Anaheim Freezes Some Pay, Cuts Services in Approving Budget

An hour before its deadline, the Anaheim City Council grudgingly approved a $428.6-million budget that would freeze manager salaries and reduce some city services.

But some council members vowed Tuesday to whittle away at the city manager’s bare-bones spending diet with budget amendments. Mayor Ben Bay said the council will convene at 10 a.m. every Tuesday, instead of the normal 1:30 p.m., “working from the bottom up” until he is satisfied.

The city charter stipulates that the council must adopt a balanced budget by midnight on the last day of the city’s fiscal year, which this year was Tuesday. The final vote came at 11 p.m.

Calling City Manager William O. Talley’s budget “an insult to our intelligence,” Bay declared that “the whole budget is predicated and planned with one objective: to force this council to raise taxes.”

The budget includes just a 1.5% increase for general city expenses; cuts $578,000 from staff seminars, travel and meeting expenses; eliminates the jobs of one pothole crew and reduces spending for street, sidewalk and building maintenance.

It also freezes management raises except for those managers who can prove that their departments reduced costs. In those cases, the money saved can be used for raises.

The original proposed budget had a $3.67-million deficit, but Talley balanced that budget through cuts, spending freezes, money shuffling and by lifting $1.6 million from reserves.

The shuffling of what Bay called “fancy numbers” came when Talley included $2.5 million from a 2% increase in the city’s bed tax--from 8% to 10%--to balance the budget. That money had been reserved for the renovation and expansion of Anaheim’s 20-year-old convention center.

That shift, Bay said, constituted “cutting one end off the blanket, sewing it to the other end, and saying you’ve got a longer blanket.”

But Talley said the convention center payments would not be due until construction finishes in 1989, when the city will have to find new income sources if it is to undertake major projects.

One major project that survived this year is a $2-million public safety package that includes 32 new Police Department employees with a promise of 10 more in 1988.

Bay insisted that there is fat to cut somewhere and said he will find it “if it takes us six months.” He accused Talley of hiding details of city operating costs to force a tax increase, first in utilities then in business licenses. Talley never mentioned specific revenue sources and denied the allegations.

“I’ve been in business for over 30 years, and politicians have made that accusation (of withholding information) before,” he said. “They’re entitled to by their office. But it’s hard to say there’s nothing there (to cut) and have to produce the nothing.”

In Talley’s defense, council members Miriam Kaywood and Irv Pickler said Bay could have come up with his own proposals when the preliminary budget was presented in April.

“All the cities (in Orange County) are having money problems,” Kaywood told Bay. “You don’t want to live in the real world.”

The city’s money trouble has arisen because two major sources of city funds--the sales tax and hotel bed tax--are expected to lag.

Ron Rothschild, manager of programs for Anaheim, said the city is expecting an increase of just 4% in sales tax revenue in the next fiscal year, compared with growth of 7% and 8% in recent years. For the current year, the city expects to receive about $30.5 million in sales tax.

The council postponed decisions on whether to allow 5% increases in city fees for operating permits and license applications. Also delayed was a proposed user fee for non-emergency calls to the Fire Department. That fee could bring in $300,000 a year, Rothschild said.