Facing a projected $3.44-million deficit for the coming fiscal year, City Administrator Michael T. Uberuaga recommended this week that the City Council levy a cable-TV tax, raise trash and water fees and delay most capital projects.
The city's $189.5-million budget, which Uberuaga presented to the council Monday, would also continue the current hiring freeze in most city departments and roll back operating costs to 1989-90 levels.
Consequently, if the plan is adopted, the police force will remain the smallest per capita among county cities; aging firefighting equipment will not be replaced; beaches will be cleaned less often, and lifeguards will monitor some beach areas less frequently.
Still, under the proposed budget, most of the spending shortfall would be covered by withdrawing $2.9 million from general fund reserves.
The council will hold more budget meetings before voting on the spending plan June 17.
As proposed, the city's 5% utilities tax would be extended to cable-TV subscriptions. The tax would cost subscribers about $2 per month, raising a projected $750,000 in city revenue each year, officials said. The new fee would be imposed starting Aug. 1.
Uberuaga proposed using income generated by the cable-TV tax to support police and fire services. The council exempted the police and fire departments from operating spending cuts imposed in March, resulting in cost overruns of $498,000.
Uberuaga has recommended that the balance of the tax revenue pay for two police officers for a foot patrol downtown and for Fire Department costs.
The city's trash haulers, the Rainbow Disposal Co., is expected to increase charges to the city during the next fiscal year, which begins July 1. To offset those charges, Uberuaga has proposed that residents' monthly trash bills be increased, to $10.60 from $9.85.
To offset anticipated increases in water costs, the city is also proposing raising average monthly water bills to $17.56 from $14.54. Council members and city officials are scheduled Monday to discuss that increase in detail.
The spending proposal includes a $100-million general fund budget, 6.5% higher than this year's allocation. The remainder of the budget covers other accounts, including a $17.7-million capital improvement fund, a $17.3-million water fund and a $14.8-million Redevelopment Agency budget.
Most of the capital funds will go toward the pier reconstruction, library expansion and some ongoing projects. But some street repairs, storm drain improvements and other projects have been placed on hold.
Uberuaga's proposal comes two months after council members cut spending and increased fees to bridge a $3.9-million gap in this year's budget. The budget woes have been caused by the recession and other factors limiting city revenues, while city costs have continued to rise, Uberuaga said.
He told council members that they can safely dip into city reserves to help balance this year's budget but must still boost revenues and limit spending to fend off a serious financial crisis a year from now.
"We can get by this year by restricting our operating costs but not in 1992-93," Uberuaga said. "Either we increase revenues, decrease expenditures--or both--or we deplete our reserves."
If the budget picture is similar a year from now, the city may be forced into layoffs, he said.