More than any disaster the city has faced, the financial meltdown of the past year is serving to force Los Angeles to redefine itself and the services it provides.

"I keep telling my friends that this year is awful and that next year and the next few years will be difficult," Councilman Greig Smith said. "And, I predict in five years people will not recognize the city of Los Angeles."

Faced with a $212 million - and growing - shortfall for the final four months of this fiscal year and another $400 million next year, the city has been reeling from one crisis to the next trying to find ways to balance its budget.

On Thursday, after watching the City Council debate all day only to push off its decision by a month, Mayor Antonio Villaraigosa ordered that work begin immediately to lay off 1,000 workers. He also ordered an accelerated process to transfer workers from general fund jobs to those that are covered by special funds, like sanitation, or in the proprietary departments, Airports, Harbor and Water and Power.

While there was some sense the mayor had not done enough work with the City Council earlier to explain the problem, no council member disputed his power to take the actions.

"He did not talk to me about it," said Councilman Herb Wesson, who - like Villaraigosa - once served as Assembly speaker and knows how to gather votes. "I don't think it was realistic to ask this body to vote for layoffs when the information was presented only 20 minutes before the meeting.

"But I do think that this will be a defining moment for the city of Los Angeles. What we are going through will change this city."

Councilman Bernard Parks, who chairs the council's Budget and Finance Committee, said the city has been living on borrowed time and is now being forced to make the changes it should have considered years ago.

"This has been a long time coming," Parks said. "We have been using one-time solutions for too long. Every time someone finds a pot of money we didn't know we had was just delaying the problem to the future. Well, now guess what? There are no more pots of money."

While the mayor took the onus off the council of having to order the layoffs, much work remains, Parks said.

"We still have to find a way to cover the shortfalls," Parks said. "Ordering the layoffs helps, but it still will only give us a couple of months of relief. The big savings from the layoffs will come next year and in future years."

Among the mayor's proposals are bringing in private operators for the Convention Center and golf courses, developing a public-private partnership for the Zoo and leasing out 10 garages.

Councilman Richard Alarc n said he opposes privatizing more city services.

"If the garages are worth so much money to private firms, why can't we just use their approach and make the money ourselves?" Alarc n said. "It just doesn't make sense to me.

"The problems are the problem and they are not going away. We should set a tone that layoffs are a last resort."

But the mayor said he believed he had no other options and his action also had other implications, officials said.

"What he did is tell the bond market that the city is seriously addressing its problems," Smith said. "That's important because that determines what we pay to borrow money."

And, Parks said, ordering the layoffs now could save other jobs.

"If the council had done a miraculous job and saved 100 jobs from layoffs, the 30-day delay would have meant 120 more people were on the list," he said. "He is limiting the problem."

Councilwoman Janice Hahn said the mayor's order on transferring workers mirrors what the council wanted.

Hahn is skeptical that so many workers need to be laid off.

"We were told there are 1,200 vacancies," Hahn said. "I think we can find jobs for everyone."

Several outside observers, however, believe the city has been too slow to move.

Economist Kevin Klowden of the Milken Institute said the council appears to be in denial.

"I don't think the City Council has come to grips with the size of the problem it faces," Klowden said. "The idea of postponing the layoffs for them to find another solution, on its face, seemed absurd. There is no simple solution for the problem the city faces.

"And they aren't alone. The unions are in denial of the problems the city has. They would rather see jobs lost than give up some of their salary to keep the city working."

Klowden agreed with Parks' assessment the city should have dealt with the problem years ago.

"Instead, they gave concessions to the unions that deferred the problem to the point it is," he said.

Because of the booming economy up until two years ago, Klowden said the city was able to "pass the buck until we've reached the limit.

"Everyone knew, at some point, there would be a recession, because there always is. No one expected it to last this long, but it is here and they need to deal with a slow recovery because the money for expansion will be very slow to return."

Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said the time to defer problems is over.

"You can't just kick the can down the road because every day they delay just adds to the cost of the problem," Kyser said. "They have some very, very tough decisions to make and there are going to be a lot of unhappy constituents. But there is no getting around it."