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MAYOR VILLARAIGOSA ISSUES STATEMENT ON CITY'S FINANCIAL HEALTH

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Category: City News

Published on Tuesday, 06 April 2010 10:29

Written by Dianne Lawrence

April 6 2010 LOS ANGELES - Mayor Villaraigosa issued the following statement on the City's fiscal health.

"Today we are facing the consequences of the City’s failure to enact the necessary rate increases with Fitch Ratings, a major credit rating agency, withdrawing the DWP's AA- bond rating, thereby costing the
ratepayers more in the long run.

Over the past several months, I have been advocating for a plan that would put the Department of Water and Power back on a path towards fiscal health, protect the department’s credit rating and avoid the very situation in which we now find ourselves. Due to the rising cost of energy and fossil fuels, this plan included difficult, but necessary rate increases that were based on sound fiscal recommendations from the City Council’s own independent consultant.   

The DWP has also informed the Controller that they cannot transfer $73.5 million to the City's General Fund, putting the City in danger of running out of money by May 5, 2010.

For this reason, I am directing all General Managers in the City to do, among other things, the following:

1. Adhere to the spending controls initiated in the joint Mayor-Controller memorandum of March 10, 2010 (attached) and strictly follow the established criteria in your reallocation requests.

2. Expedite repayment of Reserve Fund loans to ensure that the Reserve Fund is available for our budget balancing purposes and that the size of the Reserve Fund remains fiscally sound to start the next fiscal year.
The City Administrative Officer (CAO) has already requested repayment information from each department with an outstanding loan. It is critical that the information requested be submitted to the CAO immediately.

3. Advance the submission of all pending bills, invoices or cost reports to the appropriate City department responsible for requesting General Fund and Reserve Fund reimbursements from special or grant funds."

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