FOUNTAIN VALLEY : City Avoids Full Impact of State Cuts

City officials are taking losses of about $1 million in state money in stride, since steps were taken to lessen the blow.

Cost-cutting measures, including a hiring freeze and cautious spending, and a generous sales-tax base have lessened the impact, city officials said.

City Manager Raymond H. Kromer said the city is expected to lose $420,000 in property-tax revenue and $700,000 in redevelopment money.

“We’re not happy with that, but by making some adjustments in our budget, we’ll be able to live with it,” Kromer said.

Kromer said sales-tax revenue generated from high-volume discount retailers, such as Price Club and Pace Membership Warehouse, has kept the city afloat, since the money is used to help pay for city services and operations.

“It seems we have been able to weather the storm compared to cities that depend on car sales and shopping” centers, Kromer said.

Councilman John Collins agreed that Fountain Valley is a lot better than other cities by having the discount warehouses in town.

“That has probably saved us,” Collins said. “As the economy builds, we should have (sales-tax) revenues to offset” the state losses.

Councilwoman Laurann Cook also said the city has looked toward ways to attract retailers to build a solid sales-tax base.

“We’ve done some creative things so we are able to provide the quality of services our citizens expect,” Cook said.

City officials don’t expect any layoffs or cuts in services, including public safety.

“The basic services are going to be pretty much untouched,” Collins said. “I don’t think anybody is going to notice any difference.”

Kromer said the general-fund revenue losses could result in not filling city positions as employees retire or through attrition and delaying purchases of capital equipment, such as new trucks.

Most of the budget streamlining to deal with the effects of the losses in state revenues will be handled administratively, Kromer said.

But Kromer said the loss of redevelopment money will mean deferring capital projects such as street repairs and could affect payments for bond obligations.

Overall, Kromer said, the city is in good shape. “But we’d be in a lot better shape if the state of California left us alone,” he said.