Culver City Raises Fees and Taxes, Finds Little Fat to Pare in Budget

When Culver City Councilman Jim Boulgarides was elected in April, he promised a “line-item review” of the budget, hoping he would uncover programs and personnel the financially troubled city did not need.

But when the council passed the city’s 1988-89 budget last week, it had raised taxes to avoid cutbacks in police and fire services, deleted only one program, the $250,000-a-year Convention and Visitors Bureau and added an employee to the city staff.

Boulgarides, a professor of business management at Cal State University, Los Angeles, said he could not find any unproductive programs or unneeded employees to cut from the city’s $46.5-million budget.

“I think this budget has been, what we used to call in industry, as ‘well-scrubbed’ as any I’ve ever been involved with,” he said.

More Police

What Boulgarides did find was a city whose population has grown less than 10% over the past 10 years, but whose police department has grown nearly 30% over the same period.

The larger police department, which accounts for almost a quarter of city expenditures, was needed because of increasing crime and traffic from neighboring cities and a burgeoning daytime population in Culver City brought on by recent commercial development, he said.

Both Boulgarides and Steven Gourley, the other newly elected member on the council, said past councils failed to gauge the full impact of development on the city’s finances and are partially to blame for the past three years, when city revenues have not met expenditures.

The council balanced the budget for the past two years by depleting the city’s reserve funds. This year, finding that the community supported higher taxes rather than decreased fire and police service, the council voted for a variety of tax and fee increases.

‘Sins of Past’

“I greatly regret having to increase fees and taxes, but we are now paying for a mentality that said, ‘Let’s put it off,’ ” Gourley said. “We are now making up for the sins of past governments, past councils. These past councils have not accurately gauged the cost of development.”

Mayor Paul Jacobs, who has begun his fourth term on the council, disagreed with Gourley’s and Boulgarides’ assessment.

“I hardly think that the commercial development has been a negative for the city,” Jacobs said. “The benefit of having a commercial community is that it pays for much of the services the residential community enjoys.”

Businesses account for 65% of the city’s general fund revenues and receive 55% of city services in return. Residents account for 10% of the general fund revenues and receive 45% of the city services, according to Jody Hall-Esser, director of the Community Redevelopment Agency. The other 25% of revenues come from the federal government and other sources.

Taxation Gap

Jacobs said the council’s decision this year to institute fees for fire inspection and hazardous materials, to raise the hotel bed tax from 9% to 10% and to raise the utility users’ tax from 9.5% for residences and 10.5% for businesses to 11% for both, will further increase the taxation gap between residents and businesses.

Administrative assistant Eric Shapiro estimated that the new fees and increased taxes, including a new application of the utility users’ tax to out-of-state phone calls, will raise about $1.5 million for the city.

The city is also raising annual sewage fees from $53 per single-family home to $138. This, along with a similar increase for apartments and businesses, reflects a sharp increase in what the city of Los Angeles charges Culver City to use its sewers, said City Engineer Jim Davis.

Jacobs blamed many of Culver City’s financial troubles on the federal government’s decision in 1986 to end a revenue-sharing program that gave the city $1.5 million a year. In addition, he said, the city’s cost of dumping trash has doubled since last year because the dump site has raised its rates.

Shapiro said the City Council’s decision to cut the residential utility users’ tax from 11% to 9.5% in 1986 also hurt financially.

Strong Agency

Despite their criticism of the council’s past decisions on development, both Gourley and Boulgarides say the financially strong Redevelopment Agency has benefited the city by providing new parks, improved streets and repairs to city facilities.

Both, however, insist that past councils did not anticipate the financial limits development would place on the city by requiring services, such as police and fire, that the city and not the agency must pay for.

The council will consider future costs of development when it discusses Marina Place, a proposed shopping mall at the city’s western tip, during its July 11 meeting.

Although the mall would not be in a redevelopment area and all of its tax money would go directly to the city, Gourley doubts that it would pay for itself over the years and has said he will not support it.

City staff estimates that the mall would require nine additional police officers and four more firefighters.