Los Angeles has, for years, stockpiled millions of dollars in funding meant to pay for various bond programs, forcing taxpayers to shell out at least $54 million in “unnecessary” interest payments on that dormant money, according to an audit released Wednesday by the city controller’s office.
In launching an audit of Proposition O — the voter-approved 2004 measure that financed storm-water cleanup — Controller Ron Galperin found that the city often issued bonds for construction projects before the bills came due, leaving money idle in bank accounts. Taxpayers then had to pay “excess” interest on that borrowed money, Galperin said.
The Proposition O audit found that the city made about $6.8 million in unnecessary interest payments from 2010 to 2015, prompting auditors to examine other bond programs over the last several years and search for similar patterns.
In analyzing three such programs, auditors estimated that taxpayers paid an additional $47 million in excess interest because the city issued its bonds too soon.
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