Troubled CRA Lacks Focus, Audit Finds

The Los Angeles Community Redevelopment Agency is top-heavy, lacks a clear mission, is struggling financially and has trouble working effectively with the neighborhoods it serves, an independent management audit has concluded.

The thick audit document, delivered to the mayor and City Council on Wednesday, lays out in detail many issues confronting an agency in transition. It makes recommendations for charting a clearer course for the organization that once presided over the building of a new Downtown.

The council-ordered audit by Capital Partnerships Inc. comes in the midst of debate over the agency’s future. The report does not specifically address some of the changes proposed for the agency, including the mayor’s push to make it part of a new organization focused on economic development. Nonetheless, officials expect the audit will help sort out many thorny issues.

“It creates a more objective environment to discuss with the City Council and the mayor what the focus (of the CRA) ought to be,” said attorney Daniel P. Garcia, an experienced City Hall insider recently appointed chairman of the CRA board.

“In general, I agree with it. It added specific numbers to the concerns I and others have had,” Garcia said, saying he will immediately begin talks with council members, the mayor’s office and CRA staff on ways to correct the problems identified in the management audit. They include:

* Confusion about the agency’s goals and priorities. The audit noted that the City Council is emphasizing riot and earthquake recovery projects, the mayor is focusing on economic development, and the agency itself is concentrating on affordable housing programs.

* An “inconsistent track record” in working effectively with the communities it serves, despite its expending a “substantial amount” of staff time and energy in outreach and public participation programs.

* A complicated and declining financial situation, which is dependent on increases in tax valuations in redevelopment project areas. The city’s economic slump has left the agency with shrinking amounts to spend on social services. About 80% of the CRA’s tax revenues over the next five years must go to pay off bonds issued for redevelopment projects.

* City Council controls, imposed on the agency in early 1991, that resulted in “unintended consequences” of a cumbersome disbursement system and some gaps and duplication among the various city offices that oversee parts of the CRA functions. “City Council oversight needs to be restructured to focus more on policy, budgetary and financial oversight and less on individual transactions,” the audit recommended.

The audit attributed many of the problems with the agency’s structure to a number of “piecemeal reorganizations” over the last six years.

“The existing structure is top-heavy, seems to hinder effective decision-making and clouds agency responsibility and accountability for results,” the audit said. “Simply put, CRA’s existing organizational structure requires too much administrative time and costs to manage relative to the delivery of redevelopment services to the agency’s customers--the communities it serves.”