City Hall Takes First Step to Tap Port Profits : Revenue: Two City Council committees will study ways the wealthy port might help the recession-strapped city.

The Long Beach City Council, beset by continuing fiscal worries, took a tentative first step Tuesday to tap into the port’s hefty profits, which totaled $64 million last year.

The council will have two of its committees study ways in which the rich, self-supporting Harbor Department, which runs the port, might boost the city’s recession-plagued finances.

“This is a real bread-and-butter proposal . . . that will benefit people all over the community,” maintained Councilman Warren Harwood, who has argued for more than a year that the city should share in more of the port’s riches.

The council’s move came on the heels of a report that city revenues remain in decline because of the recession. To avert a possible $14-million shortfall by the end of the budget year, City Manager James C. Hankla has called for continued spending cuts and further restrictions on hiring.

“At this time, I believe that reduced spending will offset revenue shortfalls,” Hankla predicted in the report. Although he said “critical services have not been affected” by the belt tightening, he conceded that there have been delays in responding to citizen inquiries and in processing bills.

Last year, Hankla asked city departments to trim spending by 5% for the budget year, a call he said was being heeded. He also put limits on hiring, and in the report said new restrictions were being added, although some critical hiring will still be allowed.

And although last year’s increase in the local utility users’ tax has brought in new income, budget writers predict that the recession will leave most of the city’s major tax funds with less money than anticipated. Sales taxes, for instance, were down about $1.6 million as of December, compared to December, 1990.

Such bad tidings left the mayor and most council members agreeing that the city should look to the prosperous harbor for help. But several warned that any reach for harbor funds should be made carefully and in cooperation with the Harbor Commission.

“We have to be somewhat cautious in this area,” said Mayor Ernie Kell. “We are on very thin ice.”

Councilmen noted that there are numerous legal constraints on how port money can be used, and they argued that the port’s vitality should be protected to ensure that it continues to provide thousands of local jobs. Moreover, Vice Mayor Jeffrey A. Kellogg worried that if the city started taking harbor money, the state would soon follow, leaving little behind.

Councilman Douglas Drummond was even more cautious. “I oppose this direction. I think it’s premature,” he said. “This is not the time to reach yet,” he added, saying that if the city takes port money “it comes out of somebody’s pocket.”

But Harwood and others countered that Long Beach is in too much financial trouble to ignore the port.

“We actually can’t fund the business of city government . . . by going to the single-parent renters and the small-business people,” he said, arguing against more citywide tax increases.

Harwood has proposed that City Hall take advantage of a clause in the local charter that allows the Harbor Department to transfer up to 10% of its net income to the city for tidelands expenses.

As proof of how badly the Tidelands Fund needs money, Harwood Tuesday presented a listing of nearly $52 million worth of beach and waterway projects awaiting funding.

His proposal will be reviewed in committee.