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Politics & Government

Measure P Establishes Emergency Reserve Fund

The charter amendment formalizes past practices.

Los Angeles voters will decide March 8 whether to approve Measure P, which would require the city to put 2.75 percent of its general fund revenue into an emergency reserve account within the reserve fund.

The account could be tapped only if there is a fiscal emergency such as a result of natural disasters or man-made disasters such as terrorist attacks.

The current City Council already adopts this policy, but Measure P—also known as the Emergency Reserve and Budget Stabilization Fund—would codify that action as part of the City Charter and force future councils to continue to set aside the money.

Councilwoman Jan Perry said she authored the measure because of the term limits that will take effect in 2013.

“I wanted to ensure that … future councils will be obligated to set money aside to have a minimum rainy day fund,” said Perry, who represents the 9th District.

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Accessing the fund would require a two-thirds vote of the City Council if the mayor approves and a three-fourths vote of the council to override a mayoral veto. The fund would have to be repaid the following year, unless there is a catastrophe.

Measure P would also set up a Contingency Reserve Account to deal with revenue shortfalls and unanticipated expenditures in the annual budget, and a Budget Stabilization Fund that would help balance the budget in lean years.

In this way, Pertty noted that the measure will help Los Angeles maintain its bond rating. “It will cause us to contribute to our own financial stability and should go a long way to protect the city from being vulnerable from unexpected occurrences,” Perry said.

Several business groups support Measure P, including the Los Angeles Area Chamber of Commerce, the Valley Industry and Commerce Association and the Central City Association of Los Angeles, whose membership comprises about 450 large businesses and organizations.  

“From the business perspective, I think having these constant budget crises and furloughs and closing departments is very volatile, and it undermines the business environment,” said Anne Williams, the Central City Association’s vice president of legislative and legal affairs.

“Business wants consistency, and they want reliability and dependability on their government. It’s bad for business to have constant fiscal crises,” Williams said.

Other supporters include the New Frontier Democratic Club and the Los Angeles County Young Democrats.

The official voter guide did not list any opposition arguments to Measure P.

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