HUNTINGTON BEACH : City Makes Moves to Balance Budget

Moving to stem an estimated $3.88-million budget deficit, the City Council late Monday agreed to increase beach parking fees, expand a city telephone tax, delay most capital improvements and enact a city hiring freeze.

The measures are part of a sweeping fiscal rehabilitation package recommended by City Administrator Michael T. Uberuaga that also calls for $1.73 million to be withdrawn from the city’s reserve fund.

While bridging the current shortfall, which amounts to about 3.5% of the city’s $93-million general-fund spending plan, the remedial effort also aims to set guidelines to help the city weather financial woes expected to continue through the next five years, Uberuaga said.

Mayor Pro Tem Jim Silva was the only dissenter, saying the city should make its operations more cost-efficient before imposing other measures.

Silva, however, joined his colleagues in adding a provision to the fiscal overhaul to exempt the Police and Fire departments from any staff or service reductions, should city staff cutbacks become necessary. City officials, at the council’s request, are drawing up new revenue-source proposals to help defray the cost of police and fire services.

Before adopting the stop-gap spending measures, the council held a closed meeting to evaluate Uberuaga’s performance during his first year as city administrator, a review process that could lead to a $10,000 salary bonus for the chief executive.

A bonus provision is included in the salary package given Uberuaga when he was hired in February, 1990. Mayor Peter M. Green said Tuesday that no decision will be made for several weeks about whether to award Uberuaga a bonus but that the seven-member council had given him a favorable evaluation.

Under the budget-reduction package the council approved Monday, the city’s existing 5% utility tax on phone usage, which had applied only to residents’ calls made within California, will now also be charged on interstate calls. City officials expect the tax to add about 62 cents a month to the average bill. The new tax is expected to boost city revenues by $100,000 for the remainder of the current fiscal year, which runs through June 30. In subsequent years, officials anticipate that it will add $500,000 in annual income.

New beach parking rate hikes are expected to help offset this year’s spending gap by another $77,000, while creating $316,000 in new annual revenue in future years. Parking in off-street beach parking lots, which now costs $5 daily, will climb to $6 on weekends and holidays. Rates will also increase for a menu of annual parking passes, recreational-vehicle camping spaces and metered beach bluff-top parking.

The council at its next meeting Monday will consider hiking the city’s average business-license tax to $76 from $56. Including the increase, which would trim another $35,000 from the current deficit, the city’s license fee would remain below the $96 average fee charged in other Orange County cities.