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CITY BUDGETS : A SPECIAL REPORT : A Balancing Act Between Less Money, Rising Costs

June 22, 1987|JEFFREY A. PERLMAN | Times Urban Affairs Writer

The Irvine City Council is considering new and increased fees, with concerts at Irvine Meadows and boxing at the Irvine Marriott among the targets for the levies. In Huntington Beach, some parking rates are going up. It's the same story all over Orange County.

With few exceptions, cities wrestling with 1987-88 budgets that refuse to balance are being forced by reductions in anticipated sales and property tax revenues to hike fees and tap reserves--a sign that the county's economy is slowing down.

Most of the county's 26 cities still are expecting to take in more taxes in the 1987-88 fiscal year than in the current year--4% to 8% more, in most cases. But city officials say that that rate of growth is only about half of the previous year's and is not enough to cover rapidly escalating expenses.

There are a few bright spots. Santa Ana, for example, has managed to find enough money to launch a new program to spruce up neighborhoods.

For the Record
Los Angeles Times Wednesday July 1, 1987 Orange County Edition Metro Part 2 Page 2 Column 5 Metro Desk 2 inches; 56 words Type of Material: Correction
A June 22 story in The Times incorrectly reported that the City of Brea will end the 1987-88 fiscal year about $250,000 in debt. Although expenditures are expected to exceed revenues for the period, the city plans to cover the shortfall by drawing down on its operating reserve. As a result, the reserve is expected to decline by about $250,000 in the fiscal year, from about $2.5 million to $2,247,620.

But, faced with a state law requiring balanced budgets, most city councils are struggling to maintain services at current levels.

Garden Grove Assistant City Manager Mike Fenderson summed up the situation described by many of his counterparts in other cities when he said: "We see the economy weakening . . . I see where serious problems will have to be addressed in the future."

Here is a city-by-city look, in alphabetical order, at how the budget-balancing is going at city halls across the county.

Brea The Fiscal Year Begins With Red Ink Situation

The city will begin the next fiscal year on July 1 in the red, but pressing needs and opportunities to save money led the City Council to adopt a budget that contains increased spending.

The $25.7-million budget adopted on June 16 is an increase of 7.5% over the current budget. The general-fund portion of the budget includes $250,000 in spending beyond projected revenue, according to Controller-Treasurer John Stark. This means that if projections become reality, the city will begin 1987-88 with an operating fund balance of about $2.5 million and end the year about $250,000 in debt, he said.

The main reason is that the city "will be absorbing costs this year (1987-88) from programs that commenced the current year but didn't represent a full year's cost," Stark explained.

New projects and programs in the budget include nearly $110,000 for the Police Department, $52,000 for the Maintenance Services Department, $52,618 for a new juvenile detective, and funds for street striping and increased landscape services.

But the city also expects new sources of revenue. A revised user fee for the Sewer Enterprise Fund will become effective on Sept. 1, adding $62,000 to help cover its full operating and replacement costs. And new user fees for land-use processing will take effect July 1. They are expected to add $325,000, contingent on "a sustained high level of building activity," Stark said.

Sales tax revenue is expected to be up 7.8% over the current year, from $5.5 million to $5.9 million. Property tax revenue is expected to climb 5.2%, from about $1.9 million to just over $2 million.

Contributing to this story were Times staff writers Marcida Dodson, La Mont Jones Jr., Lanie Jones, Ray Perez, Mark I. Pinsky, David Reyes, Bob Schwartz, Nancy Wride and Jonathan Weisman.

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