OurLA.org, by by Chelsea Cody, Feb. 25, 2010

The City Council has agreed to let go of $12 million in special, district-specific funds in order to restore the city’s emergency reserve fund.

Since the city’s credit rating was downgraded this week, city officials are looking into using some reserve fund dollars to fight the growing $212 million budget deficit. Previously, the mayor has also requested that the council loan the reserve nearly $40 million from their discretionary accounts.

The LA Times reports that these discretionary accounts are typically used for projects such as crosswalks, pocket parks, street repair, graffiti removal and, on occasion, their staff salary accounts.

The council members will determine which accounts will be tapped for funds. However, it is expected that most of the money will come from funds set aside for development projects that are replenished with tax revenue from the respective 15 districts.

This move is thought to be a first step in budget analysts attempts to find money that can be freed up to help cover this fiscal year’s budget gap.