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The insurmountable budget shortfall for the city of Los Angeles received another reality check today. City Controller Wendy Greuel today released her Bugedtary Cash Flow report one month early. "Traditionally, I report to you on March 1st of the year but the situation we are facing is so dire, I am compelled to update you now so that urgent action can be taken immediately," she wrote.
The problem? Despite all efforts to save money, the city faces a $199 million deficit by the end of the current fiscal year on June 30th. While the reserve, currently at $189, could nearly balance the budget, Greuel warns against it. "To deplete the majoirty of the Reserve Fund this year would leave the City with no margin for error and a total inability to respond to further revenue shortfalls," she wrote. "The City's own policy targets maintaining a 5% balance in the Reserve Fund which would equal approximately $220 million." Among other things, an underfunded reserve jeopardizes the city's ability to retain loans.
