SANTA ANA : $19-Million Budget Shortfall Projected

A projected $19-million shortfall in the next fiscal year may force the city to increase fees and lay off as many as 84 employees, according to the city manager’s preliminary budget report.

Designed as a starting point for budget discussions, the report blames the state’s continuing financial difficulties for a decrease in revenue and warns that additional state reductions could require even deeper cuts locally.

The City Council, which received the report from City Manager David N. Ream last week, will hold a session tonight to discuss possible reductions in police, fire and planning.

“We’re going to find ourselves in a $19-million shortfall, and somewhere along the line we’ll have to pick that up, through streamlining, attrition and other ways,” Councilman Thomas E. Lutz said Monday. “We’re hoping to come out pretty good.”

City officials will scrutinize all departments for unnecessary expenses and keep public safety a top priority, Lutz said.

“Some of the departments that have been frills for the residents, maybe those are the ones we’ll have to take a hard look at,” he said.

However, Lutz did not specify which departments those were, saying it is too early to tell.

Ream’s proposed $121.7-million budget calls for saving $10.6 million through employee reductions and generating $8.4 million through new or increased fees. New fees would include a tax on cable television, which would raise $552,000, and a fire inspection fee for businesses, which would generate $280,000.

Because about 80% of the general fund budget goes toward employee salaries and benefits, layoffs must accompany any attempt at budget reductions, Ream said in his report. He suggests reducing the work force by 84 employees, including seven managers, 15 police employees and 12 Fire Department workers, and closing the McFadden Branch Library.

Also, the Community Development Department, which could suffer the largest cuts, stands to lose 19 full-time positions for an estimated savings of $1 million.

Tonight’s budget study session will begin at 6 p.m. in the City Council Chambers. Two more budget meetings will be held this month. The first, at 6 p.m. March 23, will include discussion of the Community Development, Recreation and Library departments.

The final meeting at 6 p.m. March 30 will include discussion of other departments, including Public Works, Personnel and Finance.