RIORDAN ORDERS SPENDING CUTS; DEPARTMENTS MUST TRIM BY 2 PERCENT.

Byline: Patrick McGreevy Daily News Staff Writer

Mayor Richard Riordan said Monday that city revenue is falling short of expectations and he has ordered all departments to cut spending by 2 percent in the budgets they submit for next year.

In a letter to city managers, Riordan said a city government that is more innovative and more efficient is needed to meet the demands of a population of 3.6 million people.

``Although the Los Angeles economy is on the rebound, and the city's revenues are growing, they will not be sufficient to meet all our needs,'' Riordan said. ``Therefore we must strive for additional efficiencies, increase productivity and reprioritize existing resources.''

Even so, the 2 percent cutback proposed by Riordan for next year is an improvement on the 6 percent cut he demanded this year and the 10 percent reductions required of some departments during the economic recession earlier in the decade.

Riordan also offered the option of increasing productivity or levels of service as an alternative to cuts in spending.

Chief Legislative Analyst Ron Deaton, the City Council's key aide, said the city's cost of doing business, including pay raises promised to city employees, could outstrip any revenue increase.

But he noted that the rebound in the local economy should mean additional revenue next year, including gross-receipts taxes.

``I don't think the situation is as bad as it has been in the last five to 10 years,'' Deaton said. ``We're in better shape. It should be less painful.''

Riordan told the managers that his budget priorities for next year continue to include public safety, including reducing gang and family violence, improving child care and recreation programs, and economic development.

``With all of your help we have already made incredible progress,'' Riordan told the managers. ``Our city is safer, our streets are cleaner, our neighborhoods are healthier and our economy is stronger.''