L.A. Faces Insolvency Without Using Reserve Fund

[villager]

Source: AP

L.A. Faces Insolvency Without Using Reserve Fund

The Los Angeles city controller has warned the mayor and City Council that the city will not be able to make payroll next month if it doesn't dip into its reserve fund.

In a memo to officials on Monday, Controller Wendy Greuel said the city faces its most urgent fiscal crisis in recent history after the council blocked a proposed electricity rate hike last week.

The Department of Water and Power needed the rate increase to cover a $73.5 million transfer to the city's general fund, which pays city employees and bills.

Greuel says the city will be $10 million in the red by May 5 without a transfer of $90 million from the reserve funds.

By tapping into reserves, Greuel also warns the city will exhaust the reserves by June 30.

Read more: http://cbs2.com/local/Los.Angeles.insolvency.2.1613033.html

[quakerboy]

1. I wonder how much they could save

by not having to enforce pot laws. Just curious.

[annabanana]

2. Is it time to drown California's government, Grover?

Is it small and weak enough yet? Let's just see how America copes with having Somalia on it's West Coast....

[JDPriestly]

3. Is L.A. too big to fail?

Time will tell. Seems to me that if the federal government can bail out banks, it should be able to bail out municipalities. Under Republican mayor, Richard Riordan L.A. built Staples Center, a huge entertainment and convention center that was supposed to bring in lots of money. I wonder how that is working? Coincidentally, the Staples Center is a couple of blocks from a dingy little restaurant THAT WAS OWNED BY RICHARD RIORDAN. Another Republican out to prove that government does not work well for ordinary people.

Corruption is rampant in big business and in government, and when a big businessman gets into government, watch out.

[Bluenorthwest]

4. Los Angeles City Council members are the nation's highest paid

$178,789 . They get perks that are really amazing. Free gas, cars, staffs of 20 per member, expense accounts, it does not end. There are 15 of them.

[jmowreader]

6. For extra entertainment...

A member of the US House of Representatives only makes $174,000.

[No Elephants]

12. Not a justification, but just saying: housing and other costs of living in L.A. are very high.

15 seems too many as well.

By way of comparison, Boston, which also has a very high cost of living, has 13 City Councillors, whose salary is $87,500 (up this year from $75,000 for the past four years). (They vote on the Mayor's salary every four years and an increase in the Mayor's salary means an increase in theirs, which is half the Mayor's salary of $175,000, as of 2010). Interestingly, the Governor of Massachusetts makes $135,000 a year, a lot less than the Mayor of Boston. Go figure--literally.

[City67]

5. a Billion $$$ in the bank

Last I heard the DWP had over a billion $$$ in the bank. And they're suddenly worried about $73 million to city hall? I think it's more about punishing them for blocking an excessive rate hike. Just a thought.

[SoapBox]

7. And then there was the MASSIVE pay raises given to DWP.

All this just BURNS my BUTT!

Just a couple years ago, the L.A. City Council was held hostage by the
DWP (Department of Water and Power) workers, wanting HUGE pay raises
and increases in benes...Eventually the Council caved!

Go back...reduce that pay.

And demand that our MIA Mayor stay in town (I first like him but he's as
worthless as most other mayors...more interested in his political future).

This whole thing is a joke and is the plain old POOR MANAGEMENT.

P.S...I am wholly in favor of unions! BUT, there comes a time and place
for being realistic. ALL the screaming and squawking by the union workers
here in California are simply going to strangle the bunch of us.

Let me tell you folks...I go down (hell, I'm down about as far as I can go without living in a box)...You go down too!

Wake up...get real...and negociate some realistic pay and benefits.

[Rapier09]

8. Los Angeles

Hell on earth doesn't describe this place.

[pilar007]

9. I love L.A.

Say what you will...I still love it here.

[SoapBox]

10. Ditto

...after growing up in the cold, sloppy, wet "North"...I'll NEVER ever leave Southern California.

I love it too!

[Hepburn]

15. I love L.A.

Would not live any other place.

[happygoluckytoyou]

11. IN A RELATED STORY forty thousand a year per pot smoker, in the overcrowded prison system

[Bette Noir]

13. So, now the City government is jacking up the price of electricity

to cover the cost of other City services? Typical. Folks who protest tax hikes should consider the alternatives. Here in LA, one can't leave the house without worrying about being pulled over and given a bogus ticket-- the City put a surcharge on traffic tickets a couple of years back, and not all the charges are genuine. Heck, you don't have to leave the house to get a ticket. Watering the yard after 9 am, or on any day other than Monday or Thursday is good for a $125 fine.

And the teabaggers think having the right to buy health insurance is a restriction of freedom.

[Hepburn]

14. I was in West L.A. yesterday -- driving on Pico.

Going between Westwood and Santa Monica Court -- two trips. Had not driven on Pico between Westwood and Centinella for a few years. Notice how bad the condition of the street is immediately.

This is a main street in the area. It is rutted like it belongs in some Third World country. It is really obvious that the City of L.A. is mega hurting for money.

[melm00se]

16. Government math?

the city will be $10 million in the red by May 5 without a transfer of $90 million from the reserve funds.

so LA needs $90 million credit to wipe out a $10 million debit?

Am I the only one who sees a problem with that?

[Blackhatjack]

17. Any way you look at it Calif municipalities are going to default ... AND ENRON HELPED

Let's go back to the time when Enron extorted outrageous long term contracts for electricity by manipulating the supplies and forcing 'brownouts.' And then the Bush Administration refused to step in and impose price controls on a manipulated 'deregulated' market.

Those inflated energy costs have a way of raising the costs of just about everything.

Enron... the gift that just keeps on giving.