Garden Grove Mayor Assails Council Over Taxes : Revenue: W.E. (Walt) Donovan says city faces bleak future without new sources of funds. Colleagues’ reluctance on utility levy causes his outburst.

Facing a $6-million budget deficit and with no signs of an imminent boost in sagging revenue, the mayor of Garden Grove said this week that the city is destined to become “a damned slum” because his City Council colleagues don’t have “the guts to raise taxes.”

Mayor W.E. (Walt) Donovan angrily stormed out of Wednesday night’s council meeting after his fellow council members seemed unmoved by his plan to impose a utility tax to help close a budget gap that he and City Manager George Tindall warned will result in sharp service cuts.

“I don’t see why in the heck we don’t put in a 2% utility tax,” Donovan told the council. “It would raise about $3 million and take care of the deficit.”

Councilman J. Tilman Williams agreed that the need for new revenue is evident, but said he would prefer to put a proposed utility tax on the ballot for residents to decide. Other council members expressed reluctance to increase taxes, leading to Donovan’s outburst.

“I’ve had it,” Donovan said. “Property values are going down every day, and the city will be a damned slum in pretty short time. You haven’t the guts to raise taxes to provide money for services.”

Officials expect revenue of slightly more than $42.6 million to go to basic operation funds for fiscal 1992, while expenditures are projected at $48.3 million.

Councilman Mark Leyes called that budget realistic and said it “genuinely reflects” service levels the city is providing.

“We must be accountable and achieve maximum efficiencies before we ever start thinking about new revenue for increases in services,” he said.

But Tindall warned that without an increase in revenue, the city is likely to experience an increase in gang activity, deterioration of neighborhoods, reduction in fire protection and paramedics and elimination of supervised after-school playgrounds designed to steer youngsters from trouble.

Councilman Robert F. Dinsen said Thursday that the city “can make it” without a tax increase, but only if the state Legislature rejects a proposal to return a lesser share of state motor vehicle taxes to cities.

“If (the state) takes more . . . tax, we’ll be hurting,” Dinsen said. But he added, “I never voted for or approved new taxes, and it would take a pretty critical situation for me to.”

Dinsen was referring in part to a report delivered to the council Wednesday by Tindall, who said the city has been hard hit by its heavy reliance on sales taxes, which have dipped sharply during the recession.

Much of the city’s immediate future hinges on whether the state opts to grab all or part of the more than $5 million in motor vehicle taxes generated annually to help balance the state budget, Tindall said. The city had already been hurt by news received this week that it will get $250,000 less than projected from vehicle taxes because of slow auto sales.

“If they (the state) take the vehicle-in-lieu fee of $5.1 million, or if the current financial trend continues for several years, we’re out of business,” Tindall told council members.

“We’re talking about giving up entire departments and surrendering the keys of the city to the county of Orange. We won’t be able to mete out mandates, and we’ll be out of business as a city.”

Tindall has already proposed eliminating 37 full-time city positions, 22 of which are vacant, and 19 part-time spots, including 11 vacant. He has also proposed leaving open 13 police positions unfilled and laying off at least one police employee.

Police Chief John R. Robertson, who will become police chief in the city of Orange, has warned that the cuts will force officers “to step back and react to calls” rather than heading off problems.