GARDEN GROVE : Council Warned of $7.7-Million Deficit

City Manager George L. Tindall has warned City Council members that the city is facing a deficit of about $7.7 million in the 1993-94 budget.

Tindall is predicting a $5.6-million shortfall in revenue because of stagnant sales and property taxes. The city may lose an additional $2.1 million “to bail out” the state budget in Sacramento, he said.

The preliminary budget figures “are devastating,” Mayor Frank Kessler said Monday.

Kessler said officials may have to lay off employees, cut salaries, eliminate some services and programs or increase fees and taxes to close the deficit.

The city depends on sales taxes to generate $12.6 million, about 30% of the budget. But Kessler said the city faces the loss within the year of Orange County Volvo, one of the city’s top sales tax producers. The company plans to move to Santa Ana, he said.

Other major retailers also fare significantly worse in Garden Grove than in other cities and are being threatened by the city’s weak economic base, he said.

Kessler said there needs to be an effort to build “upscale condos” to draw higher-income people to support local businesses.

“There needs to be a balance in housing stock,” he said. “In the past, our efforts have concentrated on first-time home buyers.”

Officials circulated a survey of 10 comparable cities showing Garden Grove to be at or near the bottom in most economic categories. The city is spending about $319 per resident in the current budget. Orange, at the top of the survey, is spending $491 per capita, according to the survey.

Garden Grove receives $79 per person in sales tax revenue. Tustin, at the top, receives $180, according to the survey.

Garden Grove has 1.2 sworn police officers per 1,000 residents and 0.6 firefighters per 1,000 residents, both at the bottom of the list.

At a budget workshop at City Hall on Saturday, Tindall also warned that the city has been unable to maintain buildings properly or to comply with state and federal mandated programs because of financial constraints.

The city doesn’t meet fire safety requirements because of lack of emergency exits in the second floor of City Hall, he said.

It is also not in compliance with mandates for workplace safety programs or employment of a safety officer, or with Americans With Disabilities Act requirements for handicapped access at city facilities, he said.