City Council OKs Budget That Hinges on Utility Tax

The City Council breezed through the 1997-98 budget because most of the work had been done three months earlier.

When Proposition 218 passed last fall, it created a $2.8-million shortfall in the city’s $22.7-million budget by effectively outlawing the city’s lighting and landscaping taxing district, which paid for beach, park and street-light maintenance.

In February, the city staff drew up a budget saving $1.8 million by cutting several community programs, laying off workers and increasing fines and fees, such as parking meter rates.

To make up the rest, the council approved placing a 2.5% tax on gas, electricity, water, sewer, telephone and cable TV bills on the ballot for a June 3 election.

If the measure fails, the city will have to cut another $1 million by eliminating local police dispatching, closing Richard T. Steed Memorial Park and taking other actions.

After a brief review and a few questions at a workshop earlier this month, the council unanimously gave preliminary approval to both versions of the budget--with and without the utility-tax revenue.

Now the city must wait for the utility-tax vote.

“It’s really difficult on our employees,” City Treasurer Paul Gudgeirsson said. Several are now facing layoffs because of the budget cuts, and “you’ve got a series of other employees who have to wait until June 3 or June 4 to see if they have jobs.”

The biggest single savings for the city--about $430,000--will come with the layoffs of 23 public-works maintenance employees.

The city’s general fund budget of $22.7 million is up 4% from 1996-1997, while expected revenue is up 5% to $21.8 million.

The council will adopt the new budget at its June 18 meeting. It goes into effect July 1.