City Council, with Revenue Up from an Improved Economy, Approves Increase in Budget

Major sources of West Hollywood at the middle of the fiscal year (payment of sales tax, collected by the state, and property tax, collected by the county, are short of projections because of delays in payment)
Major sources of West Hollywood at the middle of the fiscal year (payment of sales tax, collected by the state, and property tax, collected by the county, are short of projections because of delays in payment)

An uptick in city revenue, thanks in part to an increase in construction and in travel to West Hollywood, led the City Council last night to approve an increase of $7.2 million in expenditures from the city’s $72 million operating budget.

According to a report from City Manager Paul Arevalo, hotel room taxes at the middle of the city’s 2012-2013 fiscal year were up 15 percent from the year before, a sign of increased hotel occupancy rates and an increase in average daily room rates. That led the Council to approve increasing the revenue budgeted from that tax to $19.4 million for the 2013-2014 fiscal year, which began July 1 last year and ends June 30 this year. Visitors pay a tax of 12.5 percent on their hotel room rate, with an additional three percent levied on those whose hotels are in the city’s Tourism Improvement District.

Revenue from city licenses and permits also has increased, up 46 percent over the $3.5 million in the middle of the 2012-2013 fiscal year. The report to the Council attributes that to the revival of real estate projects that were dormant during the recession. Another sign of the revival of the real estate market is a seven percent increase in property tax revenues over the amount collected at this time last year to a total of $5.3 million at the middle of this fiscal year. A report by the County Assessor says that West Hollywood ranked third, behind Santa Clarita and Bradbury, in license and permit revenue increases.

Extending city parking meter hours also had an impact on city revenue, with money from from parking fines and parking meter fees up 7 percent over the middle of the 2012-2013 fiscal year. The report attributes that increase to both longer meter hours and increased meter rates and an increase in parking fine receipts.

A major one-time revenue increase came from the sale of a city maintenance facility at 6439 Santa Monica Blvd. at Cole Avenue in Hollywood for $3 million.

The Council approved a number of expenditures last night that will consume that projected $7.2 million revenue increase, leaving the city with a break-even budget.

They include spending $3 million for on the new city maintenance facility on Romaine Avenue and setting aside $1.8 million to cover design services for the second phase of the redevelopment of West Hollywood Park. The Council agreed to spend $691,000 as the first payment on debt incurred with the issuance of bonds to cover the parking garage under construction behind City Hall. The increase in projected revenue also will cover $1.5 million in unbudgeted expenditures that include increase costs for maintaining and operating City Hall and a 6 percent increase in staffing costs, attributable to a relaxation of a previous job freeze and a two percent cost of living raise given city employees starting July 1 of last year.

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luca d
luca d
8 years ago

…and when the revenues are down, how will the city pay for the expanded social services they are providing?
why can’t they just cap spending, maybe an annual cost of living increase, and play for that rainy day?

Larry Block
Larry Block
8 years ago

Well.. but not enough money to save the Book Fair or Sunset Music Festival…..

URBAN
URBAN
8 years ago

Well of course there is an increase in revenue from city licenses and permits since such fees were raised — especially development and building fees which were increased on average of 17%.

BC
BC
8 years ago

And just like that, it’s gone.

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