CITIES: State audit blasts redevelopment panels' accountability.
An audit released Monday criticizes California redevelopment agencies for lacking performance measures that track how well they fight blight and create jobs, but supporters claimed the report was compiled to bolster Gov. Jerry Brown's proposal to abolish the agencies.
State Controller John Chiang's review of Los Angeles' and 17 other community redevelopment agencies found they funded questionable projects, delayed in making tax payments and engaged in irregular reporting practices.
"For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures," Chiang said. "The existing approach is not how anyone concerned with performance, efficiency and accountability would draw it up today."
Chiang's report credited Los Angeles in working to improve blight, unlike CRAs in other cities. Palm Desert, for example, was criticized for projects designed to remove blight on luxury golf courses.
However, Chiang said he found problems with all of the CRAs he reviewed in how they file financial reports and other required documents.
"The lack of accountability and transparency is a breeding ground for waste, abuse and impropriety," Chiang said. "In whatever form local redevelopment takes in the future, the level of oversight and openness must be consistent with the amount of public dollars entrusted in their care."
Los Angeles officials
disagreed with some details of Chiang's audit.They said, for example, that CRA/LA diverts 13 percent of its budget - not 20 percent - for administrative costs. They also said that CRA/LA spends 25 percent of its budget on housing, while the audit put that figure at 20 percent.
Chiang launched his review after Brown proposed eliminating the more than 400 CRAs in California and using the tax revenue that now goes to the agencies to fund schools and public services instead.
CRA officials have defended their operation, saying they are an essential element of the local economy. The governor's office, however, said the audit bolsters the case for shutting them down.
"It will make more local taxpayer dollars available for core needs like education, public safety and emergency medial care for the most vulnerable," Brown spokesman Gil Duran said.
"We simply can't afford to spend public money on mermaid bars and luxury golf courses at a time when schools are facing major cuts and public safety resources are stretched thin."
CRAs are designed to boost economic development in blighted areas by making public improvements, offering incentives and investing in various projects. As property values rise, the increased tax revenue is used to fund the CRA and its programs.
Mayor Antonio Villaraigosa has defended the Los Angeles CRA, saying it is one of the few agencies that boost economic development in the city.
The CRA/LA board and City Council are scheduled today to hold a joint meeting to discuss potential strategies if Brown pursues his plan to eliminate the agencies.
Chiang spokesman Jacob Roper said the report does not make any specific recommendations on ridding the state of redevelopment agencies.
"This is a fact-finding report for officials," Roper said. "But if it comes down to a choice between schools and a golf course, we need to choose schools."
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