BUDGET SHORTFALL HITS CITY : PROJECTIONS SHOW $30 MILLION GAP.

Byline: Rick Orlov Daily News Staff Writer

It may be a new year, but Los Angeles is facing an old problem: a projected $30 million budget shortfall that could balloon to $90 million next year.

City officials say they can weather the situation with minor actions.

``If you look at last year when we had a $240 million shortfall, it's a lot more manageable because it's a smaller number,'' said Chris O'Donnell, budget director for Mayor Richard Riordan.

``But, on the other hand, a lot of the easy options we had in past years are gone, so it's a mixed bag of what we have to do,'' he said.

To fix this year's deficit in the city's $4 billion budget, O'Donnell said Riordan is expected to propose a hiring freeze on all jobs except in police, fire and sanitation to save $3.3 million.

Cutting some outside contracts, reducing police overtime and deferring various programs that don't have direct impact on public services may also be attempted.

O'Donnell said the city received a minor boost when property tax revenues came in $13 million more than expected and there was an increase in revenue from the sale of new cars.

City Administrative Officer Keith Comrie agreed with O'Donnell's assessment.

``The economy is still slow and we've come out of this recession differently than in past recessions,'' Comrie said. ``But, this is manageable.

``When you're looking at shortfalls in the $200 million and $300 million range, you tend to breath harder. But this is manageable.''

One of the major factors in preparing for the 1997-98 budget - due to be released in April - is how the city will pay for the 18 percent four-year raise given police officers last year.

The police and fire salary hikes are expected to account for about $50 million of the projected shortfall.

``The mayor remains committed to public safety and that will not change,'' O'Donnell said, adding the mayor believes next year's shortfall can be narrowed through paring department budgets throughout the city.

Also, he said, no decision has been made on how much to increase the LAPD budget, which now stands at $1.2 billion.

Police Chief Willie L. Williams and the Police Commission have submitted a budget asking for a $200 million increase, but city officials have said they expect the mayor to propose about a $40 million increase.

Other factors that remain uncertain for the city next year is how much to expect from the Department of Water and Power, which in past years has provided upward of $100 million for the city's general fund.

O'Donnell said he expects that contribution to drop to $90 million for this coming year as the city prepares to lose the transfer entirely with the upcoming deregulation of the electricity industry.

Also uncertain is whether the city will be able to take advantage of a $31 million transfer from the Department of Airports to cover past city investments at Los Angeles International Airport.

The Federal Aviation Administration has ordered the city to return the money, which now sits in an escrow account. However, the city has said it plans to appeal the order. Various administrative hearings on the matter could take more than a year to resolve.