Garden Grove Council Approves Austerity Budget

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The Garden Grove City Council Tuesday night passed a $94.7-million general fund budget for the coming fiscal year, continuing the city’s three-year austerity plan until its revenue picture improves.

Tax revenues have been inching up along with the economy, but the recovery has been slow and revenue growth is still below pre-recession peaks, said Finance Director Kingsley Okereke.

While the 2013-14 budget does not propose additional staffing cuts, it continues cost reductions through a once-a-month furlough and a hiring and spending freeze. The city plans to close the projected $5.9-million deficit with a property sale, transfers and by drawing on reserves and other special funds. The city depleted its $3-million contingency fund in previous years to balance the budget.

Garden Grove is banking on future economic development projects to bring in new revenue. A proposed 600-room water park hotel resort on Harbor Boulevard has been in the works for more than a decade. The city will finance the project with former redevelopment money and $51 million in bonds.

Once built, the resort could generate as much as $8.5 million each year, according to staff. The city is still waiting for final approval from the state Department of Finance before it can move forward with the resort and other developments.

The budget passed without much discussion by the council or members of the public. While many cities prepare comprehensive budgets and hold workshops for the council and public, Garden Grove typically does not prepare a line-item draft budget until weeks after the vote.

Members of the public had just five days before the vote to review the budget documents posted online. Most details on the general fund, revenue and expenditure estimates and cost-cutting measures in the proposed budget were provided during a presentation at the budget hearing itself, which wasn’t prepared by staff until the day of the council meeting.

Okereke said that after staffing cuts in recent years, there isn’t enough staff to prepare a detailed draft budget. He said budgeting is a year-round process and for Garden Grove, passing an annual budget functions more as an update.

“Every city does things differently,” he said.

Contact the writer at thyanhvo@gmail.com.

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