Council Seems to Like City Manager’s Proposal : Budget Makes a Good First Impression

The city manager’s $1.3-billion budget proposal is debuting to generally favorable reviews, suggesting it will garner City Council approval with relative ease.

Though the spending plan once again calls for dipping into the city’s dwindling reserve funds, it restores services cut in previous years, adds 10 more police officers and increases parks and recreation funding.

Council members had few complaints after getting their first glimpse at the budget proposal this week, saying it basically reflected their priorities. They were less enthusiastic about Mayor Ernie Kell’s suggestion that another $800,000--on top of City Manager James Hankla’s proposal--be taken from the reserves to pay for sidewalk repair and street tree replacement.

“I really question whether people feel that putting it in street trees and sidewalks is the No. 1 priority,” Councilwoman Jan Hall said, adding that if there is sufficient padding in the reserve fund to add to the budget, it should be used to hire even more police officers.

Kell, in presenting the budget to the council, largely agreed with Hankla’s recommendations, which call for a 5.6% increase in city spending over this year. In his only departures from the city manager’s proposal, Kell is seeking an additional $200,000 for drug education and gang diversion programs, along with the sidewalk funding.

The request for more anti-drug and anti-gang money won support from Councilman Clarence Smith, who represents a poor, high-crime section of Long Beach.

Smith said the city needs to do more than just increase the size of its police force, arguing that more social programs are also needed to deal with crime.

Councilman Evan Anderson Braude, saying Hankla and his staff had done “a masterful job” of putting together the $1.272-billion spending blueprint for fiscal 1989-90, also questioned whether the council should reach deeper into the reserve fund, particularly to fix crumpling sidewalks.

Just how much money the city will have left over at the end of the coming fiscal year is a matter of educated guessing. Hankla, crunching his budget numbers earlier this year, concluded that the city would be left with a mere $2.5 million in addition to the $2.5 million of the General Fund that the city must by law hold in reserve.

City Auditor Robert E. Fronke, making his estimates closer to the July 1 start of the new fiscal year, says as much as $10.2 million could be left over at the end of the next budget year, in addition to the required minimum.

Fat with oil income in the early 1980s, the city’s year-end surplus funds have taken a dive since 1984, when they amounted to about $35 million. Oil prices dropped, hurting revenue from the city’s oil properties and eroding energy tax income. Revenue sharing money from the federal government dried up, and at the same time, the city turned to the leftover funds to balance the General Fund, further shrinking the reserve.

In his budget document, Hankla predicts $9.5 million will be left over at the end of this fiscal year, but he wants to use $7 million of it to balance the coming year’s General Fund spending plan of $258 million. Projected income for the fund is only $251 million.

With the bulk of the city budget devoted to self-supporting departments over which the council has no control, such as the Harbor, the General Fund pays for such basic city services as the police and fire departments and the library.

Concerned About Reserve

While the city’s financial picture brightened this year to the point where Hankla could propose a budget that calls for an increase, rather than a decrease, in services, city officials warn that they must devise financing plans to eliminate the General Fund’s dependence on reserve money, and come up with ways of paying for major expenses, such as road repair and beach maintenance.

“We need to have a plan that shows how and when we have a truly balanced budget,” Fronke said.

The council will hold a public hearing on the budget June 6 at 6:30 p.m., when the council is also likely to vote on the spending plan.