Council: What To Do With The Stimulus Money? • Long Beach Post

Consider this: You have a mortgage or rent payment that is due every month regardless of the national economy. The rest of the bills, phone, gas, water, etc., keep coming and no matter how much you cut back those dinners on Second Street, there is less and less left over each month. Throw in a student loan or child’s tuition, maybe day care, and it’s even worse. Trying to stave off financial ruin, some–well, let’s be honest, many–have turned to the buffer of the credit card. But now that once seemingly insurmountable balance has slowly been whittled away like an old wooden fence under the onslaught of a termite army on a munchies bender until you can just scrape together the minimum payment each month.

However, like landing on the right square and picking up that lucky card in a board game, one day you get a call telling you of a sudden inheritance, or perhaps your kids ages and your wedding date have finally paid off in this week’s lottery. How ever it happens, you lift your head out from the pit of debt that has become your life and suddenly see before you a big fat wad of cash.

Thanks to the Obama Administration’s nearly $800 billion stimulus package and a quick Congressional approval, the City of Long Beach–along with cities throughout the nation–may have finally hit that elusive jackpot.

At least, this was the apparent mood Tuesday when the City Council took a first look at the city staff-compiled list of projects that may meet the federal criteria for stimulus funds.

This first stab at what the city might ask for from the stimulus funding amounts to 38 projects requiring just over $600 million. Quite a wish list.

Keep in mind though, and as pointed out by staff to the Council, this is essentially a wish list and as most of it will be doled out by the feds in a competitive process with thousands of other requests from across the nation, the likelihood that Long Beach will get all it asks for is slim.

The main criteria to receive the money is that any projects are ready to go right now, that is, all the legal processes required before construction or implementation have been done, and second, that the projects serve to ease the jobs situation.

“It’s not just about building, but it’s about enhancing the lives of our residents,” said Council member Tonia Reyes Uranga said. “The number one purpose stated [by the stimulus package] is to preserve and create jobs and promote economic recovery. So really it’s all about jobs–preserving the jobs, creating jobs–for the man and woman on the street.”

It’s nice to see Council member Reyes Uranga emphasize this point, mainly because looking at the list of projects compiled by City Hall might leave one scratching their heads as to whether this point was fully understood when the list was compiled.

Of the roughly $600 million in funds the city is currently considering applying for, the five largest single ticket items are: an $111 million storm water drain project, a $90 million project to retrofit four city buildings with energy saving equipment and material, an $85 million parking structure at the Long Beach Airport, a $50 million project to conserve water in public landscaping, and a $40 million project to collect grease from local restaurants to make bio-diesel fuel. According to the city, these five projects will create 38, 105, 1,000, zero and 56 jobs respectively. This adds up to 1,199 jobs either retained or created for $376 million, or roughly $315,000 per job.

If you consider all of the 2,683 jobs estimated to be retained or created (in the council agenda item which is missing seven unnamed projects mentioned in chambers) by the various projects, the average amount of stimulus money to be spent on each job retained or created would be $185,420.

“Especially in this economy where we have people losing jobs in double digit numbers,” said Council member Reyes Uranga, “it is extremely important that we weigh the projects–that we look at them and see if the value really is there in terms of job creation and job preservation.”

Now keep in mind that most of these proposed projects would actually benefit the city in the long term just by being completed, such as the energy retrofits, the water conservation effort and the storm drain projects. However, if we look at it simply from a jobs creation point of view, the return on investment seems a little poor.

Also keep in mind that while many of the 2,683 jobs estimated to be retained or created by the wish list would benefit the hard hit construction sector–which lost 900,000 jobs nationally since February of last year–there are virtually no projects that will benefit the even harder hit manufacturing and white collar job sectors, which shed 1 million and 2.7 million jobs respectively since February 2008.

Certainly any job saved is a benefit to the city, however, it seems that if the city can find this $600 million worth of projects, there must be some funding in a so-called recovery and jobs creation bill to provide things like small business assistance or projects that target the service- and manufacturing-oriented sectors.   

“I think that you and I both know that almost no one is immune to this recession/depression,” said Council member Reyes Uranga, “but there are those that are less fortunate, that are lower income, that perhaps have less education or less opportunity, who are already struggling to maintain their jobs [that] have been hit the hardest. With this stimulus package, our president has stated that [it is] not only to preserve and create jobs but to really assist those that are most impacted by this recession.”

Another danger in focusing on construction projects is the threat of overruns, an all too common occurrence in city projects. Add to this the specter of looming inflation and there is a real possibility that what a project is expected to cost today, may be more than what it first cost as it nears completion a year or two down the road. If projects like the Long Beach Airport parking structure do cost more at the tail end of the project, an already financially-strapped City Hall may find itself facing sizable expenses to finish such a project.

Mayor Foster alluded as much in warning that the stimulus package funds are not an ongoing thing and would be a “one year, two year maximum” source of funds.

“In putting these projects together, bear that in mind,” said Mayor Foster. “If there are continuing expenses afterward, someone has to bear those and it is very unlikely that the federal government is going to continue [this] funding. It’s great to have more dollars, but everyone needs to be careful about how we spend those dollars.”

The Mayor, while urging caution, also emphasized the necessity of quick action in applying for the funds. Mayor Foster, in referring to President Obama, said “he wants things that are quality, but [he wants them] pretty quickly.”

Following the discussion, the Council unanimously approved a motion calling for city staff to come back within 30 days with guidelines that would help steer the funding request process and an additional list of projects not contained within the first list and/or additional projects requested by council members.

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