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Hawthorne Cuts 30 Jobs, Hikes Utility Tax

July 14, 1994|JON GARCIA | SPECIAL TO THE TIMES

Faced with a new $1.1-million deficit, long-term million-dollar debts and a sluggish economy, the Hawthorne council this week balanced its 1994-95 budget by trimming its work force and raising the city's utility users tax.

The $27-million spending plan, adopted Monday on a 3-1 vote, will mean Hawthorne residents and business can expect a little less than they are accustomed to.

The budget includes a cut of 30 positions, which will mean longer waits for city services such as road repair and building inspection, and delays in public facilities repairs, said interim City Manager James A. Algie. In addition, city officials are seriously looking at raising water rates and sewer fees.

"For non-public safety departments, we've cut through the muscle and chipped halfway through the bone," Algie said.

The increase of 1.5% in the utility tax is expected to raise the average resident's rate about $1 a month. The current utility charge is about $65.

But the proposed water rate increase would be much higher.

According to a city water rate study, since 1989 the city has absorbed a cost increase of almost 200% for the water it buys from outside sources. But residents' water rates have not gone up for the five years.

The study puts average monthly residential water rates at $19.30 and recommends an increase of at least 44% over the next several years.

The city can no longer absorb the costs and must pass the increases on to the consumer, Algie said. Some businesses will be expected to pay far more than residents.

Mark Schoenfeld, a local business owner for more than 30 years, told the council last month that the utility tax increase will raise his monthly bill from $350 to $500--a 43% hike.

Schoenfeld said his business, A-1 Catering, has seen its gross sales plummet over the last few years from $5 million to $1.8 million annually. The recession, he said, has forced him to cancel profit sharing and health benefits. The tax increase, Schoenfeld said, would hurt his business even further.

"It's a matter of how many nails you can drive into the coffin," he said.

The rerouting of taxes to the state over the past few years has cost the city $6 million to $7 million a year, Algie said. "The state doesn't give anything back," he said.

To make up for the loss, city officials are studying ways to bring in revenue, including leasing out city office space, developing city land and levying new assessments to pay for public safety services.

And more money may be needed soon. Councilman Steven Anderson said he fears that lawsuits against the city could add up to millions of dollars.

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