MAYOR CALLING FOR CUTS 5% TRIMS URGED FOR DEPARTMENTS.

Byline: RICK ORLOV Staff Writer

Faced with an uncertain economy and the potential loss of up to $250 million in revenues, Mayor Antonio Villaraigosa is calling on city department heads to cut spending by 5 percent and find up to $20 million in savings for the next city budget.

``I expect this budget to bring us closer to our vision of Los Angeles as the greatest city of the 21st century,'' Villaraigosa wrote in the four-page letter to department general managers as they begin the budgeting process for the coming year.

The budget is now a $6.7 billion spending plan that lays the groundwork for a five-year, 1,000-officer expansion of the Los Angeles Police Department and includes the first-ever trash pickup fee for homeowners.

The mayor said he envisions a city ``where Angelenos are connected by a world-class transit system, where we lead the nation in our commitment to green practices, ... where every neighborhood is safe. These aspirations are threatened, however, by mounting uncertainties involving the city's key revenue sources.''

Chief among these is the flattening in the housing market and lawsuits filed by phone companies against the utility users tax and the tax on cell-phone usage. In addition, the mayor said the city is in jeopardy of losing transfers from the Department of Water and Power.

``Combined, these losses could amount to as much as $250 million,'' the mayor wrote.

To prepare for the worst-case scenario as well as address the ongoing structural budget deficit, the mayor said departments need to take the first step to reduce spending.

City Administrative Officer Bill Fujioka said it is important to address the issue now when departments have a chance to determine how they plan for the future.

``This is strictly a matter of fiscal responsibility and letting the general managers tell us how they plan to run their departments,'' Fujioka said. ``We want to avoid what's happened in the past, where departments ask for the moon and present unrealistic budgets.''

The letter from the mayor did not address issues such as pay raises for municipal workers, which will be negotiated during the coming year, or plans to resolve ongoing disputes with the union representing firefighters and the Engineers and Architects Association.

rick.orlov(at)dailynews.com

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