The Los Angeles City Council rejected a plan to lease garages to private investors to raise money that would have helped close a year-end budget hole and defease bonds.
The council’s decision Wednesday leaves the city with a $54 million budget gap.
Council members ignored recommendations by Mayor Antonio Villaraigosa and city administrative officer Miguel Santana to approve a plan that maximized the value of the parking garages in a public-private partnership.
The city has two parking-system revenue bond series totaling $94 million that would have been defeased as part of the P3 proposal.
In an earlier session, council members tweaked the original P3 proposal under pressure from business leaders in the areas where the parking, now subsidized by the city, is located.
After the changes, prospective bidders said they would not bid on the plan.
The council already approved $33 million of cuts to make up for the potential loss from a canceled P3 plan. But the city administrative officer is now expecting an additional $25 million, leaving a $54 million hole in the budget largely due to a fall-off in tax collections.
Having started the fiscal year with a $490 million deficit, Los Angeles expects a $300 million budget deficit next fiscal year, according to the mayor.