Cities Use Extra Transit Funds as Stock in Trade--at Discount

The city of La Verne began this year with far more money than it needed for public transportation and hardly any money to fix potholes.

So it made a trade, sending $423,000 in public transportation funds to the city of Lancaster in exchange for $253,800 that could be used for any purpose, including street repair.

On the surface, that may seem like a poor deal for La Verne since it received only 60 cents for each dollar it traded.

But Brian Bowcock, La Verne public works director, said he was delighted with the trade. So many cities have surplus transportation funds, he said, that cannot be traded except at a discount.

Annual Surplus

La Verne receives about $300,000 each year for public transportation. The city sponsors a dial-a-ride bus system for the elderly and handicapped, subsidizes bus passes and runs other transportation programs, but still accrues a transportation budget surplus of $40,000 annually.

Bowcock said he “can be as creative as the next guy” in finding ways to spend money, but he does not see much point in building elaborate bus shelters or dreaming up other public transportation projects when he has streets in disrepair.

La Verne is just one of a number of cities that have amassed surplus transit funds. Many of them, including South El Monte, Temple City and San Dimas, have traded transit funds at a discount to those few cities, such as City of Commerce and Torrance, that seek extra transportation funds because they run city bus lines or have other special needs.

The abundance of money for public transportation comes from Proposition A, which Los Angeles County voters approved in 1980. The measure increased the sales tax by half a percent, and directed that one-fourth of the money go to cities and the county government for local transportation projects.

Inequities Created

Cities have used the money to start local bus systems, finance dial-a-ride services for the elderly and handicapped, subsidize Rapid Transit District bus passes for commuters and run other transportation programs.

San Gabriel Valley cities receive more than $12.2 million a year in Proposition A funds. Amounts are distributed on the basis of population. Allocations for the last fiscal year, which ended June 30, ranged from $9,435 for Bradbury, with a population of 924, to more than $1.2 million for Pomona (population 119,144) and $1.3 million for Pasadena (population 131,960).

Alan Pitashnick, senior analyst with the Los Angeles County Transportation Commission, which administers Proposition A funds, said the allocation formula creates inequities because transit needs are not directly related to the number of residents. But, Pitashnick said, it would be difficult to devise a formula that would be fair, and, in any event Proposition A specified that the money be distributed on a population basis.

A number of cities have tried to persuade the Transportation Commission to allow them to use Proposition A money for street repairs.

Steve Henley, assistant city manager and public works director for South El Monte, said a city should at least be able to repair streets damaged by buses. He said Santa Anita Avenue in South El Monte “has been falling apart” because buses travel on it daily from the El Monte bus station to the Pomona Freeway.

Position Reaffirmed

But, Pitashnick said, the commission last April reaffirmed its position that Proposition A funds cannot be used for street repairs, not even for bus damages.

“The commission feels that it’s better to find an alternate source (of street repair funds),” Pitashnick said. Besides, he added, the amount of money available from Proposition A is too small to repair the number of potholes in most cities.

David Barnhart, city engineer and transportation manager for Pasadena, said that putting Proposition A money into street repairs would be like “putting it in a bottomless pit.”

Although cities need more money for street work, Barnhart said, it took years to gain public support for funding public transportation, and it would be foolish to divert the money to street projects now.

Funds Hoarded

Barnhart said Pasadena has accumulated a substantial surplus in Proposition A funds--about $4.5 million--but the money is being hoarded for a major capital project, such as an extension or addition to a proposed light rail line from Los Angeles to Pasadena.

He said Pasadena has never considered trading its Proposition A money for other funds.

But, in addition to La Verne, four other San Gabriel Valley cities have swapped Proposition A funds with other cities at a discount in the past two years under agreements approved by the Transportation Commission. South El Monte traded twice, sending $10,000 to Norwalk for $6,300 in unrestricted funds and $100,000 to City of Commerce for $60,000. Temple City swapped $700,000 with the City of Commerce for $430,000. San Dimas sent $600,000 to West Hollywood for $300,000. Bradbury traded $30,000 with City of Commerce for $19,500.

In addition to the trades between cities, the Transportation Commission each year allows a limited number of cities to trade Proposition A funds for federal money, which they can use to improve streets. The trade is made by taking federal funds earmarked for Commuter Computer, a nonprofit ride-share organization, and exchanging them for Proposition A money, dollar for dollar.

Cities that have traded their Proposition A money for federal funds within the past two years include Alhambra, which traded $470,000; Claremont, $285,000; Glendora, $500,000; Pomona, $580,639; Sierra Madre, $150,000; Walnut, $200,000, and West Covina, $600,000.

In addition, Baldwin Park was able to work out an arrangement with the county to pay part of its share of the cost of road work in a joint city-county redevelopment project by giving the county $800,000 in Proposition A funds, which the county used to build a park-and-ride lot for commuters in the San Dimas area.