Council OKs Budget Extension for CRA

The Los Angeles City Council Friday approved a 60-day budget extension for the Community Redevelopment Agency, but only after a rancorous debate over why the agency’s board was unable to approve a new budget on time.

President Peggy Moore and Commissioner Keith Richman said they hope to soon have a new budget for the fiscal year beginning July 1, but are trying to avoid debt financing of administrative staff costs to close a potential budget gap.

Moore and Richman complained to the council they have for several months been asking agency General Manager John Molloy to provide options for balancing the budget without going into debt. That request, they said, has not been answered.

The redevelopment board, appointed by the mayor, is locked in a power struggle with council members over the future of the CRA, which in the past served as the economic engine that has helped to transform the downtown skyline.

“You have endowed us with the responsibility of putting forward to you a responsible budget,” Moore told the council. “We feel many of these questions that have not been answered do not allow us to do that.”

Richman objected to Molloy’s proposal to use $1 million in bonds to cover administrative staff costs, saying it is mortgaging the agency’s future. But Molloy said the money is for staffing on redevelopment projects, an allowable long-standing practice.

Richman also said bonds proposed for a North Hollywood project area are unnecessary because the project is generating sufficient tax revenue to cover costs for the next couple of years.

The North Hollywood project is being used as an excuse to float more debt to pay administrative salaries, Richman said.

“I respectfully, sharply disagree with that,” Molloy responded. “We are trying to do some projects.”