NEWPORT BEACH : City Plans to Hack Budget by $3 Million

Having cut $8.1 million from its budget two years ago and another $6 million last year, Newport Beach officials have begun looking for $3 million more to trim from the 1994-95 fiscal budget.

Directors of the 11 municipal departments--such as the police, general services and city attorney’s office--have been asked to draw up a projected budget that proposes cuts of 4.5% to 7.5%, City Manager Kevin J. Murphy said. Those reductions will probably include cuts in city staff and reductions in some municipal services.

Officials have tried to find cuts in the $56-million budget that residents will not notice. But most of those veiled expenses--such as delaying road improvements or replacing city-owned vehicles--have already been cut close to the bone, officials said.

“We can no longer afford the luxury of continuing to do business as usual,” Mayor Clarence J. Turner said in his State of the City address Friday night at the Newport Beach Marriott Hotel and Tennis Club. “It is my contention that fewer personnel will be asked to maintain a level of service that the citizens of our city have come to rely on.”

The city’s budget has been a focus of attention in recent years because of the statewide recession and steady decrease in sales tax and other revenue upon which cities traditionally rely.

Last year, while the city raised taxes on business licenses, hotel beds and use of emergency paramedics, it also eliminated 47 full-time jobs from its payroll by way of retirements, attrition and six layoffs. For the remaining 700 employees, officials granted a 3% pay raise that went into effect the first of this year and a second increase of 5% at the top of the salary scale to begin in April. These raises, which the city manager and city attorney declined, are the first salary increases in more than two years.

The raises account for the bulk of the city’s projected $3-million shortfall for 1994-95 fiscal year. City Finance Director Dennis Danner said that officials will probably design an early-retirement package in hope of attracting enough takers to keep this year’s layoffs to a minimum.

But staff reductions alone probably cannot meet the projected budget deficit, and for that reason city officials have begun looking at scaling back service at many levels of the city government, Danner said. For example, he said it may take longer to get building inspectors to a site, and street sweeping may not be as frequent.

The city’s public safety departments--police, fire and marine safety--will be able to avoid the deepest cuts because of last November’s voter approval of Proposition 172 to continue a statewide sales tax to pay for public safety. Danner said that Newport Beach is anticipating receiving $452,000 from the state to cushion the blow of municipal cuts.

Officials caution that budget projections at this point are simply estimates that cannot be assured until the governor signs a state budget. City staff expects to review and fine-tune the budget with employee associations throughout March and will submit the budget document to the city council in May.