Los Angeles budget officials are warning that the city needs to immediately borrow tens of millions of dollars to avoid dipping into its emergency reserve fund after several high-profile lawsuit payouts.
The City Administrative Office recommended in a new report that the city borrow $50 million to $70 million to address cases that are part of a “new trend of increased liability payouts.”
The city typically budgets $60 million a year for its legal liability fund, but has already paid out $135 million since July 1, when the current fiscal year began.
Recent significant payouts include a $200-million settlement by the Los Angeles City Council over a housing-related lawsuit brought by disabled groups and an $8-million settlement to end lawsuits related to the fatal Los Angeles Police Department shootings of three unarmed men in separate incidents. The $200 million will be paid out over 10 years.
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