West Hollywood City Manager Paul Arevalo is proposing a budget for the upcoming fiscal year that projects increases in revenue associated with new commercial and residential development in the city and continued growth in its hotel business.
The projected revenue increases are based on the city’s relatively quick recovery from the national economic recession. In the 2013-2014 fiscal year, West Hollywood’s revenue was twelve percent higher than its pre-recession peak. The average annual growth for past ten years has been 4.1 percent and for the past five years has been 2.6 percent, according to city figures.
The budget that Arevalo has presented to the City Council projects $112 million in operating revenue and $109 million in operating expenses and proposes spending $3.8 million capital projects for the 2014-2015 fiscal year, which begins July 1. The budget projects revenue of $113 million for the 2014-2016 fiscal year and spending of $111 million. Of the overall budget, $79 million is part of the General Fund, essentially a part of the budget that the city has flexibility to allocate because it isn’t committed to special uses dictated by the state or other sources of revenue. General Fund revenue is budgeted at $80 million for the 2015-2016 fiscal year.
One sign of the increase in development is that the biggest percentage increase projected for the upcoming fiscal year is from building permits, estimated to increase by 17 percent, for a total of $4.8 million, over this fiscal year. The third largest percentage increase — seven percent — is projected to come from property taxes, which are estimated to generate $13 million for the city.
The second largest projected percentage increase, nine percent, is in revenue anticipated from parking meters. The proposal says that revenue will total $4.7 million in the upcoming fiscal year, citing completion of a city plan to install credit card parking meters and a reduction in fees charged by the contractor who processes the payments
While other revenue sources are projected to show bigger percentage increases, the city’s largest actual source of revenue continues to be hotel room taxes, which also have benefitted from the end of the recession and increased travel to West Hollywood, which hosts an estimated 1.2 million visitors a year. The budget projects a three percent increase to a total of $20 million in the upcoming fiscal year. That revenue fell eight percent in 2009 because of the recession. It now is a third higher than its pre-recession peak. City visitors pay a 15.5 percent tax on their hotel bills, with three percent of that going to Visit West Hollywood, the city’s visitor and tourism promotion arm.
Finally, sales and use taxes are estimated to increase four percent to $13 million. While sales tax revenue dropped more than 11 percent in 2010 because of the recession, it has rebounded to an average of five percent over the past five years, which includes the 2010 decline.
The budget proposes spending initiatives in five key areas. Those areas and some of the proposed projects include:
TECHNOLOGY. The budget proposes spending $425,000 over the next two years to establish a citywide Innovations and Technology Catalyst Group that will implement new technologies and build tech infrastructure to serve local residents and visitors and businesses.
Another $200,000 would be spent annually to continue implementation of a geographic information system that will allow the city to present information digitally. An example of that is the city’s InfoMap, which makes information about proposed real estate development available online to residents.
ARTS & CULTURE. The budget proposes doubling funding for grants to non-profit art organizations serving West Hollywood to $100,000 a year. It also proposes allocating $47,000 for an annual literary event to replace the West Hollywood Book Fair, which was put on hiatus this year because of rising costs and falling attendance. The biggest arts and culture spending would be $425,000 to fund operations at the West Hollywood Library. Los Angeles County has helped fund additional services since the construction of the new library, but those reserve funds will be exhausted in the 2015-2016 fiscal year.
HUMAN SERVICES & HOMELESSNESS. Proposed city initiatives in this category include developing a strategy to help older residents continue to live in West Hollywood, where housing costs are on the rise. The budget proposes spending $35,000 on that.
COMMUNITY ENGAGEMENT. The budget proposes spending $150,000 to celebrate the city’s 30th anniversary this calendar year. It also proposes allocating $265,000 to improve the city’s efforts to communicate with and engage its residents. That money would cover community meetings and newsletter as well as use of Twitter and increased use of Facebook and other social media.
Under the proposed budget, the city would spend $100,000 to hire a consultant to lobby for extending MTA rail services to West Hollywood and to influence decisions regarding the possible redevelopment of the MTA bus depot on Santa Monica Boulevard. Cohen Bros. Realty has proposed developing that property as a shopping mall.
EASTSIDE SERVICES. The budget includes $350,000 to expand the PickUp Line, the city’s free weekend nightlife shuttle along Santa Monica Boulevard, to La Brea Avenue. It also would spend $170,000 on additional bicycle “security ambassadors” who would concentrate their efforts on the east side. Another $300,000 would be spent in 2014-2015 for improvements to the Plummer Park Community Center and tennis courts, with $100,000 spent the following fiscal year.
Other proposed major expenditures include $640,000 over two years to fund the Design District street landscaping program and improve bicycle and pedestrian transportation.
Spending on capital projects would include $800,000 over two years for improvements to City Hall, $785,000 for tree maintenance over two years, $930,000 for street paving over two years and $550,000 for sidewalk and curb construction during the same period.
The budget proposes spending $112,000 over two years on West Hollywood Park and $85,000 on Hart Park.
The budget will go before the City Council at its next meeting and must be approved by July 1.
SaveWeHo Where would suggest they move the massive MTA division to on the Westside? Bus divisions (P. E.) rail yards are strategically located so as bus service in this case can easily and economically be dispatched. In addition, the maintenance part of the division is dispatched numerous times during the day to clear bus break downs which include on street repairs to towing the buses into the yard. Without Division Seven, said breakdowns would have to be dispatched from downtown Los Angeles. Think about a stalled bus blocking a intersection any where in West Hollywood. Division Seven has been at… Read more »
Absolutely hilarious the city now wants to hire someone for $100k to lobby to bring rail service to the city when just 10 years ago they ripped out our tracks to put a green median. I’m all for getting rid of the buses and this MTA on the SE corner of SM Blvd and San Vicente..but the PDC developers want to put in a mall in our small city when we have the enormous Beverly Center and the redeveloped Beverly Connection not a mile away? Just stop this absurdity. The only thing we need on that corner is an enormous… Read more »
There is no MTA bus depot on Santa Monica Bl. There may have been P.E. train station many years ago but that was closed down. Perhaps some money could be budgeted to educate the masses on what is located within the city and what is not. There is a MTA operating Division on Santa Monica Bl. It’s my opinion the reason the PDC wants to enter into a joint developement with the MTA is that they built the Red building to close to their northern property line and have no or limited access to the Red buildings north side. During… Read more »
I hope some of that extra $200,000 for technology goes to improving the InfoMap.
To this day, after several months of construction, the “InfoMap” still does not show any information on the huge development going up at the intersections of San Vicente/Norwich and Rosewood.
What is going up on that corner???…..Does the city need to spend that $200,000 before we can find out?