Thursday, November 12, 2009
The giant $787 billion federal stimulus program is like the elephant in the famous parable about the blind men who describe the massive beast based on the small part each is able to touch. It is so big and so new – only about 43 percent of the money has been spent nationwide – that despite all the chatter, no one can yet pronounce the program a success or failure.
Monterey County will take in $70 million for everything from roads to academic research and schools to social services. But the local unemployment figure stands at 10 percent, and state officials worry about the potential for fraud and waste, especially in government agencies unaccustomed to fattened budgets.
Still, for some county agencies and small businesses, the money has already been a lifeline.
FRAUDSTERS WILL INEVITABLY CASH IN, TOO.
At Monterey Salinas Transit, Assistant General Manager Hunter Harvath says 30 bus drivers dodged a bullet when the transit company averted lay offs with a whopping $7.6 million stimulus grant, the county’s single largest. Twenty new drivers and mechanics joined the work force, and bus fares were temporarily reduced by 25 cents from Labor Day 2009 until Memorial Day next year, courtesy of Uncle Sam.
Among other big recipients: the Monterey Peninsula Airport scored a $4.3 million grant for a runway project that has pile drivers and cement masons, among others, on the graveyard shift until they finish at the end of the month. Road projects total more than $17 million, while infrastructure improvements at county military installations are also big stimulus sweepstakes winners, with more than $6 million.
Fraudsters will inevitably cash in, too. The FBI estimates that 7 to 10 percent of the stimulus money will be lost to graft or incompetence, says California’s Recovery Inspector General Laura Chick, who is keeping an eye out for mismanagement – especially in local school districts, California Energy Commission projects and workforce investment boards that are newly flush with stimulus dollars.
No-bid contracts, like the $1.4 million recently awarded to BI, Inc. for a Salinas-based program to supervise county probationers, are also a red flag for Chick. Probation officials say they didn’t let the contract out for bid because of the need to get it up and running quickly and because BI was the only bidder for a similar program in Napa County, where the company is getting good reviews for helping people on probation stay out of jail. However, BI’s John Thurston cited competitive concerns in refusing to provide a complete list of places the company does business.
Stimulus loans and grants are also showing up in unexpected places like a Salinas chiropractic clinic, a research lab in Pacific Grove, and the new Erik’s Deli in Monterey. Franchisee Maulesh Patel had already signed a lease late last year when his financing fell through in the thick of the credit crunch. “Everything crumbled,” Patel says, until Monterey County Bank approved a $270,000 Small Business Administration loan, which under the stimulus program is 90 percent government guaranteed.
The bank’s SBA lending portfolio has more than doubled since last year because of stimulus cash, says Vice President Brenda Roncarati.
And at Stanford’s Hopkins Marine Lab in Pacific Grove, a grad student reports that a 5-foot-long Humboldt squid is frozen and under study as part of a $300,000 oceanographic research project with implications for climate change and the environment.