10:46 PM PDT on Sunday, September 26, 2010

The Press-Enterprise

Norco city leaders, after consistently rejecting added city-wide taxes, have proposed other solutions to balance the budget, which is projected to run out of money in May.

The shortfall in the general fund, which pays for daily operating expenses, can be temporarily bridged, said Finance Director Andy Okoro, but the account faces multi-million dollar shortfalls in 2011 and 2012 unless services are cut or revenues are increased.

“The money we have in the bank has gotten to a precarious level,” Okoro said at a presentation to the City Council this month. “It’s not an option to not pay your bills.”

The general fund is projected to have a $215,000 shortfall in May. The city would then transfer money from an account that holds money from land sales. But the general fund could then face a $1.1 million shortfall by September 2011, $2.5 million by December and $3.1 million by May 2012.

That account will never actually get that low, Okoro said, because Norco will have had to make cuts or increase income long before then, in order to continue to operate.

The city’s reserve account, meant to be tapped in emergencies, will have only about $1 million by mid-2011, Okoro said.

In response to the dim outlook, council members on Sept. 20 discussed but did not vote on ways to increase revenue. Some of the council members interviewed this week expanded on their proposals, but none would identify cuts, preferring to wait until the series of budget study sessions concludes.

“I want to wait until the first of January when we get the fourth-quarter (tax income) results before making any projections on what to cut,” Councilman Harvey Sullivan said. “By January, if we haven’t seen a better trend, we are going to have to cut something.”

Councilwoman Kathy Azevedo wondered whether Norco should attempt to institute a sales tax that would exempt auto dealerships.

Councilman Harvey Sullivan said he doesn’t support a sales tax but does back a landscape maintenance district that would pay for upkeep of the city’s 120 miles of horse trails.

In 2008, the council rejected three possibilities proposed by a consultant: a utility users tax, a parcel tax and an “equestrian assessment.”

Councilman Berwin Hanna said the city needs to fill empty shopping centers.

Councilman Kevin Bash said there are three streets in Norco — Second, Sixth and Hamner — that have substantial businesses and could be themed with the Norco “Horsetown USA” brand.

Bash said Sixth Street — a mixture of older houses and businesses — first needs to be made more visually appealing, and soon.

“There’s no time to let Sixth Street mosey along and become an economic engine,” Bash said. “You can’t expect someone to invest millions of dollars into a piece of property and have tenants look north or south and see old cars piled up and weeds.”

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