HUNTINGTON BEACH : Panel Would Slash Spending, Hike Fees

An advisory panel’s preliminary recommendations to the City Council this week would slash city spending by $5.6 million and increase user fees to raise an additional $2.7 million.

The belt-tightening package would offset a $6.5-million deficit projected for next year and begin replenishing the city’s dwindling reserves.

The suggestions were made by the 11-member Budget Review Task Force, appointed by the council to help guide it through the city’s most dramatic fiscal revamping in years. The task force is seeking ways to balance the 1992-93 budget while shoring up the city reserve fund, which has been drained of $4 million over the last two years to compensate for revenue shortfalls.

The panel will refine its proposals before issuing its final recommendations to the council next month. After issuing that report, the group will begin devising plans to remedy long-term financial problems.

According to the group’s preliminary report, the city deficit will balloon to $30.9 million by 1995 if no action is taken.

Responding to city administrators’ assertions that they do not yet consider the financial outlook a crisis, task force chairman Philip S. Inglee warned that the problems may be worse than they have been characterized.

“I don’t think there is panic in the streets, but if we say that a $6.5-million deficit is not edging toward a crisis, we’re missing something,” said Inglee, a bank president and chief executive officer.

In his group’s report to the council, Inglee emphasized that the city should not expect to bail out the budget with any one-time windfalls, such as an anticipated refund from the state Public Employees Retirement System.

“We’re talking about a true deficit,” he said. “There may be a tendency to use one-time funds to correct this, but it would be putting a bandage on a problem that needs to be corrected.”

The task force is tentatively proposing 3% pay cuts for all city employees, which would carve $1.7 million from the budget. It is also urging council members to cancel $10.2 million in unused bonds rather than use the money for future projects. Those bonds had been acquired to pay for a parking structure north of the Municipal Pier, a project that has since been called off by the council.

By voiding those bonds, the city would save $900 million in interest payments that would be due if the bonds are issued.

City Administrator Michael T. Uberuaga has recommended that the city use the bond money to help fund the library expansion and beach parking improvements, both of which would generate revenue to help offset the interest payments. The council is expected to decide next month whether to cancel or use the bonds.

The panel is also suggesting that vacant city positions not be filled, which would save an estimated $1.3 million. It proposes that the city save another $700,000 by scaling back its contribution to the Visitors and Convention Bureau, condensing its public information agency and making other service reductions.