COUNCIL OKS DRAFT BUDGET FOR NEXT YEAR CITY SPENDING PLAN FOCUSES ON QUALITY-OF-LIFE SERVICES.

Byline: Rick Orlov Staff Writer

With the issue of San Fernando Valley secession looming over the city's future, the Los Angeles City Council approved Monday a $4.81 billion budget for 2002-03 that would expand quality-of-life services for residents.

In a one-day session examining the budget proposed by Mayor James Hahn, council members were warned that a vote in November to break up Los Angeles could have a dramatic effect on programs.

``If it does pass, we will ask for immediate authority to shut down any new programs,'' City Administrative Officer Bill Fujioka told the council. ``We know the cost of borrowing is going to be affected. We know there will be other consequences. We know we have to be very cautious in the coming months.''

The council vote was 14-0. Councilman Hal Bernson, who had been present earlier, was absent during the vote.

The budget, for the first time in recent history, calls for a reduction in spending - by $45 million - by trimming administrative staff positions, said Councilman Nick Pacheco, chairman of the council's Budget and Finance Committee.

Limits within the budget were blamed on the Sept. 11 terrorist attacks, which dramatically cut tourist-related income to the city, on top of the recession, which prompted some cutbacks beginning last December.

Council President Alex Padilla said the council attempted to focus on neighborhood programs.

``What we did was look at the basic services provided with the reduced amount of money available,'' Padilla said. ``I don't think there's a lot of fat in it.''

But the budget increases a number of programs - such as paving 10 miles of unimproved streets and alleys, increasing street repairs from 98 to 117 miles, expanding the bulky-item pickup program, adding funding for a speed-hump program and expanding home delivery of meals to 481 more elderly residents.

The council also put in $2 million in unallocated funds to make up for lost state revenue for a summer youth jobs program.

The council will give the spending plan its final approval on Friday and send it to Hahn. He will have five days to make any vetoes, and the finished package will then return to the council for review.

The budget is for the fiscal year that begins July 1.

``We appreciate the council's quick action and are glad they could find additional resources,'' Deputy Mayor Matt Middlebrook said.

The budget includes no new taxes, but it imposes a 10 percent gross receipts fee on waste haulers to cover the costs of recycling.

It also increases the annual revenue transfer to the city's General Fund from the Department of Water and Power. The transfer is being increased 5 percent to 7 percent, which is expected to generate $47 million.

Pacheco said the biggest change in the budget, however, was increasing the reserve fund from Hahn's proposed $64 million to $104 million.

Fujioka said that was accomplished through higher-than-expected transfers from city departments as well as revenues from the continued strength of the real estate market.

BUDGET HIGHLIGHTS

Here are the main features of the proposed $4.81 billion budget approved Monday by the Los Angeles City Council.

--Add 360 officers to the Los Angeles Police Department.

--Create a $104 million reserve fund.

--Increase revenue from the Department of Water and Power reserve fund from 5 to 7 percent.

--Include $2 million to replace lost state revenue for a summer youth employment program.

--Resurface 260 miles of roads.

--Repair 118 miles of sidewalks.

--Trim 123,000 trees.

--Provide 43 new parks facilities and rehabilitate seven others.

--Expand the L.A. Best after-school program.

--Provide $3 million for neighborhood councils.

--Increase funding for libraries to purchase books and computers.

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BUDGET HIGHLIGHTS (see text)