HUNTINGTON BEACH : City Aide Has Grim Economic Forecast

City Administrator Michael T. Uberuaga this week forecast a grim economic outlook for the rest of the fiscal year, saying the city is facing a $2.2-million shortfall in its current budget.

“This estimated general fund shortfall is caused primarily by a continuation of the lethargic recovery from the economic recession in California and Orange County,” Uberuaga said in a written report presented to the City Council during a special meeting Monday night.

“In addition, some new revenues that the city had counted on have not materialized. For example, estimated revenue from renting the city’s jail for (federal) Immigration and Naturalization Service detainees has been reduced from $600,000 to $90,000 for fiscal year 1992-93.”

Uberuaga told the council that in February he will give them some alternatives for making up the budget shortfall. He said the options will include additional cutbacks, tapping city reserves and seeking new sources of revenue.

Uberuaga said the city’s share of the state sales tax is running about $1 million short of estimates for this fiscal year. Property tax revenue is also bringing in less money than expected because many property values have decreased during the recession, Uberuaga said.

A bigger threat to the city’s budget planning, Uberuaga said, is the possibility of the state taking more of a share of tax dollars once dedicated to the cities. The state balanced its budget last fall by taking away some of the cities’ money, and Uberuaga said he fears that the state will take a bigger share this year.

“Efforts currently underway to balance the current and next year’s budget can only succeed if the state will stop reducing city revenues by its actions,” Uberuaga said. “Since 50% of the city’s expenditures are for public safety, further expense reductions that do not reduce public safety services will be difficult to implement.”