The Hermosa Beach City Council Tuesday night adopted its city budget for the 2003-04 fiscal year and approved increases in parking fees and fines as a way of generating additional revenue. The vote was 4-1 with Mayor Sam Edgerton dissenting.

The council also voted to hold off on a certain kind of spending until the state budget is adopted which would most likely be in September.

“I just want to suspend all nonessential purchases until the state comes through with its budget,” said Councilman J.R. Reviczky.

In a May 29 workshop open to the public, the City Council reviewed this year’s proposed city budget and discussed ways of balancing future budgets while still funding the sorely needed capital improvement projects around town.

The city unveiled its $32 million preliminary budget and capital improvement program for the 2003-04 fiscal year May 15. The budget reflects an estimated $17.7 million in expenditures from the city’s General Fund while city officials predict that an estimated $16.1 million in revenues will be allocated to the same fund with an already existing balance of about $2.4 million.

General Fund revenues are up by approximately $174,000 (1.09 percent) but General Fund expenditures have risen by about $1.3 million (8.42 percent).

Total budget revenues are about $25.9 million, approximately $506,000 (1.91 percent) less than last year, while total expenditures are expected to reach approximately $32.1 million, about $3.2 million (11.07 percent) more than last year.

The expected rise in expenditures from the General Fund is mainly due to increases in employee salaries, insurance, benefits and retirement from current negotiations of contracts expiring at the end of June.

Public safety is the largest expenditure of the General Fund at 59.5 percent while public works is ranked second at 12.4 percent, and management and support is third at 9.2 percent.

In terms of the entire budget, public safety still ranks first at 41.9 percent, capital improvements is ranked second at 23.4 percent and public works is third at 15.5 percent.

The city will raise parking meter and parking structure rates from 75 cents to $1 per hour. It will also raise parking fines by $5 (with the exception of street-sweeping tickets). Most ticket fines will increase from $30 to $35. The estimated revenues for the possible increase in parking meters, fines and the public parking structures in town are about $245,000, $222,000 and $157,000, respectively.

The council also agreed to host a public hearing on whether to install parking meters on upper Pier Avenue.

A total of 119 spaces would receive meters and the cost of the meters would be about $44,000. Estimated revenue for the 2003-04 year would be about $47,000 and the first year after would be about $57,000.

The City Council also voted to eliminate its policy of purchasing laptop computers for the five elected officials at $2,600 each. The municipality also agreed to reduce expenditures in the city’s landscaping and lighting fund by $66,000.

The council still has yet to decide whether it will give the Hermosa Beach Historical Society $8,000 for its museum expansion project. It will take a closer look to determine whether the funds can be allocated from the Community Resources budget.

It also voted to scale down the Parks and Recreation Commission’s community picnic to a budget of $1,000. The commission usually funded the event through a $10,000 donation from the national retailer Mervyn’s. Commissioners informed the council the event costs about $3,000 and will now seek private donations to cover this year’s costs. The event will coincide with the grand opening of Valley Park in July. The city has also sent a letter to the Beach Cities Health District to reconsider funding ambulance services or the services of a nurse educator as it has in the past.

As a way of closing the anticipated deficit in 2005, the City Council may also agree to place a measure on the ballot for an increase in the Business License Tax, the Hotel Tax and the Transient Occupancy Tax that would go before the voters at its next official election slated for 2004.

The council also explored the idea of eliminating several city-hosted events such as the New Year’s Eve event and the St. Patrick’s Day Parade and Festival as a way of saving money. However, the proposal died in a 3-2 vote.

“These events have become very sacred in our city,” said Edgerton. “It is a part of the soul of the city and I don’t think they should be cut because of a down year. It is one of the reasons why people move here. They have been tested by time and have a staying power because of the groups that organized these events and work for nothing.”

The city’s property tax represents 33 percent of General Fund revenues and the sales tax comprises 14 percent, but the latter is expected to decrease by 4 percent due to the loss of the two car dealerships. The estimated 1-percent increase in revenues to the General Fund is mainly due to an anticipated rise in the city’s 7-percent increase in property tax revenues and the Transient Occupancy Tax revenues with several new hotels popping up in town.

The third largest revenue source is the Utility User Tax. It represents about 13 percent of the General Fund revenue, projected at about $2 million. The Transient Occupancy Tax represents 7 percent of the General Fund revenues and is expected to increase by 11 percent.

The city also anticipates spending approximately $6.8 million in capital improvement projects. It anticipates allocating about $2.8 million to the pier renovation project, $2.4 million to street improvements, $1 million to sewer upgrades, $216,000 to community theater upgrades and $169,000 to the fire station remodeling project.

“I’m voting against this budget because I think we should cut spending and I don’t like raising fees,” said Edgerton. “I think this is a bandaid approach to try and hold back what I think is a much bigger wound. We need to be able to cut more than what we are.”