Effort to Balance Budget : Compton Reported Ready to Lay Off 80

City officials are expected to send out layoff notices to about 80 employees this week as part of an effort to balance the budget for the new fiscal year, sources said.

Even with the layoffs, which would represent about 10% of the city’s work force, the new budget still has a $6-million shortfall that may require additional payroll cuts, sources said.

City officials did not discuss the layoff plans Tuesday night at a public hearing on the budget, despite repeated inquiries from residents.

Howard Caldwell, acting city manager, told residents that he would propose a balanced budget. When one resident asked whether there would be layoffs, Caldwell said he had not completed budget revisions, but that he would do whatever is necessary, including laying off employees, to balance the budget.

However, a source said the layoff plans were disclosed earlier Tuesday at a closed-door meeting of Caldwell, City Controller Timothy Brown and council members.

Caldwell and Brown painted a grim financial picture during the closed meeting, the source said. Even with the layoffs, the source said, the city is still $6 million short of balancing its 1989-90 budget, which the council must have in place by the start of the fiscal year on July 1. Part of the problem, the source said, is that this year’s budget contains a $3-million deficit that must be made up next year.

Caldwell told department heads Wednesday morning that he or his assistants would begin meeting with them individually to disclose which positions must be cut. Two department heads confirmed that Caldwell painted a “bleak” picture of the city’s budget situation during the morning meeting, but said Caldwell insisted that the problems could be managed if everyone worked together in a businesslike fashion.

Although few details of the impending layoffs are known, the source said that the city’s ambulance service would not be affected by the first wave of cuts. City Manager James Goins, who was fired by the council last week after introducing a $101-million budget, had suggested eliminating the ambulance service.

City administrators, the source said, are anxious to get the layoff notices in the mail as soon as possible because Civil Service rules require that those being let go receive a 30-day notice. As a result, the city must continue to pay their salaries into the new fiscal year that begins July 1.

The Goins firing last week underscored what has been a festering fiscal issue for at least six months, ever since City Controller Brown began warning that the city was spending too much money and would end up with a shortfall this year and layoffs in the coming year. Goins was insisting that there was no budget gap.

But last week, after he submitted a budget to the council which contained layoffs in the Fire Department and cuts in the Police Department, as well as new taxes and fee increases that the council had never approved, the city manager was fired on a 5-0 council vote. Caldwell, senior assistant city manager, was named acting manager and told to bring to the council a new budget proposal that did not contain increased revenues from new taxes and higher fees.

Though Brown declined to talk to The Times about the budget and the cuts, he did say that he could come up with only $82 million in anticipated revenues for the coming year. Goins’ budget called for spending $19 million more than that.

Goins cut Brown out of budget preparations after the two officials differed openly over the city’s financial condition. Brown had warned that the city would face a severe financial crunch. Goins insisted, however, that the City Council could balance the budget and avoid layoffs if it approved new taxes and fee increases.

Some council members told Goins during budget planning sessions that they would be reluctant to approve such measures.

Caldwell said during a break in the council meeting Tuesday night that his budget proposal will not include increases in municipal water rates or the utility tax.

The council set another public hearing at 3:25 p.m. Tuesday to allow comment on Caldwell’s budget proposals. The budget document will be available for public review by Friday in the city clerk’s office.

Through a staff member, Caldwell said he would not be available for comment on the layoffs.