Los Angeles came out in full support of a $1-billion plan to restore 11 miles of the Los Angeles River, but when the price tag increases, will the city still be so eager to take on the burden?
Over two meetings, the city's Arts, Parks, Health, Aging and Recreation (APHAR) committee hashed out the issue of the restoration's increased costs. Initially estimated to cost at $1.03 billion, Alternative 20 will now reportedly cost a total of $1.36 billion. With that price tag increase also comes an increase in the city's cost share to at most $1.183 billion (or about 87 percent of total cost). Another option is being explored where the city's share is at $965 million (or 71 percent of total cost). KCET previously reported on this real possibility, which has unfortunately come true."This has taken a lot of twists and turns over the past few months," remarked Councilman Mitch O'Farrell during the latest APHAR meeting on the issue this week. "We want the best result here in the 11-mile stretch we've been focused on so diligently, but we also want it to be within reasonable cost, not at the expense of everything we do in the city."
O'Farrell's remarks precisely puts the city's predicament in question. How much support does the Los Angeles River revitalization warrant, especially considering the other issues plaguing the city? Notably, fixing its aging water pipe system is projected to cost another $1.3 billion.
According to City Engineer Gary Lee Moore, the cost increased because added costs on so-called LERRDS (lands, easements, rights-of-way, relocations, and dredged material disposal areas) in the Ferraro Fields area (from the 5 freeway to Brazil Street, including Verdugo Wash), which increased by $76 million; and the area from Main Street to 1st street including the Piggyback Yard, which increased by $220 million primarily because of relocation costs. The cost for the Arroyo Seco Confluence area, however, was reduced by $30 million.
The price tag became a larger issue when the United States Army Corps of Engineers (Army Corps) asked the city to sign two documents -- a letter of intent for the L.A. River Restoration project, which confirms the city's intention to participate in the project as a non-federal sponsor for the project, and a financial capability document, stating that the city has the financial means to fund the project as part of the process of approval. Both documents should be submitted by March 31, so it can be considered by the Civil Works Review Board and continue on to be authorized by the United States Congress.
Though the financial capability document is non-binding, Miguel Santana, the city's Chief Administrative Officer (CAO), still expressed concern. "We understand that the documents are not binding to the city in any way, but we continue to believe that a signature on behalf of the city has actually value and meaning. That's why the [Army Corps] is asking for it," said Patricia Huber of CAO.
In response, the CAO drafted a document outlining possible funding sources for the project, many of which are competitive in nature, such as Proposition 1 State Water Bonds, state cap and trade proceeds, and private sponsorship or philanthropy, which total to about $337 million. "It does not get us to the cost-sharing number," said Huber. Other potential funding sources would include the EIFD and other voter-approved fees, such as increasing the city's water quality fee or a general obligation bond similar to Proposition O.
The CAO's outlining of fund sources harshly brings to light the uphill battle the city will be facing as it continues to pursue a higher cost alternative. "We need to recognize that though this document isn't binding, we will eventually move to a binding document," said Huber. "We're going to have a heavy lift in terms of funding this project over the coming years."
Every council member did however emphasize that while the cost may seem daunting, it isn't a number that the city has settled on. Though the Army Corps estimates a 15-year timeline, a more realistic expectation would be somewhere within the 30 to 50-year horizon.
"There are many steps along the way that will get us that more equitable cost sharing," said Moore. "Working with the Army Corps in Washington D.C., the city council and the mayor, we'll come up with a positive resolution."
Matias Farfan, Assistant Chief Legislative Analyst (CLA), remarked that the costs presented in the report are present value. "In the 15-30 year lifespan of the project, the costs will gradually increase. Land won't cost the same as it does today."
Though the APHAR committee voted to move ahead with executing both requested documents, the discussion highlighted the amount of ambition and determination needed to get the Los Angeles River Revitalization off the ground. As yet, the city is still working to realize an Alternative 20 that doesn't put the city coffers at such a disadvantage. O'Farrell says, "We will figure out a way forward if the costs escalate or if the negotiations aren't successful."
In support, Lewis MacAdams, founder of the Friends of the Los Angeles River said, "We're supportive of signing this letter of intent. We know it's a big step for the city, for the river, and for all of us who care for the L.A. river. It's a major step forward into the future. I congratulate the city for its bravery."