Merchants Angry as They Learn Parking-Lot Funds Were Used for Other Purposes

For more than a decade, merchants in San Pedro have regarded the community’s parking meters as piggy banks that would one day finance a new downtown parking lot.

Under a Los Angeles parking-lot acquisition program, all money collected from parking meters is placed in trust funds to pay for city parking lots and meters.

But recently, when merchants tried to cash in on the program, they found that the San Pedro account did not have enough to buy the lot they had picked out on 6th Street. The San Pedro parking-meter fund, which they expected to contain $225,000, was $12,000 in the hole instead.

“The money was taken from us,” said Rick Gaydos, president of the San Pedro Revitalization Corp., a nonprofit group of business leaders. “And the city never told us about it.”

Deficit Criticized

The deficit has sparked criticism of a 14-year-old program designed to pay for new city-owned parking lots in many small business districts, including ones in the San Fernando Valley. Meter revenues collected from those areas--about $9 million a year--are designed to be returned to the parking districts in ways that make the districts more accessible to business customers.

But, over three years, beginning in 1981, $8.8 million was removed from the parking-lot accounts to pay other transportation costs, including the salaries of some city employees, because of shortages in the city budget, said Phyllis Currie, an assistant city administrative officer.

The City Council approved the fund transfers as part of yearly budget adoptions, and some members were unaware that they were damaging the parking-lot acquisition program, according to Los Angeles City Councilwoman Joan Milke Flores. She voted to approve the budget in those years with no idea the money was being diverted, Flores said.

“It was really a shock . . . and a swindle,” she said. “When these meters were put in, the city said to the businessmen: ‘We know you need more parking lots,’ and they set up this trust fund.

‘Our Money’s Gone’

“In the meantime, all our money’s gone.”

Flores, who represents San Pedro, introduced a measure last week that would seek to restore the lost funds to the various parking-meter districts, whose trust accounts now total about $19.5 million. But, even as the city’s finance and transportation committees prepare to consider the proposal--possibly this month--other council members are conceding that there may be no place from which to draw the funds.

“That money’s lost and gone forever; there’s nothing we can do about it,” commented Councilman Zev Yaroslavsky, chairman of the three-member Finance Committee.

City budget planners decided to tap the parking-meter funds in 1981 as Los Angeles struggled to recover from Proposition 13, the property-tax limitation initiative, Currie said. The money was used for salaries of Transportation Department employees and for projects such as installing stop signs and repainting curbs, she said.

According to reports from the city administrative office, Councilman Gilbert Lindsay’s inner-city district lost $2.4 million during the three years the funds were transferred, the most among the city’s 15 council districts. Losses in other districts ranged from $1.7 million in Yaroslavsky’s Westside district to less than $100,000 for Valley council members Joy Picus ($95,000) and Ernani Bernardi ($52,000).

Valley council members Howard Finn and Hal Bernson did not lose funds because their districts contain no parking meters.

The amount of remaining funds varies from district to district. Lindsay’s district, for example, still has nearly $5 million in parking-meter revenues. Yaroslavsky’s district has $5.4 million, whereas Picus’ district has a $141,000 deficit and Bernardi’s district is $756,000 in the red, according to the city Administrative Office.

In most cases, the effect of the transfers also has varied from district to district.

In San Pedro, where the transfers emptied the parking-meter fund, money was not available last year to buy the $175,000 lot that merchants had hoped would boost revitalization. Gaydos of the merchants’ group said the city might be willing to loan money to San Pedro from other parking-meter accounts, but such a loan would have to be repaid from future meter revenues.

Merchants hoped to use future revenues to buy more lots as the downtown business district develops, he said.

“This is hampering the revitalization of downtown San Pedro,” Gaydos said. “We shouldn’t have to borrow money when there are funds that ought to be there.”

Bernson, whose district was not affected, said he hopes to ensure that such transfers do not occur again. Eventually, he said, meters may be used to generate parking revenues near Cal State Northridge or along parts of Reseda Boulevard.

Need to Protect Program

“I’m certainly interested in seeing we don’t rob these parking districts in the future,” he said.

Yaroslavsky said the effect is difficult to gauge in the Westside. The district’s account still totals more than $5 million, but the larger problem is to find available property. Residential groups whose members live near commercial areas often do not want parking lots put next to their homes, he said.

And the lost money makes it all the more difficult to acquire lots in an area where property values have skyrocketed, Yaroslavsky said.

“You can’t get much for $1 million,” he said. “We can’t expect . . . these parking-meter funds to create a dent in the problem.”

In 1981, when he was a member of the Finance Committee, Yaroslavsky helped review the city budget but said he was unaware of the transfers until months after they were made.

“The first time it slipped by the entire City Council,” he said. “It was buried in the budget.”

Currie said the city attorney’s office authorized the transfers before they were presented to the City Council. She said every council member had a chance to review the budget before it was adopted.

Money Used Legally

“It was a legal use of the money,” Currie said. “I think the record speaks for itself--it was a part of the budget process.”

The following two years he tried to fight the transfers, Yaroslavsky said, arguing that they were a break in faith with merchants who had been promised money for parking lots. But other council members, including former Finance Committee Chairman Marvin Braude, believed the transfers were the only realistic way to handle the budget.

“It was an emergency--it was a question of raising taxes or utilizing these funds,” Braude said. “We had received a mandate from voters to cut back and use whatever reserve funds we had, and that’s what we did.”

Braude, whose Westside and San Fernando Valley district lost $390,000, said all council members should have been aware of the transfers at the time. Although he would like to be able to restore those funds, he said, “It is a question of priorities--do we pay for more parking lots or more police? Or do we repave potholes?”