City of Los Angeles to Run Out of Money on May 5th, According to Projections
“The question I have been asked most often during the budget crisis is 'When will the City run out of money?' Unfortunately, we finally have the answer," announced City Controller Wendy Gruel this afternoon after the L.A. Department of Water & Power said it would not transfer $73 million to the city's General Fund, which pays for police and other basic city services. "Without the full Power Revenue Transfer I now project that if the City remains on its current path, the City’s General Fund will be out of money - in fact it will be negative $10 million - on May 5th, 2010."Ouch.
Greuel says balancing the budget is likely out of realm at this point and the city's reserve fund balance "could be anywhere from $0 to negative $43 million on June 30th." The consequence of that would leave the city with "no room to cover any additional shortfalls or unexpected emergencies.” (So if Mulholland Drive closes again, city emergency funds may not be around to fix it)
“This is the most urgent fiscal crisis that the City has faced in recent history, and it is imperative that you act now," Greuel said in a letter to the City Council and Mayor, asking for an immediate "transfer $90 million from the City’s Reserve Fund to the General Fund." If city employees cannot be paid, the city cannot "legally permit" them to work. "Unless you take action to transfer $90 million from the Reserve Fund, beginning April 19th, 2010, my office may not be able to pay the salaries of all City employees and/or make payments to vendors."