Santa Ana Budget Proposal Is Put on Hold

Troubled by a proposed city budget that includes higher utility taxes and not enough money for municipal code enforcement officers, the City Council has decided to delay its vote for two weeks on the $242.4-million spending plan.

Among those voicing concerns over the proposed budget were Santa Ana Chamber of Commerce officials who oppose the city’s plans to raise the cap on the utility tax because it would hurt businesses, they said. The current cap is $6,000 per year per business.

Under the budget proposed by City Manager David N. Ream, the utility tax would increase from 4% to 5% and raise the average residential customer’s bill by at least $1.50 per month. The tax applies to gas, electricity, telephone service and, for the first time, water.

Chamber of Commerce President Michael Metzler said that if the tax cap is removed, at least 50 businesses will suffer. Metzler said one firm has calculated that its utility taxes would increase from the current $6,000 limit to $80,000 a year.

“Taxes have been going up year after year and businesses have been picking up the lion’s share,” he said.

City Council members also said they were concerned about the proposed utility tax increase.

“I think that we owe the people of this community one hell of an explanation as to how we can grant Ream a 9% raise and then turn around and raise taxes to make ends meet,” Councilman John Acosta said. Acosta was one of two council members who voted in April against increasing Ream’s annual salary to $135,996.

Councilman Robert L. Richardson asked for more time to study the budget. He said he is looking for assurances that recently approved ordinances to improve neighborhood standards through code enforcement can be carried out.

“The feeling I have is that the enforcement of various neighborhood standards is critical for the city’s long-term future, and I just want to be assured we have the staff resources in place to carry those out,” Richardson said.

In an effort to continue a capital improvements program in the neighborhoods, the city is planning cuts or no increased service in other areas.

For example, Ream has suggested cutting 21 city staff positions, and there are no plans to add police officers, firefighters or code enforcement officers.

“While we would like to add more code enforcement officers,” Ream said, “we don’t feel we can in a year where we are requiring an increase in the utility tax and laying off and reducing 21 positions in other areas, until we see what the total impact of the state and county budget shortfalls will be.”

Although the city budget reflects a 10.8% increase in spending over last year, Ream has blamed state and county officials for imposing new fees or taking revenues away from cities to balance their own budgets.