Carson Told to Expect Deficit of $1.4 Million at End of Fiscal Year

Despite dozens of budget sessions last year aimed at crafting a balanced spending package, Carson officials this week were told in a report by the city’s finance director that the city will probably face a $1.4-million deficit when the fiscal year ends in June.

Finance Director Lorraine Oten, in a report on the city’s financial condition, said several factors contributed to the deficit projection, primarily a downturn in the economy, which has reduced the city’s sales tax revenue.

Sales tax revenue has been budgeted at $14.1 million, but actual revenue will probably fall short of projections, accounting for most of the anticipated deficit, Oten said Thursday.

In addition, Oten cited the city’s failure to implement 40 layoffs when the 1990-91 budget was adopted last November.

Oten said the retention of those employees until most were transferred into vacant positions last month cost the city between $300,000 and $400,000 in unbudgeted expenditures.

The status of the 40 employees had remained in limbo while the city unsuccessfully sought freezes in wages and benefits from its unions in exchange for a no-layoff promise.

Additionally, the city laid off 15 probationary workers a few weeks before adopting the spending plan in November. City administrators are now discussing laying off 10 more workers.

Carson officials said the city in all likelihood will have to dip into its $7-million reserve fund to balance the budget. Council members have said they would prefer to use that account for emergencies or for replacing capital equipment.

However, Mayor Vera Robles DeWitt, in an interview Thursday, said she could not foresee an alternative to dipping into the reserves.

“We’re no different from all of our other South Bay cities,” DeWitt said. “We’re all facing a slowdown in the economy. . . . The revenue is skimpy.”

DeWitt, who pledged to come up with a balanced budget in a timely manner when the council elected her to the ceremonial mayor’s post last year, said the council has been “unwilling to bite the bullet” and make unpopular cuts.

“We can’t keep operating at a deficit,” DeWitt said. “I don’t know how to get the majority of the council operating in the same direction.”

In last year’s budget sessions, DeWitt frequently urged fiscal restraint. The city has raided its reserves each of the last five fiscal years. Last year, the council balanced its $29.9-million budget by taking $2.2 million out of its reserve account.

“It just goes to show you what an inexact science budgeting is,” Councilman Michael Mitoma said.

He said the city will have to consider further layoffs in addition to the 10 now being discussed by city administrators.

Referring to DeWitt’s pledge for a balanced budget, Mitoma said: “It’s easy to say things. But unless you’re willing to do extreme cutbacks, it’s very difficult to do.”

Council members will hold a budget workshop Wednesday to discuss Oten’s report and next year’s budget.