Budget official sees three more years of deficits at L.A. City Hall

Los Angeles will confront revenue deficits in each of the next three budget years, even if elected officials keep a lid on spending and secure new concessions from the workforce, the top budget analyst at City Hall warned Thursday.

In a memo to the City Council, City Administrative Officer Miguel Santana said lawmakers won’t have the money to rebuild services cut during the recession until 2018, when a $20.9-million surplus is expected, unless new tax revenue is found or other programs are cut.

That situation could limit Mayor Eric Garcetti’s ability to expand core services. Garcetti has promised to take a “back to basics” approach during his first four years. On Monday, he and his aides proposed a budget with modest hikes in service -- additional library hours, more code enforcement inspectors and an expansion of road repairs from 2,200 lane miles to 2,400.

Deputy Mayor Rick Cole said Garcetti is working on ways to generate savings for the city that exceed Santana’s revenue projections. The mayor is focusing on limiting workers’ compensation costs, improving the city’s purchasing process and getting more productivity through technology, he said.

“All of these fundamental reforms translate into improved and expanded services,” Cole said.

Santana’s memo also warned that Garcetti has not allocated enough money for his planned road repair expansion or for enhanced ambulance service. Cole said the mayor is looking to accomplish the added road repairs in part by being more efficient and scaling back overtime hours.

At the Fire Department, Garcetti aims to keep ambulances in the field by “deploying other resources and sources of funding,” Cole said.

Thursday’s memo repeated themes sounded by Santana in recent months. He called for no cost-of-living increases for the city’s workers and pushed for employees to pay 10% of their health insurance premiums.

Santana released his memo three days after Garcetti proposed his administration’s first budget, which is designed to eliminate a $242-million shortfall for the fiscal year that begins July 1. The council must decide whether to approve or rework Garcetti’s 2014-2015 financial plan next month.

Once the budget is approved, more deficits will follow, the memo said.

Santana projected a $165.2-million deficit in 2015-16; a $186.8-million deficit in 2016-17; and a $73.9-million deficit in 2017-18. Each of those figures assumes that the council will approve Garcetti’s gradual reduction in the top business tax rate over the next four years.

Garcetti has argued that the tax reductions would make the city more attractive to businesses. His strategy is expected to remove $45 million in yearly business tax revenue from the budget by 2018.

david.zahniser@latimes.com

Twitter: @davidzahniser