The city of Los Angeles is in better financial shape than previously thought.
The city controller reports L.A.’s emergency reserve is $23 million more than expected thanks to some penny pinching by several departments. The reserve fund total is now about $200 million.
The bump in the rainy day account isn’t a lot given the city’s multi-billion dollar budget. But it’s welcome news to a city that’s been forced to make painful budget cuts in response to plummeting tax revenues in recent years.
In a letter to the mayor, city controller Wendy Greuel said L.A. still faces many unknowns. The biggest is whether the economy will continue to improve and the city’s optimistic budget projection of a 1.8 percent increase in revenue will hold.
L.A. also faces a liability of up to $750 million in a court ruling favoring residents who claimed the city overcharged them on their phone bills. Greuel adds that the city is bracing for a possible $200 million shortfall in next year’s budget.