Higher Taxes, Budget Cuts Predicted as Pomona Confronts Financial Crisis

By JESSE KATZ

June 5, 1986 12 AM PT

Times Staff Writer

POMONA —

After four consecutive years of budget cutting, the City Council today will begin grappling with what officials say is the worst financial crisis in Pomona’s history.

The fiscal crunch will force the city to raise taxes by $3.5 million and to make $1.7 million in cuts in order to meet projected expenditures of $37.5 million, said City Administrator Ora Lampman.

Despite voicing criticism of Lampman’s proposed budget, council members have conceded that they have almost no choice but to approve it largely as presented.

Lampman--calling it the most difficult budget he has ever prepared--has recommended a 4.5% across-the-board cut that includes eliminating 34 employee positions, grounding the Police Department’s helicopter, shutting down one fire truck company and turning off one-third of the street lights in residential areas.

Tax Hike Necessary

Even at that reduced level of service, Lampman said, the city still would need to raise revenues by $3.5 million, probably by increasing the local utility tax and, for the following year, forming a public safety assessment district.

During past years, the city has been able to supplement revenues with reserve funds or federal revenue-sharing money and state funds, but those sources are not sufficient to cover this year’s shortfall, Lampman said.

“In the past we’ve had the option to use other funding,” Lampman said, noting that the city used $2 million in water fund reserves to balance the 1985-86 budget. “Now there are no more pots to draw from.”

Bad Timing

For Pomona, which officials describe as a city just beginning to emerge from years of economic decline, such financial woes could not come at a worse time.

With city services already strained by a 25% population increase over the last seven years, officials say that they do not want an image of fiscal instability to jeopardize new commercial growth.

“This is the time we really need to emphasize public relations and information,” Lampman said. “We don’t want to reflect a depressed image.”

In fact, a city-financed public relations campaign and aggressive efforts at recruiting investors already have spawned 11 redevelopment projects, but even optimistic council members admitted in an open letter mailed to Pomona residents last month that the city is experiencing “a temporary lag between development and prosperity.”

‘Hope for the Best’

“Pomona is very active as far as development is concerned, but the money we see probably won’t show up for another four or five years,” said Councilman E. J. (Jay) Gaulding. “There isn’t anything we can do other than approve next year’s budget and hope for the best.”

Mayor G. Stanton Selby said that, once current difficulties are resolved, the city soon will prosper, in reference to the redevelopment projects.

“It may sound like a paradox,” said Selby, “but the future of Pomona has never been brighter than it is today.”

But the council, which meets today and Friday for all-day budget hearings at Cal Poly Pomona’s Kellogg West, may be divided over who should bear the burden of the shortfall in the interim.

Budgetary Constraints

Under the Gann spending limit law approved by voters statewide in 1979, the city is limited to spending $37.5 million for the 1986-87 fiscal year--$1.7 million below the level necessary to fund current services.

Lampman said that although he did not like the approach, he thought that across-the-board cuts were the only way that the impact of the crunch would be shared by all departments.

Some council members, however, contended that the budget should have reflected different priorities.

“What have we gained if we trade Pomona’s red ink for blood in the streets?” Councilwoman Donna Smith said of the proposal to eliminate nine police officer positions.

Cuts in Police Assailed

“If we let crime and gang violence continue at its current level, it will devour us and then we won’t have a budget to worry about because we won’t have much left to call Pomona,” she said.

Vice Mayor Mark Nymeyer agreed that the Police Department, the Fire Department and the Department of Public Works are being asked to give up too much.

“I think it’s time to set some priorities and recognize that some people need to be cut more and some people need to be cut less,” he said.

Lampman defended the cuts by pointing out that almost all of the 34 positions proposed for elimination already are vacant or will become so through attrition.

Result of Hiring Freeze

Those vacancies, he said, were produced when the council imposed a hiring freeze for this year to save the city $1.3 million.

Police Chief Richard Tefank said that the proposed reductions in his department probably would not affect the ability of officers to respond to emergencies.

But he worried that law enforcement would become more reactive than preventative.

“We would have to wait for the incident to occur,” said Tefank, noting that at 1.4 sworn officers per 1,000 residents, Pomona is far below the national average of 1.8 officers in cities with populations greater than 100,000.

Losing Control

“When you becomes reactive to things certainly you have lost some control,” Tefank said.

Similarly, acting Fire Chief Ron Robertson said that emergency services would not suffer under the proposed cuts, but he added that the removal of one fire truck company--which is responsible for life safety and rescue--leaves the city with only one other truck company.

“It’s just a matter of the council and citizens deciding how much risk they want to assume on their own,” he said.

Although much of the attention has been focused on the police and fire departments--particularly since the council earlier this year rejected a potentially money-saving plan to contract out for county safety services--frustration also was evident in other city departments.

Employee Quits

City Clerk Joyce Herr, who is being asked to cut one typist-clerk position, said that one employee--fearful that the proposal meant the elimination of his job--already has resigned.

“It has a severe effect because if they take away one person, that’s one-fourth of my staff, including me,” Herr said. “Imagine if police or fire were cut by 25%.”

Community Development Director Sanford Sorensen wrote in a memo to Lampman that the proposed elimination of a building inspector position and half of a planning technician position “will put us in the precarious position of being unable to provide the services for which we charge substantial fees.”

But City Librarian Halbert Watson, who is being asked to cut book purchases from $144,000 to $92,347, said that the proposal was not as severe as past reductions.

Misery Loves Company

“We took most of our cuts at the beginning,” said Watson, noting that the library has lost 18 full-time positions in the last 10 years. “It’s nice to know that it’s being shared.”

While the council must struggle to cut the city’s expenditures down to the Gann spending-limit level, at the same time it must raise enough taxes to bring revenues up to that $37.5-million limit.

Most council members said that this year’s $3.5-million shortfall probably will be covered by raising the city’s utility tax, which provides an additional $1 million for each percentage point increase.

The tax, which was raised from 7% to 8% for this year, automatically returns to its previous level next year. Selby said that even an increase of the utility tax to 10% would not be unusual for a city of Pomona’s size.

‘Scream Like Heck’

“I’m sure a lot of citizens would scream like heck that they were being hurt financially,” he said. “But I think the actual financial impact would be very little.”

Gaulding, however, said that using utility charges to fund the budget does not represent an equitable distribution of the city’s tax burden.

“We should charge what the (city’s) costs are to the people who get the benefits (of city services),” said Gaulding, who refused to sign the council’s open letter because it recommended an increased utility tax. “This isn’t an even-handed addressing of who gets the benefits and who doesn’t.”

Lampman and the council also have recommended the formation of a public safety assessment district that, if approved by two-thirds of the voters, would bring in new revenues for fiscal year 1987-88.

Protests Last Year

Despite abandoning plans for an assessment district last year after angry residents protested at City Hall, council members said that the tax might be approved if voters understood that it would be used specifically for police and fire services.

“The people have to see what kind of bang they’re going to get for the buck,” said Smith.

But Sarah Ross, chairwoman of the Pomona Concerned Citizens Committee, a local community organization, said that the people should not have to pay for what she called the council’s “shortsighted leadership.” Ross also charged that the city’s redevelopment agency has failed to generate any revenue, while many of the projects have placed a greater demand on local services.

“It all falls back on us,” said Ross, who is leading a petition drive to have the city audited by an independent accounting firm.

POMONA’S BUDGETARY DILEMMA

The City of Pomona will have to cut services and raise taxes in fiscal ‘86-’87:

Cut Services: The city would have to spend $39.2 million to continue current levels of service. But under the Gann spending limit law, approved by state initiative in 1979. Pomona is prohibited from spending more than $37.5 million for the coming fiscal year. The proposed budget will have to be cut by $1.7 million to meet the Gann ceiling.

Raise Taxes: Even if the city made these cuts, expected revenues are only $34 million, or $3.5 million short of this reduced level of service. City officials say this shortfall probably will be covered by an increase in the local utility tax.

Expenditure necessary to maintain current services: $39.2 million

Gann spending ceiling/proposed ‘86-’87 budget: $37.5 million

Shortfall, probably to be covered by increased taxes: $3.5 million

POSSIBLE CUTS

A partial list of how the $1.7 million in cuts to meet the Gann spending limit would affect city services:

Police

Elimination of the Aero Bureau helicopter

Elimination of nine positions

Fire

Elimination of one fire truck company

Elimination of 11 positions

Public Works