With Los Angeles fighting a massive budget deficit, City Controller Wendy Greuel called on City Council members Wednesday to give up $25million in special funds used for pet projects in their districts.

The money has accumulated over the past 12 years from the sale of city property and oil pipeline franchise revenue, and council members can spend it on various public works, community buildings and other projects.

Greuel urged the council to transfer the funds to the city's struggling general fund now and in the future. She was unsuccessful in pushing for a similar change when she served on the City Council.

"I am the eternal optimist," Greuel said. "I hope the council will recognize how serious the city's situation is and give the money to the general fund."

Mayor Antonio Villaraigosa made a similar call last week, asking the council to loan up to $40 million in various discretionary funds, including the oil and property sales accounts among others, to help shore up the reserve fund.

Several council members said they agreed with Greuel.

"We put (the fund transfer) on the table long before the mayor and controller raised it," council President Eric Garcetti said. "Everything should be put on the table now."

In fact, over the past two years the council has agreed to stop the transfer of the money to their discretionary accounts and voted to have it replenish the general fund. But Greuel said she would like to see a permanent ban on the practice.

Council members were in partial agreement with a permanent switch, but with some limitations.

Garcetti said some of the funds, such as those spent for projects around the Sunshine Canyon landfill and the former Lopez Canyon landfill, are already committed to particular programs and intended to mitigate neighborhood nuisances.

Councilman Tom LaBonge said the money has not been wasted.

"We used it to put up a stoplight that was needed badly," LaBonge said. "We were able to use it for building a senior center."

Under city policy, each council district is allowed to retain 50 percent of money from the sale of city-owned property. Each council member also receives half of the franchise fees paid by oil companies for the portion of oil pipelines that run through their district.

Jon Coupal of the Howard Jarvis Taxpayers Association questioned the need for the special funds.

"It sounds like a slush fund to me," Coupal said. "It seems like something antithetical to what you would want during a time of such economic uncertainty."

Throwing ideas around

In an audit, Greuel released figures detailing how much money each council district has accumulated from oil franchise fees and the sale of surplus property. The seven districts that are partially or fully in the San Fernando Valley had a combined total of around $6.5 million.

Greuel's audit was released as the City Council and Villaraigosa continued struggling with a city deficit estimated at approaching $700 million over the next 16 months.

On Wednesday, council members imitated a person looking under the sofa cushion for loose change as they brainstormed ideas to bring in new revenue and collect old debts to help balance the budget.

During the freewheeling two-hour discussion, the proposals included taxes on billboards and marijuana, charging for emergency medical treatment and other services and creating a city savings bond for residents to buy.

"We are facing a four-month problem of $685 million - that's how I look at it," Garcetti said. "That's the $212 million we need to cover by July 1 and what we are facing next year. We have to work smarter and faster."

The council created a special ad hoc Commission on Revenue Efficiency, composed of debt-collection experts who will advise the city on how much outstanding debt it has and how to collect it.

Ron Galperin, an attorney and former City Council candidate who serves on the city's Productivity Commission, will chair the panel that will be in effect for six months.

"We are at a critical juncture," Galperin said. "One of the issues that has been my obsession has been the city collections and what we can do to improve it.

"We do not have an accurate total of what is due. I believe it is well in excess of the $400 million that has been estimated."

Galperin said he has done preliminary work that revealed a confusing system involving 17 different types of invoices sent out by the city and no clear policy on collections.

"One thing we could do is make it easier for people to use the city Web site to pay taxes," Galperin said. "If you look at it, it's impossible to figure out."

Looking for revenue

The council looked at a variety of revenue proposals, most of which would require voter approval or legislative changes. It also authorized a request for proposals on ways to market the city.

Among the proposals that would not require voter approval: an increase in traffic enforcement tickets; development of a voluntary monthly fee of $5-$10 on Department of Water and Power bills for emergency medical services; and a long-term program to market the city's name.

Garcetti said the city should look at changing how much is charged for red-light camera violations, reducing the number of tickets and allowing the city to keep more of the money in exchange for installing more cameras.

Council members also asked for a report on developing another tax amnesty program to waive penalties and encourage tax scofflaws to pay back taxes.

They also were interested in finding ways to tax billboards by looking at increasing the gross receipts tax as it applies to the signs. Other areas of interest were developing an oil extraction charge, a tax on medical marijuana and increasing ambulance and emergency medical call fees.

Councilman Paul Krekorian urged the city to look at hiking its 14 percent bed tax at hotels to 15 or 16 percent.

"I don't think adding a dollar or two on a $100 a night room is going to keep people from coming to Los Angeles," Krekorian said.

Other ideas being explored are adding a charge to telephone bills to cover 911 costs, making changes to the documentary transfer tax to broaden how it is applied, increasing the parking tax from its current rate of 10 percent to 15 percent and imposing a fire assessment tax.

No vote was taken on any of the proposals, but city staff was asked to report back in time to consider placing measures on the November ballot.

Councilman Paul Koretz suggested the city look at creating a savings bond.

"We should find ways for people to invest, to create some fund to invest in the city," Koretz said.