City to ‘Buy’ State Funds for Parking at Historic Depot : Finances: Proposition A cash is acquired from three cities. It will be used to upgrade a stop along a commuter rail line set to begin service in October.

Glendale will pay for part of a commuter hub at the historic Southern Pacific Railroad Depot by “buying” state transportation money--at a discount--from three other cities.

The deal approved by the City Council this week allows Glendale to virtually double its money, buying $976,415 in Proposition A funds from La Canada Flintridge, Cerritos and Lawndale for $500,000.

Those cities, in turn, get needed cash to help balance their budgets. According to state law, Proposition A money, allocated to cities based on population, must be used for transportation purposes. The law allows cities to barter their Proposition A money, though the ultimate use of transportation funds must be approved by the County Transportation Commission.

The exchange will allow Glendale to acquire land for parking at the 400 Cerritos Ave. depot, which will be a stop on the commuter rail service scheduled to begin in October between Los Angeles and the Santa Clarita Valley and Moorpark areas.

In separate action, the council approved plans to restore the 67-year-old station and convert it into a commuter hub. Full restoration of the depot, designed to preserve the Spanish-Colonial Revival architecture, is expected to take two years and to cost almost $1.2 million.

Initial plans call for spending an additional $8.1 million, including the $1 million in land purchases approved Tuesday, to build surface parking lots for 725 vehicles. About 300 parking spaces are expected to be ready by October, said Jeanne Armstrong, city redevelopment director.

Ultimately, the city plans to spend up to $33 million to develop a transportation center on the 2.5-acre site, scheduled to be finished by the year 2000.

The center would include multilevel garages built in phases for 1,500 cars, dual loading platforms for commuter trains and light rail service and parking bays for shuttle buses, all linking Glendale with other regional destinations.

Glendale purchased the depot--now an Amtrak station--in 1989 from Southern Pacific for $3.3 million. The city has pledged to use some of its own money, as well as state and federal grants, to develop the center, which will also continue to serve Amtrak.

Part of the money is to be generated by proposed formation of a new redevelopment zone along the railroad tracks and San Fernando Road on Glendale’s western border, Armstrong said.

Cities are eligible to receive a portion of property taxes generated from improvements done in a redevelopment zone that increase the value of land and buildings.

City officials said buying Proposition A funds from other cities is part of an innovative financing plan. Glendale earns about $2 million a year in Proposition A money, but the funds are still not enough to meet the city’s ambitious transportation development plans.

The exchange practice “is not extremely common,” but it is beginning to happen more as cities struggle to balance tight budgets in the recession, said Los Angeles County Transportation Commission spokeswoman Cynthia Pansing.

Glendale first took advantage of discounted transportation funds last year when it bought $1 million in Proposition A money from Cerritos for $600,000, a 40% discount. That money also was used to acquire property for the transportation center.

In the agreement approved Tuesday, Glendale will pay from 47.5 cents to 53 cents on the dollar for Proposition A money. Glendale Finance Director Brian Butler predicted that the rate may drop even further as the recession continues. “Cities are having difficult times and they need unrestricted dollars,” Butler said. “There are not that many cities that have a capital improvement program such as Glendale from which to draw.”

Smaller cities with lower allotments of Proposition A funds usually are forced to sell at a greater discount, Butler said. Lawndale, for instance, with a population of 28,000 and two square miles of territory, has tentatively agreed to sell $100,000 in Prop. A funds for $47,500 in cash. Glendale, the third-largest city in Los Angeles County--behind Los Angeles and Long Beach--has a population of about 190,000.

“It helps to fill the gap between decreased revenues and our expenditures so that we are able to maintain services,” said Lawndale Assistant City Manager Karen Stauffer.

She said the sale “could mean the purchase of a small piece of equipment or a supply of needed Xerox paper. Anywhere we can save and increase our revenues certainly is going to help.”

Cerritos, which receives between $500,000 and $600,000 a year in its annual Proposition A allotment, was able to negotiate a slightly higher rate on the sale of funds--$252,500 in cash from Glendale for $476,415 in transportation money.

Cerritos Finance Director Rebecca Lingad said the city will use the money to build a trust fund to operate a performing arts center. She said Glendale outbid another buyer that had offered 50 cents on the dollar. Glendale’s bid amounts to 53 cents on the dollar.

Even though the La Canada Flintridge City Council this week agreed to sell Glendale $400,000 in transit funds at half price, two council members Monday urged city officials to continue negotiations in an attempt to reach a better deal. La Canada Flintridge last year was able to get 60 cents on the dollar, selling $500,000 in Proposition A money to the fast-growing city of Santa Clarita.

City and regional officials said potential fund exchanges generally are advertised by word of mouth. But Glendale is considering advertising itself in municipal trade publications as a potential buyer in order to find the best bargains.