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Facing a steep drop in city revenue, La Habra is looking to cut about $3 million in expenses to balance its budget for the 2010-11 fiscal year.
Financial Director Jim Sadro outlined the city’s bleak situation during a presentation to the La Habra City Council this week.
The budget deficit is largely due to a more than 24 percent decrease in sales tax revenue from its peak two years ago.
“When you lose a quarter of your biggest revenue source, you feel that in your pocketbook,” Sadro told the council.
Sadro said La Habra’s decline in revenue is fairly typical for a city of its size and location, and not nearly as severe as what some of Orange County’s wealthier cities have experienced.
“Everybody’s having problems with auto dealers that have closed and retail dropping off,” Sadro said. “Some of the beach communities — I mean, they have high-end retail — they really lost a lot of money.”
The proposed budget includes the elimination of seven full-time staff positions, four of which have already been completed in the form of layoffs. The hardest-hit department was Community Development, which lost two employees. Public Works and Community Services each lost one employee.
This is the first time the city has laid off employees in more than 15 years, Sadro said. The three remaining positions that would be eliminated are currently vacant.
The city is expected to cut hours for part-time staff by 10 percent, and full-time employees will be asked to take a 6 percent pay cut through a furlough plan.
In order to reduce costs associated with public safety, which consumes 66 percent of the city’s general fund, La Habra has undertaken a reorganization of its Police Department and is looking to negotiate concessions from the La Habra Police Association.
While there was little debate among the council members concerning most of the budget presentation, a $2,500 cut to the La Habra Area Chamber of Commerce proved to be a bit of a sticking point.
Mayor G. Steve Simonian called for the cut to be removed from the budget, citing his dedication to promoting local businesses.
“The whole reason that I ran for office, the whole reason I joined the Republican Party is because I’m pro-business,” Simonian said. “To take money away from the chamber, which promotes and assists businesses, seems to fly in the face of logic to me. I think we’re sending the wrong message as a government body. I think it looks like we’re penalizing business.”
Mayor Pro Tem James Gomez, who opposed the Simonian’s proposal, said he discussed the cut with Mark Sturdevant, executive director of the chamber, and said Sturdevant had no problem with the reduction in funding.
“He told me that he was fine with it,” Gomez said. “He said that he wanted the chamber to do their part and understood the fact that it was very, very minimal and he wanted to step up.”
Gomez also said he opposed the idea of exempting the chamber of commerce from cuts while city services are being reduced.
“In this economy where we are eliminating public safety — potentially eliminating public safety positions — asking them to furlough, I can’t in good conscience not allow the chamber of commerce to participate in some way in this,” Gomez said.
Gomez was ultimately the only member of the council in opposition to the mayor, and the removal of the cut was approved 4-1.
The council then voted, 4-1, with Gomez opposing, to receive and file the modified budget. Further discussion is expected at the council’s next meeting June 21.