Desert Hot Springs, a resort town in California, warned yesterday that it will run out of money by March due to burdensome salary and pension costs and could join other U.S. cities that have recently filed for bankruptcy protection, Reuters reported today. The problems in Desert Hot Springs came to light last week when a new finance director reviewed the city's records and discovered a $3 million shortfall in its budget of $13.5 million. Amy Aguer, the town’s interim director of finance, did not have details on how the shortfall occurred but said that it was the result of higher-than-expected pension and salary costs, especially in the police department, and overly optimistic estimates of revenue.
