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.

Laguna Beach For the Second Year, There Will Be a Deficit

For the second year in a row, the City Council has adopted a budget that shows more expenses than revenue. But City Manager Kenneth Frank said this was nothing to worry about.

“We might have a deficit one year, but we don’t have it over a period of time,” he said. “We always keep a little in reserve.”

The $18.8-million budget for fiscal 1987-88 is up slightly from the current year’s $17.6-million spending plan.

Frank said the city’s biggest concern is liability. “Laguna Beach--perhaps more than any other city in California--is beset by the proliferation of liability lawsuits,” he told the council in his written budget message in April.

The city in 1987-1988 probably will pay $950,000 in insurance costs, 5% of the total city budget, Frank said. In the last decade, Laguna Beach has had to defend itself against several serious accidents. In two pending cases, the city is being sued for $5 million for diving accidents in which the victims became quadriplegics. “I don’t think we’ll lose either one, but it costs $100,000 to defend them,” Frank said.

Other expenses for Laguna Beach in the new fiscal year: $200,000 for “the most expensive street resurfacing effort in the history of the city.” The money will come from the city’s gas tax fund.

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.