Council to Consider Fee Hikes or Spending Cuts to Balance Budget : Finances: The city administrator is calling for an overhaul of the spending and revenue policies to address an estimated shortfall of more than $5 million.

HUNTINGTON BEACH —  Faced with the city’s most serious budget crunch in years, council members today will consider whether to hike fees or cut services to pay for several unbudgeted key projects.

As City Administrator Michael T. Uberuaga proposes his first budget to the City Council, he is calling for a radical overhaul of the city’s spending and revenue policies to address an estimated shortfall of more than $5 million. In particular, Uberuaga said he plans to end the city’s practice of dipping into reserves and plans to establish firm budgetary guidelines and increase the city’s income during the next several years.

Next year’s budget is estimated at $176.7 million.

Uberuaga, known for his financial talents, became the city’s chief executive in February; he estimates that the government needs an additional $5 million to $7 million annually to “realistically” address all the city’s service and capital needs. The city’s current level of income is stable, he said, but is not increasing, and the city is spending more to perform many services than it is collecting for them.

“The city’s not broke,” Uberuaga said last week. “The level of services will not decline this year. But our revenue base is not expanding at the rate of service demands. So there’s a gap there. And if nothing is done, you eventually have a decline in the level of services.”

To begin addressing that problem, he has recommended that the council immediately enact a range of fee increases to generate an estimated $2.5 million in extra income each year.

Uberuaga calls for monthly trash fees to be raised from $7.50 to $9.85. He also proposes expanding an existing city intrastate phone tax to include out-of-state calls and suggests raising developer fees that pay for library services from 10 cents per square foot of new construction to 15 cents per square foot.

In addition, Uberuaga proposes hiking charges for community services, including rental of park spaces and library materials, as well as some parking fees. Moreover, a full menu of planning and zoning services would be increased by an average of 184%. Hikes would range from 21% for appeals of council decisions to 1,100% for city staff review of development site plans.

All of the fee increases, Uberuaga said, would merely cover the cost of those services, most of which the city now partially subsidizes.

Uberuaga is asking council members to trim spending or redistribute funds to pay for unbudgeted projects and proposals.

The council has not yet found a funding source to pay for this year’s scheduled $5-million installment toward rebuilding the municipal pier or the $534,000 needed to establish a police substation and other community facilities in the crime-ridden Oak View area.

The Planning Commission last week called for a $300,000 effort to overhaul the city’s general land-use plan, which also would mean cutting other areas of the budget.

“I think these are all fine ideas, but we’re going to have to increase some fees or make some other budget decisions to pay for them,” Uberuaga said. “I don’t think it’s good fiscal policy to draw on our reserves, as we’ve done in the past.”