Long Beach Prepares to Tighten Belt : Budget: The city manager proposes broad cuts and rate increases to offset a deficit.

Long Beach residents and businesses would pay more for city government but get less in return under a proposed $362.8-million budget for basic municipal services in the upcoming fiscal year.

City Manager James C. Hankla is recommending $8 million in rate increases and $7.2 million in service cuts to help erase a projected $40-million deficit for the 1995-96 fiscal year, which begins July 1. Most of the remaining $24.6 million will be taken out of surplus funds and savings on employee insurance and medical coverage.

The new revenue would come from raising natural gas rates by 10%, or $2.58 a month, for the average household, impounding the cars of unlicensed drivers and charging late fees on all utility bills. Hankla has recommended raising water rates by 5.5% and trash collection rates by almost 3.9%.

There would also be wide-ranging cuts in city services. Readers and researchers would find the main library, which is now open seven days a week, closed on Sundays. Senior citizens would no longer be able to get medical checkups or dental work at the city’s 4th Street senior citizens’ center. The Long Beach Municipal Band would perform eight summer concerts instead of the usual 16. The grass growing around City Hall and in street medians would be cut less often. There would also be cuts in the graffiti-removal budget.

From 35 to 50 employees, primarily in parks and recreation, may be laid off as a result of the spending cuts.

These measures are necessary, Hankla said, because the city has been pushed to the edge of a fiscal precipice by the loss of $15 million a year in property tax revenue to the state, which has been diverting property taxes from cities to schools for the past three years. “If we don’t change the way we do business . . . we’ll be [going] over the cliff,” he warned.

City Council members are aware that long-term solutions to the city’s nagging financial problems must be found. They have been exploring the possibility of turning some city services over to private companies, which may be able to provide them at lower cost. The city also hopes to generate more revenue by seeking opportunities to perform services for surrounding cities.

Hankla’s budget proposal calls for privatization of some parks maintenance, tree trimming, the temporary clerical pool and custodial services.

“That’s one of the things I’m pleased to see in the budget,” said Councilman Jeffrey A. Kellogg, an ardent supporter of the privatization plans.

The Police Department was one of the few agencies that escaped the ax in Hankla’s spending plan. He included an additional $3.2 million for the police force, including $2.1 million to hire 49 more officers. But he recommended that the hiring be postponed until September, 1996.

Kellogg opposed delaying the hiring of more officers. “They should be added sooner, not later,” he said. Hankla “is just putting off the inevitable.”

That’s not the only Hankla recommendation likely to face stiff opposition from the City Council, which is scheduled to adopt the budget in late June after a series of public hearings.

Mayor Beverly O’Neill, who pored over Hankla’s budget for two weeks before releasing it Monday, already has proposed restoring some of his cuts. She wants to keep the main library open seven days a week, cut the Municipal Band schedule by one-fourth instead of one-half and restore the $62,800 that Hankla cut from the graffiti-removal program.

O’Neill, who does not have a vote on the council, also proposed a work furlough program under which all city employees would take at least one day off work without pay. She estimated the savings at $500,000 a year.

Hankla said he did not include work furloughs in his budget because it was a policy that should be left up to the council. “I’ll be happy to take my day off and work it anyway,” he said.

Councilman Douglas S. Drummond said he thought work furloughs are a good idea and would support several of O’Neill’s changes to the proposed budget.

Councilman Alan S. Lowenthal said O’Neill could also expect his backing on some of her recommendations, particularly the restoration of the library funding. “It doesn’t meet the needs of the community to close the main library on Sundays,” he said.

The $362.8-million general purpose fund is part of an overall $1.89 billion city budget that also pays for airport and harbor operations, natural gas and water services, the redevelopment agency, housing authority and trash collections.

The new budget covers city spending during the 15-month period from July 1, 1995, to Sept. 30, 1996.