Even Beverly Hills Feels the Squeeze of Recession : Economy: Wealthy city may have to eliminate up to 100 jobs to cut $11 million from its spending plan.

It may be no surprise that Los Angeles, New York and other urban centers must grapple with budget deficits, layoffs and the painful choices imposed by the nation’s lingering recession.

But Beverly Hills?

This has been a city well sheltered from normal budgetary concerns--for not only is it rich, but lucky as well. It even boasts a $300,000-a-year oil well on its high school campus to help support the school system.

Yet after decades of developing a well-earned reputation for excess, the city has succumbed to the laws of economics. This week, the City Council directed department heads to find a way to slash another $6 million from the city’s proposed $80-million budget for the fiscal year that begins July 1.

That cutback, combined with a $5-million cut recommended by the city manager, will mean an $11-million budget reduction that may require the city to eliminate up to 100 jobs, including 30 positions that are vacant because of a hiring freeze, according to city finance officials.

“If you’re talking about cutting $11 million, a major part of it has to focus on people,” said Donald Oblander, director of finance administration for the city. “We’ve had times when we had to face some cutbacks, but never on a scale like this.”

The signs of the recession dot the city’s landscape: boarded storefronts along Rodeo Drive, a 21% commercial vacancy rate and fewer tour buses along the familiar celebrity trails.

City officials blame their budget woes on an unexpected drop in sales, hotel and business taxes, and the huge debt from the city’s lavish $120-million Civic Center.

The ornate city headquarters, completed last year, stands as a symbol of the city’s financial problems. Filled with expensive fixtures and imported materials normally reserved for lush corporate suites, the Civic Center cost three times more than originally estimated and carries an annual debt of more than $9 million.

“We have to pay now for the mistake of the Civic Center and I don’t want to pass that off to taxpayers,” said Councilman Robert Tanenbaum. “It’s tragic that anyone will have to lose their job, but that is the awful reality of a bureaucracy that has become overgrown.”

The city was further battered by the unexpected collapse of two of the town’s biggest businesses. The city’s economy sagged noticeably when Drexel Burnham Lambert and Columbia Savings & Loan plunged into insolvency with the crash of the junk-bond market and the S & L industry.

The loss of nearly 1,000 jobs, and the 300,000 square feet of office space that was immediately dumped on the market, were only part of the problem. Drexel had kept a block of 100 rooms at the Regent Beverly Wilshire Hotel for its high-flying customers and the city’s restaurants reaped the benefits of their free-spending ways.

Even as the city has launched an aggressive economic development campaign, the council is struggling to make up an estimated $4-million deficit in its current budget caused by the shortfall in revenues. Chamber of Commerce officials say that the city can no longer rely on its glitzy image to attract tenants and shoppers, especially when neighboring communities are offering cut-rate deals to lure away businesses. Commercial brokers say that the vacancy rate along Rodeo Drive is about 15%, and much of a new $200-million retail project called Two Rodeo Drive is still unoccupied.

“Isn’t everybody paying a little bit for the excesses of the ‘80s?” asked Bill Boyd, executive director of the Beverly Hills Chamber of Commerce. “We’re all on a time payment plan where we owe for our past mistakes. But we can’t stop spending for things that are going to generate revenues in the future.”

City officials recently went on a trade mission to the Far East in hopes of attracting corporate tenants. The city is promoting itself as the top entertainment community in Southern California, and is negotiating with movie mogul David Geffen and Playboy Inc. to move to offices in the gilded enclave.

Most of the City Council members members said they would rather make some deep cuts than raise taxes, which they said would unfairly punish residents for the city’s past spending decisions. The council, which had considered imposing a utility tax or a gross receipts tax for businesses to raise revenues, will instead hold a series of budget hearings starting Monday to decide where the cuts will be made.

“It’s extremely difficult to have to make decisions like we’re going to have to make since these are people with families who depend on their jobs,” said Councilman Allan Alexander. “But it’s a job that has to be done. We’re dealing with public money and we have a responsibility to spend that money in a prudent manner.”

Mayor Vicki Reynolds said that when the budget numbers first came out, council members were a “little shocked” at the projections. But she said the city has to bite the bullet.

“If the recession is nationwide, then even Beverly Hills is going to be affected,” she said. “We are no longer protected from events taking place all around us.”

Fiscal Facts: L.A. and Beverly Hills

Here are some selected fiscal comparisons between the city of Los Angeles and Beverly Hills. Figures other than those for total city budgets are per capita for the 1990-91 fiscal year. LOS ANGELES TOTAL 1990-91 budget: $3.5 billion Population: 3,485,398 Revenues Property Tax: $153 Sales Tax: $86 License permits and fees: $66 State motor vehicle license fees: $35 Parking fees: $31 Expenditures Police: $274 Fire: $113 Recreation and Parks: $38 Libraries: $16 Public Works: $197 Government spending per capita: $1,004 Welfare Welfare recipients as of March, 1991: 492,950 (14% of total population)

BEVERLY HILLS TOTAL 1990-91 budget: $79 million Population: 31,971 Revenues Property Tax: $588 Sales Tax: $413 License permits and fees: $128 State motor vehicle license fees: $38 Parking fees: $294 Expenditures Police: $573 Fire: $297 Recreation and Parks: $241 Libraries: $109 Public Works: $275 Government spending per capita: $2,471 Welfare Welfare recipients as of March, 1991: 450 (1.4% of total population) Compiled by Times editorial researcher Cecilia Rasmussen