City controller says LA is in financial trouble, raises alarm on state of budget

LOS ANGELES (KABC) -- What is the state of the Los Angeles city budget? The city's controller is raising the alarm, saying it's in dire shape.

"The city of L.A., financially, we are in trouble," said Controller Kenneth Mejia.

He sent a letter to the mayor and the City Council, warning that the city is facing less revenue and, coupled with higher spending, could mean a big fiscal problem.

His report says the city faces a $140 million shortfall in revenue for this fiscal year, and an additional decrease of $73 million next year.

"The city is estimated to overspend by $300 million over budget. So when you have less revenues compared to your budget, and you have more expenses over your budget - that's a big gap that we have to fill," said Mejia.

"It's so bad that we have to do things differently," said Council Budget Chair Katy Yaroslavsky, who believes the city will need more money and there could be some cuts.

All of this comes at this critical time as the city rebuilds following January's devastating fires.

"We're looking at $100 million in LAFD overtime, on top of a budget that already had gone up from the prior the year. But really, what the fire department needs, based on conversations with them and just being part of this body, is their facilities need to be upgraded. They need more people fixing the trucks," added Yaroslavsky.

A concern during the fires was that some emergency vehicles couldn't be used because they were sitting for repairs.

Some councilmembers say there is also a lot of waste. A homeless audit released Thursday found that because of poor oversight, it can't track a substantial amount of money allocated to homeless services.

"The expenditures there, as well as the money that we've been spending on LAHSA, I think there is clearly an urgent need for a recalibration and very swift action to see spending in areas that clearly aren't showing us results," said Councilmember Monica Rodriguez.

Yaroslavsky said in addition to trying to fix this year's budget, this is a multi-year problem. And officials are trying to figure out how to make sure they can fix the budget for the next several years.