The Los Angeles City Council voted unanimously Tuesday to plug a financing gap that threatened community programs once paid for with federal dollars, devoting more than $1.9 million in reserves to help sustain programs that include neighborhood beautification and youth activities.
The city has scrambled to figure out how to keep a host of programs running after the Department of Housing and Urban Development told the city it was violating rules governing federal grants, spending more of the federal funding than allowed on “public services.”
To make sure that federal money for community redevelopment and renovation doesn’t end up paying mainly for public services that cities would ordinarily cover on their own, federal rules cap the percentage of grant money that can be used for those kinds of services.
Since many Los Angeles programs were deemed to be “public services” that fell under the cap, the HUD warning meant the city had more programs competing for a smaller chunk of the federal money. City officials decided to pay for some of the programs using city money, relieving some of the competition.
But that posed another problem for the community programs, since city funding doesn’t start flowing until July -- three months after the federal grants ran out.
Last month, some nonprofits panicked after learning that a key stream of their funding was due to halt in weeks. Groups battling HIV/AIDS, for instance, had feared that such an interruption would put thousands of people at risk and jeopardize dozens of jobs.
To prevent that from happening, Council President Herb Wesson and Councilman Gil Cedillo proposed pulling $1.9 million from the reserve fund for economic uncertainties to keep the programs going for those three months; Councilwoman Nury Martinez seconded the motion.
The programs that will be sustained with that $1.9 million include efforts for community beautification, youth employment, keeping parks and recreation centers open longer throughout the summer to prevent gang violence, and facilitating the hiring of day laborers, according to the motion.
"If we didn't get this funding, we would have to close our day laborer center ... it was going to be a matter of days," said Martha Arevalos, executive director of CARECEN, the Central American Resource Center. Such centers "are like a second home for day laborers. They're helping people who want to work to get those jobs -- and to make the process as smooth as possible."
That stopgap funding is roughly 10% lower than what the programs were previously getting, according to Edward Johnson, Wesson's assistant chief deputy. Other programs, including those that help prevent HIV/AIDS, will continue to get some federal money.
Halting the community programs "would have had a ruinous impact on Angelenos most in need," Councilman Paul Krekorian said in a statement Tuesday, after a Council committee backed using the reserve money. "The steps we are taking today will help bridge the gap and ensure the continued viability of these programs until we can find a longer term solution."
Though the feared three-month gap has been plugged, the programs could still face reductions in the coming year. Mayor Eric Garcetti and city officials are still in the process of crafting the budget for the fiscal year that starts in July.