As the Los Angeles City Council on Friday discussed measures to deal with a $585 million deficit, City Controller Wendy Greuel expressed concern that the council's budget committee refused to recommend a permanent end to the diversion of certain revenues to members' slush-fund accounts.

In the last 12 years, Greuel says, $25 million in revenue from pipeline franchise fees and the sale of surplus city property has gone to council members' “discretionary accounts,” which they can use for anything from installing crosswalks to throwing a neighborhood party. The budget committee refused to recommend a permanent end to funneling the cash to those accounts, but the money has been given over to the general fund during the last two fiscal years.

Greuel argues that moving the money permanently to the city's general fund will result in an extra (and much-needed) $5.5 million for the fiscal year that begins July 1.

In other news, the controller also decried the committee's recommendation to cut the city's reserve fund from five person of the budget to three percent. Greuel says that, in the case of an unforeseen emergency such as an earthquake, the city's cash flow would essentially run dry.

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