HAWAIIAN GARDENS — For the second time in as many weeks, City Administrator Darwin G. Pichetto has unexpectedly cancelled a key budget-balancing session, continuing to delay this tiny city's effort to forge a spending plan that will reverse its slumping financial condition.
Pichetto called off the budget meeting only hours before it was to begin on Tuesday night, officials said.
"I don't know what the problem is," Mayor Kathleen M. Navejas said in a telephone interview this week. "This is getting pretty frustrating," she added, reflecting the council's desire to put the politically touchy budget to rest.
"I just want to get this done," agreed Councilman Donald E. Schultze, who has waged a bitter war of words with Navejas over the past few weeks. "The bottom line is that we need to know how close we are to balancing this thing."
"They have found some more mistakes. They had some trouble, but I don't know exactly what happened."
Pichetto said the budget session was cancelled after he and Assistant City Administrator Ronald Downing reviewed spending cuts that had been approved in three previous budget sessions, which began last month.
Pichetto said that "various adjustments need to be made" on several spending issues that the council thought had been resolved. He declined to elaborate.
The council has been struggling to trim spending proposals before it approves the budget for fiscal 1988-89, which began July 1. Council members initially faced a deficit of nearly $1.2 million. After weeks of haggling, that figure has been sharply reduced. But the council still must cut about $260,000 if it is to balance spending with the roughly $3.1 million the city expects to receive in revenue.
In the meantime, city officials are running the square-mile city of 12,000 without any spending plan.
Officials had hoped to wrap up the budget sessions with Tuesday's meeting by trimming the popular $407,000 recreation budget.
"We still don't have everything together," Pichetto said, adding that the city's finance staff would be working through this week to correct mathematical errors detected by Downing, who joined the city staff last month.
Pichetto said the council's budget session was rescheduled for next Monday. The session was initially scheduled for Aug. 23, but was postponed for two weeks over a disagreement on how much money the city had left in its reserves.
Officials have reported that the city coffers are nearly empty. Although the city has about $340,000 in its account, some officials say that much of that is restricted funds--federal and state money granted to the city for special projects.
That controversy has been fueled by Navejas' charge that for years the city has been run poorly, with three former city administrators essentially hiding various fiscal problems from council members.
Both Schultze and former City Administrator Charles E. Bryant have disputed the charge.
Request for Audit
Two weeks ago, City Atty. Maurice F. O'Shea requested that the Los Angeles County Grand Jury conduct an audit of the city's finances for the past five years.
In an Aug. 26 letter to Robert Leland, grand jury foreman, O'Shea wrote: "Preliminary review by the City Council and our independent audit has reflected that the practices of past city administrators did not disclose to the City Council vital information and remedial measures that previous auditors recommended to the city in conducting its accounting and fiscal affairs."
"The City Council is very desirous of an immediate independent review and investigation . . . to determine whether there has been misconduct in the past practices and procedures in dealing with public funds. . . . "
But in a second letter, sent three days later, O'Shea said: "The city has not taken the position, nor does the city make allegations of wrongdoing by any persons, including past city administrators."
Pichetto said that the city has not received a reply from the grand jury.
Audit 'Seems Appropriate'
Leland, in a telephone interview, confirmed the city's request. He said, however, that the grand jury has not contacted the city, and declined to comment on whether the watchdog agency will launch a probe. Deputy Dist. Atty. Steven Sowders, head of the district attorney's special investigation division, has said he believes a grand jury audit "seems appropriate."
Recent city audits have shown that for years, the city has been the victim of sloppy accounting and bookkeeping procedures. Although some city officials blame past administrators, other officials claim that the council is guilty of overspending on social programs the city cannot afford.