Irvine : Council Divided Over Projected Budget Deficit

Facing the first budget deficit in the city’s 16-year history, City Council members are in disagreement with staff members and each other over the extent of the fiscal crisis and how to solve it.

Walter D. Kreutzen, Irvine’s director of administrative services, said in a report that next year’s budget could be as much as $6.4 million in the red.

But Mayor Larry Agran on Thursday called the projection “a bit unrealistic” and estimated a $2-million to $3-million shortfall--less than half Kreutzen’s projection. Agran said the shortfall could be offset by increasing business fees and tightening the belt of city government.

Councilman David Baker said Thursday that “any deficit is not very good, whether it’s $3 million or $6 million.” But while he supported cutbacks, he opposed placing the burden on business, an action he said might result in the loss of jobs.

In disputing the staff estimate, Agran said the report “makes all of the worst assumptions regarding revenue projections” and “assumes the maximum projections for new programs and new priorities.”

Kreutzen said his projections are based on “responsibly conservative revenue estimates” that reflect a slowdown in the Irvine economy and show that Irvine “has reached a critical point in its financial affairs.”

Although Irvine has never experienced a deficit, the report says that similar projections required budgetary adjustments four times in the past, noting that “this problem is not insurmountable.”

A suggested remedy to allow city staff and programs to remain at current levels was to establish fees for business licenses, landscape maintenance, utility users, entertainment and new development.

But Baker, a former mayor, instead suggested contracting privately for some services. He also advocated consideration of eliminating or cutting back some newly mandated programs, commissions and committees.

He suggested that council members consider rescinding their recently passed raises--from $300 a meeting to $600--as a gesture of “tightening our belts first.”