Desert Hot Springs Seal

Desert Hot Springs has declared a fiscal emergency as it seeks to avert a second bankruptcy filing.

By Rick Rojas
November 20, 2013, 4:20 p.m.

Officials in Desert Hot Springs have declared a fiscal emergency in an attempt to avert a second bankruptcy as the Palm Springs-area city approaches insolvency.

The City Council voted unanimously Tuesday to approve the emergency declaration, with revenues expected to fall short of covering the city’s expenses by a significant margin.

A report prepared by Desert Hot Springs’ interim city manager, Robert Adams, said that the city suffers from a “serious structural imbalance” brought about by the economic downturn and decreased development, among other factors.

The city has budgeted expenses of close to $20 million despite revenues of just under $14 million, according to the report. The city is projected to deplete its reserves within the next five months, which would prompt officials to have to file for bankruptcy for the second time in its history.

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