Idle Funds

Untapped Resources: Controller Identifies $28 Million in Unspent Public Funds

The City’s treasury is made up of 830 individual special purpose funds (special funds) as of March 2018, in addition to its General Fund. These special funds were each created with very specific restrictions and collectively maintained a balance of $8.7 billion as of June 30, 2017, constituting 90 percent of the City’s overall treasury. Some of the funds are restricted based on legal or grant requirements; other uses are guided (or restricted) by various policy decisions. The result has been a fragmentation of our City’s funds, making it difficult in some instances for funds to be spent.

This report zeroes in on a specific area of concern that directly affects Angelenos across multiple categories: $28.2 million that has remained unspent for public safety, economic development and more.

My office has studied and reported on the opportunities and challenges of so many special funds. Since issuing our first report in 2014, we have worked with many City Departments and City Council members to close almost 200 funds. Over the same period, the City created another 157 special funds. It is a priority for my office to examine how each and every special fund was created, how they are managed and the extent to which they are being used – or not – for much-needed City purposes.

These funds have been idle for a minimum of four years, with some funds unexpended for more than 10 years. This funding could be used for much needed public services such as street improvements, economic development and public safety services. We have identified idle funds and associated funding amounts, in the following categories:

• Exceedingly restrictive accounts, such as fund number 864, entitled, “Venice Coastal Parking Impact Fund,” which can only be used for parking improvements in a three square block section of Venice. The fund has $978,584 and has not been tapped in at least six years;
• Divergent uses, such as fund number 911, entitled, “Channel Gateway/Venice Affordable Housing,” which was originally authorized in 2000 and still has $452,757. The source of the funds was a one-time $1 million payment from a developer and its eligible uses are for affordable housing in Venice or operations of a beach shuttle;
• Programs no longer active, such as a number of Business Improvement Districts from Reseda to Downtown, L.A. that still have $202,157 spread across five accounts;
• Legacy accounts, such as fund number 44H, entitled, “Calworks Youth Jobs Trust.” This account was authorized by the City Council in 2000 for a five-year grant, but sits with $181,501 for economic development;
• Expired grants, such as fund number 311, entitled, “Fifth Year Economic Planning Grant,” which was authorized in 1987 for a one-time grant program still has $43,564 in the account. The grant no longer exists but the fund remains active.

There is a crucial imperative for the City to update and reform its management and use of special funds. This report highlights 123 idle funds, with a total cash balance of $28 million, from which there have been no expenditures over a period of three years. While 17 of these funds have no current cash balance, 31 contain more than $100,000 and 7 hold more than $1,000,000. These funds are administered by 18 different departments, with the Mayor’s Office, Economic and Workforce Development (EWDD), and the City Clerk administering the largest numbers of funds.

This funding could be used for much needed public services such as street improvements, economic development and public safety services. We have identified idle funds and associated funding amounts, in the following categories:

• Street Improvements: $7.6 million in 13 funds
• Parks: $7.6 million in eight funds
• Affordable Housing: $5.1 million in six funds
• Economic Development: $3.9 million in 33 funds
• Public Safety: $2.5 million in 27 funds
• Public Works: $762,000 in seven funds
• Social Services: $449,000 in 10 funds
• Arts: $229,000 in two funds