Oh Hey, They Found $30 Million, The City Won't Shut Down After All
After a stressful Wednesday where Los Angeles budget news was a mile a minute, Thursday had some peace. Budget officials announced that there was an unanticipated $30 million realized through unexpected tax revenues and cuts made last month, according to the Daily News. That money will be combined with $90 million from the city's reserve fund to make the city solvent through the end of the fiscal year. "We will make the payroll of April, May and June," Council President Eric Garcetti told the paper. "Our employees and the public should be assured there will be no immediate shutdown."
City Council Wendy Greuel, however, had, some warnings. "I don't think a $30 million reserve fund is a good financial situation for a city with a $7 billion budget," she said to the paper. "We will get by these next few months, but it is not a good policy to have to borrow from your reserve fund to pay your bills. We have never had to do that before."
The reserve fund should be at $350 million, 5% of L.A.'s budget, and is there for emergencies and to show lenders they can pay back loans.
A $73.5 million transfer from the L.A. Department of Water & Power is still at issue, thanks to a stand off over the controversial carbon surcharge. Mayor Antonio Villaraigosa wrote a letter to the utility requesting the money, but says there is no guarantee they will listen. Without yesterday's $30 million news, the city was facing bankruptcy on May 5th.