SEAL BEACH : City Weighs Options to Prevent Shortfall

Despite the City Council’s vote last month to more than double Seal Beach’s utility-users tax, the city still faces a bare-bones budget that will probably require cuts in city spending.

Officials, who are putting the finishing touches on the $11.5-million to $11.8-million budget, said that the tax increase might still leave the city with a $200,000 to $300,000 shortfall.

To close the gap, the city might consider reopening its now-closed jail facility at the police station and place it under private administration. If reopened, the jail could provide booking services to surrounding cities, and in the process, collect jail booking fees.

City Manager Jerry L. Bankston said the jail could produce as much as $100,000 a year in new revenues.

Further salary reductions and cuts in employee overtime could occur, as might some additional layoffs, Bankston said.

The city will also attempt to fund all its capital improvement projects from federal, state and county grants rather than with city money, he said.

The outcome of the budget process depends in part on the state, which is expected to significantly reduce funding to cities this year.

In addition to the proposed state cuts, the city must rebate at least $500,000 in aerospace sales taxes to the federal government, producing a total budget shortfall of about $2 million.

By increasing the tax that residents and businesses pay on their monthly gas, electric and telephone bills from 5% to 11%, the city is expected to generate about $1.8 million.

Council members said they voted for the tax increase because it was the only way to avoid massive cuts in city services.

Over the last two years, Seal Beach has been forced to cut spending and personnel by about 20%.