Pico Rivera Takes 40% Loss in Money Swap, Figures It’s Good Deal

When Los Angeles County agreed this week to swap $660,000 for $1.1 million from Pico Rivera, county officials figured they had made a good deal. But so did Pico Rivera City Manager Dennis Courtemarche.

From Courtemarche’s perspective, he had traded away--for 60 cents on the dollar--tax money his city cannot use for money it can.

Before the trade, the city had $1.1 million it could spend only on public transportation, a need already fully met, officials said. Now it has $660,000 it can spend to add a traffic lane to each side of Whittier Boulevard, the city’s main thoroughfare and the heart of a reviving shopping district.

Trade Defended

“We cut the best deal we could for the project we need,” Courtemarche said. “If 60 cents is the best deal we can cut, that’s 60 cents more than we would have gotten otherwise.”

The $1.1 million, accumulated through a special countywide sales tax, is provided with a use-it-or-lose-it stipulation and would have gone back to the Los Angeles County Transportation Commission by next summer if not spent, he said.

Pico Rivera’s agreement to trade tax money at a discount is unusual only because so much money is involved in one transaction.

It is otherwise typical of dozens of smaller deals negotiated by about half of Los Angeles County’s 85 cities--including 12 in the Southeast and Long Beach areas--since voters approved a half-cent sales tax for public transportation in 1980 known as Proposition A.

The swapping of the special transit funds at discount for tax money with fewer strings attached reflects the fact that many smaller cities can find no reasonable way to spend their share of the windfall.

Regional transportation agencies will get the bulk of the $348 million expected to be collected from the half-cent tax this fiscal year. About $86 million, or 25%, will go to the 85 cities, but only about a dozen, including Long Beach, Commerce and Montebello, have bus systems.

Cities in the Southeast and Long Beach areas will receive about $15.5 million in special transit funds for this fiscal year, with awards based on population. Projected allocations for the fiscal year that began July 1 range from $825 to Vernon, which has only 82 residents, to $4.19 million in Long Beach, where about 415,000 people live.

Train Station Planned

Like Pico Rivera, most smaller cities spend their share of the tax on free dial-a-ride programs for the elderly and handicapped, subsidized bus passes and on maintenance of bus shelters--and still have money left over each year.

Pico Rivera has greatly expanded its transit offerings this decade and now spends $400,000 annually on them, Courtemarche said. But it will receive about $562,000 from transit taxes during the 1988-89 fiscal year.

Until last fall, Pico Rivera had planned to spend its accumulated surplus to build an Amtrak station, but it pulled out of the competition for the station last fall when the price tag soared. So Courtemarche said he sent out letters to every city in the county, and to the county itself, to try to deal with his transit funds.

“I got three letters back,” he said. “One city offered 30 cents on the dollar, another offered 50 cents and the county offered 60 cents.”

The county may have offered more because it was swapping federal urban aid funds, which can be used only for road improvements and carry many regulations that cities often find tedious. Most deals are struck with general fund dollars, which carry no strings.

The federal money, however, was just what Pico Rivera needed for its Whittier Boulevard project. With about $1 million more from other sources the city will add lanes and landscaping to a one-mile strip from Rosemead Boulevard to the San Gabriel River as part of a $37-million redevelopment project, Courtemarche said.

In addition to Pico Rivera, 11 other Southeast and Long Beach area cities have swapped transit funds at a discount since 1981. The area’s most active traders are Downey, which in six deals has swapped $1.66 million in transit funds for $994,000, and Commerce, which has entered nine agreements while exchanging $1.6 million for $2.58 million to operate its bus system.

Although Downey has gotten just 60 cents for each transit dollar, Administrative Services Director Lee Powell said the city has met both its citizens’ transportation needs while trading for $240,000 to buy its new computer-aided fire dispatch system and $500,000 for landscaping of Lakewood Boulevard.

“I understand why people might look funny at this (trading at discount), but it has its advantages,” Powell said. “It puts Proposition A money in the hands of people who can use it, and at the same time we can buy a fire dispatch system.”