Officials Divert Funds Intended for Community

During the past three years, members of the Los Angeles City Council have diverted more than $130,000 intended for public service and neighborhood cleanup programs to pay for their staffs’ salaries, city records show.

With the entire council’s approval, 10 members have almost routinely transferred money from the $20,000 annual city allotment given to each of the 15 council members for donation to nonprofit and other community groups.

“I’m shocked. I’m shocked,” said Nina Royal, an activist involved in graffiti cleanup and neighborhood patrols in Sunland-Tujunga. “If it’s allotted for community projects, it should not go to staff.”

It is legal and within the council’s jurisdiction to spend the funds on salaries, but that use clashes with the council’s original intent for the money: to help community groups fight crime, blight, gangs, graffiti and other social ills.

City records show that between July, 1991, and June, 1994, 10 past and present council members transferred a total of $130,407 to their office salary accounts from their public service and cleanup accounts.

Councilman John Ferraro transferred the most, using nearly $43,000 during the past three years to pay staff salaries, according to the city records. Councilman Joel Wachs diverted the second-highest total, nearly $39,000 during the same period, the records indicate.

The public service and cleanup accounts--which each contain $10,000 annually--are provided in addition to each council office’s annual $640,882 budget, which pays salaries for the council members and their staffs. Council President Ferraro has a $680,367 annual budget.

Although $130,000 may sound like a small amount of money, it represents hundreds of potential grants, which can be the lifeblood of community organizations. When the money has been donated, it has normally been given out in increments of between $250 and $2,500 to local business groups, police support organizations, anti-gang programs, recreation centers, arts foundations, and for beach cleanup efforts and school field trips.

Council members who used the money for salaries instead of donations to community groups defend their actions, saying the money they spent on staff salaries or training helps their offices better serve their constituents.

Ferraro, whose district includes parts of North Hollywood, said he believes the best use for some of the money was to pay his staff so they could better respond to problems raised by constituents. He was uncertain whether the money allowed him to hire additional staff or simply maintain his current staff, but he said he was sure it did not pay for raises.

“I’m sure there are a lot of groups that would like to have the money, but we have to decide how best to serve the district,” Ferraro said.

A Wachs spokesman said that in past years Wachs has donated money from the accounts to community groups but that this year all the money was used to retain staff that would have otherwise been eliminated by budget cuts.

“It’s a matter of which way we chose to help our district,” said Greg Nelson, an aide to Wachs, whose district stretches from Sunland-Tujunga to Studio City.

News of how the money was spent sparked criticism from other city officials, taxpayer watchdog groups and nonprofit organizations that depend on such donations. But some community leaders were reticent about publicly criticizing the council members, saying they feared their comments would cause them to receive even less money in the future.

One high-ranking city official who asked not to be identified said the use of such money for salaries sends the wrong message to other city departments, which have coped with a hiring freeze and pay cuts for several years.

“We give the departments the message to trim and look for ways to save money, and I think the council should live up to that message,” the official said.

Scott Mathes, executive director of the California Environmental Project, a statewide group that has used volunteers to clean up the canyons in Wachs’ district, said he has mixed feelings about how Wachs has spent the funds. Wachs has donated to his group in the past, and Mathes said he would like to receive further contributions.

“I think that by donating to smaller organizations like ours he would be showing that he cares for his community,” Mathes said.

Suggestions about how the money could best be spent varied widely.

Tim Mahfet, executive director of the Universal City/North Hollywood Chamber of Commerce, said he didn’t even know the council members had money to donate to community groups. And although he declined to criticize council members who spent the money on salaries, Mahfet said he hopes to get donations in the future from Wachs and Ferraro, the two councilmen who represent the chamber’s membership.

“Hopefully both will be of a mind to share with us,” Mahfet said.

Royal, the Sunland-Tujunga activist, suggested that it could be used to help equip the city’s Police Department with new crime-fighting tools, such as computers.

In fact, Councilwoman Laura Chick this year donated all $20,000 from her two accounts to the West Valley Police Activity League, a law enforcement booster organization that has donated computers and other equipment to the LAPD’s West Valley bureau.

Chick was among six past and present council members who did not divert any money to salary accounts during the past three years.

Councilman Richard Alarcon, who represents portions of the northeast San Fernando Valley, did transfer $9,197 from the two accounts to his salary budget last year, according to records. However, Alarcon’s chief of staff, Annette Castro, said the money was transferred at the end of the fiscal year so that it would not divert back to the city’s General Fund. She said the money remains in Alarcon’s budget, and he has not yet decided how it will be spent.

Under the city’s guidelines, if money from the two $10,000 accounts is not spent by the end of the fiscal year, it reverts to the city’s General Fund and can be used to pay police salaries, street paving or any other city expense.

Although the amounts in the community donation accounts make up only a fraction of the city’s overall $4.3-billion annual budget, the transfers provide a rare look at the power city lawmakers have to move money around from about half a dozen “discretionary” accounts.

Council members can tap accounts to pay for work-related travel, conferences, meals and receptions. Each council member is also allowed to have an “officeholder account” that is funded by donations from supporters to pay for governmental, legislative and political activities.

The public service and cleanup accounts for nonprofit organizations were created by the City Council in 1987 in an attempt to end the squabbling among council members over money for pet projects, which broke out every year when the city’s budget was adopted.

To quiet the rancor and debate, the council created the two accounts and put $10,000 in each so that every council member would have a predetermined amount to donate to worthy causes within his or her district.

The public service account was designed “to provide services that yield direct benefit to the public within the council districts,” according to city records. The cleanup account was created “to provide community cleanup and graffiti removal services within each district,” records say.

The City Council has the legal power to move the money out of those accounts and spend them as the council sees fit, said Deputy City Controller Tim Lynch. However, this can only be done with the approval of the entire council, he said.

That approval was granted 30 times in the three-year period and rarely was there any debate or discussion about whether it was appropriate.

On the other hand, there have been a few occasions when council members took the opposite tack, subtracting money from their salary account to make donations to community groups and cleanup efforts.

In the past two years, Councilman Marvin Braude diverted a total of $2,800 from his salary budgets to community groups. Last year, then-Councilman Ernani Bernardi spent $1,170 from his salary accounts on such groups.

Account Transfers

Each member of the Los Angeles City Council is allotted $10,000 to donate to public service groups and $10,000 for cleanup programs. But over the past three years, council members have transferred more than $130,000 from those accounts to pay for staff salaries. A look at some of these transfers during the past three years.

1993-94

From public From Council member service account cleanup account Joel Wachs $10,000 $10,000 John Ferraro $9,012 $10,000 Ruth Galanter -- $5,700 Richard Alarcon $697 $8,500 Mark Ridley-Thomas $63 $3,300 Rita Walters $1,133 $8,695 Jackie Goldberg $227 $2,948 Rudy Svorinich Jr. -- $2,000 Marvin Braude -- $1,000 1992-93 Joel Wachs $8,740 $10,000 John Ferraro $6,997 $10,000 Marvin Braude $2,000 -- 1991-92 John Ferraro $819 $6,000 Ernani Bernardi $145 $2,798 Mark Ridley-Thomas $3,252 $8,379

Source: Los Angeles city records