'Creative frugality' helps cities fight back against budget cuts

What are you going to do when the money just isn't there? The nation's fiscally troubled cities, wrestling hard with that question, have felt they had little choice but to reach for the extreme. Some have cut services and personnel drastically while others have been scouting hard for often-elusive sources of revenue.

But some have found there is also an important middle ground with a significant potential for savings.

Basically, it involves stretching existing dollars by using them more efficiently, charging users for more services, combining departments, and calling on the private sector for more help. While some call the result ''creative frugality,'' most city leaders gathered here for the National League of Cities 1981 congress tend to view it more as ''making do.''

Officials in North Miami, Fla., deplored the fact that they paid out well over $300,000 in insurance premiums each year to cover liabilities such as false arrest when they got back only $20,000-40,000 in actual claims. So, says Mayor Howard Neu, the city decided to insure itself. The annual premium money was deposited into a special trust fund and invested. It is currently over $1 million strong and North Miami is well satisfied that it is saving thousands of dollars by the move.

Meanwhile, officials in Seaford, Del., hope to trim the costs of their recreation services by at least one-fourth by moving the head of the department out of a separate building to the main city building and put him in charge of volunteers and part-time help, rather than a full-time staff. Essential services such as grass cutting were shifted to the public works department.

Les Cattron, a teacher and City Council member in Sharon, Pa., thinks his city might similarly shave some costs from its $40,000-a-year school crossing guard program by paying only the program administrator and relying on volunteers. Like many other cities, Sharon is exploring the idea of contracting out more services to private firms. It has tried the concept with janitor services and garbage collection.

''Its not so good for the unions, and I happen to be a member of one,'' Mr. Cattron says, ''But you've got to look at the tax dollars.''

Many cities also have found they can save on public transportation costs by contracting with private firms to take on less-traveled routes and weekend service. Phoenix, for instance, contracts out some Sunday bus service to a local taxi company, saving an estimated $560,000 a year.

Newport News, Va., is trying to make its city dollars stretch further by charging more and higher user fees for recreation facilities, such as golf and tennis courts, and is marketing their availability in ads to step up use.

''Its not just normal cost-cutting, and most people seem to regard it as a challenge,'' says Newport News City Council member Mary Sherwood Holt. ''But I think what its going to come down to is cities deciding what services are absolutely essential . . . .''

Mayor Charles E. Bailey of Ormond Beach, Fla., recalls that many in his city of 23,000 were not happy four years ago when city fathers decided to charge residents connection and user fees on water and sewer services. But as a direct result, the city has just contracted for $2.4 million worth of expansion in its water treatment plant. Between the fees collected and $1.4 million in interest earned last year on invested city money, the city will pay cash.

''When we first started charging, it was very, very unpopular,'' says Mayor Bailey. ''They wanted to chew us up. But now here we are able to pay for the expansion without a bond (issue).''

Although many have questioned whether volunteers can and will come to cities' rescue in providing essential services, nonprofit organizations clearly are making more of an effort to fill in.

In Morgantown, W.Va., a group of 12 churches has revived a free lunch program - the only qualification, hunger - called Community Kitchen. Churches used to sponsor a similar program before the government began offering food stamps and other nutritional aid a few years back. Producers donate the food involved in exchange for a tax writeoff. Trained volunteers are also the mainstay of the city's emergency medical service. The program's main cost, which includes seven paid paramedics, is borne by revenue from the state's coal severance tax.

''I think we have to tighten our belts and begin to look to voluntary organizations again,'' says Morgantown Mayor Florence Merow. ''I believe the private sector will come through.''

A number of cities have tapped local firms for volunteers and dollars, not just for the usual cultural projects but to help zoos, parks, schools, and even fire services. Corporations have been encouraged to invest in everything from buying a fire truck and leasing it back to the city to purchasing playground swing sets.