Two L.A. agencies get $111 million in stimulus funds but have created only 55 jobs

Two Los Angeles departments have received $111 million in federal stimulus funds yet have created only 55 jobs so far, according to a pair of reports issued Thursday by City Controller Wendy Greuel.

The reports conclude that the agencies, Public Works and Transportation, moved too slowly in spending the federal money, in part because of the time it takes to secure approval of government contracts. The two agencies plan to create or retain a combined 264 jobs once all the money is spent, according to the reports.

With unemployment above 12%, city officials should move more urgently to cut red tape and spend the money, Greuel said. “The process needs to be changed to make sure we get these projects out as quickly as possible,” she said.

A spokeswoman for Mayor Antonio Villaraigosa referred questions to City Administrative Officer Miguel Santana, the top budget official. Santana would not comment on the audit but offered a newer set of figures for stimulus spending citywide, which were sharply different from Greuel’s.

Santana’s report said that in June, stimulus dollars helped the city create or retain 936 jobs. “And we’ve only spent 13% of what we’ve received,” he said.

Greuel said in response that she spoke with Santana on Thursday and that he did not disagree with the data contained in her audit.

The controller’s audits found that as of March 31, the city had secured $594 million from the American Recovery and Reinvestment Act, which was created to invigorate the economy by spending money on infrastructure projects.

Of that total, nearly $71 million went to the city’s Department of Public Works, which plans to create or retain 238 jobs by resurfacing streets and bridges, rebuilding sidewalks and storm drains, and adding bicycle safety grates to catch basins.

So far, the public works agency has shielded 37 public employee jobs from elimination as a result of the city’s ongoing budget crisis and created eight public or private jobs, the report said. Part of the problem, Greuel found, was that it took eight months to put together certain bid packages, review the bids and award the contracts. The second report looked at the Department of Transportation, which received seven grants worth nearly $41 million to purchase buses, install traffic signals and upgrade railroad crossings. Although those projects were designed to support 26 jobs, nine have been created or retained so far, Greuel’s report said.

Auditors found that the department moved slowly to purchase 16 Commuter Express buses, a process that took from July 2009 to June 2010, when the City Council approved the expenditure. Greuel said in her report that department officials had overlooked the fact that the buses would need the council’s sign-off.

Four of six contracts from the Federal Highway Administration, dealing mostly with installation and upgrades of traffic signals, also were slow in being awarded, the report said. Greuel’s audit said the transportation agency’s bidding process, which is designed to ensure the city complies with local, state and federal contracting policies, “may not be the best approach” for stimulus funds.

Cynthia Ruiz, president of the Board of Public Works, said her agency agreed with Greuel’s findings and had begun looking for ways to streamline the contracting process. “We’re hoping to have some changes within the next six months,” she said.

The reports did not touch on other agencies that have received federal money, including the Department of Water and Power. Those agencies will be examined in coming weeks, Greuel said.

david.zahniser@latimes.com