Los Angeles is facing alarming financial pressure due to rapidly rising lawsuit settlements, according to City Controller Kenneth Mejia. In a post on X (formerly Twitter), Mejia issued a “CITY OF LA GOING BROKE ALERT,” citing serious concerns with the city’s liability claims budget. Although the city allocated $87 million for lawsuit and settlement payouts for the fiscal year, a staggering $97 million has already been spent within just three months, surpassing the annual budget by $10 million.
A significant portion of these settlements—$59.4 million—was attributed to the Los Angeles Police Department (LAPD). Another $21.7 million fell under the “miscellaneous” category, which covers various incidents. Mejia explained that this miscellaneous figure was primarily due to two specific cases: “$10.5 million for a street lamp fixture that fell on a person’s head” and “$7.5 million for an attack by an adopted shelter dog, resulting in a lost arm.” Together, these two incidents alone made up 83% of the miscellaneous payouts.
The city’s approach to funding these claims is also concerning. As Mejia highlighted, these settlements aren’t deducted from the budgets of the departments involved, such as the LAPD, the Bureau of Street Lighting, or Los Angeles Animal Services. Instead, the payouts largely come from the city’s General Fund. This fund is typically reserved for essential city services and resources for residents, meaning these settlements could directly impact the quality and availability of public services.
“Liability claim payouts aren’t taken out of the budgets of the individual City Department that gave rise to the liability – instead, they mostly come out of the General Fund which is mainly used to fund city services and resources for Angelenos,” Mejia noted, emphasizing the broader financial implications.
Link: KTLA
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