AGOURA HILLS ACTS ON LOSS OF UTILITY TAX : CITY GRAPPLES WITH REVENUE ISSUES.

Byline: R.A. Hutchinson Daily News Staff Writer

A week after voters defeated their utility tax, Agoura Hills city officials are scrambling to get the fee removed from monthly bills and to decide how to make up for the $1.4 million lost annual revenue.

``We're under the assumption everyone wants this off their bills as soon as possible,'' said City Manager David Adams. ``That's why we're discussing it at (tonight's) meeting.''

City Council members are expected to approve an urgency ordinance tonight that rescinds the tax and gives city officials the go-ahead to ask Southern California Edison, The Gas Co. and several area telephone companies to begin removing the extra fee from their monthly statements.

Measure A, a ballot item to keep the 2-year-old tax, was defeated in a citywide election June 25. Since then, Adams said there have been several calls - about 50 - to City Hall asking when the fee would be dropped and when residents could get a refund of the money they've been paying.

Residents have been paying a 4 percent utility users tax on telephone, electricity and gas bills since the fee was approved by the City Council in June 1994. Business owners have been paying a 3.5 percent charge for such services.

Adams said it will take between 30 and 60 days for the various utility companies to update their billing processes, but he's advising residents they no longer have to pay the tax.

``We're thrilled it's finally going to happen, but it's two years too late,'' says Barbara Murphy, who founded Citizens Against New Local Taxes after the tax was first approved. ``The second step is to address the refunds.''

That's a trickier issue, Adams says.

Last fall the California Supreme Court reversed a previous lower court ruling that had allowed special taxes to be created by an elected body. In December, the high court ruled that a transportation tax implemented by Santa Clara County was illegal, concluding a case first heard in September.

In making that ruling, the court upheld Proposition 62, a 1986 initiative that banned special taxes without voter approval by the constituency affected.

Since that ruling, Adams said the approximate $100,000 collected monthly from the tax has been put into an escrow fund that totals about $1 million.

Before knowing how refunds will be handled, Adams said several issues must be addressed either by the judicial or legislative bodies in California to determine the fate of the money in escrow, including whether taxes collected prior to the December ruling must be refunded and whether Tuesday's defeat of the tax means the money collected prior to the court rulings must also be refunded.

``Nobody knows. Even the courts don't know,'' Adams said. ``Just the mechanics of how it will be done have to be figured out.''

Meanwhile, Adams said city staff is trying to put together a 1996-97 budget that reflects the loss of the revenue from the tax. City officials said they enacted the tax originally to cover a projected $695,000 deficit in the annual $6.5 million General Fund budget. Of that figure, about $500,000 was allocated to replenish dwindling reserve funds.

At the top of the list of big-ticket items that may be cut are street repairs budgeted at $660,000. Adams also has listed park improvements at Morrison and Forest Cove parks, which together total $313,300; reconstruction of Jim Bowie Road, $140,000; and sidewalk repairs totaling $114,000.

Others in a list of about 20 proposed reductions include an economic development strategic plan consultant, the annual slurry-seal street program, extra Los Angeles County Sheriff's deputies assigned to selected duties; a youth outreach program, eliminating proposed weed and trash cleanups, the elimination of a part-time emergency management position and other miscellaneous equipment and supplies.

Murphy said she and other critics of the tax will be watching to see how city officials handle the budget cuts.

``The vote showed there is no confidence in current city management,'' Murphy said. ``There needs to cuts in staff, salaries and benefits and services - especially expensive litigation costs - need to be bidded out. (If not) then I see that type of action leading to another recall.''