LOS ANGELES, Kalifornia - April 5, 2010 - Los Angeles will run out of cash on May 5, city Controller Wendy Greuel said today in a release in which she requested a $90 million transfer of reserve funds to pay bills.

The controller said she received a letter from the Los Angeles Department of Water and Power today indicating the utility wouldn’t send an anticipated $73 million payment to the city’s general fund. That money is part of an annual contribution of 8% of power revenue that the utility makes in lieu of paying taxes to the city, according to Ben Golombek, a spokesman for the controller.

“The question I have been asked most often during the budget crisis is, ‘When will the city run out of money?” Greuel said in the e-mailed release. “Unfortunately, we finally have the answer.”

Greuel, 48, said in the release that the city might not be able to make payroll. She asked Mayor Antonio Villaraigosa and the City Council to release $90 million from reserve funds to meet what she described as “an urgent cash need.” The controller’s financial reporting division estimated that the city would need $90 million to ensure solvency through the fiscal year that ends June 30, according to Golombek.

The mayor supports the controller’s request for $90 million from the reserve fund, said his spokeswoman, Sarah Hamilton, in an e-mailed comment. He also called on city managers to adhere to spending controls he asked for in March, according to Hamilton.

 “This is the most urgent fiscal crisis that the city has faced in recent history, and it is imperative that you act now,” Greuel said in her release.

“There is no surplus money to transfer at this time,” David Freeman, interim general manager of the department, said in a letter today to Greuel that was released by Golombek.

The City Council’s vote to block a proposed electricity rate increase last week may push the Department of Water and Power into deficit, the Los Angeles Times cited Freeman as saying.

The mayor and the department had sought the rate boosts.

Fitch Ratings today withdrew its AA- rating on $720 million of bonds the department planned to sell this month, according to a press release. The credit-rating company said it had assumed a rate increase in the credit assessment. The sale, which included $616 million of taxable Build America Bonds, has been postponed, according to the Fitch release.

“Today we are facing the consequences of the city’s failure to enact the necessary rate increases,” the mayor said in an e-mailed release. The lack of rate boosts will wind up “costing the ratepayers more in the long run,” he said.