You Handle the Money: County Creates Stimulus Task Force

The Board of Supervisors voted Tuesday afternoon to create a task force to manage the county's expected share of money from the $787 billion federal economic stimulus package signed into law earlier by President Barack Obama.

At the recommendation of Supervisor Zev Yaroslavsky, the board voted to direct the county's chief executive officer, William Fujioka, to create an interdepartmental team to make sure that the funds are expended in a "timely manner."

"It is critical that the county be prepared to move quickly to invest those funds which are made available to the Los Angeles region on an expedited, effective and efficient basis," Yaroslavsky's motion states.

Although analysis on the massive package is ongoing, the stimulus could create 75,000 to 100,000 jobs in Los Angeles County, which could receive $6.5 billion in bailout money, a local economist said last week.

Roughly $26 billion is expected to go to California as a whole, said Jack Kyser of the Los Angeles County Economic Development Commission.

The stimulus package is a mix of federal dollars for infrastructure and other public works projects to save or create jobs and tax cuts to spur spending.

But California's $40 billion deficit, and the long-delayed state budget being hammered out to address it, threatens to slim down the county's piece of the pie, Kyser said.

"The (state) budget could be taking money out of our pocket just as the federal government puts it in," he said.

Legislative gridlock has left the state without enough money to pay its bills, including reimbursements for county services. The Legislature adjourned today without a budget, leading Gov. Arnold Schwarzenegger to prepare to lay off government workers and halt public works projects statewide.

The lack of a state budget and subsequent lack of money in the state's general fund has already led California Controller John Chiang to start deferring payments to counties for services.

Late last week, Fujioka confirmed that the state had failed to reimburse the county for $9.4 million in funding for the CalWORKS program. The state was expected to delay $105.4 million worth of payments to the county over the course of February.

"For months, I have repeatedly warned the governor and Legislature that without a solid budget in place, we would see a cash crisis in early 2009," Chiang said.

"That crisis has arrived, and without enough money to make it through February, I was forced to delay payments that do not have first call to funding as specified in the state Constitution, federal or case law."

Sacramento County has already filed a lawsuit to compel Chaing to stop the payment delay. The Los Angeles County Board of Supervisors authorized county counsel to join the lawsuit last week.

The board has approved a countywide hiring freeze to deal with the issue, as well as directing departments to cut expenses by five percent. On Tuesday, Fujioka said it might not be enough.

With cash flow now a more prominent issue, Supervisors Mike Antonovich and Mark Ridley-Thomas led the board today in looking for ways to secure reimbursements for county-run programs.

At the supervisors' recommendation, the board directed Fujioka to explore the possibility of setting up a reserve fund to act as a bulwark against possible funding delays.

In addition, the supervisors called for a report on the status of reimbursements from other jurisdictions that could exacerbate the already bad situation, as well as looking at the possibility of using electronic transfers to speed the reimbursement process.

Last week, Fujioka told the supervisors that the county had enough money to go without state reimbursements for just one month, after which the county would have to start borrowing money to cover its debts.

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