Los Angeles is on the brink of a budget emergency, with its finances in a “dire” state and no money to cover unexpected expenses after a series of lawsuits blew a hole in the city’s already tight budget.

So if you were hoping that this would be the year that City Hall, in preparation for the 2028 Olympics, would undertake to smooth out destroyed sidewalks, repair burned-out streetlights, prune trees, or any other public investment to make the city a more pleasant city for residents and visitors alike, don’t hold your breath.

Los Angeles is broke. Mayor Karen Bass and the City Council need to get serious about developing a plan to stabilize the city’s finances this year and into the future.

This will not be an easy task. In just the first three months of the fiscal year that began July 1, the city will pay $258 million in liability costs. The largest category of compensation – 40% – is related to police negligence or use of force. About a third of the payouts are for cases involving personal injuries due to unsafe conditions, such as broken sidewalks and streetlights. About 15% are employment cases involving harassment and other working conditions.

Even though liability expenses are the immediate cause of the dire financial situation, the budget adopted by Bass and the council was already out of date, largely due to costly police and civilian employee raises approved during the last fiscal year. .

The city began this fiscal year in violation of its own financial policy to maintain a reserve fund — where money is stored to cover emergency or unforeseen expenses — of at least 5 percent of the city’s general fund budget. 8 billion dollars. (The goal is 10%.) The reserve fund was at 4.12% as of July 1, according to City Comptroller Kenneth Mejia. If all liability fees were paid from reserves, the fund would fall to 2.8%. And if the fund drops below 2.75%, the board is required to declare a budget emergency.

To avoid that, city leaders are considering extreme measures, including borrowing money to pay off some judgments and settlements, which involves adding interest to the initial cost. It is also likely that the city will continue to slow or stop hiring some municipal employees, further reducing basic services such as street repairs, park maintenance and code enforcement.

These measures may restore the reserve fund, but they do not solve the underlying problem: the city is not living within its means. Los Angeles leaders approve employee raises the city can’t afford, then cut staff and services while hoping for an economic boom that would increase tax revenue.

It’s a feast or famine pattern that happens over and over again, making it more difficult for the city to make long-term investments, such as maintaining public infrastructure, adopting technologies to modernize service delivery and even training of staff and managers. These are investments that could reduce growing lawsuit awards and potentially prevent personal injury lawsuits from broken sidewalks and dangerous street conditions, as well as employee lawsuits for harassment and retaliation.

To fix Los Angeles’ budget, city leaders must move to multi-year budgeting in which spending commitments are planned in advance rather than the current annual rush with priorities and programs changing from year to year.

The city must also be far away more transparent on employee employment agreements, including an independent analysis of impacts.

Contracts are negotiated in secret, ratified by union members and quickly approved by elected officials, many of whom rely on unions for campaign contributions. There was little discussion last year about how a billion-dollar increase over four years would affect the budget and how other employee unions would expect similarly large increases . Nor has there been any public debate over the deal allowing park rangers and some police officers to convert their good pensions into excellent pensions at a one-time cost of $23 million to the general fund; Voters will decide on November 5 whether this agreement moves forward with Amendment FF to the Charter.

And city leaders must decide what basic services Los Angeles can afford to provide — or should provide. Public safety is a core responsibility of local government, but what tasks can civilian employees perform more effectively so that sworn police officers can focus on responding and solving crimes?

Addressing homelessness is a top priority, but should the city continue to fund social support, mental health and treatment services that are the responsibility of county government? What programs and services should be cut because Los Angeles can’t afford to be all things to all people? And what core municipal responsibilities continue to be diminished because the city fails to make wise spending decisions?

On Wednesday, Bass announced the creation of a steering committee comprised of Department of Public Works directors to better plan, coordinate and streamline the construction and maintenance of streets, sidewalks, parks and other public infrastructure. Having a long-term infrastructure plan is certainly preferable to the status quo in which basic maintenance rises and falls based on the city’s budget and political priorities.

But committees and efficiencies aren’t going to solve Los Angeles’ financial problems. The mayor and city council will need to make difficult choices over several years to put the city on a stable financial footing.