West Covina is bracing for a slight increase in its deficit, from $2.1 million to $2.6 million. The increase is in line with what we are seeing in cities across the San Gabriel Valley, the state and the nation, and are attributing largely to the decline in automobile sales and other retail sales.
To make things worse, West Covina, like the rest of the cities in California, is holding its breath to see how the state is going to grapple with its ballooning deficit, which could reach $28 billion by 2010.
One thing West Covina has to offer compared with other cities is a healthy reserve, which for the time being is helping it deal with this deficit. But it’s not a permanent solution, City Manager Andrew Pasmant said.
The reserve is $40 million, $16 million which is available in cash today. The other $24 million is due to the city.