City may increase fees in 2003-04

Jenny Marder

City officials hope to balance the 2003-04 budget by increasing fees

in Huntington Beach by $3 million.

Having just sliced $11.1 million out of the 2002-03 budget by

laying off employees and dropping several programs, the city is now

tackling next year’s budget. While the cuts won’t be as deep this

time around, the city still has to determine how it will absorb

roughly $2.5 million in losses from the state and up to $27 million

in refunds for a property tax that was illegally collected from

homeowners.

Aside from these costs, the proposed budget is balanced, City

Administrator Ray Silver declared at Monday’s budget workshop.

Silver hopes to pay for the property tax refunds through a general

bond issue and to absorb additional costs by hiking fees in

departments across the board. Number crunchers balanced the budget by

adding $1.2 million in revenue from fee increases to the proposed

budget in anticipation of the City Council’s approval of at least

that much in hikes.

A $3 million fee increase would cover $1.2 million that the city

needs to feed the budget, plus $1.8 million to get the general fund

reserve back up to 7%, Silver said. The proposed budget was able to

absorb some, but not all of the state losses.

With state losses, workers compensation soaring and millions of

property tax dollars to refund, the city is scraping to stay in the

black.

An outside contractor, hired by the city, is performing a study to

determine the total costs of providing city services to the

community. Staff will use the results of the study to come up with a

list of recommended cost changes for services. Fees could go up or

down, said Clay Martin, the city’s administrative services director,

but the city is hoping to gain a good deal of revenue from the new

fees.

Fees that are likely to jump are community services fees, the cost

of room rentals, special events or permits for development projects.

“They are tough decisions, but they’re not impacting employees as

much,” City Councilman Dave Sullivan said. “This round is kind of

directed toward the public, you might say. I don’t distinguish

between tax and fees. It’s semantic. It’s money out of people’s

pockets, but it’s costing more for the public to do things.”

This is only the second time that the city has performed this type

of review in conjunction with the annual budget. The city conducted

its first cost allocation plan and user fee study in August 1991 and

raised about $3 million dollars, Silver said.

“With all of these changes, it’s important to come back on an

annual basis to ensure that the fees reflect the most current cost

information that we have and also changes in law or council policy,”

said Martin said at Monday’s meeting.

Sullivan and Councilwoman Jill Hardy suggested that staff come

back with some figures on fees that other cities charge so they have

something to compare them to.

The City Council will discuss the fee recommendations at the next

budget study session, scheduled for Aug. 25. Public hearings are set

for Sept. 2 and Sept. 15, with budget adoption recommended on Sept.

15.