Los Angeles city and county leaders are reviewing their finances in the wake of looming bankruptcies for San Bernardino, Stockton and Mammoth Lakes.
With the news that San Bernardino is the latest municipality to consider bankruptcy, elected officials in Los Angeles city and county are taking another look at their finances.
Los Angeles sold $1.26 billion in notes yesterday to pay for basic services until revenue comes into the city later in the fiscal year. The city’s top budget official, City Administrative Officer Miguel Santana, said funds were borrowed at the lowest average yield ever achieved by the city because of a strong financial outlook.
“The high rating is attributed to the city’s stable economic outlook and strong credit repayment history. It is also a result of the city’s aggressive marketing outreach program, which met with investors, including credit analysts and portfolio managers, to discuss the strong financial health and position of the city,” Santana said in a statement.
Mayor Antonio Villaraigosa told reporters this morning that unpopular financial and employment decisions helped the city to avoid an anticipated $1 billion shortfall.
“We would have been at a $1.1 billion dollar structural deficit, but we made the tough decisions,” Villaraigosa said. “And we’ll continue to make them going into the future because this city is too great. The people of this town deserve as much in the way of services as we can provide, given our economic situation.”
Los Angeles County Supervisor Mike Antonovich, meanwhile, is asking budget officials to report back on how the county’s financial practices compare to those of Stockton, which is also looking at bankruptcy.
“Stockton’s bankruptcy provides an ominous warning for other municipalities who fail to apply fiscally responsible policies in their budgetary planning,” Antonovich said. “Rather than matching spending to revenue, they float bonds in order to cover escalating costs for retiree health care, pensions and public facilities and capital improvements. This is a recipe for fiscal collapse.”