Torrance OKs $84.4-Million Budget

With little discussion, the Torrance City Council approved an $84.4-million budget for 1989-90 that includes new or increased taxes for sewer services, long-distance telephone calls and garbage collection and eliminates an exemption to the city’s hotel tax.

The two-inch-thick budget report, adopted Tuesday, recommends the new taxes to help offset slow growth in revenues from sales and utility taxes and a reduction in the city’s interest-earning revenue.

The new taxes will add almost $1 million to city revenues during the 1989-90 budget year, city officials said.

Councilman Bill Applegate provided the only vote against the new long-distance telephone tax, calling it a “side-door approach to increasing taxes” without the vote of the residents.

City Council members received a letter from the American Telephone & Telegraph Co. also protesting the new telephone tax.

There was little other discussion about the budget.

City officials noted that the budget has been increased only slightly--0.73%, or $612,859, over 1988-89--and adds only 2 1/2 staff positions.

City Manager LeRoy Jackson, who headed the team that prepared the report, called the budget difficult to balance but said the overall financial standing of the city is sound.

Exemption Eliminated

As part of the budget recommendations, the council voted to eliminate an exemption to the transient occupancy tax that allows businesses to rent a block of hotel rooms for more than 31 days tax-free. Eliminating the exemption would increase revenue by $150,000 in the next fiscal year.

The council also voted to:

* Nearly double the cost of sewer services, which would increase revenue by $268,000 in 1989-90. Average household costs, which now range from 48 to 60 cents a month, will increase to $1.07 to $1.34 a month.

* Levy a new 6% tax on long-distance phone calls, which would raise $400,000.

* Increase trash pickup fees by 50 cents per household, which would raise $168,000.

The report expresses concern about the reduced growth rates in sales taxes, which have dipped from a 16.5% increase in 1983-84 to a projected 7.45% growth for 1989-90. Sales taxes raised about $14.5 million in 1983 and about $24 million in 1988. Jackson has said the growth rates in sales has slowed because the number of shopping centers and auto malls in the area has reached a saturation point.

Utility Tax Revenue Down

Growth in revenue from the utility users tax dropped from double digits in 1980-81 to a projected 6.7% for 1989-90, the report said. Dollar amounts on utility users taxes were not available. In this case, the report says the slower growth rate was due to changes in land use from industrial to commercial and office, which usually results in reduced use of utilities.

City reserves collected interest earnings of $2.7 million in 1980-81, compared to $1.3 million projected for 1989-90, the report said.

Interest income has declined, city officials said, largely because of major expenditures from the reserve fund, including more than $5.2 million to repair a landslide at Via Corona and Vista Largo, $9.7 million to redevelop the downtown industrial area, and $500,000 for legal advice and studies on safety at the Mobil Oil Corp. refinery.

Also, recent state and federal legislation has increased by $400,000 the cost to the city to provide employees with Social Security, unemployment insurance and overtime pay, according to the report.

The budget recommends that the city postpone requested spending of more than $1 million, including the hiring of two groundskeepers, a police officer, a firefighter, three librarians and several clerks and secretaries.