BUDGET SPEEDS HIKES IN FEES KEY PANEL BACKS $7.8 BILLION PLAN.

Byline: RICK ORLOV

Staff Writer

Amid warnings that Los Angeles still could face cuts later this year, a city panel Tuesday recommended a proposed $7.8 billion budget that clamps down on spending while accelerating dozens of fee hikes.

The recommended budget would speed implementation of a $26 trash- collection fee -- from Jan. 1, 2008, to this September -- and would significantly increase funding only for the Los Angeles Police Department.

The recommendation by the City Council's Budget and Finance Committee is generally in line with Mayor Antonio Villaraigosa's call to limit or reduce all other spending for the fiscal year that will start July 1.

In related remarks, the city's chief legislative analyst, Gerry Miller, called the city projections of revenue increases reasonable but "aggressive," and he warned that "constant monitoring" will be needed on whether the revenue is materializing.

"This is going to be a tough year for all of us and is going to require a significant amount of cooperation," Councilman Bernard Parks said after the committee voted 5-0 to adopt the spending plan. "We are going to be reviewing spending more closely this coming year and are prepared to make changes if we have to.

"There is no room for error in this budget. We can't afford to wait to the end of the year to find out we have problems."

Councilwoman Wendy Greuel said the plan will be open for review at any point in the coming year.

"It is a very tight budget year, and we have some problems on the horizon we will have to address," she said. "We are going to look at all spending very closely."

The budget trims most departments' spending 3-5 percent but does not impose a hiring freeze. Instead, department managers have been urged to use caution in new hiring to avoid cuts this year.

But while Villaraigosa had proposed implementing a trash-fee hike Jan. 1, 2008 -- six months earlier than initially planned -- the panel accelerated that even further.

The panel also voted to place $2.75 million the mayor had sought for anti-gang programs into a special account to be overseen by the council's Ad Hoc Committee on Gangs.

The proposed budget will be formally presented Friday to the full City Council, which is scheduled to consider it Monday.

Aides to Villaraigosa said the mayor was pleased with the committee's overall support of the budget.

"We are encouraged that the council has taken steps to support the mayor's priority to hire 780 new police officers, while at the same time increasing the city's reserve fund," spokesman Matt Szabo said.

"However, we are concerned that the committee is attempting to put the brakes on a significant portion of the mayor's gang-reduction plan."

City officials continued to grapple with the mayor's plan to reduce the $143 million structural deficit -- the difference between revenues and expenses -- even as property and sales tax revenues are projected to slow.

A recent court ruling also has prohibited the transfer of $30 million from the Department of Water and Power's water revenue fund this year. And last week the city lost a court battle over a utility users tax that could cost $167 million next calendar year unless the decision is overturned. Meanwhile, a second court case could cost the city an additional $103 million.

"This is something where the mayor included that $270 million in revenue in the budget, and we are not recommending it be cut," the chief legislative analyst said. "It doesn't appear there will be any financial impact this (fiscal) year, but we could lose it as a revenue source next year.

"If we do have an adverse decision at some point (sooner), it will be an enormous problem," Miller added. "To be blunt, it could be a problem we won't be able to deal with unless there are massive cuts, including (in) the Police Department."

In the potential $167 million loss, the state Court of Appeal said the city erred in increasing a cell phone users tax in 2003 without getting voter approval under Proposition 218. Miller said the council could ask for a public vote but the earliest that could occur would be in 2009.

In addition to the trash-fee hike, the council also moved to help finance the budget by pushing up the starting date of a series of other new fees so they will take effect July 1.

Miller said officials hope that imposing the fees earlier would bring in an extra $2 million.

And as Parks warned that the city needs to prepare for possible losses beginning later this calendar year, the panel also voted to increase the city's reserve fund -- to a record $201 million.

The panel said it also wanted to have monthly department spending reports, along with updates from the City Attorney's Office on pending claims and the use of outside attorneys.

As part of the cost-savings moves, the committee recommended the LAPD -- while still remaining on pace to hire 780 officers in the year ahead -- reduce the size of classes going through the academy and space out the hirings.

Amid the belt-tightening, however, the panel recommended restoring $58 million in programs the mayor had recommended for elimination.

Among them is $2 million to the City Attorney's Office for its neighborhood prosecutors and anti-gang efforts, $2.38 million to the Fire Department to staff its new Playa Vista station and restore the Community Emergency Response Team program and $12 million extra to the $87.5 million LAPD overtime account.

The panel also restored $4.3 million to add 26 miles of street repaving and $1 million to increase the number of trees trimmed in the city.

City Attorney Rocky Delgadillo, who had complained about cuts to his budget, said he was pleased with the recommendation.

"The members of the committee have demonstrated a clear commitment to public safety and the fight against gangs with today's action," he said.

rick.orlov(at)dailynews.com

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Budget highlights

Total spending: $7.8 billion.

Increases:

Los Angeles Police Department for 780 more officers and overtime.

Los Angeles Fire Department to staff new station in Playa Vista, restore community emergency response teams, add 41 days to lease of a Helitanker to fight fires.

Street Services for a program to deal with illegal signs and for more street resurfacing and tree trimming.

City Attorney's Office for anti-gang and neighborhood prosecutors.

Fees:

Accelerates various permits and fees to fund police, firefighting and planning.

Speeds up higher rates for trash collection to Sept. 1.

CAPTION(S):

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Budget highlights (see text)