Monterey Park Budget Crunch Forces Fee Hikes

Responding to what officials called an immediate financial crisis, the City Council voted 4 to 1 Monday for across-the-board increases of fees ranging from the cost of an animal license to tennis lessons in the parks.

The vote came after City Manager Mark Lewis told a council meeting that for two years the city has compensated for shortfalls in its operating budget by drawing from what is essentially the city’s savings account.

“We have both a short-term and a long-term budget problem,” Lewis said. “We don’t want to send Monterey Park on a downhill track.”

To meet expenses for this year alone, Lewis said, the city will need to take $1 million from its reserve account to shore up a $20-million budget. That will leave the city with only $1.4 million in reserves.

The increased fees, Lewis said, should boost revenues by $1.2 million in the coming year. The increases will occur throughout all departments and involve scores of fees that the city charges.

Lewis also has tentatively proposed sweeping cuts in expenditures, totaling $2.3 million for the coming year’s budget. As an example, Lewis said, the staff travel budget would be reduced from $108,000 to $20,000.

The cuts and increased revenues, he said, should correct the financial problems.

If the council took no action, Lewis told council members, the city would have to reduce its basic services. Lewis notified the council of the budgetary problems shortly after assuming his post last year.

The council approved a series of new fees as well as increases in existing fees. In some cases, city officials said, fees have not been increased in a decade. In addition, they said, there has been no annual review of many fees that have become outdated. The changes went into effect with their passage.

Among the new fees is one that allows the city to charge drunk drivers for the costs incurred in their arrests and from the accidents they cause.

The council also instituted the use of parking meters. Parking on city streets now is free.

But one councilman and dozens in the audience questioned using fees to solve the problem. “The bureaucracy in this city is going to slurp up (the fees) like a hungry animal,” said Councilman Christopher Houseman, who cast the lone dissenting vote.

‘Tight Restrictions’

Instead of increasing fees, he proposed “very, very tight restrictions” on city expenses. He said city departments “should be put on a very short leash.” Houseman cited the city’s cost for legal advice as one example of an expense that needs to be reduced.

And Marie Purvis, a Chamber of Commerce board member, told the council: “You better start thinking about the effects of this on the people you’re getting the fees from.”

As an example, she cited business licenses. Under the approved changes, the cost rose from $63 per license to $75.

Sherman Chiang, administrator of the Best Western Monterey Park Inn, argued about another increase--the room tax charged hotels and motel guests. He suggested a 10% room tax instead of the 12% tax that the council eventually approved. “I understand the city budget problems,” he said, but he said a jump from 8% to 12% was too much.

Increases in the room tax alone, Lewis said, will mean an additional $200,000 in revenues in the coming year. And, he said, a 250-room hotel is in the planning stages for the city’s Los Angeles Corporate Center. With a 12% room tax, that hotel is expected to add $150,000 in annual revenues.

Mayor Barry L. Hatch and three of his colleagues said the fee increases were necessary. “We’re not trying to stick it to anybody,” Hatch said. “We’re trying to keep this city afloat. Something has to give. And we’re going to have to do some belt-tightening.”

“I just hope people understand how critical the situation is,” Councilwoman Judy Chu said. “It would be completely irresponsible not to go ahead with some of these proposals.”

Parking Meters

And the city manager said the council chose to “focus the burden of these increases away from the residential taxpayer.”

The council did respond to concerns from student leaders of East Los Angeles College, who were worried about the impact of 50-cents-an-hour parking meters proposed for streets around the school.

“Please help us students out,” said Juan Gaspar, student government treasurer.

The council agreed to eliminate 265 parking meters planned for the school area.

Criticism of city finances came from the firefighters union, which earlier this month began negotiating for a new contract. The group’s three-year contract expires in July.

“We understand the city is in dire straits,” said union President Kevin Olinger. “But we’re stuck in the middle.”

Olinger supported the fee increases as a way “to pay your employees a basic competitive salary.”

He also said the union fully supported a proposal for the Fire Department to be consolidated into the Los Angeles County fire system, because it could save Monterey Park nearly $600,000 a year.

Proposal Studied

“We’re going to start walking the streets and tell people that the city can’t come close to competing with salaries and benefits that the county can offer,” Olinger said in an interview.

Lewis said he is studying a proposal from the county Fire Department but that he has questions about whether it would be economical for the city to give up its department to the county.

Firefighters applauded Houseman when he asked how the contract negotiations were being handled by Lewis.

Houseman also criticized Lewis for hiring an assistant city manager and an administrative intern just before Lewis announced budgetary problems last fall.

Hatch defended Lewis, saying that the city manager had done a great job in drawing the council’s attention to the city’s financial problems.

Hatch also said that Lewis had cleaned up City Hall. “Bribery was going on in this community for services rendered,” Hatch said. “If you were one of the old boys, you got treated like one of the old boys. There was politics from one end of City Hall to the other.”

In interviews later, neither Hatch nor Lewis wanted to go into detail about these allegations. Hatch would only say: “(The bribery) is all water under the bridge.”

Lewis did disclose, however, that soon after he joined the city last August, he heard rumors about corruption in what was then called the city’s Engineering and Building Division and ordered a Police Department investigation. A police report, Lewis said, concluded that one building inspector probably took small amounts of money from several developers in exchange for waiving certain requirements during the early 1980s. The inspector died in a car accident, Lewis said.

“It would be unfair to cast any aspersions upon any current member of the city staff,” Lewis said. “This was an isolated individual, an isolated problem.”