Chick Says Department of Transportation Mismanaged Funds

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The Los Angeles city Department of Transportation is sitting on at least $5.4 million in traffic mitigation funds collected from developers and another $7.8 million in parking revenues, according to an audit released Thursday by L.A. City Controller Laura Chick.


The audit looked at 11 traffic mitigation funds managed by the Department of Transportation and found five of them had been inactive for at least three years. Together, these five funds had a balance of $4.3 million. The money in the traffic mitigation funds is collected from developers as a condition for project approvals.


The audit found another $1.1 million in an inactive fund that should have been closed five years ago; these monies should have been transferred to active accounts, the audit said.


“These funds are just sitting there, gathering dust. There is something very wrong with this picture. Developers are building projects, paying fees to mitigate traffic problems and somehow these dollars sit idle for many years,” Chick said in a letter to Mayor Antonio Villaraigosa, City Attorney Rocky Delgadillo and the City Council accompanying the release of the audit.


In addition, the audit found that the Special Parking Revenue Fund (with a total account balance of $90 million) had $7.8 million sitting in accounts for projects that had been completed or eliminated. Monies in this fund are used to build public parking garages in commercial districts, among other things.


“The Department of Transportation is charged with the management of these accounts, yet precious public resources have been languishing,” Chick said.


Among the audit’s other findings: the Department of Transportation does not provide detailed budgets for several of the mitigation funds and also continues to re-appropriate unspent balances for completed projects.


The audit also found that the department’s contract with the Grand Central Parking Garage contractor is unclear and may have resulted in the city paying out as much as $472,000 in excess funds.


The audit recommended that Department of Transportation Management put in place tighter oversight policies to ensure that all funds collected are used for their intended purposes and are not appropriated to completed projects.


Responding to the audit, a Department of Transportation official said the department has long been aware of the problem of unused mitigation funds and agrees with the audit’s findings.


“We’re not just collecting money and sitting on that money,” said Wayne Moore, assistant general manager for finance and administration. “Projects are being planned and designed. But in some cases, the projects need other matching funds from other state or local agencies before they can go ahead.”


Nonetheless, Moore said the department has already implemented some of the recommendations in the audit and is in the process of implementing others.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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