L.A. Fire Bond Spending Assailed : Safety: Controller says $65 million approved for high-rise sprinklers is gone with only one of six projects completed.

The city of Los Angeles has used the entire $65 million in bond proceeds that voters authorized six years ago to add sprinklers to six city buildings, but work has been completed at only one site, according to a critical report released Wednesday by the city controller’s office.

Because there is no money left in the Fire Life Safety Fund to do the renovations, proceeds from another bond issue will be used to give City Hall and municipal buildings in Van Nuys and San Pedro the sprinklers required on all buildings taller than 75 feet. But City Hall East and Parker Center, the Downtown police headquarters, may never get sprinklers, the report says.

“It’s very disturbing,” Controller Rick Tuttle said. “The voters didn’t get what they bargained for. The city didn’t deliver its end of the bargain with the voters.”

The controller’s report urges Mayor Richard Riordan and City Council members to investigate what led to the poor management of the funds, which voters approved in April, 1989, in response to the disastrous First Interstate Bank fire the year before. Tuttle’s staff worries that the sprinkler situation could signal larger problems in the management of about $400 million in outstanding bond proceeds intended for earthquake retrofitting, police expansion, libraries and 911 emergency service.

“We hope to use it as a lesson. It may be the clearest example of how our performance doesn’t meet what our promises are,” Deputy Controller Tim Lynch said. “Management problems can’t be fixed by the controller’s office, they have to be fixed by the mayor’s office and council.”

But Bill Mercer, the city’s chief administrative analyst who has been involved in the project, said Tuttle’s conclusions are “not valid.” He attributed the shortfall in the sprinkler fund to rising, unexpected costs associated with the building projects and said the work can be paid for through other means.

“The biggest problem is that it’s taking this long,” Mercer said of the work that was originally scheduled to be done by 1992. “But the bargain with the voters was that we’d put sprinklers in the buildings. We’re doing that.”

Voters agreed to raise property taxes about $5 annually per parcel for two decades to help the city comply with a 1988 ordinance requiring sprinklers in high-rises. The city used the money to issue $60 million in bonds, which have earned $5 million in interest.

City Hall South has the new sprinklers, as does part of City Hall. A small amount of work also has been done on City Hall East and Parker Center.

But a large chunk of the bond proceeds were spent to buy and furnish a building on Vignes Street for the Personnel Department, which enabled other city employees to relocate while the sprinkler work was being done. Tuttle’s report questions the $25 million spent on the Vignes property, saying that the city may have paid too much and, in any case, that the fire safety bonds were not intended for real estate.

Mercer defended the Vignes Street purchase, and suggested that the building could be mortgaged to raise the money needed for the rest of the sprinklers.

“If we had thrown away the money on leases, we’d have even less money available for projects today,” he said, citing the primary reason for the exhaustion of the Fire Life Safety Fund as: “The prices of projects have gone up.”

The city’s ability to manage bond proceeds has come under criticism in the past--ironically, though, for spending the money too slowly.

In January, 1994, a Times review showed that earthquake repairs for dozens of city buildings and bridges had been mired in bureaucracy for years after voters agreed to raise property taxes to fund the improvements. At that time, only $30 million of $376 million approved in 1990 had been spent or pledged, with just one-quarter of 160 buildings and eight of 34 bridges slated for earthquake safety improvements actually being repaired.