NEWPORT BEACH : City Officials Begin Budget Talks Early

City officials, fearing a possible $11.8-million shortfall in revenue next year, have begun discussing a number of budget options, including continuation of a citywide hiring freeze and charging residents for some services.

Customarily, budget discussions aren’t held until January or February. However, City Manager Kevin J. Murphy said that if layoffs are necessary next year, “we want to give (employees) early notice.”

If layoffs and cuts in services are to be avoided, Murphy said, “the economy will have to do a 180-degree turn.”

“If we hold departments to a zero growth rate, we believe we will be prepared to deal with what comes,” he said.

“It doesn’t look that rosy. As a result, we’re taking action now to prepare for very difficult times. It’s going to take us years to recover.”

City action could include raising the business license fee, which hasn’t been raised in 15 years, and charging residents for some services, such as $35 annually for paramedic care.

Those not subscribing to the proposed paramedic program would pay a fee of $350 to $400 each time they call paramedics.

The program could add about $800,000 to the city’s $90-million budget, according to Fire Chief Timothy D. Riley.

Council members said residents might complain about such a program, arguing that they pay taxes for the service already.

In a best-case scenario, in which all new fees are levied, Newport Beach could end up $2 million in the black, Murphy said.

But that is unlikely. The surplus could be wiped out by the state if it decides to take more than expected in property taxes, he said.

“If the state takes one thing from us, we’re immediately in the red,” Murphy said.

The state recently announced that Newport Beach will have to pay $2.5 million in uncollected sales tax receipts. The city plans to pay it over a period of 10 years.

The city faces a $500,000 revenue shortfall this year. That represents a 3% decline in revenue.

“We don’t want to create gloom and doom,” Murphy said, “but we clearly have a problem.”

The city’s departments will begin meeting later this month to address fiscal projections for the 1993-94 year.