HUNTINGTON BEACH : Council Will Reduce Budget by $3 Million

Striking a compromise between a budget plan prepared by the city administrator and one by a citizens’ panel, the City Council has agreed to slash at least $3 million in spending to offset a $5-million deficit.

Under a series of 1992-93 budget guidelines the council adopted last week, the remainder of the shortfall will be covered by increasing user fees.

In recent months of a budget preparation process that began last September, City Administrator Michael T. Uberuaga has recommended that the budget be balanced by trimming city spending by $2.6 million and hiking fees by $2.4 million.

The 11-member Budget Review Task Force has proposed an alternate plan, which calls for spending cuts as deep as $4.8 million.

In an effort to harmonize the two plans, Uberuaga last week recommended the budget policy guidelines to the council, which call for spending reductions upward of $3 million.

Council members rejected a suggestion by Councilman Don MacAllister that they seek to cut $4 million in spending.

A cut that deep “could cause serious challenges to provide services to the (nearly) 200,000 people of this city,” Councilman Jack Kelly said.

The council is trying to avoid layoffs or salary cuts. Uberuaga’s proposed spending cuts would reduce some city services but would not cost jobs.

Many residents in recent weeks have echoed the task force’s proposal to scale back city employees’ scheduled raises.

In addressing that issue, Uberuaga told the council that because the city is “in the middle of a three-year contract (with most its employees), I find it very difficult to see where we could have a salary rollback.”

The council did vote to extend the current hiring freeze through December. Additionally, no new job will be created unless it can generate enough new income or save enough money to pay for itself.

Amid the budget trimming, the council also adopted a policy to maintain a reserve balance of at least 3% of the annual budget and to work toward a 5% reserve.

The council also officially voted to balance the budget by the end of this fiscal year on June 30 and to implement a private financial restructuring plan that has been done for the city.

That plan emphasizes that the city is spending more for fee-supported services than it is collecting in return. To correct that long-term budgetary drain, the report suggest that the city either increase fees or scale back some of the services it provides.