Finding that the city faces a $1.9-million deficit for fiscal 1995-96, a panel of top administrators has recommended that the City Council make drastic budget cuts, including freezing all employee salaries and benefits.
Also proposed are laying off several police officers and eliminating one position each in the block grants and gang-intervention programs, as well as contracting for fire services and street sweeping.
To boost revenues, the panel has proposed a business license tax based on gross receipts.
City Manager Bill Smith, who headed the panel, said in a report to the City Council that a business license tax equal to 0.10% of gross sales could earn the city $500,000 for the next fiscal year.
The council today will consider the entire package of proposals, crafted by Smith with the help of the police chief, the fire chief and directors of the city's finance, public works and personnel departments.
Smith said the anticipated $1.9-million deficit is about 7% of the current $25.5-million budget.
To cover the shortfall, the city must make $1.2 million in cuts and raise revenue by at least $800,000. A $600,000 cushion also would be necessary if revenue projections are not met, he said.
The city could save $500,000 by contracting with the Orange County Fire Department and $50,000 by privatizing street sweeping, Smith said.
The council last month authorized a study to determine whether the city should contract with the county for fire services.
Smith said freezing benefits and salaries would save $300,000, and cuts in the Police Department would bring in $235,000.
Police Chief Jim Cook would have the authority to make the cuts.
The city would save $130,000 more by eliminating one position each in the block grants and gang-intervention programs.