COUNCIL TIGHTENS SPENDING TREE TRIMMING CUT BACK; STREET WORK IS CURTAILED.

Byline: James Nash Staff Writer

Amid dire budget forecasts, the Los Angeles City Council voted Wednesday to strengthen the city's current hiring freeze, reduce tree trimming and delay resurfacing 84 miles of city streets.

The moves, approved unanimously, are intended to help Los Angeles weather a fiscal storm as Governor-elect Arnold Schwarzenegger considers rolling back the recent increase in vehicle license fees - a major revenue source for cities and counties. Last year, the fees accounted for about 7 percent of Los Angeles' general-fund revenues.

The council added teeth to the city's current hiring freeze, which has drawn criticism that it is fraught with loopholes. Now, most city departments will be able to fill vacant positions only with approval from the mayor and City Council.

City departments that reduce their expenditures by 3 percent or more would be exempt from the freeze.

``We're out of Band-Aids, folks,'' Councilman Greig Smith said. ``It is a problem of structure, of how we have run this government for too long.''

Councilman Bernard C. Parks, chairman of the council's Budget and Finance Committee, said the current budget crisis is the most severe since at least 1978, when voters adopted the tax-limiting Proposition 13.

``If it's not the worst, it's close,'' Parks said.

If city departments continue to spend at their current rates, Los Angeles will finish the current fiscal year with $40 million less in its reserve fund, Chief Legislative Analyst Ron Deaton said. But the problem grows much worse with anticipated budget cuts from the state. The reduction in vehicle license fees could cost Los Angeles $175 million to $225 million, Deaton said.

Deaton and other city officials said forecasting Schwarzenegger's budget initiatives as governor would be guesswork at best. But, they said, they don't expect Schwarzenegger to come to Los Angeles' rescue.

``The state could only make a very bad problem considerably worse,'' Deaton said.

Schwarzenegger told reporters last week in San Bernardino that he would insulate cities from revenue cuts if the vehicle license fee is rolled back. The fee generates an estimated $4 billion for local governments in California.

Schwarzenegger spokesman H.D. Palmer said Wednesday that the governor-elect stands by his pledge, but hasn't determined an alternate source of revenue to compensate for lost vehicle fees.

``That's part and parcel of the discussions that will take place on the budget,'' said Palmer.

Los Angeles Councilman Jack Weiss said city officials need to plead their case with the governor-elect and legislators. Weiss added an apparent jab at the Hummer-driving Schwarzenegger.

``Eighty-four miles of unfixed Los Angeles streets ... that'll ruin the axle on a Hummer,'' Weiss said.

The council also moved to clamp down on spending by requiring that one-time sources of revenue only go toward temporary expenses, and by requiring that new city programs be accompanied by a reliable source of funding.

The council also instructed City Administrative Officer Bill Fujioka to meet with city unions to discuss ways of reducing personnel costs.

Julie Butcher, head of the city's major non-sworn employee union, Service Employees International Union Local 347, said the union is open to any ideas, including layoffs. None of the council's votes Wednesday eliminated any current employees.

``We frankly are having a hard time cleaning the sewers and maintaining the parks,'' Butcher said. ``But the fact is, we're going to continue to do that.''

James Nash, [phone]

james.nash(at)dailynews.com