SOUTH BAY ELECTIONS : Candidates in Hermosa Face Fiscal Gloom

Several weeks ago, City Manager Gregory Meyer issued a sobering report to the City Council.

“The city’s general fund is in extreme jeopardy,” Meyer wrote. “The prognosis for a significant improvement within the next two to four years is not good.”

The report urged the council to approve a proposed ballot measure for a special citywide tax to pay for police, fire and paramedic services. The measure, which was rejected by the council, was one of several proposals that Meyer and others have suggested in recent months to raise revenue or cut expenses.

“The financial state of the city is precarious,” Meyer said in an interview this week. “We are drafting a budget for next year that will be 95% of the current level. We are looking at ways to contract out services and to cut costs.”

As the campaign for three seats on the City Council winds down this week, questions and concerns about the city’s financial well-being have joined standard ones about density and development as key elements in the election.

Meyer and others around City Hall have predicted that city finances will be the most important issue facing the new council during the next four years.

“We may be facing the most difficult period in our city’s history,” said Councilman George Barks, who is seeking an unprecedented fourth term on the council in the election next Tuesday. “I really think that everybody is going to have to sacrifice.”

Candidate June Williams, the only challenger who has not previously run for council, added: “The past councils did not plan ahead. Their actions have had little effect. This city needs a change now.”

Five candidates, including Barks, 43, and another incumbent, Mayor Jack Wood, 42, are running for the council, which pays each member $300 a month and provides health and dental benefits. Councilman Gary Brutsch, who has served one term, is not seeking reelection.

Williams, 57, served for five years on the now-disbanded Board of Zoning Adjustments. Etta Simpson, 64, a longtime community activist who sponsored a successful open-space initiative in the 1984 election, has waged two unsuccessful campaigns for City Council. Jim Rosenberger, 39, who served on the Planning Commission for seven years and was active last year in an effort to defeat a proposed hotel at the site of the former Biltmore, failed in one previous bid for a council seat.

All five candidates have pointed to the financial crisis facing the city, with Wood and Barks emphasizing that their experience on the council will help guide the city through difficult times and the three challengers laying at least partial blame for the predicament on the incumbents.

But none of the candidates has proposed increasing property taxes or other direct taxes to raise revenue for the city. Instead, all have emphasized the need to develop the city’s commercial base and to encourage development that will bring in more sales tax revenue.

Of all the candidates, Wood seems the least concerned about Meyer’s predictions of doom and gloom. At a candidate’s forum last week, he said there are easy ways to make money for the city--namely by encouraging commercial development such as the controversial proposal to build a hotel at the Biltmore site on the Strand, and by moving ahead with plans to drill for oil in the city’s tidelands.

‘Poorly Managed’

“Quite simply, this is not a poor community, it never has been a poor community, and it will not be a poor community,” said Wood, who is engaged to be married next month and is a civil engineer with his own business in the city. “It is just poorly managed. The priorities are in the wrong direction.”

Barks, who opposed the most recent hotel proposal for the city-owned Biltmore site, also emphasized the need to expand the city’s commercial base to collect more sales tax. He suggested, however, that the city will need to cut expenditures--including employees’ salaries--as well.

“Eighty percent of our expenses are for personnel,” said Barks, who is separated from his wife and is a lifetime resident of the city. “You have to either cut people, cut programs or freeze salaries--or perhaps a salary cut to keep the jobs and the programs. These are going to be the choices.”

Simpson, who has lived in the city with her husband for 31 years, has pledged not to accept city reimbursement for official trips (Wood has done the same during his first term) and said she would not accept any salary from the city above the amount of her expenses as a council member. She also said that she will not seek coverage under the city’s health and dental insurance plans.

Public Service

“My supporters and I believe in fiscal conservatism,” said Simpson, who in February asked the council not to raise its salary from $150 to $300 because of the financial problems facing the city. “I see the job as a public service. I don’t expect to be paid.”

Rosenberger also said that he will not seek health insurance coverage with the city, and he pledged to give to local charities any portion of his salary that exceeds his direct expenses.

Rosenberger, who is single and runs a laminating business in Hawthorne, said the key to solving the city’s economic woes is to encourage commercial development on Pacific Coast Highway, in part by providing parking for businesses on neighboring side streets. He has also proposed slant parking on Hermosa Avenue downtown to accommodate more parked vehicles there.

Williams, who is a widow and 17-year resident of the city, has suggested that to help save money the City Council stop traveling on “junkets,” and she said the city should work to attract more shoppers to the downtown area. She also said it was bad public relations for the council to raise its salary during tough economic times for the city.

“I don’t think anybody runs for council to get the $300,” she said. “But with the budget bad, they should not have increased their salaries.”

Development Issues

While the city’s financial woes may be the most serious problem to face the new council, the candidates by and large have emphasized more familiar--and popular--issues in their campaign literature and during two public forums.

All five candidates oppose any development--commercial or residential--on the 19-acre Santa Fe Railway right-of-way, which the railroad wants to develop.

The candidates differ on what should be done with the Biltmore site, an issue that has divided residents for years. A proposal to build a hotel on the one-acre site and several adjoining properties won by one vote in a special election last year, but that election is being contested in court.

Wood and Simpson supported the most recent hotel proposal, while Barks, Rosenberger and Williams opposed it.

Wood has argued that a hotel would help revitalize the city’s downtown and would bring in much-needed tax revenue for the city. He has consistently supported placing a hotel on the site.

“The Biltmore site has got to be the biggest joke that ever hit Hermosa Beach,” Wood said. “It is an example of fiscal irresponsibility by all past councils.”

Smaller Proposal

Simpson, who opposed an earlier proposed hotel development for the site, supported the most recent proposal--a switch that was sharply criticized by hotel opponents. Simpson, a self-described environmentalist, said the most recent proposal was smaller than the others, included setbacks and view corridors, and provided for a half-acre park.

“The first proposal was a design with one massive bulk and did not consider the surroundings of shape and size,” she said. “We are a diverse community and the use of that property as a hotel would recognize the diversity while further balancing the economy.”

Barks, who at one time supported a hotel for the site, opposed the most recent proposal. He has suggested that the new City Council establish a task force consisting of 20 or 30 residents to decide what to do with the property.

“The council has not been able to reach a consensus and the community has not reached a consensus on the site,” Barks said. “The time has come to bring the community together and heal the community.”

Rosenberger, who has opposed all hotel proposals for the site, said he would support a hotel that was limited to the one-acre parcel but did not include neighboring properties. He said Hermosa Beach needs to preserve its small beach-town atmosphere.

Beach Character

“The (proposed) hotel was just too large,” Rosenberger said. “It would affect property values down on the entire Strand, and the whole thing would be developed. It would be a detriment to the community. . . . If Hermosa loses its small beach character and charm, it loses its reason for being.”

Williams said she would support a hotel on the Strand at the Biltmore site, but she said she opposed the most recent proposal. She said the city should be able to get a better deal with the developer.

The candidates have also campaigned heavily on the issue of residential density, with four of them basically lining up against Wood. On Tuesday, a new density-reduction ordinance went into effect that is expected to block construction of thousands of apartments and condominiums in the city over the next few decades.

Although Wood said at a recent candidates forum that he “can live with the down-zoning,” he voted against the ordinance. His opponents have criticized the vote, saying Wood is pro-development and is not concerned about problems of congestion, overcrowding, parking and traffic.

Residents Not Informed

Wood has argued that the city did not properly inform property owners about the ordinance when it was being considered by the council. He said he spent $800 to print and deliver notices to residents informing them of the proposed density reductions.

“My major objection was the noticing,” he said.

Wood’s opponents have also criticized him for his sometimes brash demeanor and professed irreverence for certain rules and regulations. He has come under fire for an incident involving the city health insurance program, in which he signed up his girlfriend, now his fiancee, for health and dental coverage. Wood listed the woman as his wife on the forms. The city allows only legally married spouses of city employees or council members to enroll in the plans.

Wood removed his girlfriend from the plans, he said, when he learned that her enrollment was not allowed, but he insisted that media coverage of the incident was overblown. He said he had been advised by a city employee, whom he would not name, that he could enroll the woman, and he noted that the insurance forms did not require him to sign under oath when he listed the woman as his wife. The incident is under investigation by the Los Angeles County district attorney’s office.

Rosenberger said Wood’s handling of the insurance issue was “the last straw” that made him decide to run for office. “The problem isn’t only that he did it, which was a willful act, but that when he got caught, he said, ‘So what?’ ” Rosenberger said. “I feel this town deserves better than that.”

Unwilling to Comply

Added Barks: “It is not a major violation of the law, but it shows his willingness not to comply with things that he views as unimportant. That is not good.”

Wood and others, however, have been quick to point the finger at those who have been pointing at him.

Rosenberger has been criticized for a proposal he made to the City Council in the midst of the Vietnam War. In 1972, he asked the council to name Hanoi the city’s official sister city. The move has been characterized by Wood and others as anti-American.

Rosenberger, however, has defended the proposal--which was rejected by the council--as a move of “friendship and Christian compassion” that was inspired by stepped-up U.S. bombing of the North Vietnamese capital during the Christmas holiday.

“People say it is a skeleton in my closet, but I see it as a trophy on my shelf,” Rosenberger said.

No Receipts

As for Barks, he has been criticized for his handling of several official city visits to Hermosa Beach’s sister city, Loreto, Mexico. Barks has been unable to provide receipts from trips he organized to Loreto in 1983 and 1984 and unwilling to provide bank records. Civic activist Roger Creighton, who filed a complaint against the city on Tuesday in an attempt to get bank records from the trips, said he wants to see the records to determine if Barks improperly spent city funds.

Barks returned $70 to the city last year when concerns about the trips first surfaced. He said in an interview this week that he will not turn over his bank records to Creighton.

“I don’t think he has the right to see a personal account of mine,” he said. “I have never misrepresented what the trips would cost or what they would include.”

Although the candidates agree that money has played little if any role in the campaign, Wood has the distinction of raising more money in his reelection bid than any other candidate in the history of the city.

According to the most recent statements filed with the city clerk, Wood has raised $12,688, Rosenberger $5,368, Williams $3,830, Simpson $2,212 and Barks $1,548. The previous record was set in the 1984 election, when John Cioffi, who was elected to one of two open seats, raised $5,188.