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Street Project The Auditor Should Talk About: How ELB Traffic Project Was Cancelled And $1,000,000 Diverted For Downtown Walkway

Other Projects At Traffic Circle & Iron Triangle Not Delivered As Promised

(September 1, 2000) A recent written report by the City Auditor's Office indicated significant sums budgeted for street repairs were never spent. (See coverage at City Auditor report). The Auditor's report is due to be presented verbally at the September 5 City Council meeting.

The Auditor's report recommends (among other things) that the Capital Improvement Program (CIP) street repair budget be a plan with "definite and specific projects."

But that seems unresponsive to a very definite and specific ELB street project that was never done, and won't be, because roughly $1,000,000 has been diverted to fund a downtown pedestrian walkway.

The Auditor's report doesn't discuss this, perhaps because it was never hidden in the first place. The money was re-directed away from funding a promised traffic project at Spring St. and Lakewood Blvd and toward the downtown walkway openly and publicly, by voted action of the City Council.

How this happened is a case study in how LB City Hall treats promises made to taxpayers and neighborhoods.


In 1991, the City Council approved a 16% increase in business licenses and new fees on new development to pay for traffic improvements, part of a highly touted "Traffic Mitigation Program."

The "Traffic Mitigation Program" capped a lengthy, largely City Hall driven process, replete with "blue ribbon" style committees, community meetings and news articles claiming future traffic needs justified the tax to provide improvements for the public. The Council even incorporated many of the "Traffic Mitigation" projects into the City's General Plan Transportation Element, a legal document, in 1992.

Those projects included running one street under another (called "grade separation") at the Traffic Circle, the "Iron Triangle" (Bellflower/7th/PCH) and Lakewood and Spring, measures that would reduce congestion and lessen the risk of intersection traffic accidents.

Now, nearly a decade later, these projects have not been delivered to the public as promised (details below)...and the one at Lakewood and Spring will never be done because the money is being diverted to a downtown walkway, approved by the City Council last year.

A Tax Amid Promises But Without Guarantees

The so-called "Traffic Mitigation Program" was devised (in the words of a 1990 city staff memo) by "a committee of development and business interests which was convened by the City Manager [i.e. former Manager James Hankla]...The Committee released its recommendations on July 10, 1990 at a community forum sponsored by the Chamber of Commerce." The 12-member "Advisory Committee on Funding Transportation Improvements" included Mike Choppin ("IDM Corporation"), Doug Otto ("Liaison to Citizens Transportation Task Force") and individuals listed as then-connected with the "Long Beach Area Chamber of Commerce," "Downtown Long Beach Associates," among others.

Amid much establishment cheerleading, the City Council approved the busines license tax increase and money soon began flowing into City Hall.

Few noticed that despite public statements about traffic projects, nothing in the tax ordinance actually required City Hall to provide any traffic projects. From City Hall's perspective, the money was simply general fund revenue, which could be spent as City Hall desired. The results were predictable.

Within a few years, the Council twice voted to approve new developments at Lakewood/Spring likely to increase traffic, despite the supposedly pending traffic project to reduce it. The Council voted to allow a new UPS facility at the southwest corner in December, 1996 and a Marriott Hotel expansion on the southeast corner on April 27, 1999.

At a hearing on the UPS project, then-Councilman Del Roosevelt dismissed public concern that the Lakewood/Spring grade separation would never be done. Nonsense, he called public skepticism at the time. (Three years later, he voted with the City Council to kill the Lakewood/Spring traffic project.)

In early 1999, ELB resident (now publisher) Bill Pearl appealed approval of a Marriott Hotel expansion to the City Council. During the appeal, Pearl brought up the 16% business license tax increase and traffic projects City Hall promised but never delivered. He said that if a LB business took money for products and didn't deliver them, it would be out of business.

Pearl urged that the Council refund money collected for projects never delivered and rescind the tax. Councilmembers ultimately approved the hotel exansion but also directed City staff to deliver a written report on the business license tax and the money.

On July 13, 1999, staff sent Councilmembers a detailed, comprehensive and very complete report. It included the bombshell relevation that none of the 16% business license tax collected in FY 97-98 had been transferred to the Traffic Mitigation Program. Instead, the money was apparently spent on other capital projects.

Before the report could be publicly discussed by the Council, the Mayor shuffled it into a Council committee (i.e. outside of most public attention.)

Meanwhile, city staff asked the Council to delete the Lakewood/Spring project entirely, claiming traffic hadn't grown as much "as planned." (This didn't stop City Hall from collecting the tax.) The City Manager told the Council the Lakewood/Spring project never reached its "second phase" and was not a stand-alone project separate from airport area projects.

On this record, the Council voted to remove the Lakewood/Spring project from the City's CIP plans and diverted its funding to a downtown pedestrian walkway and two other projects unlikely to ease street traffic (some 710 freeway signage and a longer 605 freeway offramp emptying traffic onto Spring Street).

The downtown walkway between Ocean Blvd. and 3rd street, part of the Promenade, will be near a planned "D'Orsay" luxury hotel within City Hall's downtown redevelopment area. City staff justified shifting the traffic money to the walkway on grounds it would "support transit use through linkages to the Transit Mall" and encourage development and business location "within walking distance of the most heavily served by transit [sic] area of the City." [Query: Do you expect luxury hotel patrons to arrive by bicycle, buses or the Blue Line?]

The Council and Planning Commission both voted to approve this and voted to call the downtown walkway consistent with the General Plan Transportation Element. This is despite the fact the walkway will be funded by not doing the Lakewood/Spring traffic project that is part of the General Plan Transportation Element.

Meanwhile, the Traffic Mitigation Program report was brought out of Council committee and the Council moved to avoid future embarrassments with the 16% business license revenue. Instead of repealing the tax or refunding proceeds not spent as promised, the Council kept the money and told staff it wanted greater flexibility in using the funds for "other" capital projects (i.e. not necessarily the Traffic Mitigation projects sold to the public when the Council imposed the tax.) The Council also specified that the 16% amount be listed as a line-item on business license bills.

With the exception of the Long Beach Business Journal, details of what the Council did went nearly unnoticed.

This year, on August 15, 2000, city staff released a report on the Traffic Mitigation Program for the fiscal year ended September 30, 1999. (It was held over to the September 5, 2000 Council meting.) As in last year's report, it indicates:

"Business License Tax Surcharge No transfers of busiess license tax surcharge were made to the Transportation Mitigation Program during the reporting period [Oct. 1/98-Sept. 30/99]."

The staff report indicates a "completion" schedule as follows:

  • For the Traffic Circle, "5-10" years;
  • For "near-term operational improvements" [i.e. not grade separation] at the Iron Triangle, 10+ years.

    By comparison, LB's General Plan Transportation Element (adopted in 1992), City Hall listed the timing and priorities of these projects as follows:

  • Traffic Circle Grade Separation: 1991-1996, 1996-2000 [i.e. should be done now]
  • Iron Triangle Grade Separation, 1996-2000, 2001-2005

    The City Auditor's report does a service by showing budgeted money for street repairs that hasn't been methodically spent...but it doesn't take an Auditor to see the problem at Lakewood/Spring (and with other projects including 911) isn't a lack of "performance measures."

    It's a moral issue, not a bookkeeping one. when a City Hall repeatedly makes excuses, and uses legal loopholes, to avoid or delay providing services due taxpayers.

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