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Stimulus for sale (UPDATED)
I read a story that says small cities in California are selling their federal stimulus funds to other cities in exchange for cash. The sellers are towns that aren't ready to start digging and paving or don't need to. The buyers have a list of transportation projects and a bunch of shiny new shovels. Well, now, LA County's Transportation Authority is nixing this idea.
My original post yesterday cited a story in the Pasadena Star News. After the story ran, the MTA's CEO came forth and said this was all a misunderstanding on the part of some MTA staffers. From today's paper:
MTA board members, who had allocated a minimum of $500,000 in stimulus funds to every city in Los Angeles County, had never intended to let cities sell their shares of funding to other cities for cash, board member Richard Katz said.
"It is our intention that all of the stimulus money be for transportation purposes and transportation only."
MTA CEO Roger Snoble said in a statement that "Metro is trying to allow some flexibility to the cities, but there is no provision to allow stimulus money to be swapped with general fund money.
So I guess that takes care of that. Apparently, some MTA staffers told the cities they could make these swaps. Here's yesterday's post for background:
LA County's Metropolitan Transportation Authority received $215 million from the federal stimpak and gave each of the county's 88 cities at least $500,000. But some cities are doing swaps. Examples from the article in the Pasadena Star News:
The city of Bradbury, with a population of roughly 1,000, is working on a deal to sell its $500,000 share of federal funding to the city of Torrance for $315,000 in cash for its general fund.
Torrance plans to use the extra federal funds for a variety of street improvement projects. Bradbury will use the $315,000 however it sees fit.Irwindale, population 1,500, sold its $500,000 to Westlake Village, for $325,000 cash.
Westlake Village plans to use those federal funds for a multimillion dollar project improving an overpass and on-ramp for the 101 freeway.
Here's how Chief Planning Officer, Carol Inge, explains why the MTA didn't just reallocate the money where it was needed:
"Our board wanted to give every city at least a chance to benefit from the stimulus package. The intent of the stimulus funds is to get jobs quickly, and I think it's a good thing to get them all over the county, and our cities have always been partnered with us in doing transportation improvements."
Could be a case of creative thinking, if and only if the MTA accounts for every penny to make sure the swapped funds are still being spent on needed job-creating projects and not boondoggles. It's true, a town of 1,000 people may not require half a million dollars worth of road improvements. But the way they did this still gives one pause. The article quotes Doug Johnson of the Rose Institute of State and Local Government. He doesn't like it one bit:
The MTA's authorization of such swaps amounts to a "cash giveaway out the back door. The
MTA pleads they have no money for transportation projects, and now they're just giving cash away and letting the cities auction it off to each other regardless of priority or project or what. I'm just stunned and appalled."
Are you?
This is the Obama Administration....Hope, Change, Deals, Cash, and Prizes....EVERYTHING IS UP FOR SALE !!!!! Senate Seats, and everything else !!!! Its how Obama got elected...terrorist money and from other unscrupulous sources......
The man is a clown, needs to be impeached, and the bailouts NEED TO END. There wasn't hardly anyone screaming for bailouts till WE STARTED DOING THEM !!!!! Then, suddenly OUT OF THE BLUE...EVERYONE SAID THEY WERE BANKRUPT !!!! Every town, every city, every bank, every business....I DONT BELIEVE IT !!!!! This is a HUGE SCAM and the money needs to END NOW.
Send Obama BACK to his thug life in Chicago and TAKE OUR COUNTRY BACK !!!!!
I personally don't understand how the city of West Lake Village get's a half million dollars when it's one of the wealthiest cities in Los Angeles. As an Angeleno myself, I think that money would better deserved in one of the communities that were hit hardest. There is no fairness in giving money to that who is not desperate for it.
That's one thing that troubles me about this whole thing, Hassan. Some of these 88 cities are getting cash instead of transportation money. So let's say, city A is fairly run down and could use jobs and transportation projects AND decides to swap for cash instead of taking the stimulus. How do you feel if you live in that town?
On the other hand, if you trust the cities to look out for their best interests, then, what's the big deal? The MTA is, as far as we know, still directing the federal money to transportation projects. It's just that some of the cities are passing on the transportation funding and transferring it to their neighbors in exchange for cash.
We've got quite a screamer on our hands here (CharInOhio). If you were trying to come across as an out of touch loon...congrats you nailed it!
Now to the point.... It's hard to judge the situation from this information but I would hope that there is sufficient oversight. I guess the thought is this will help push stimulus dollars to those areas that can use them while providing cash to areas that have different needs. I see this has increased efficiency. getting the right color of money in the hands that can best use it the fastest. However I do agree with you Scott, oversight is needed and probably not been provided.
