You might have read this story about cities in Los Angeles County selling their stimulus transportation funds to one another for cash – a big no-no, apparently, for the Los Angeles Metropolitan Transportation Authority.
So now the MTA is canceling the deals. Which is, indeed, a positive development.
But ending the backroom swaps does nothing to cure the underlying problem: the fact that the MTA is doling out a minimum of $500,000 in federal stimulus money to every one of LA County's 88 cities for "shovel-ready" transportation improvements, irrespective of those cities' actual needs.
Several of those cities are so tiny that they have no transportation projects ready to go and no immediate need for half a million dollars in transportation funds.
Take Bradbury, population 1,000, for an example of what happened.
Like other small cities, Bradbury didn't want to forsake its funds from the MTA, so it pre-sold its $500,000 share of restricted federal stimulus money to the City of Torrance in exchange for $315,000 in unrestricted cash.
Rolling Hills, a 1,900-resident gated community association with no public streets, tried a similar swap. City Manager Anton Dahlerbruch said the community simply could not benefit from the transportation funds, so it traded its $500,000 for $305,000 in unrestricted money from Rancho Palos Verdes. Dahlerbruch explains:
"We thought we'd exchange it for general fund money and we'd invest it back into the community for a public works project, such as undergrounding (utility lines). It would have been in the spirit and the intent of the federal legislation."
The Congressional House Committee on Transportation and Infrastructure has since told the New York Times that the swaps are "illegal." But if it wasn't for The Pasadena Star-News dragging the deals to light this week, they may have slipped past the public.
A few city councils had already approved the swaps. And for their part, MTA staffers are said to have initially authorized – and even encouraged – the bartering, before the MTA board officially made it clear that "all the money has to be spent on transportation."
The agency now says cities can trade their stimulus dollars for equal amounts of LA County Measure R transportation funds, which can be used later. To qualify, cities must submit a letter to the MTA, outlining how Measure R money would be used. The deadline is today. The other option is for the MTA to take back the funding and re-allocate it to other cities who need it.
What a mess. And to think it could have been avoided with the agency's efficient funneling of the stimulus in the first place.
The MTA will be allocating a hefty $215 million or more of federal stimulus funds to local cities to improve LA county's transportation infrastructure. Those millions should be sent to large priority projects that can have a long-term impact, not to small cities with no apparent need.
Failure to do that undercuts the stimulus effect.
Transportation spending should not to be taken lightly. Wise investment in the sector is climate policy. America's stimulus funds should go into the best clean transportation projects where possible, and not a dollar of that money should be wasted, anywhere.