HUNTINGTON BEACH : City Gets Proposals to Cover Fund Losses

City Administrator Michael T. Uberuaga proposed Thursday that the City Council extend a hiring freeze, cut general fund spending and dip into surplus funds to cover the loss of nearly $3 million in local funds that will now go into state coffers.

Under the state budget finally approved this week, the city will lose $2,082,000 in property taxes, $172,000 in cigarette taxes and $750,000 in redevelopment funds that would have gone to the city.

The city could make up for most of the loss by extending a hiring freeze until next July, curtailing equipment spending by $1.68 million and spending $565,000 from the budget surplus, according to Deputy City Administrator Robert Franz.

An employee hiring freeze, which has been effect for about two years, has created about 50 vacant positions.

Franz said officials are uncertain how the city can absorb redevelopment losses but emphasized that current projects aren’t expected to be affected.

Franz said it is “ridiculous” that the city could spend about 10 months dealing with its own $4.2-million shortfall last year, yet the state could take away $3 million in a matter of days.

The loss of redevelopment dollars is a onetime action, but losses of property taxes and cigarette taxes will continue, Franz said.

Councilman Peter M. Green predicted Thursday that the “average person” won’t feel any impact of the state raid on city dollars since there will be no cuts in safety personnel.

“We’re all feeling the crunch of the recession--social services, schools, county agencies,” Green said. “Rather than moaning about the hit we took, we should all work together.”

City Council members are expected to act on proposals to cope with the revenue at Tuesday’s council meeting.