Page 3 - FY 2021-22 Supporting Information
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CITY OF LOS ANGELES

         Richard H. Llewellyn, Jr.                         CALIFORNIA                                       ASSISTANT
                                                                                                      CITY ADMINISTRATIVE OFFICERS
         CITY ADMINISTRATIVE OFFICER                                                                     PATRICIA J. HUBER
                                                                                                            BEN CEJA
                                                                                                          YOLANDA CHAVEZ




                                                            ERIC GARCETTI
                                                               MAYOR
                                                        April 20, 2021



               Honorable Members of the City Council:

                       The 2021-22 Proposed Budget is a historic budget.  Following a year of uncertainty and
               economic upheaval caused by the global COVID-19 pandemic, the City of Los Angeles is poised
               to make large and impactful investments in areas of equity and justice, homelessness, economic
               opportunities, and capital and technology improvements, all while preserving critical City services
               and achieving the largest Reserve Fund in the City’s history.  This budget demonstrates the City’s
               resiliency and recognizes that its ongoing challenges require bold actions,  creativity and
               innovation, and an ongoing commitment to fiscal responsibility.


                       The hope  and  optimism personified in the Proposed  Budget is  attributed to the
               improvements  the  City  has  seen  with  COVID-19  case  rates  and  vaccine  distributions,  and
               especially the unprecedented federal response in relief funding through the American Rescue Plan
               (ARP).  We also thank our labor partners who came to the table to help the City and the City’s
               poorest residents in this time of need.  Still, there is no question that without the ARP, the Proposed
               Budget would have necessitated the City to rely on austerity measures beyond those anyone of
               us has experienced since the Great Recession.  In fact, before the ARP was passed, the balancing
               plans recommended by this Office called on the City to deplete its reserves, debt finance ongoing
               operations, and continue down a path of reducing its workforce and, with it, the services the City
               provides.  The ARP will allow the City to emerge from a year of COVID malaise, ready to take on
               its most daunting problems.


                       There continues to be no greater challenge  than addressing homelessness and this
               Proposed Budget makes the largest investment the City has ever made to address homelessness.
               Including  Proposition  HHH  bond  proceeds,  ARP  funds,  state  funds  dedicated  for  homeless
               services, and the General Fund, the City’s commitment to ending homelessness has never been
               stronger.

                       Despite the mostly positive news, the City budget future remains extremely challenging,
               and the  Proposed Budget’s increase  in the  City’s reserves  is necessary.   First  the  Proposed
               Budget’s reliance on the federal ARP funds is not without risk.  The U.S. Department of Treasury
               is responsible for distributing ARP funds to cities and  it is  currently developing methods and
               guidance for the allocation and oversight process. If the Department of Treasury guidance restricts
               the ARP funds in a way that is inconsistent with the appropriation provided in the Proposed Budget,
               the City will need to reassess the proposed funding.  In some cases, reductions to programs and
               services may be required if alternative funding sources are unavailable.  Even if programs are
               eligible for  ARP funds, since ARP funds are  one-time revenues, increased services and new



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