New budget goes to council

CITY HALL — The city’s Finance Department released a revised draft budget Friday that includes the elimination of 23 vacant positions, a hiring freeze and across-the-board cost reductions in order to bridge an $8.4-million gap for the current fiscal year.

The draft budget, which goes to the City Council on Tuesday for final approval, also includes the latest round of revenue projections based on second-quarter returns. Almost all of them are down.

Sales tax revenue projections were reduced roughly $3 million, while the forecast for income from city services slid $1.24 million.

Projected revenue from building permits took a $1.3 million hit, as did hotel occupancy taxes projections, by $300,000.

Through a mix of collective cost cutting and money transfers, the overall budget revision called for in Tuesday’s proposal is $5.43 million as the economic recession continues to take its toll on the city’s general fund.

But even with the latest round of adjustments, Finance Director Bob Elliot warned that unless third-quarter results — due sometime in April — held stable, further revisions might be needed.

“We hope not to,” he said. “We think we’re doing enough, early enough, to get us through the end of the [fiscal] year, but with the economy in turmoil like it is, it’s anybody’s guess.”

Beyond the macroeconomics of the recession, there are also some local considerations that could also impact the city’s financial path.

City executives are in the process of reviewing salary proposals for general city employees as their contract comes up for renewal in June.

The jury remains out on the effect of the Americana at Brand since holiday sales tax reports won’t be finalized and released for at least another month, and the impact of the state budget crisis — and its precarious attachment to a number of statewide voter initiatives — remains to be seen.

Nevermind that any budget revision before June could face a reshuffled City Council, which undergoes a three-seat election April 7.

On that date, Glendale voters will also decide on whether to approve a revised Utility Users Tax that city officials contend will protect what was an $8.7-million revenue stream last year against lawsuits from the telecommunications industry.

And any budget shoring for this fiscal year will likely offer but a brief respite before City Hall attempts to hammer out a new budget for 2009-10.