US cities from Los Angeles to Philadelphia are sitting on half or more of the federal stimulus funds intended to create jobs almost two years ago, as bureaucratic delays and staff cuts obstructed projects.
Los Angeles, the second-largest US city by population, spent just 29 per cent of $630 million in stimulus money as of October 31, according to municipal records. Minneapolis has used 32 per cent of a $63 million allocation as of Sept. 30, while Philadelphia utilised 16 per cent of $251 million in the same period.
“With 12.5 per cent unemployment in the City of Los Angeles, we want to be able to create these jobs as quickly as possible,” city Controller Wendy Greuel said in an interview on Bloomberg Television’s Inside Track today. “People who are unemployed want jobs today, not next year.”
The $862 billion economic rescue signed by President Barack Obama in February 2009 was aimed at blunting the impact of the longest recession since the 1930s. About one-third of the stimulus package, or $275 billion, was funnelled toward local governments, non-profits and businesses for infrastructure and other ventures to create jobs. Priority was given to so-called shovel-ready projects that could start within 120 days.
“In general, the notion of ‘shovel ready’ was a bit overstated,” said Doug Turetsky, a spokesman for New York’s Independent Budget Office, a public financial monitor, in an e-mailed response to a question on stimulus spending. New York, the nation’s most populous city, has spent 55 per cent of the $7.2 billion it was awarded as of September 30, according to a city website.
Stimulus contracts
About 61 per cent of the $275 billion in stimulus contracts, grants and loans had been paid out to their ultimate recipients as of December 17, according to the Recovery Accountability and Transparency Board, an independent authority created to track the funds. The money was used to employ 675,000 people between July 1 and September 30, the board said.
Los Angeles’s public works and transportation departments took as long as a year to begin work on stimulus projects such as installing left-turn arrow signals at 45 intersections, according to reports by Greuel in September.
Bridges needed earthquake retrofitting before other work could begin, Greuel found. Local and state authorities disagreed over whether street resurfacing should be done by city employees or contract workers. Managers wasted time debating whether to seek bids for similar work as one contract.
Early retirements
The early retirements of 2,400 municipal employees in the past year due to budget cuts limited the staff available to supervise projects, Greuel said.
“It’s a little bit of everything — furloughs, early retirements and the bureaucracy,” she said. “We did hear from other cities that they were having similar challenges.”
Inadequate staffing at the 29 federal agencies awarding the money strained their ability to respond, according to a March report from the Commerce Department’s inspector general.
Greuel said her audits found no evidence that Los Angeles misspent money. In New Jersey, contractors billed the state $27 for light bulbs, and ran up tens of thousands of dollars in “unreasonable costs” on a $119 million weatherisation programme funded with stimulus money, according to an auditor’s report.
