Huntington Beach Stretches Budget $3 Million Further : Local government: City Council covers slash in state funding by extending hiring freeze, spending some of last year’s surplus and cutting general fund spending.

In an effort to cover the $3 million the city will lose because of state funding cutbacks, the City Council late Tuesday voted to extend a hiring freeze, spend funds from last year’s budget surplus and reduce general fund spending.

The state reduced property taxes and other revenue to the city’s general fund totaling $2.25 million.

The state also took about $804,000 from the Huntington Beach Redevelopment Agency for 1992-93.

City Administrator Michael T. Uberuaga warned council memers that there may be more revenue reductions by the state this year and that the city must be prepared for further economic jolts.

When the city’s budget was adopted in June, general fund revenue was estimated to be $718,821 greater than expenditures. But the council was forced Tuesday to cut more than $2 million to keep the budget in balance because of the state action.

The general fund budget was reduced from $98.4 million to $96.2 million.

In addition, the council voted to extend the hiring freeze until next July, spend about $565,000 from last year’s budget surplus and reduce general fund spending by $1.6 million.

“Obviously, with the state taking $2,253,700 of our general fund revenue, the budget surplus will disappear and become a shortfall unless action is taken by the city to reduce expenditures or increase revenues,” Deputy City Administrator Bob Franz told the council.

The reductions will not diminish service to the community, Franz said.

The loss in property tax and cigarette tax revenue to the city is expected to become permanent in coming years, Franz said. The reduction in redevelopment money may be a one-time matter, he said.

Franz said officials are undecided on how to make up for the redevelopment loss but don’t believe it will have an impact on current redevelopment projects.