Budget Controversy Churns Pasadena

City officials say they haven’t seen this much controversy over a proposed budget since the passage of Proposition 13.

“It’s rare,” Pasadena Finance Director Harry Lauritzen said of the uproar generated by the city’s proposed $71.5-million budget for 1985-86. “There seems to be a lot of reaction and it’s just about equal to what it was in ‘78” when drastically cut property taxes left local governments struggling to replace millions in lost revenues.

At issue are a number of suggested cuts in city services designed to bridge a $5.6-million deficit in next year’s budget. Coupled with that is Pasadena’s capital improvement program, presented to the Board of City Directors along with the budget, which calls for a series of increased fees and taxes and creation of a special assessment district that will affect virtually every Pasadena resident.

Although the two are separate documents, they are being considered concurrently and controversy over them has intertwined since their presentation to the board last month. City directors must take action on both plans before July 1, the beginning of the fiscal year.

“This is the most controversial budget I’ve seen since I’ve been here. There’s just a lot of things going on,” said Budget Administrator Michael Yelton, who has been with the city for nine years.

The city’s capital improvement program, a five-year plan for upgrading Pasadena’s deteriorating infrastructure, is being touted as the most ambitious capital project undertaken by the city in 20 years.

But ways to finance the $265.7-million project have generated heated debate for more than a month. The most recent battle erupted last week when the city mailed about 33,000 letters informing property owners that a citywide assessment district was being considered which would levy charges ranging from $60 to $88 a year for an average single-family home.

The assessment district would remain in effect for 10 years and would finance $17 million worth of repairs to gutters, sidewalks, curbs and street lights.

The letters came as a surprise to most property owners, who have deluged City Hall with angry calls since the notices were mailed last Thursday, city workers said.

According to Finance Director Lauritzen, the assessment district would charge property owners a yearly fee commensurate with the benefit received from repairs done near their property. For example, a homeowner who has a street light in front of his house would be charged $96.67 a year, in comparison with $60.11 a year for a single-family home with no street light in front of it.

A protest hearing on the assessment district has been scheduled for June 18 at 2 p.m. in Pasadena’s Conference Center. Under municipal law, the assessment district can be turned down if a majority of the city’s landowners file written protests before the hearing is concluded. The Board of City Directors may also change or modify the proposal before its enactment.

The city is also mired in controversy over its decision last month to include nonprofit organizations in the business license tax. That decision was part of a hotly contested move by the board which also doubled the yearly fees paid by profit-making businesses. Both issues were designed to raise an additional $2 million in city revenues for street repairs included in the capital improvement project.

Overall, the greatest public outcry in the last month has been over the city’s proposed budget cuts. As initially suggested by City Director Rick Cole, the cuts would eliminate eight city services and nearly 200 jobs, saving $1.2 million by contracting the services to private firms or relying on Los Angeles County departments to provide them.

Although only one of the service cuts, affecting the Housing Mediation Board, is actually listed in City Manager Don McIntyre’s proposed budget, all of them are still being considered by the board and can be amended into the budget before it is passed.

And despite intense public criticism, most of them will probably go through, Cole said. “I would say that nobody but the Health Department is safe,” he said this week.

Proposals for the city’s 52-employee Health Department and the 27-member paramedic service are the most controversial of the cuts. Discussions to save both departments are still in progress under intense lobbying from both groups. And despite Cole’s prediction, other city directors have said they favor keeping the paramedic service and the Health Department.

A decision on the cuts will not be made until City Manager McIntyre completes reports on the effects of phasing out the programs. Those reports are to be presented to the board within two weeks.

Although the cuts are ostensibly designed to bridge the estimated $5.6-million gap in next year’s budget, that figure is not entirely accurate, city officials said this week.

While budget planners predict city spending next year of $77.1 million and revenues of $71.5 million--leaving the $5.6-million gap--there is $4.4 million in surplus funds from this year’s budget that will be carried over into next year, Lauritzen said. Using those funds, the estimated shortfall becomes $1.2 million, an amount which the city hopes to cover by tapping into money appropriated, but not used, during this fiscal year.

“The budget was in balance when it was presented,” Lauritzen said Tuesday. “There are other political considerations that have nothing do with economics.”

Those considerations, Lauritzen and other city officials said, are local manifestations of the so-called Reaganomics policy to streamline government and lessen its involvement in services such as social programs by turning them over to the private sector.

“It’s getting government down to a lean, mean, fighting machine,” Lauritzen said.

Cole, by far the most liberal and left-of-center member of the Board of City Directors, said he proposed the far-ranging series of cuts to city services because “we’re facing up to some very serious issues now that we could duck. But facing them now will make a brighter financial future for the city.”