The Lawndale City Council was forced to send its bare-bones, $7.8-million budget back to the drawing board Thursday night after city officials learned of an unexpected loss of $91,000 in state funds.
The shortfall was the result of a cutback in a year-old state program that was designed to give additional funds to cities that since Proposition 13 have received little or no revenues from property taxes collected within their borders.
Lawndale city officials had expected to receive $163,000 from the program this year, but were notified Wednesday that they can count on only about $72,000, Finance Director Judith Longman said. Last year, the city received $81,570 from the program, which was expected to double this year.
“When you’re operating as tight as we are, that could be disastrous,” Mayor Harold Hofmann said Thursday, before the council agreed to reconsider the budget at a workshop session Monday night.
The council also directed City Atty. David J. Aleshire to draw up a ballot measure for the November election for a 2% utility tax on gas, electricity, water, cable and telephone services.
The measure, which would need the approval of a simple majority of voters to pass, would be expected to generate $240,000 a year for the general fund. Although Councilwoman Carol Norman said she would not support the measure, she said she would not oppose putting it on the ballot.
Councilman William Johnson expressed fears that without Norman’s support the ballot measure would be doomed, adding, “I don’t want to spend a lot of money to see it shot down.” But he agreed to place the measure on the ballot after City Clerk Neil Roth said the cost of doing so would not exceed a few thousand dollars.
The budget that the council was scheduled to adopt Thursday contained several revenue projections based on recently increased business license and building permit fees. But because building activity has shown a decline in the last six months, at least two council members expressed fears that the revenue projections based on those fees were inflated. The budget estimated building permit revenues at $550,000 and business license revenue at $307,500.
The proposed budget would give workers a 2% raise, far smaller than the salary packages proposed by the city’s two bargaining units, both of whose contracts have expired. One full-time position--that of a community safety officer--and one part-time consulting position would be eliminated.
Dean Viereck, a community safety officer and local president of the California League of City Employee Assn.-Service Employees International Union, said workers had requested an 8% cost-of-living increase as well as salary adjustments to bring the city’s pay scale up to par with other comparable cities. According to a survey put together by a private consulting firm hired by the city last month, some salaries are as much as 15% below the rate in comparable cities.
He said many of the nearly 30 workers in his bargaining unit are unhappy about the 2% proposal, and predicted employees would continue to abandon the city for other jobs in other cities. The union, however, has not taken a formal position on the wage-package proposal, he said, because the city has not yet presented a formal counter offer. The union’s three-year contract with the city expired June 30, he said.
“I think it’s something that should have been started months ago, at least,” Viereck said. “It’s hard to approve a budget until their contracts are approved.”
But Linda Pittman, president of the Lawndale Professional Mid-Management Employees Assn., which represents about 15 other workers, said she is confident employees will come to an agreement with the city. The 2% raise is “not what we hoped for,” she said, but employees “understand the situation the city is in and we hope to come to a mutually agreeable contract.”
A two-year extension on the mid-managers’ three-year contract also expired in June.
Like last year, the largest expense in Lawndale’s no-growth budget is for police protection, which is provided by contract with the Los Angeles County Sheriff’s Department. This year, police services will cost Lawndale $2.2 million, an increase of more than 10%, Longman said.
Although the proposed budget projected $175,000 in reserves, Councilman Larry Rudolph said last week that he believes the city will be dipping into that reserve fund because some expenses, including city attorney fees, were underestimated.
“You can balance a budget saying you’re not going to do this or that, yet in reality you know you’re going to have to do it,” Rudolph said. “I think we’ll be lucky if we come out of it with a balanced budget.”