Los Angeles city controller says tens of millions of dollars sit idle | CPT PPP Coverage

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The city of Los Angeles has nearly $73 million sitting idle in 203 special funds that haven’t been touched in at least two years, including 62 funds that have been untapped for more than a decade, according to a new city controller’s report released Friday, July 7.

City Controller Kenneth Mejia recommended that city departments spend about $51 million, including approximately $10 million earmarked for housing and homelessness programs, and called on city departments to submit plans for spending the money.

He also recommended terminating a number of funds and redeploying the balances held in them, or returning them to the original source, which includes about $600,000 that could be redirected back to the city’s general fund or general fund reserves.

“Our commitment to transparency and accountability impels us to continually press for maximizing the impact of public resources,” Mejia wrote in the report. “Prudent reserves are vital for long-term fiscal sustainability. Yet letting funds sit in obscure accounts for years at a time shortchanges the people of Los Angeles at a time when they are insisting on greater responsiveness from their City government.”

According to the report, as of April 30, about $14 million in idle funds were designated for community safety, $11.7 million for economic development, $11 million for sanitation and environment, and nearly $10.1 million for housing and homelessness.

The mayor’s office did not immediately respond to a request for comment about the $10 million that Mejia is recommending be spent on housing and homelessness programs. Mayor Karen Bass has made combating homelessness and increasing L.A.’s housing stock her priority since taking office in December.

Other untapped funds included about $7.4 million meant to go toward parks programs, $4.5 million for social services, $3.1 million for transportation, $1.9 million for public works and $1.1 million for street-related expenditures.

Jake Flynn, spokesperson for City Councilmember Bob Blumenfield, said in an email Friday that the council’s budget committee chair was away and had not had a chance to review Mejia’s report. The council is on recess the next three weeks.

“I know this is an issue that the council has made some progress on and will continue to do so,” Flynn said in his email. “When the council is back in session, I’m sure these recommendations will be discussed and taken into consideration.”

Mejia, who took over as controller in December, reviewed 661 special funds totaling about $5.4 billion in preparing this year’s report. He concluded there were 203 funds with total balances worth $72.87 million that hadn’t been spent in two or more years.

Some funds have restrictions on how the money can be spent. But Mejia identified 64 funds, totaling $51.26 million, that he recommended be put to use.

For many years, elected officials in City Hall have known that there are tens of millions of dollars going unspent.

In 2018, then-City Controller Ron Galperin informed the council that about $28 million in funding could’ve been used over the years. Galperin reported at that time that there were 123 accounts from which no expenditures were taken in at least four years – with some going as long as 10 years without any spending activity.

Last year, Galperin identified about $55 million in unspent special funds that he said could help with the city’s budget woes.