AP Photo/ Damian Dovarganes
Los Angeles Mayor Antonio Villaraigosa announces the elimination of two small City Departments on Friday, Feb. 19, 2010, in Los Angeles.
Los Angeles Mayor Antonio Villaraigosa said Thursday he no longer believed it would be necessary to shut down some city services because of a gaping budget hole.
Mayor Villaraigosa said that while L.A. still faces a massive deficit, its immediate financial picture looks better than it did earlier this week.
“My hope is that we are going to have the revenues," Villaraigosa said. "The CAO shared with us today that it may be that we’re getting in more revenues than we thought.”
Villaraigosa stood with City Council leaders — after days of trading jabs with them over a planned transfer of $73 million from the Department of Water and Power to the city’s dwindling general fund.
City Council President Eric Garcetti said the D.W.P. still needs to make that transfer.
“We need to have as much money as possible in our reserve at year’s end," Garcetti said.
Without the transfer, the City Administrative Officer said the reserve will dip to as low as $30 million when the fiscal year ends June 30. That would give the city little wiggle room if it encounters unexpected expenses or an emergency, like an earthquake.
But Villaraigosa again refused to order his D.W.P. general manager to make the transfer. The mayor said he feared its potential negative effect on the agency’s finances.
Over the last several months, the city has cut costs by laying off at least 43 workers, granting another 2,400 workers early retirement, increasing debt collection and negotiating lower costs for its contracts.
When the DWP vowed to withhold the $73.5 million because the City Council rejected its application for 5.7 percent increase in electricity rates, Villaraigosa on Tuesday called for shutting down non-revenue generating services, which would essentially furlough thousands of employees.
The city's Chief Legislative Analyst Gerry Miller said on Wednesday, however, that the mayor does not have the power to close agencies without the concurrence of the council.
Wire services contributed to this report