City Manager Warns of Prop. 218 Deficit
The city faces a $600,000 budget deficit for the next fiscal year because of Proposition 218, City Manager Daniel E. Keen said this week.
Proposition 218, a statewide initiative approved by voters in November, restricts local governments’ ability to assess fees.
Keen said it specifically affects La Palma’s Water and Sewer Fund and its Lighting and Landscaping District. Both entities up to now have supplemented the city’s general fund, which covers most city expenses, including police protection.
“The city is all right for this fiscal year that ends June 30, but it’s the new fiscal year, starting July 1, where we face trouble,” said Keen, who will give a report on the money situation and make recommendations at the City Council meeting Tuesday.
Keen said that the council has three options to cover the projected $600,000 deficit: “They can raise revenues, reduce expenses or use reserves.”
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