Wednesday, September 17, 2014
FOLLOW US: 

The Los Angeles County Board of Supervisors agreed last week to dip into a reserve fund to pay some bills, but also agreed to trim a list of projects to be funded in the face of state budget cuts. William T Fujioka, the county's chief executive, wrote to the board, saying the state's prolonged budgeting process and shrinking tax revenues make the move necessary. The money will come from a $215.9 million economic reserve set aside to address budget gaps, make capital investments and boost operating efficiencies, Fujioka stated.

Already, Fujioka has asked county department heads to cut their budgets by 5 percent. But those savings unlikely to put much of a dent in the $35.8 million budget deficit. Fujioka advocated spending $34.1 million from reserves.

But, after Supervisor Gloria Molina questioned the necessity of some spending, the board agreed to eliminate about $5 million worth of projects. Axed from the spending list were $3 million for various solar energy projects and $2 million from a project that will convert Public Works maps to electronic form. Molina also tried to delay a proposed $2 million renovation of the county's press offices and create a county TV channel, but she received no support on that issue from her colleagues.

 The reserves "should be for critical items only," Molina said.

The projects that Fujioka requested funding for were touted as ones that would boost ongoing cost savings. The Public Works maps project, for example, was supposed to save the department $1.4 million over three years. The request for funding, however, came at an awkward time--right after Fujioka and other county staff members made doomsday predictions about state budget cuts killing county services.

The county is running a deficit of about $35.8 million this fiscal year, which ends June 30. Next year, the funding gap is expected to grow to $173 million and continue to grow for two more years, according to Fujioka. The state's fiscal crisis prompted Gov. Arnold Schwarzenegger to propose delaying state payments to county-run programs for up to seven months.

The controller said some February payments will be delayed for at least 30 days due to cash-flow issues. The governor's proposal could cost the county an estimated $1.4 billion, while the controller's payment delay would cost the county $105.6 million, according to Fujioka. Fujioka brought some department heads to the Board of Supervisors meeting with him.

They predicted layoffs and program cuts that would affect everyone county. To make up for payment delays, the county would have to borrow money, most likely at high interest given the tough economy, according to Fujioka.

"This is a doomsday scenario," said county Supervisor Zev Yaroslavsky, who firmly opposed borrowing money.

At the suggestion of Supervisor Don Knabe, the board voted to oppose any attempt to delay state payments to the county, and directed county staffers to come up with ways to deal with shortfalls.

 

Category: Economy


 

Slideshows





Click to
Win!