LA’s chief financial officer says the city has big financial problems

[ad_1]

LOS ANGELES – The City is under going an audit of finances and spending on Mayor Karen Bass and the city’s Inside Safe program after the LA Alliance for Human Rights and a federal judge expressed frustration over the management of funds to tackle homelessness through that and other services programs.

LA City Controller Kenneth Mejia however, is raising alarms over what he says is a serious budget deficit that is creating greater financial issues for the City. “It’s fair to say that the city of L.A. should be worried about our financial health. It’s not looking good and the people of Los Angeles will suffer based on decisions that City Hall makes,” Mejia told KABC 7.

According to Mejia, Los Angeles has a projected budget deficit of $476 million dollars, which is made up of $289 million in overspending and $187 million in less than expected revenues. The overspending occurred in three departments: police and fire – mainly because of staffing issues and overtime – and in liability claims.

“We’re not in a recession. This is not COVID. This is a budget deficit that we made here in City Hall,” said Mejia.

The City Controller in a statement when his office released the Annual Comprehensive Financial Report (ACFR) in January said: “It is my responsibility to report the bad news: this year the City is spending well beyond our actual revenues. Projected deficits for years to come will force wrenching choices that threaten the vital services Angelenos rely on. This is not the result of a sudden economic downturn, but the culmination of years of short-term budget balancing at the cost of long-term fiscal sustainability.”

Mejia also pointed out that “despite widespread staff vacancies, General Fund departmental spending actually exceeded last year’s adopted budget by nearly $200 million. Had the vacancy rate been closer to normal, the budget would have been in the red.

As our Office has consistently pointed out, citywide deferred maintenance of vital infrastructure requires urgent attention. Last year’s underspending of $316 million in budgeted capital expenditures underscores that the City continues to fall behind – which means even higher costs in the long run.

Again, as we have warned, current staff shortages and long-term underinvestment in the training, technology, equipment and facilities for our workforce hobbles productivity and shortchanges our residents. The homelessness crisis and the reality of a changing climate put even further strain on City resources.”

Mejia told KABC 7 he’s against eliminating 2,000 vacant positions to save money.

“It’s not like these positions have been vacant for many years. They haven’t. All these departments have been trying to fill these positions. A few months ago, we were talking about ‘We need to fill these vacant positions. Come on, join the city.’ And now, we’re like ‘Oh wait. We need to hold back because we’re overspending on police, liability claims, on fire.’ Now, we have to cut other positions in other departments in order to cover that overspending,” said Mejia.

He also warned that without a long-term approach to “putting our fiscal house in order, short-term decisions will doom Los Angeles to an inexorable decline in public services, undermining our quality of life and the economic prospects of our residents.”

In a statement provided to KABC 7 and the Blade, the mayor’s office said they remain “focused on the work that has resulted in thousands more Angelenos coming inside last year than the previous year, a record number of LAPD applications, and finalizing a budget in partnership with our city department heads that will be balanced and protect services for Angelenos.”

The deadline for Mayor Bass to release her budget for next year is April 22.

[ad_2]

Brody Levesque

Source link