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Budget-Balancing Plan Approved : Finances: A garbage collection fee will be initiated and city salaries frozen to avoid mass layoffs and help trim $3 million from the budget.

July 11, 1991|KENNETH J. GARCIA | TIMES STAFF WRITER

Beverly Hills officials tentatively agreed this week on a $3-million combination of spending cuts, revenue increases and accounting techniques that will allow the city to balance its budget for the coming 12 months and stave off, at least temporarily, the specter of mass staff layoffs and tax increases.

The City Council members said they would raise about half of the funds by introducing a fee for garbage collection, a service that had been free. An additional $1 million will be raised by delaying the replacement of city vehicles, and an estimated $800,000 will be saved by freezing all employee salaries for a minimum of six months.

The budget adjustments, made in response to public outcry over earlier proposals that significant spending cuts be made in the city's venerated police and fire departments, are expected to be made final at the council's next meeting Tuesday night. The city has been operating on an interim budget since the fiscal year started July 1.

Council members said they will still be forced to lay off 12 city employees, although they have not specified in which departments. Also, more than 50 positions are being left unfilled. However, as a result of the negative public reaction against the proposed cuts in city public safety services, city officials said none of the personnel cuts would come from the police and fire departments.

Faced with an $11-million shortfall, the City Council during the past two weeks managed to cut $9 million from the proposed 1991-92 fiscal year budget before opting to impose the new garbage fee and implement other savings proposals to balance the $80-million budget.

The new refuse collection fee likely will cost each single-family homeowner between $10 and $25 per month and will cover increases in landfill use and recycling costs.

Council members warned, however, that tax increases may soon be necessary if the city's sagging sales-tax revenues don't increase markedly during the next year.

"I wish we didn't have to endure all of this, but I think in the long run we have come out stronger and better," said Mayor Vicki Reynolds. "But it may come to pass that we may have to raise taxes in the future."

Councilman Allan L. Alexander said that although the council managed to make the cuts without a serious reduction in services, the city will have to come to grips with the fact that there are few revenue-generating options left except passing some new taxes. He estimated that a utility tax and a property-transfer tax could raise up to $14 million annually, returning the affluent city to firm financial footing.

However, Councilman Bernard J. Hecht said he was opposed to any tax increase, as long as the city could continue to find funding from other sources.

"I feel that it's in our capability to pass a balanced budget without taxing the public," he said.

The council blamed the city's budget woes on decreased revenues from sales, hotel and business taxes. But the largest and most convenient scapegoat has been the city's opulent Civic Center, which cost $120 million, double its estimated budget.

The idea of layoffs has been anathema to a city that has for decades enjoyed the fruits of a rich populace and a thriving business community. The last time the city experienced anything approaching this year's budget crisis was following the passage of Proposition 13 in 1978, when Beverly Hills lost more than $4 million in property taxes.

At the time, the city raised business license fees and reduced costs in other areas rather than lay off numerous employees.

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