CITY BUDGETS : A SPECIAL REPORT : A Balancing Act Between Less Money, Rising Costs

The Irvine City Council is considering new and increased fees, with concerts at Irvine Meadows and boxing at the Irvine Marriott among the targets for the levies. In Huntington Beach, some parking rates are going up. It’s the same story all over Orange County.

With few exceptions, cities wrestling with 1987-88 budgets that refuse to balance are being forced by reductions in anticipated sales and property tax revenues to hike fees and tap reserves--a sign that the county’s economy is slowing down.

Most of the county’s 26 cities still are expecting to take in more taxes in the 1987-88 fiscal year than in the current year--4% to 8% more, in most cases. But city officials say that that rate of growth is only about half of the previous year’s and is not enough to cover rapidly escalating expenses.

There are a few bright spots. Santa Ana, for example, has managed to find enough money to launch a new program to spruce up neighborhoods.

But, faced with a state law requiring balanced budgets, most city councils are struggling to maintain services at current levels.

Garden Grove Assistant City Manager Mike Fenderson summed up the situation described by many of his counterparts in other cities when he said: “We see the economy weakening . . . I see where serious problems will have to be addressed in the future.”

Here is a city-by-city look, in alphabetical order, at how the budget-balancing is going at city halls across the county.

San Clemente Considerable Increases in Operating Costs Seen

The city’s operating expenses are expected to be considerably higher than its revenues for the second year in a row. But city officials plan to take about $700,000 out of reserves to meet the shortfall and so achieve a balanced budget, said Greg Hulsizer, assistant city manager.

Hulsizer attributed the shortfall in part to continued high insurance costs, expected to be about $895,000 in the new fiscal year. Also, he said, San Clemente’s year-old growth-control ordinance has sharply increased the city’s legal fees and reduced the fees it receives from building permits.

Although San Clemente will have a balanced budget in 1987-88, “The city is at a crucial time in our financing process” and must figure out in the coming fiscal year “how we can continue to fund our services,” Hulsizer said.

At a meeting last Wednesday night, the City Council approved the fiscal 1987-88 budget, which totals $28.2 million. Operating expenses are projected at $14.1 million, and revenues are projected at $13.5 million. Those figures are up slightly from the current fiscal year, in which expenses were estimated at $13 million and revenues at $11.9 million.

Property tax revenues, estimated at $3.1 million in fiscal 1986-87, are expected to grow to $3.5 million in 1987-88, and sales tax revenues are expected to rise from $1.9 million in 1986-87 to $2.1 million in 1987-88.

In adopting the budget, the council added 10 full-time positions, including two in engineering to handle the lengthy building-permit process. Council members also raised city water rates by 8% because of rising costs but also lowered sewer rates by 8.9%.

Contributing to this story were Times staff writers Marcida Dodson, La Mont Jones Jr., Lanie Jones, Ray Perez, Mark I. Pinsky, David Reyes, Bob Schwartz, Nancy Wride and Jonathan Weisman.