Anaheim Adopts Plan With Spending Cuts, No Layoffs

Anaheim took steps Tuesday to balance its 1987-88 budget by adopting a plan that calls for reduced expenditures but includes no layoffs or cutbacks in services.

The City Council had grappled with ways to resolve the estimated $8-million budget shortfall for months before voting unanimously to accept the plan.

Much of the shortfall was created because of a long-running legal dispute over two parking structures at the Anaheim Hilton and Towers. Under an unusual financing arrangement with the hotel’s developers five years ago, the city borrowed $54 million to have the garages built as part of the development. But when a dispute arose with new owners over who should pay for the money-losing garages, the city assumed responsibility for paying for the debt.

The amount of the debt service payment this year totaled $5.7 million. To make up for the amount, the city will largely depend on modifications in what it had expected to spend and a slight increase in anticipated revenues.

The city will save more than $1 million in salaries created by the departure of more than 120 city employee who retired this year to escape the effects of a change in the city’s retiree health benefits plan.

Other reduced expenditures include:

- A $200,000 decrease for legal services.

- A $278,000 reduction in management salaries.

- A $106,000 reduction in travel and training expenses.

- A $171,000 reduction in liability claims expenses.

Expected revenue increases include:

- $550,000 in the transient occupancy tax.

- $250,000 in additional sales tax.

- $150,000 in building permit fees.

- $145,000 additional in interest earnings.

Nearly $3 million was trimmed through reductions in street maintainance projects. An additional $400,000 will be tapped from the city’s general benefits reserves, a $14-million fund for reserve vacation, medical and worker’s compensation funds.