Same Tune, Different Verse: Layoffs Loom : Budget: With reserve funds low, Carson may need to eliminate jobs and cut services to avoid a $2-million shortfall.

Carson residents have heard this tune before: Revenues are lagging behind spending so the city must dip into reserve funds to balance the budget.

But this time, there’s a twist. City officials are considering layoffs and further cuts in services to prevent this year’s projected $2-million shortfall from wiping out those reserve accounts.

Officials have not yet disclosed how many of the city’s 280 employees might be laid off or which programs might be cut.

In July, the council adopted a $29.1-million spending plan that called for eliminating nine city jobs and stopping subsidies for a number of Parks and Recreation Department programs.

City Administrator Larry Olson said the city’s financial situation was of “grave” concern and that it would be unwise to use the $2.6 million in two reserve accounts for capital equipment replacement and emergencies.

“I don’t think they can touch it anymore,” Olson said of the council. “Those are really the only funds the city has in the event of any disaster or major catastrophe or an (unfavorable) judgment in a lawsuit.”

This year’s budget is $500,000 less than last year’s and is based on anticipated revenues of $26.4 million. However, revenues for the first three months of this fiscal year, which started in July, are $500,000 less than during the same period a year ago. By the end of the fiscal year, sales tax revenues--which account for about half the city’s income--are expected to fall about $1 million short of the $14 million anticipated.

Councilwoman Vera Robles DeWitt said the council has failed make the tough spending cuts that are necessary to deal with the budget crisis.

“We can’t keep operating at the level we’re operating,” DeWitt said. “The red flags went up several years ago but the council kept approving budgets that didn’t meet expectations.”

DeWitt said council members also have been unable to agree on new sources of revenue, such as whether to impose an oil pipeline fee or a one-time trash collection franchise fee.

Olson said a slump in the economy has translated into a dramatic drop in sales tax revenue. “That downturn has turned out to be longer than expected,” Olson said.

The council has raided reserve funds for the last six fiscal years. In 1988-90, the council balanced a $29.9-million budget by borrowing $2.2 million from reserve funds. The amount it borrowed from reserve funds in 1990-91 will not be available until next week, but the figure is expected to be considerably lower than in the past, Olson said.

The city currently has reserve funds of $7.9 million, but $5.3 million must be set aside for possible insurance-related claims. The remaining $2.6 million can be spent for emergencies.

Using reserve funds has been a sore point among some council members. In July, city officials discovered that $915,000 that was to have been used to build a sound wall along the San Diego Freeway was instead inadvertently placed in the reserve account and ended up being used to cover general operating expenses.

That error has yet to be corrected, and city officials will decide in the next few weeks how to replace that money.