L.A. slow to spend stimulus monies, boost economy

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The city of Los Angeles did a good job of getting federal stimulus monies to help boost the local economy, suffering from one of the highest unemployment rates in the country. While it was successful in getting $630 million from Washington for local infrastructure projects, nearly two years later, only 13.3 percent of it has been spent according to a report published Sunday in the Los Angeles Times.

The Times found that of the 108 projects for which funds had been obtained, only eight had been completed by mid-October. City officials say the problem has been the lack of qualified employees to manage all the new contracts.

To save money last year and help close a $427 million budget deficit, the city created an early retirement plan to trim its payrolls. Perhaps the deal was a bit too rich. Over 2,400 experienced employees signed up for the deal and were quickly gone. On top of the retiring employees, another 360 employees were laid off.

“We saw the retirement of some of the most competent people in the city’s workforce happen just overnight,” said City Administrative Officer Miguel Santana. “So that’s been the challenge, not just with the stimulus but in everything we do.”

While officials blame a shortage of personnel, critics say that the real reason is the dysfunctional nature of the city hall employees that residents have been complaining about for years. Nothing ever seems to get done in a timely or efficient manner.

An audit by city controller Wendy Greuel cited a couple of examples of projects that should have been handled quickly, but dragged on for far longer than the complexity would suggest.

One, a so-called “shovel-ready” project to install 85 left-turn signals and 25 new traffic lights, was not sent out for bid until more than seven months after approval by state and federal agencies in mid-2009. A contract is just now being finalized and the work should be done before the end of next year.

Another simple project, to install new sewer grates that make roadways safe for bicycles, took eight months to finalize contracts.

Paving projects covering over 100 miles of roadways badly needing repair, have also been slow to materialize. City officials blamed conflicting information from state and federal officials whether city workers, or outside contractors, could handle the work. Eventually, it was agreed that city workers could handle the projects and now, the work is estimated to be completed by June 2012.

Voicing her dissatisfaction with the painfully slow pace of the stimulus projects, Gruel said “we should have looked at this as an opportunity to streamline the process. Seven months to get out a bid was just criminal to me when we had a 12.5 percent unemployment rate and we were beginning to lay off people.”

Other major cities mostly did better than L.A. in spending the stimulus monies. To date, New York has spent 25 percent, Chicago 47 percent and Minneapolis 23.4 percent. One city that’s a bit worse off is Philadelphia at 9.6 percent.

Los Angeles Times

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