LOS ALAMITOS : Council Faces Bleak Economic Picture

As in other cities in the county that are feeling budget crunches, City Council members here were presented with a bleak economic picture Monday night when they discussed the effects of voter rejection of a proposed redevelopment plan and learned that the state may keep nearly $600,000 in revenues from the city.

The city, which last year had its first balanced budget in five years, now faces the possibility of losing up to $600,000 in vehicle license fees and property tax revenues that the state wants to keep or reallocate to reduce its own $11-billion deficit, City Manager Robert C. Dunek said.

“The state will throw out of balance virtually all the best-laid plans (of cities),” Dunek said.

Dunek had prepared a $6.7-million budget for 1992-93 but now will consider ways to cut spending by about 10%. He will offer proposals to the council at a budget review session June 17.

Money woes are nothing new to Los Alamitos, which has suffered declining sales tax revenues for several years and has dipped into its reserve fund to pay for basic services. The city hasn’t hired a community development director since the last one left in fall of 1990, and last year, an $800,000 deficit threatened to cut 23% of the city’s employees.

Reduction of some services and council adoption of a 6% utility tax stopped the layoffs and kept the city from tapping its reserves for the first time in five years.

As a more long-term solution to declining revenues, the council in 1989 formed a Redevelopment Agency and in 1990 adopted a redevelopment plan aimed at attracting and retaining businesses and subsequently increasing revenues.

Although the Redevelopment Agency doesn’t have the power to levy taxes, city officials hoped redevelopment would spur improvements along Katella Avenue and Los Alamitos Boulevard, increasing property values that would in turn generate more tax revenue.

Despite city officials’ contention that they wouldn’t use eminent domain since there are no homes in the project area, some citizens opposed redevelopment, fearing that the city may eventually incorporate residential sections into the area.

Opponents were able to get a referendum on the June 2 primary ballot asking voters whether the city should implement its first redevelopment plan. Voters rejected that plan, leading Mayor Ronald Bates to ask Dunek to prepare documents for deactivating the Redevelopment Agency. He said there was “little or no purpose” for the agency without a plan.

Council members who walked precincts to drum up support for the plan expressed bitter disappointment over the vote and concern about the city’s financial future.

Councilman Charles E. Sylvia said he wanted his support for the plan “on the record, so 20 years from now, when people say, ‘What happened to Los Alamitos . . . to the infrastructure . . .?’ my kids can say, ‘Don’t blame my dad, don’t blame the City Council--they tried to get what was good for Los Alamitos.’ ”

Bates added, “We’re just going to have to keep looking at everything and do the best we can to balance our budgets. We’re going to have to continue to be vigilant . . . to provide high quality service. In this environment, it’s going to be tough.”