Surplus Exceeds Expectations in West Hollywood

A month short of West Hollywood’s first birthday, City Council members have received financial news that they say will help them fulfill their hopes of creating the sophisticated urban village they promised voters in last year’s incorporation campaign.

The council last week received a revised budget for the current year that projects a surplus of $2.6 million to add to the $4.8-million surplus carried over from the last fiscal year.

City officials said they knew throughout the year that sales taxes and other sources of income were coming in in far greater amounts than expected. But the total surplus of $7.4 million projected for the end of the fiscal year in June, 1986, far exceeds most expectations.

‘Lies Put to Rest’

The surplus would seem to vindicate the predictions of financial strength made by cityhood proponents during the incorporation drive, when others were saying the new city would lose money.

“This finally puts to rest the lies during the campaign that the city would fall flat on its face,” Councilman Alan Viterbi said.

An independent audit sponsored by property owners Lorraine Howell and Arthur G. Lawrence, former critics of the cityhood drive, projected before the vote that the city would lose $2.5 million in its first year of operation.

Howell said this week that she is “delighted” about the city’s surplus. Because of the financial strength of the city, she said she believes that incorporation has been good for West Hollywood.

Thus far City Council members have chosen to spread the city’s surplus among a host of social service organizations, particularly those serving the city’s large homosexual and senior citizen communities. Council members said in interviews last week that they want to continue those programs but that the city’s surplus will eventually help build a civic center, open new parks and provide low-cost housing.

“You can be as liberal as you want about everything else if you are conservative fiscally,” said Ron Stone, who was chairman of the West Hollywood Incorporation Committee. “The surplus means that we will have the financial independence to maintain our current (philosophical) values.”

Some critics have said that the city’s financial good fortune has led the City Council to give money to almost every social service organization that requests it.

“They are giving money away without investigation,” said Ron Shipton, a resident who regularly attends council meetings. “Someone who has political connections can come before the City Council and get (project) money.”

‘Bottomless Cookie Jar’

Stone, who lost his race for a council seat, said he would like to see the council save more money for capital improvements such as undergrounding utility lines and building a city hall.

Mayor John Heilman said that some groups have indeed seen the council as “a bottomless cookie jar.”

“I think early on that we allocated money without seeing the big picture,” Heilman said, “without realizing that there would be a lot of other demands that would be equally worthwhile.”

City Councilman Stephen Schulte said the relatively new council is “feeling its way. But we can afford to do that because of the surplus. I don’t think that’s bad. . . . We can afford to give money to most of the groups coming in now.”

Schulte and other council members said the social programs have been worthwhile. He said the council will develop a system to provide social services, rather than just waiting for requests to come in from outside groups.

His top priority for the surplus is the development of a civic center to replace the offices the city rents on Santa Monica Boulevard. This year’s budget sets aside $1 million for the center.

Schulte said he would also like the city to enter into joint ventures to develop low-income housing. And he would like money to be set aside to create more parks and landscaped areas in the city. “I’d like to see an atmosphere in West Hollywood more like what you see in some European cities, with lots of flowers and green space,” he said.

Viterbi said his top priority will be low-cost housing for the elderly.

Rapid Change

“If we don’t do something in this area, in a decade the city will be rapidly changed,” he said. “We need to provide 4,000 units in the next 10 years.” He said senior citizens will be forced out by more affluent young people if the city does not set low-cost apartments aside.

Viterbi also supports the idea of more park space. He suggested that the city save money to buy parcels of land around the city to create small “pocket” parks.

Viterbi said road repairs and other basic improvements should also be made with some of the money. He pointed to a feasibility study for cityhood that said the city needed almost $4 million in road improvements.

The money may be needed for other routine needs. The city staff has already suggested that $3.5 million be held in an insurance reserve because the city is having difficulty purchasing liability insurance. Many insurance carriers have refused to insure cities because they are increasingly the target of large liability lawsuits.

The city’s insurance expires Dec. 29. It will have to provide its own coverage if it does not find a new insurer by then.

Councilwoman Valerie Terrigno said she would like to put money into beautification projects to bring more people to West Hollywood.

“I also want to see money set aside for parking and transportation problems that we have in the city,” she said. “When you beautify the city and do these other things that helps the business community. The more money we spend on those kind of things will increase our income as well by bringing in more tax dollars.”

Other Projects

She said the city should continue to build this tax base and think later about other projects.

Councilwoman Helen Albert could not be reached for comment.

Mayor John Heilman said he would decide where surplus monies should go after hearing from residents in public hearings next year on the city’s community plan.

The budget projects revenue of $19.8 million and expenditures of $17.2 million for this year.

City officials said they used conservative revenue estimates and that the actual surplus could be even greater. And unless the economy sours or the city goes on a spending spree, the West Hollywood can expect surpluses in future years, said Jeri Chenelle, assistant city manager in charge of finance.