Budget Hits Cities Hard, but It Could Be Worse : Finances: Some municipalities fared better under the state spending plan than anticipated, but cuts will affect almost everyone.

So what do you want first--the good new or the bad news?

The good news is that the new state budget isn’t hitting San Gabriel Valley cities as hard as once anticipated.

In June, city officials in the region were told to expect a collective loss of about $75 million in state support. That figure has been whittled down to about $30 million for the 29 San Gabriel Valley cities, according to League of California Cities figures.

The bad news? It’s going to hurt. Just about everybody will feel the effects in terms of service cutbacks, layoffs or fee increases, city officials say.

All over the San Gabriel Valley last week, city officials picked through the wreckage of municipal budgets that had been approved two months ago by city councils, which hesitantly planned for undiminished infusions of property tax and are now going to have to give some of it up.

Most had already done some contingency planning. For example, just about everybody scratched tobacco tax revenues from the credit side of their ledgers. “We always thought they’d take it,” Arcadia Finance Director Jim Dale said. “They took it, it’s done, it’s history.” For Arcadia, loss of tobacco tax revenues amounted to only about $55,000.

But the other losses will be a lot harder to swallow. The state has decreed that cities must give up 9% of their property tax receipts. In addition, municipal redevelopment agencies must turn over a one-time slice of tax increments amounting to 15% of annual redevelopment income.

The results will vary from city to city, officials say. Depending on the city, they could include shorter library hours, longer police or fire response times, increased utility rates or building inspection fees, less frequent street sweeping, new utility taxes, and a variety of other measures cities employ to scare up revenues.

There were mixed emotions as news of the new state budget, signed by Gov. Pete Wilson 63 days into the 1993 fiscal year, circulated through the region. “How about outraged and relieved at the same time,” said Ann Guider, assistant to Pomona acting City Administrator Lloyd Wood.

The word from most cities late last week was that they can handle the new round of cutbacks. But city officials could hardly restrain their resentment of a budget process that was beyond the influence of municipalities but had great significance for their constituents.

“We’re a lot of small players and they’re the big players,” said Monrovia Finance Director Ken Nordhoff, referring to the governor and legislators. “They pass the bill behind closed doors, and the onus is on cities and counties to explain the impact.”

The anticipated losses varied in the San Gabriel Valley, from a modest $7,000 reduction in property tax revenues to Bradbury to a hefty $6-million hit in tax increment losses in the City of Industry.

With a $10-million surplus in redevelopment funds this year, Industry can absorb the loss.

“It doesn’t look as if it will pose a big problem,” Finance Director Vickie Gallo said.

But for others, it will be a matter of trying to bridge virtually unbridgeable gaps.

Anticipated losses for Pasadena are even worse than League of California Cities figures indicate, City Manager Philip Hawkey said. The city estimates that it will lose about $4.8 million in property taxes and $350,000 in cigarette taxes from a budget of $300 million.

All in all, Pasadena will probably have to lay off 12 police rangers--non-sworn officers who perform guard tasks--and 34 other workers, most in entry-level laboring jobs, Hawkey said. And that’s just the start of it, he added.

“We’re exploring everything from furloughs to reductions in service,” Hawkey said.

Like others in the region, Monterey Park officials had anticipated deficits even without the state action, City Manager Chris Jeffers said. It has raised utility taxes, instituted a hiring freeze and cut back on sidewalk maintenance. Although such measures had already pared about $500,000 from the $18.4-million current budget, Jeffers said, the city now faces a new round of service cuts that could include layoffs.

It’s a particularly bitter pill, Jeffers said, because of the prospect of going through the same exercise next year. “I don’t think there’s anybody in the city who doesn’t believe will be in the same cycle for 1993-94,” Jeffers said.

In Pomona, budget officials say they have already instituted substantial savings by not filling staff positions. “We don’t anticipate any layoffs,” Guider said. “It’s not as bad as we anticipated,” she said. But the City Council will start from scratch on planning for its $53.3-million general fund budget, she added.

Although city councils have not met since the state budget was signed, Arcadia, Claremont, Monrovia and others are already talking in terms of new “revenue enhancements,” such as utility taxes and fees for service.

“The good news is that it’s not as bad as we thought, but the bad news is that there’s no place else to cut,” said Claremont Mayor Diann Ring, whose city may consider a one-time utility tax. “If (state officials) only knew how we go through our budgets with a fine-toothed comb. We don’t have anything left to cut unless we start talking about our police. They’re 50% of our general fund budget.”

The recession is adding to the cities’ woes, said Dale, the Arcadia finance director.

Arcadia may opt to use reserves to make up for the anticipated loss of about $400,000 from the $23.3-million budget, Dale said. “Last June, they were talking about $800,000 in losses,” he said. “So when someone comes along and says it’s only $400,000, there’s some relief. On the other hand, we’re like a lot of other cities. Our revenues are not increasing right now. Sales taxes are very flat.”

In Baldwin Park, one of the most financially troubled cities in the region, the City Council had already made deep cuts into its $12.2-million general fund budget in anticipation of new losses, City Manager Donald Penman said.

Mostly, the city is not filling vacant positions. “We’ve cut two accounting positions, eliminated our print shop, eliminated a mechanic and a recreation manager,” Penman said. The results are some very thin margins of service. For example, there are now only three city mechanics servicing 70 vehicles.

Penman’s main concern is the loss of redevelopment revenues. “All of our tax increments are committed to bond issues and debt,” he said.

Like other city administrators, Penman also worried about secondary losses from county cutbacks. “Ours is a lower-middle and middle-income community,” he said. “Directly or indirectly, our residents are going to feel the health and welfare cuts.”