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Los Angeles City Council President Eric Garcetti, 13th District, held a public meeting on the city budget in Hollywood on Tuesday, and said current projections indicate that cost-saving measures would be enough to enable the council to pass a balanced budget for the upcoming fiscal year.
Garcetti said the council, and every city department, has had to cut back on staff and programs this year because a variety of factors caused the budget deficit to balloon to more than $480 million. Some of the factors affecting the city budget included a loss of property tax revenue related to the implosion of the real estate market, as well as a drop in the stock market and a reduction in funding from the State of California. Mayor Antonio Villaraigosa has submitted a budget to the city council, and the council’s Budget and Finance Committee began deliberations this week. The full city council must act on the budget by June 1. Garcetti said there is a lot of misleading information circulating about the current state of the budget, including the controversy over whether the Los Angeles Department of Water and Power (LADWP) will hand over $73.5 million in revenues to help balance the budget. Garcetti said that whether or not the LADWP provides the funding, the city will still be able to balance its budget. The only question will be how much money will be left in the city’s reserve fund for emergencies. If the LADWP provides the funds, the city will have approximately $112 million left over; without the LADWP transfer, the city will have approximately $39 million.
Garcetti also said that earlier prospects of 4,000 layoffs were confusing, because many of the layoffs were avoided by eliminating positions, not filling vacant positions, or transferring employees from positions funded by the general fund to positions in other departments that are funded by federal and state grants and other special revenue sources. He said approximately 760 people have been laid off so far, and the number may increase to around 1,000, but the dire predictions of thousands of people losing their jobs will not come to fruition this year.
Garcetti also said the city took steps in November to reduce the budget deficit through furloughs, an early retirement incentive program for city employees, revised contracts with the city’s unions, and a modified deployment plan for the fire department. The city council will now be looking at other ways to close that gap without depleting city services or laying off more employees.
Some of the options include cutting hours or days of operation at libraries and community centers, or closing recreational facilities for a portion of the week. Garcetti said the city council is still examining all of the options, and he favors an even-handed approach where the cuts are spread throughout every department so no one agency is overly depleted.
“There is no way to balance the city budget without looking at [cutting] some of the services we provide,” Garcetti said. “for me, it’s prioritizing public safety and quality of life. This is a time when we are all going to have to step up.”
Garcetti added that the council is looking at several steps that could reduce future budget deficits. They include public/private partnerships where private entities could run facilities such as the Los Angeles Zoo and the Los Angeles Convention Center. He also wants to look at privatizing city parking structures, such as the Arclight Theatres garage in Hollywood.
Garcetti added that he cut his city council office budget by 25 percent, and said similar cuts are likely going to be necessary for every city department.
“We will be looking this year to pass a realistic budget,” Garcetti added. “We are not going to cut services so much that they are not going to come back. The progressive thing to me would be to try to maintain as many services as possible by asking our employees to take less money, which will allow everything to come back when the situation improves.”
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