NEWPORT BEACH : City Begins Task of Slashing Budget

With the state’s budget settled, officials on Tuesday began their battle to cut $3.9 million from the city’s cash-strapped budget by reducing services and laying off more than 30 employees.

City Manager Kevin J. Murphy recommended that the City Council cut $1.1 million in salaries and benefits for public employees including Police Department and Fire Department personnel, $1.1 million in the maintenance and operations budget, which includes gas and electric services, and $1.8 million in capital improvement projects that could include anything from park improvements to automation equipment, in order to balance the $90-million budget.

The city must grapple with a $2-million loss in property tax income and $900,000 less in sales tax revenue.

The council adopted an interim budget in June, which was anticipated to be in place only until the state passed its budget. Now that it has, Newport Beach is faced with reductions of 9% in property tax and 17% in sales taxes, which are both on a permanent downward spiral, according to the city manager.

Murphy said the city’s revenue is headed in the wrong direction, and even if the city were dealing with a healthy economy it would take several years to recover from this year’s hit.

However, no full-time employees will be laid off during this fiscal year, Murphy said. “We’re absorbing all reductions in revenues through expenditure reductions. But, it hasn’t been done without a lot of pain.” Reductions could lead to 34 full-time positions being eliminated through attrition. Specifics as to whose jobs will not be filled, whose jobs will be cut to part-time and which part-timers will be laid off were discussed behind closed doors. Murphy said affected employees will be contacted today.

Further budget cuts include:

* Eliminating some capital improvement projects, including road bump installations, Corona del Mar State Beach restroom improvements, landscaping improvements on Coast Highway at Newport Boulevard, the Bolsa Avenue mini-park development and median island improvement projects from the 1992-1993 budget, to save $438,480.

* Deferring $750,000 in construction costs for a new Balboa Island Fire Station to next year.

* Putting off until next year a $92,530 project now underway to provide artworks for McFadden Square and a $4,900 project to landscape Inspiration Point.

“We’re looking at reducing the scope of operations without tax increases,” Murphy said. However, he added, the city’s business license tax hasn’t been increased in 15 years and “I think it’s important for the business community to take a look at that.”

He also suggested that the council consider raising parking citation bail by 10% to 20%, raising the transient occupancy tax by 2 percentage points, implementing a paramedic user and subscription fee and increasing parking meter fees.

“I think we’ll just have to tighten our belts,” Councilman Clarence J. Turner said. “We have to live with this reduction, theoretically, forever. I think we should cut back and not raise fees. We’ll have to look at the city department by department.”

The council is expected to adopt a final budget later this month.