Anaheim Kills Utility Levy, Debates Layoffs

Facing a raucous crowd of nearly 1,000 people at a public hearing in the Celebrity Theatre, the City Council voted Tuesday night to rescind a 4% utility tax but sidestepped a decision on widespread layoffs to solve the city’s $14-million budget shortfall.

“Posing a tax in a recession is the worst thing the city could do,” Councilman Tom Daly said. “Jobs will be lost in the city’s major industries.”

The council had begun the night debating whether to lay off up to 200 employees and eliminate a number of programs or to impose the utility tax citywide. The council members unanimously voted to reduce their own salaries from $1,000 a month to $700 a month.

Mayor Fred Hunter continued to argue that a utility tax was far better than layoffs and cuts.

“I think people of the city will be willing to ride through this recession with the understanding that they’ll be paying $5 more a month. I think they’d say if that’s the case, so be it. But don’t tear the heart out of our city.”

Councilman Bob D. Simpson proposed Tuesday night that the council adopt a smaller utility tax, of 2% to 3%, and that it be abolished in two years. Corporations would not be charged more than $50,000 a year. His proposals, along with the proposed layoffs and cuts in services, will be considered Tuesday night.

The city has a $552-million budget and 2,200 employees. Both the tax and the cuts were proposed to counter the city’s record $14-million budget shortfall, which officials blamed on the recession and a decrease in the number of tourists visiting Anaheim, which relies heavily on the sales and hotel taxes that visitors pay.

In an attempt to avoid layoffs and cuts in services, the council last month voted 3 to 2 to impose the utility tax on all businesses and residents. However, a public protest prompted Councilman William D. Ehrle to change his vote, and last week the council tentatively agreed to rescind the tax, which would have added about $5 a month to residential utility bills.

Tuesday night, about 45 speakers lined up to address the council, almost all of them opposed to the service cuts, which called for the grounding of the police helicopter fleet and the closure of two senior centers and a library, among other things. Their comments were greeted with loud bursts of applause.

At one point, the meeting broke down into a shouting match among Hunter, Daly and Councilman Irv Pickler. Hunter accused the two of trying to be mayor.

“I’m embarrassed to live in a city with you as mayor,” Daly said. “You have let your ego get the best of you. Throughout the process you have never once been willing to compromise.”

Pickler proposed raising the utility tax by only 2% and laying off about 70 employees, which would save about $8 million.

He also blamed Hunter for his insistence on building a sports arena as the cause of the budget mess.

“Mayor, you’ve led the city on a spending spree, and the bill for the extravagant spending has come due,” Pickler said. “We are faced with having to impose intolerable taxes to pay for these follies and cut to the bare bone city services.”

Hunter responded by saying that the sports arena is not costing residents any money but is being funded by an increase in the hotel room tax and by a private concessionaire.

“This is the same issue that you raised in the mayor’s race last year and, as I recall, I won that election by a 2-to-1 margin,” Hunter said.

Before the vote, Dean Cofer, a representative of the International Brotherhood of Electrical Workers, which represents city electrical workers, told the council that without the utility tax it was making “employees bear the burden of the budget crisis on their backs. . . .

“This is not a threat, but I talked to the AFL-CIO this morning, and I learned there are 12,000 members of organized labor living in the city of Anaheim. And the one thing that should be remembered about organized labor is that the members have a long memory,” Cofer said.

Shirley Cohen, who represented a foundation that provides meals to senior citizens, said that many older people move to Anaheim specifically because of the available city services.

“It will be a sad day if the council rescinds those services for seniors or closes any centers,” she said.

David Gilliam of the Anaheim Coalition Against Taxes argued against the utility tax and called for the appointment of a commission to audit the city’s spending and recommend cuts.

Philip L. Knypstra, 54, a 30-year resident of Anaheim, said he also opposed the utilities tax unless cuts were also made in city administrators’ salaries. Knypstra, a professor of business at El Camino College, charged that more than 75 city administrators make more than $80,000 annually and that 35 make more than $100,000.

Police Capt. Roger Baker said the grounding of the three city helicopters “is the loss of an extremely versatile tool used by both police and fire departments.”

“The helicopters are used not only to apprehend law violators, but are also used for fire watch in the Anaheim Hills, in industrial sections of the city and in other areas,” Baker said. “No other instrument we have has equal value.”

Mike Balenti, 58, a 22-year Anaheim resident who works for an engineering firm in the city, was one of the few speakers to oppose the utility tax and to call for cuts in city services.

He said he believes the city adminstration purposely proposed to lay off workers and make heavy cuts in senior and youth services in order to get an emotional reaction from the people, enhancing public support for the utility tax.

“This budget crisis could be a milestone for the city of Anaheim,” Balenti said. “The City Council can really shed light on the the budget process and can ask if the staff has really done its homework before it imposes a tax.”