Can do all sorts of things, but when somebody turns up with a gun there has to be some physical mechanism to stop them from seizing control of the local supermarket.

The city can defund the entire police force, but it will have to set up or allow an alternative which will end up the same as the current one if the incentives don't change. Resetting the entire system every time something goes wrong isn't really a viable strategy. It'll work every so often.