ORANGE : Reserve Funds May Help Balance Budget

The city’s proposed budget for 1991-92 recommends using reserve funds to avoid cuts in staff and services, and suggests a yearlong hiring freeze to help curb city spending.

The $79.6-million plan also recommends a water-rate increase of 18% and proposes a 40% increase in park fees for developers. The proposed boost in water rates, which have not been increased since 1985, would mean the average residential customer would pay about $5 a month more.

Developers would see their park fees increase from $450 to $650 per dwelling unit.

Despite some expected growth, the budget presented to the City Council in a study session Tuesday recommends that the city use $1.9 million of its $10.5-million reserve fund to maintain current levels of staff and services.

“The city has been fiscally conservative for so many years for exactly this reason--to build a reserve, so we think it’s OK to spend reserves during a recession,” said Scott Morgan, senior assistant to City Manager Ron Thompson.

Next year’s budget anticipates a “modest” economic recovery but projects only a $2.7-million growth in revenue and a 3% increase in expenditures. Among added expenses are new county jail booking fees that will cost the city about $250,000, and $130,000 in increased county property-tax collection fees.

The new budget suggests that city departments continue to cut operating costs by 10% and, for the first time in several years, no new staff positions will be created. Instead, the budget recommends extending a May 1 hiring freeze that is expected to save the city $900,000 in 13 months. A January freeze of 43 positions saved the city nearly $1 million.

Despite these budget restrictions, the city’s $35-million capital improvement program is expected to remain on course. Plans for the design of two new gymnasiums and a downtown parking structure, the development of Pitcher Park and the construction of a new fire station, among other projects, will continue as planned.

The council is expected to accept Thompson’s recommendation to use reserve funds to avoid budget cuts and maintain services. He also suggested cutting the public safety budget by more than $1 million, including eliminating the Fire Department brush squad, the park ranger patrol program and the East End Foot Patrol.

A public hearing on the budget will be held at the council’s June 18 meeting.