Councillors in Leeds have been warned not to delay making tough budget decisions as the council looks to slash its spending by £90m this year.
Major cuts are needed to help the council cope with Government grant reductions and initial proposals include job losses, closure of residential homes, day centres and sports centres, scrapping the council's contribution to the free city bus, less money for arts bodies and police community support officers and price increases for some services.
Many of the ideas are out for consultation and final decisions will not be taken until the council's annual budget meeting in February.
A report by Alan Gay, resources director, to a recent meeting of the council's Executive Board said the draft proposal would, if approved, reduce the council's spending by the required 90m.
It added: "It is imperative that members understand the need to make clear and timely decisions which will deliver the level of savings required in 2011-12 and leave the council in a strong enough financial position to go into 2012-13.
"However, delays in making decisions making decisions, or slippage in the delivery of actions agreed, could seriously threaten the council's financial position.
"It is important members are fully aware of the potential consequences to the authority if this should happen."
Given that the report describes the Government grant cuts as "unprecedented in scale," it goes on to set out the legal position should the council find its spending is likely to exceed its resources.
As the council's designated Responsible Financial Officer, Mr Gay would issue a notice to all councillors, with a copy to the authority's external auditors, requiring that within 21 days actions were agreed to balance the books.
From the date the notice was issued, the council would be prevented from entering into any further financial commitments until the appropriate actions had been agreed.
The report says the council's level of cash reserves is low, a position that can only be justified "if the council's budget plans are sufficiently realistic and deliverable" and not rely on reserves.