Four months into the fiscal year, the city of Los Angeles has already overspent its budget by nearly $300 million, according to a report released this week by the City Administrative Officer.

The city is in “a particularly challenging financial position,” the report states, noting increased legal liability and labor costs across a number of departments.

L.A.'s reserve fund has dropped to 4% of revenues, according to the report. The city has a policy of keeping the fund at a minimum of 5%. If it drops below 2.75%, the council would need a two-thirds vote to withdraw money from it. That could threaten the city’s bond rating, which would increase the city’s borrowing costs.

Four months into the fiscal year, the city of Los Angeles has already overspent its budget by nearly $300 million, according to a report released this week by the City Administrative Officer.
The city is in &ldquo;a particularly challenging financial position,&rdquo; the report states, noting increased legal liability and labor costs across a number of departments.
L.A.'s reserve fund has dropped to 4% of revenues, according to the report. The city has a policy of keeping the fund at a minimum of 5%. If it drops below 2.75%, the council would need a two-thirds vote to withdraw money from it. That could threaten the city&rsquo;s bond rating, which would increase the city&rsquo;s borrowing costs.

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