Stimulus funds in California mostly go to routine projects, study says

By Alana Semuels

Aug. 21, 2009 12 AM PT

When President Obama first outlined his stimulus plan to boost the economy, leaders across the country envisioned a burst of federal funding to build high-speed rail lines, modern classrooms and a new national electricity grid.

Latrine repair? No one mentioned that. But $500,000 has been set aside to fix the toilets at Ft. Irwin, an Army base south of Death Valley National Park, according to data from the California Recovery Task Force.

In fact, much of the stimulus money earmarked for California so far has gone toward run-of-the-mill projects such as replacing a metal guardrail with a concrete one in the city of Orange and conducting a campus-wide elevator study at the Department of Veterans Affairs Hospital in San Francisco.

Federal officials defend the expenditures, saying they wanted to emphasize “shovel-ready” projects that would get people working. California had one of the highest unemployment rates in the nation in June at 11.6%, and economists anticipate it to remain in the same ballpark when the latest numbers are released today.

But critics say the stimulus bill is merely paying for work that would have been completed anyway. Worse, they say, the government is missing a chance to reshape the way Californians live, a failure that’s being repeated in states across the country.

“We have these huge, challenging needs facing the country in infrastructure,” said Steve Ellis, a vice president at consumer advocacy group Taxpayers for Common Sense. “But at the end of the day, we’ll have spent $800 billion and we’ll still have some of these huge projects staring us in the face.”

The $787-billion stimulus plan includes $499 billion in spending programs and $288 billion in various tax cuts and credits, said Ed DeSeve, senior advisor to the president on Recovery Act issues.

Over the next three years, California is expected to get $26 billion in stimulus funds for projects including building highways and bridges, developing education programs and stabilizing the state’s finances, according to a private research group. About $5.6 billion in spending in the state has been approved by the federal government as of July 22, according to the most recent update on the state’s Recovery Task Force website.

Transportation makes up a big share of the stimulus projects already approved. About $2 billion is going to transportation, including the building of a six-lane highway near the Mexican border.

But critics say that little of that $2 billion focuses on long-term transportation goals such as getting people out of cars and into public transit. About 96% of the “flexible” transportation money the state had spent by mid-June went to road projects instead of public transportation or “other non-motorized needs,” according to a study by Smart Growth America and the California Public Interest Research Group.

More money should have gone to “projects that would both be built quickly and achieve long-term goals such as reducing pollution and congestion,” said Emily Rusch, state director of the group.

The Los Angeles County Metropolitan Transportation Authority thought about applying for stimulus funds to stretch the Red Line light rail to the sea but scrapped the idea when officials realized the project couldn’t be completed in the timeline the president outlined, said David Yale, MTA’s deputy executive officer of regional programming.

“The president’s charge was to get the economy jolted, so we needed to identify projects that could move quickly and get out to bid quickly,” Yale said.

Defense projects

About 20% of the money set aside for California thus far is going to Department of Defense and Department of Veterans Affairs projects, such as replacing doors at the Golden Gate National Cemetery and renovating men’s and women’s restrooms at Vandenberg Air Force Base near Lompoc.

California is getting a big chunk of Defense Department money because it has so many bases, said Cmdr. Darryn James, a Defense Department spokesman. Two of the three-biggest Defense projects nationally will be completed in California: a $563-million hospital on the Camp Pendleton Marine base in northern San Diego County and an $86-million project to construct bachelor housing at Naval Base Coronado near San Diego.

Many of the Defense projects, including the hospital, were planned long before the stimulus was even announced, James said.

“The DOD selected projects that could be executed relatively quickly, while also focusing on mission requirements and increased quality-of-life impact for our troops and their families,” James said.

Other Defense Department projects in California include $1.3 million to replace a water main at Camp Roberts near Paso Robles and $3 million to repair the walls, floors, ceilings and latrines at a building at Ft. Irwin, according to California Recovery Task Force data.

A fleeting benefit?

Critics say those aren’t the types of projects with lasting effects on the economy.

“Whether it’s talking about building a new [military] hospital or bachelor’s quarters, there isn’t that return on investment that you’d find on something that increases efficiency like a road or transit project,” said Ellis of Taxpayers for Common Sense.

Job creation is another question. A recent survey by the Associated General Contractors of America found that slightly more than one-third of the companies awarded stimulus projects planned to hire new employees. But about one-third of the companies that weren’t awarded stimulus projects also planned to hire new employees.

“While the construction portion of the stimulus is having an impact, it is far from delivering its full promise and potential,” said Stephen E. Sandherr, chief executive of the contractors group.

It’s unclear how many jobs will be created through the Defense Department projects. Most of the construction jobs are awarded through multiple award contracts, in which the department guarantees a minimum amount of business to certain contractors, and lets only those contractors bid on projects.

That means many of the contractors working on stimulus projects already have been busy at work on government projects.

“I don’t think we’ve been hit as hard as the others -- 99.99% of our work is with the federal government,” said Debbie Saunders, a project manager at Baldi Bros., a Beaumont company that was recently awarded a $600,000 stimulus project for runway work at Travis Air Force Base.

She didn’t anticipate that Baldi would hire any more people for the project.

Another company, Barnhart Inc. of San Diego, received $9 million to renovate barracks at Camp Pendleton and $11 million to build a child-care center at Naval Base Coronado. Those projects will create about 40 to 60 jobs each at the peak of construction, said Dave Roach, a Barnhart senior vice president.

Those projects will definitely benefit the residents. The apartments that Barnhart is building will include granite countertops, washers and dryers, and exercise rooms. Some include tennis courts and pools, Roach said.

And what of those light rails, universal broadband connections and smart grids?

When Obama signed the stimulus bill, he said it would put Americans to work “doing the work that America needs done, in critical areas that have been neglected for too long, work that will bring real and lasting change for generations to come.”

The administration worked first to “rescue hard-hit families, businesses and state and local governments,” said DeSeve, the presidential advisor. For projects such as high-speed rail and smart grids, he said, “we took the time to do it right.”

Officials say California may yet get those things, but there’s no guarantee.

The stimulus bill sets aside $7.4 billion for broadband projects, for example, but competition for that money is expected to be fierce -- and large areas of California are ineligible because the money is for remote rural areas, said Sunne Wright McPeak, chief executive of the nonprofit California Emerging Technology Fund.

And though the bill allots $8 billion for high-speed rail work, that’s for the entire country. In California, the proposed high-speed rail line linking Orange County and San Francisco alone is estimated to cost more than four times that amount.

“The basic message is that unless it’s something that was pretty far along in the planning, you’re not going to see it as far as the stimulus,” said Ellen Hanak, research director at the Public Policy Institute of California.

alana.semuels@latimes.com

BEGIN TEXT OF INFOBOX

Stimulating California

California’s four-largest stimulus projects

* Marine Corps, Camp Pendleton: Hospital replacement

Cost: $563 million

* Los Angeles County Metropolitan Transportation Authority: Replace and repair old bus systems

Cost: $225 million

* Caldecott Tunnel improvements, Alameda and Contra Costa counties

Cost: $192 million

* Carpool lane work on the 405 Freeway in Los Angeles between Interstate 10 and the 101 Freeway

Cost: $190 million