Faced with worsening budget crisis, L.A. looks to delay paying its bills

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Los Angeles officials are reeling from a financial crisis that has struck nearly a year into the coronavirus pandemic – prompting city administrators to find creative means to balance their budget.

City Administrative Officer Rich Llewellyn, L.A.’s top budget official, revealed in a Friday report that he has asked each department to review all contracts due during the final quarter of 2020-21, to see which payments can be deferred to the next fiscal year, according to the Los Angeles Times.

“If a department believes that they cannot defer all or part of the payment, we asked them to justify the need to make the payment at this time,” Llewellyn said, noting the fiscal year ends June 30, meaning all deferred payments would be made after July 1.

He said the city needs to know if any contracts prevent it from making deferred payments, accrue significant late fees or interest charges, or if a late payment would potentially harm a “local small business.”

Llewellyn’s 47-page report highlighted the city’s inability to cover this year’s expenses, leaving a $750 million budget gap.

“This is the most difficult budget year the City has ever faced, and the Mayor and the Council are leaving no stone unturned looking for savings,” Press Secretary for the mayor’s office, Alex Comisar, told Fox News. “That means, as it has in past economic downturns, working with our contractors to explore options for deferring payments into next Fiscal Year, when we expect the economy and revenues to improve.”

“The Mayor will continue to find savings wherever we can this year, and push aggressively for assistance from Washington to help states and cities balance their budgets,” he added.

California, once touted for its early success in preventing spread of the virus, has been reeling of late, with Los Angeles leading the nation in numbers coronavirus cases and deaths per capita.   

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L.A. County has reported nearly 1.14 million cases since the pandemic started – a figure that is more than double the next leading U.S. county.

County officials have also reported nearly 18,000 deaths from the virus over the last year, far more than any other county, according to data collected by Johns Hopkins.

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