RLA Funds to Run Out Before Planned : Rebuilding: Staff report shows 70% of budget covered salaries, administrative costs. Initially, organizers said $3-million federal grant would last five years.

Rebuild L.A. has already spent most of the $3-million federal grant it received for operating costs and will need to raise additional private contributions or public funds to stay afloat into 1995, top staffers disclosed at a quarterly board of directors meeting Thursday.

In RLA’s first 13 months of operation, 70% of its spending went for wages and administrative costs and 17% for program services, according to RLA’s first fiscal audit released Thursday. RLA’s four co-chairmen did not explain to board members why the funding would not last longer, nor did they specify from where they would seek funds.

The nonprofit organization’s top staffers also declined Thursday to publicly divulge the salaries or even the range of salaries of any of its 30 paid employees.

“I don’t think that’s germane,” co-chairman Bernard Kinsey said in response to a reporter’s question after the meeting.

Kinsey, a former Xerox executive, and 29 other executives and support staffers are paid with RLA funds, according to RLA, formerly known as Rebuild L.A. The remaining 17 staffers of RLA, created as the city’s primary response to the devastating 1992 riots, are executives on loan from various corporations and law firms in Southern California.

During the breakfast meeting attended by about half of RLA’s board members, none expressed surprise that the bulk of RLA’S expenditures have gone toward personnel and administrative costs rather than community programs. RLA’s stated mission is to help to restore economic life to neglected neighborhoods by creating “new partnerships among the private sector, government and community,” and is not program-oriented, they said.

“It’s a very different organization, an organization which seeks to capitalize on events to get things done--and that takes staff,” said board member Herb Carter, president of the United Way of Greater Los Angeles.

During its formative stages after the riots 18 months ago, then co-chairman Peter V. Ueberroth said that the funds RLA had received were enough for five years of operation and that the organization would accept no more contributions for such costs. Ueberroth, who remains on RLA’s 96-member board of directors, did not attend Thursday’s two-hour session.

Kinsey, along with several board members, expressed confidence Thursday that donations and grants can be found to cover RLA’s costs for the five-year period.

“The words shortfall and layoffs aren’t words we’re using nor are they applicable here,” Kinsey said.

The RLA audit, prepared by Price Waterhouse, showed that the organization has taken in $8.6 million--including 66% in private contributions and 27.5% from a federal Economic Development Administration grant.

In its first 13 months of operation ending June 30, RLA spent $2.9 million on salaries and administrative costs and $533,000 on program services, the audit showed. Remaining assets were $5.1 million.

During and after the meeting, board members suggested several ways of keeping the agency solvent if funds run out late next year, as anticipated under the current rate of spending.

Los Angeles County Supervisor Yvonne Brathwaite Burke suggested that spending be slashed until additional funds become available.

Several others, including David Lizarraga, chief executive of the East Los Angeles-based private development corporation TELACU, suggested that RLA return to the federal government for additional funds. “There was a desire of the EDA to be responsive and there still is,” he said.

That idea was blasted by Jane Small, chairwoman of the Los Angeles County Commission on Disability. “I object to RLA applying for government money--they should be encouraging community agencies to be getting that money and helping them get it,” she said.