds for them so the money could not be appropriated by the state.
In Los Angeles, those projects were worth about $13 million dollars. But the accounting records provided by the CRA initially underestimated the amount by about $1.7 million.
The discrepancy appeared to be part of a pattern of sloppy accounting that Greuel said had been noticeable for more than two years. It impacted the city’s budgeting process, because it was difficult to know how much money would really be available for use by the city, she said.
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“No one could tell you how much was there, how it was being spent, how much was earmarked,” Greuel said. “That was the reason we went and looked at this.”
But CRA spokesman David Bloom said Greuel’s contention was unfair. The agency was not able to estimate the amount of money that would be available because it is based on taxes that are collected by Los Angeles County. The exact amount collected each year is based on a complex formula, and the county does not release the full results until the end of its fiscal year in September.
“We strongly disagree with the characterizations in the audit,” Bloom said. “This year we gave the city some 90-odd percent of the money months and months ahead of time. … We were acting in the best interest of the city to protect tens of millions of dollars for the city.”
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