Proposed March 2011 Ballot Measure Designed to Protect City’s Reserve Fund;
Measure Seeks to Strengthen City’s Economic Future
Los Angeles— Council President Pro Tempore Jan Perry received support from the City Council to move forward on ballot language for the March 2011 election for a charter amendment to protect the City’s coffers; the amendment would establish minimum requirements for the city’s Emergency Reserve Fund and codify that requirement in the City Charter. Perry spearheaded the initiative in an effort to secure the present and future fiscal health of the City. Today, the Council preliminarily approved language drafted by the City Attorney and City Clerk that would appear on the spring 2011 ballot.
“By amending the charter, we are codifying an important policy that helps to safeguard our reserve fund; it makes the statement that we are serious about keeping our city on firm financial footing,” said Perry.
The proposal would establish two accounts within the reserve fund: Emergency Reserve Account and Contingency Reserve Account, requiring that the Emergency Reserve Account include a minimum of 2.75% of the General Fund receipts for the year. In order to access the Emergency Reserve Account, the City Council would need to establish an economic necessity that may include a natural disaster, civil unrest, or other significant unanticipated event with a two-thirds vote of the Council with Mayoral approval or three-fourths vote of the Council without Mayoral approval. If the Emergency Reserve Account is used, the amendment would require that the Council replenish the fund by the following year. The proposed ballot measure would also create a “budget stabilization account” where the city’s surplus funds could be deposited in times of economic prosperity; these funds would be available for use in times of crisis.
Beyond saving for emergencies, the amendment also supports the City’s efforts to maintain a high bond rating. “Maintaining a minimum reserve balance helps us with our Bond Rating and when we receive a favorable bond rating and low interest rate, the City saves millions of dollars each year,” added Perry.
Perry originally introduced the proposed charter amendment in February of 2010 for placement on the November 2010 ballot. The item was deferred until the March 2011 ballot to save the city $4 million dollars.
Councilwoman Perry represents the Ninth Council District, which encompasses the most culturally diverse and vibrant communities in Los Angeles, including Bunker Hill, Little Tokyo, and South Los Angeles.