Crunch Causes Cities to Skimp, Grow Creative : Budgeting: In the ‘90s, government needs to peel the orange for the public and reveal how every segment of the spending plan fits together.

The beginning of the end of the fiscal dependence on the state caused cities throughout Orange County to restructure their governmental programs and policies and pursue more creative ways of delivering services to their communities.

The residents of Orange County have come to expect a high level of service from government, while at the same time they have little knowledge or interest in the intricacies of public agency budgeting. With the economy in a prolonged downturn, the attitude is, “Just fix it.”

For most cities, the painful realization that they were dependent on the state came as a shock in July of 1991 when the state held back revenues.

The “take-backs” or “hold-outs” continue. In Orange, where I sit on the City Council, the abrupt reduction in revenues was $1 million, moving up to over $7 million for next year’s budget.

Through the painful months of waiting to see what the Legislature and the governor decide, the state claims it is only catching up with years of generous giving.

Regardless of all the reasons for the deficits, city councils began to double-check their budgets, line by line. Employees and union representatives asked to be players in the budget process, and members of the community joined in. In Orange, there was no room for “smoke and mirrors” as every expenditure was closely evaluated.

Hiring freezes, salary freezes, shorter workweeks, layoffs, early retirement packages and policies to eliminate meals and conference expenses have been addressed countywide.

The heavy financial burden of state and federal mandates on local government was revealed, as budget-watchers poured over hundreds of unfunded, demanding programs in each city.

The high cost of doing business in older cities, where collective bargaining units have built up impressive salary increases and health and retirement benefits, came as a surprise to some. Some have been in business for decades. The hope is that they will share in the budget solutions.

The metropolitan status of the county has led to public safety and budgetary headaches. Problems we could not imagine a decade ago now affect our cities.

Unremitting immigration, housing overcrowding, dayworker issues and an increase in the number and mobility of gangs place the public safety portion of the budget pie in a priority position, usually accounting for at least half of the public expenditures.

Through the years in older cities, community programs were funded and committees grew along with festivals and recognition events. In Orange we eliminated thousands of dollars from the budget by doing away with peripheral activities, which often closely matched the dollar value of one or more employees.

The restructuring of departments has been most difficult.

The library system nationwide, although upgraded in its processes by computerization, has essentially followed the same management and operational policies for generations. Single shifts, changes in hours to meet the greatest public demand, and privatization of cataloguing and other functions could increase savings and hopefully keep most libraries open with a cadre of volunteers.

The toughest decisions will be what path to take if revenues fail to increase. Cities have raised fees for services and increased hotel bed taxes and water rates, but those efforts don’t often begin to increase income substantially. Utility taxes have piqued the interest of some cities--and the anger of the public.

In Orange, instead of levying utility taxes, we opted to reorganize for greater economy.

The single, most positive outcome of these difficult times is that we’re cutting costs and learning to operate with fewer resources.

Cities can strive to match the cost savings and efficiency of the best of the private sector and still serve the community.

Governing in the 1990s is going to take cooperation and creativity. Local taxpayers need to be convinced that city government knows what it is doing--and government needs to peel the orange and reveal how every segment of the budget fits together.