Alhambra Slashes City Spending

For the second time this year, the city is slashing expenses of municipal agencies, including the Police and Fire departments, and increasing certain municipal fees.

Following another midyear budget review, the City Council on Monday voted unanimously to approve cuts totaling $294,267 in 12 departments.

Six months ago, the council slashed expenditures by $422,000 to help balance the general fund budget, which pays for services such as public works, police, fire, and the library.

Monday, the council also increased the fee levied on each new residential unit for the construction of parks. The fee, effective immediately, soared from $50 to $1,000.

Even with that increase, the fee would be below average, City Manager Kevin Murphy said. He said a survey of 32 other Southern California communities showed that the average park fee is $1,186 a unit.

Murphy told the council his staff would have recommended the increase regardless of the city’s financial problems, because Alhambra’s old fee was so low.

The city’s latest financial troubles were triggered by a combination of problems, including a $400,000 shortfall in sales tax revenue; a $250,000 tile repair project at Almansor Court, a city-owned restaurant and banquet hall, and the Alhambra Community Hospital’s failure to make rent payments to the city.

Built in 1974 as part of an $11.2-million redevelopment project, the hospital building is owned by the Alhambra Redevelopment Agency, which leases it to the city. The city subleases it to the Alhambra Hospital Corp.

The 157-bed hospital, at 100 S. Raymond St., has been a financial problem for the city ever since it accumulated $4.3 million in debts and declared bankruptcy in 1981. Two years later it made arrangements to begin paying back rent to the city.

Last February, however, the hospital began missing its $103,000-a-month payments to the city. The hospital corporation subsequently began negotiating with a group of doctors interested in buying the facility, but negotiations foundered because the buyers were having trouble arranging financing for the $13.6-million deal.

The hospital’s delinquent rent payments have made it more difficult for the city to repay a 30-year bond issue that financed the hospital’s construction. It also has complicated financing for other city projects, Murphy said.

Councilwoman Mary Louise Bunker said she was concerned about the $113,000 cut in the police budget, but Murphy said it would not reduce services to the public. Police Chief Russell Siverling said the department will postpone buying new computers and other equipment.

Mayor Barbara Messina said the city will restore all the money cut as soon as the hospital’s financial problems are resolved. But Murphy said he didn’t know when that would be.