Later Than Most, City Must Face Up to a Budget Deficit

As other San Gabriel Valley cities were laying off workers and paring services in recent years, Pasadena was expanding.

Now, with a stubbornly persistent recession prompting a projected $5.4-million revenue shortfall, the City Council is gearing up for some painful decisions.

Should the city eliminate “non-essential” services, such as the city arts program, or privatize city operations? Should it charge franchise fees to private trash haulers for using the public right of way?

These are some of the scenarios the council is considering to balance the budget of 1992-93, which must be completed by June 30.

“They’re stimulants for thinking, not proposed cuts,” Councilwoman Kathryn Nack said after the council opened the annual budget process Tuesday, four months ahead of time. The council usually does not begin serious budget discussions until May.

Whatever the choices, there will be pain involved, said Vice Mayor Rick Cole, chairman of the council’s Finance Committee. “We’re going from belt-tightening to finger amputation,” he said.

Projections by Finance Director Mary Bradley are generally accurate, but city officials will not know how much they will be in the hole until the 1991 revenue figures are in, probably next month.

The problem is that, for the first time in memory, revenues are expected to fall significantly short of city obligations, Bradley said.

Personnel costs, which constitute about three-fourths of the city’s general budget, are expected to increase by 4%, Bradley said, but revenues are expected to remain much the same.

Pasadena’s city government, with about 2,000 employees, is a comparatively bulky one, Cole said. Glendale, with a population of about 180,000 compared with Pasadena’s 130,000, has 1,600 city employees.

This year, Pasadena’s general city budget was $122.7 million. The total city budget--including the Water Department and agencies such as the Community Development Commission--totaled $270.3 million. Glendale’s total 1991-92 budget was $295 million.

“What we’ve seen over the past decade has been a significant increase in the amount of money spent by the City of Pasadena,” Cole said. “We cannot sustain that kind of growth. That’s got to stop.”

On Tuesday, the council endorsed a set of budget-preparing principles that, although short on specifics, restated a commitment to human resources.

The 1993 budget should seek to emphasize, among other things, “Pasadena as a family community,” as well as “programs fostering or sustaining the cultural development in the community,” according to the document approved unanimously by the council.

Among the laundry list of actions the council will consider:

Cutting upper management positions at the Police Department.

Increasing the number of revenue-producing events at the Rose Bowl, particularly sporting events.

Reducing the number of contracts with consultants.

Freezing vacant positions.

City budget strategy will depend on projected revenues from sales and real estate taxes, as well as licensing fees, Bradley said. “We’re closely monitoring that,” she said. “We don’t want to end up surprised.”

So far, however, the news has been largely bad. For example, revenue from motor vehicle fees, which the state shares with the cities, has been down, Bradley said. “People are buying cheaper cars,” she said.

Information on sales tax revenues for the crucial final quarter of 1991, when Christmas retail sales were registered, will be available next month, Bradley said.

City revenue began to dwindle last year, Bradley said. The current city budget is $1.4 million in arrears, meaning the city will have to cut at least that amount from its expenses by the end of the fiscal year in June. Losses are expected to be greater next year, she said.