Compton Budget Is $11 Million in the Red

The City Council must come up with $11 million worth of spending cuts or increases in such revenue sources as utility taxes or development fees to balance next year’s budget, City Manager James Goins said this week.

“Our No. 1 concern in this city is that we don’t have any layoffs,” Goins told the council Tuesday as he presented $16 million worth of alternatives for the council to consider to close the projected $11-million gap without layoffs. He estimated that the total budget will be $95 million next year.

Among the alternatives, he said, the tax on telephone, gas and electricity bills could be increased from 5% to 7% to produce an additional $1.3 million in revenue next year.

The city also could save $4 million by joining a cooperative liability insurance pool with other cities. It could also sell little-used South Park, Goins said.

Goins estimates that the budget, which he is still preparing for delivery to the council on Friday, will be down about 16% from this year’s budget of $113.2 million, largely because of a lower Redevelopment Agency budget. The redevelopment budget exceeded $30 million this year. But most of the major land acquisitions have been made and construction projects are nearing completion, Goins said.

The city budget for the 1989-90 fiscal year, which begins July 1, will be reviewed by the council, which can make cuts or additions. Public hearings will be held June 13 and 20.

The city’s general fund, which bears the greatest share of the direct operating and labor costs, will increase from $20 million to as much as $30 million, if the council decides to avoid layoffs and accepts most of the proposals for raising revenue, Goins said.

He attributed most of the general fund increases to rising labor costs. The number of jobs this year has increased to 850 from 776 last year. Seven new police officers were hired during the year.

More Revenue Needed

Although he declined to provide details on which combination of the $16 million in alternatives he will recommend Friday, Goins gave some hints Tuesday at a budget work session with the council. He stressed, for example, the need to develop some additional revenue sources rather than rely on the type of one-time revenue infusions that have helped balance the budget in recent years.

“A utility users tax is the kind of revenue we need because it’s continuous,” he said. “You can’t sell things like South Park every year because you won’t have any assets (left).”

This year the city received more than $4 million from the sale of the Alondra dump site, which may become a residential housing tract. In two other budget years, millions of dollars from the sale of redevelopment bonds were transferred into the general fund to repay the city for underwriting some redevelopment activities.

Goins is recommending that South Park, located in the city’s southeastern corner near the intersection of Santa Fe Avenue and Greenleaf Boulevard, be sold to a developer for senior citizen housing.

City officials have said before that the park is isolated near an industrial zone. They have been working with officials in the Compton Unified School District on a plan to improve the large but deteriorated playing fields around Roosevelt Junior High School for use as a park. The school is located in the same area of town as South Park, but is in a residential neighborhood.

Hiring Freeze in Effect

Goins also is likely to recommend that the council continue a hiring freeze, which he ordered about four months ago after City Controller Timothy Brown warned of a financial problem. Goins said 46 of the 850 jobs funded in this year’s budget are vacant. The city would save $1.8 million next year if those jobs remained vacant, he said.

Brown has been saying since December that the city faces financial shortfalls and last week told the council that the city could run out of money before the end of the year. He was predicting that the city would not be able to make the mid-July payroll or be able to balance next year’s budget without layoffs or revenue increases.

Goins has contended that the city will have more than enough money to meet its payroll.

Compton also is feeling the loss of federal revenue, and expects grant money to decrease by nearly $1 million next year, Brown said. The closures of Bret Mitchell Chevrolet and Winners Pontiac at the Compton Auto Plaza will result in a $250,000-reduction in sales tax revenue next year, Assistant City Manager Howard Caldwell said. He and Goins pointed out, however, that there is a long list of potential plaza tenants, including some auto dealers.

Reports to Council

After Goins’ presentation Tuesday, Brown declined comment, saying he wanted to meet first with the city manager to compare revenue and spending projections. Unlike the rest of the city’s financial staff, which works for the city manager, Brown is appointed by the council and reports directly to it.

Brown reiterated in an interview after Goins’ presentation what he told the council last week about payroll shortages early in the fiscal year. “Based on my figures, we’re going to have a severe shortfall some time in the first quarter of the next fiscal year,” he said.

He said the shortfall may not affect the July payroll, but things would be “very, very tight financially” because cities get their largest revenues twice a year, in December and April when property taxes are apportioned by the county.