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LA controller: $1.1 billion in liability payouts strain city budget; audit and special-fund reforms proposed
Summary
City Controller Kenneth Mejia told the Budget & Finance Advisory Committee the city paid roughly $1.1 billion in liability payouts since FY2020 and identified about $80 million in underused special funds; he announced a performance audit of risk-management practices and recommended sunsetting or transferring eligible idle funds to shore up reserves.
City Controller Kenneth Mejia told the Budget & Finance Advisory Committee on Monday that mounting liability payouts and underused special funds are putting acute pressure on the City of Los Angeles’ general fund and urged both short-term shifts and longer-term policy changes.
"We've paid out $1,100,000,000" in liability payouts since fiscal year 2020 through Dec. 31, 2025, Mejia said, adding that police-related claims account for roughly $435,000,000 of that total and that excessive use-of-force and traffic-collision claims are major drivers. He said the City’s reserve fund has declined from about $648,000,000 two years ago to roughly $449,000,000 now, reducing the City's capacity to absorb future shortfalls.
Mejia said the controller's office projects the current fiscal year will be "on budget or a little bit below" and that near-term revenue gains have come from utility-users-tax increases, stepped-up business-tax collection and one-time…
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