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LA Councilman: Budget Gap Puts City Payroll At Risk

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(credit: Frazer Harrison/Getty Images)

(credit: Frazer Harrison/Getty Images)

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LOS ANGELES (CBS) — City Councilman Bernard Parks issued a stern warning to his colleagues on Wednesday that some city employees risk not getting paid at the end of this fiscal year unless the City Council takes action.

The warning came on the heels of a report from City Controller Wendy Greuel announcing she will not automatically draw money from the city’s reserve fund for departments that are over-budget a move the controller usually makes on an annual basis.

Parks called the move a “major shift,” adding that it could mean some department managers would not be able to pay their employees as it gets closer to June 30, the end of the fiscal year.

It is typical that some departments spend more money by the end of the budget year than has been appropriated, but the overages are usually minor, said Mathias Farfan, director of financial reporting for the controller.

“This time, since there are some large overages, she (Greuel) is putting some restrictions on,” Farfan said.

In early March, the city controller reported that the city was almost $32 million over budget.

At the time, the City Attorney’s Office had overspent by $9.3 million, and the Police Department had gone $10 million over budget.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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