Westside Budget Roundup : Santa Monica : Prosperous Times to Allow Hiring of 20 Police Officers

While officials in neighboring cities agonized over layoffs and prepared to impose new taxes simply to avoid deep cuts in services, the Santa Monica City Council this week decided to take advantage of the community’s relative prosperity by hiring 20 new police officers.

Amid a recession that has cut deeply into revenues in most other cities, the City Council on Tuesday approved a $100-million general fund budget, up 13.6% from the current year, that provides for new programs and some new employees in many city departments.

The city’s overall budget for 1991-92 is $191 million, up 4.2%. The larger figure includes projected expenses for the city’s airport, bus line, Water Department, Redevelopment Department and assorted other agencies and services that are not part of the city’s General Fund operations. The budget provides increased funding for the school district and maintains a reserve of nearly $9 million.

City Manager John Jalili initially presented the council with a budget containing neither the additional taxes nor a request for the additional officers. But the council made clear that it wanted to hire new officers.

“We want 20 more officers and we’re willing to pay for it,” Councilman Ken Genser said.

Councilman Kelly Olsen, who made the proposal to raise taxes for the additional officers, said his action was fulfilling a campaign promise to bolster the police force. Olsen, who was endorsed by the police officers’ union in last November’s election, is in his first term.

Council members Herb Katz and Robert T. Holbrook said they supported the hiring of new officers, but suggested that staff look to see where cuts could be made in the budget rather than raise taxes.

But the council voted 6 to 1 to direct Jalili to find the additional revenues from increases in the hotel bed tax and the real estate transfer tax. Katz cast the dissenting vote.

“We did not look at the proposed balanced budget in light of hiring the additional officers,” said Katz. “We should really bite the bullet and cut the budget.”

Jalili said it was a combination of conservative fiscal planning and luck that enabled Santa Monica to contemplate expanding its services while other cities were struggling with layoffs and deficits. The quicker-than-expected success of the revitalized Third Street Promenade has generated increased sales taxes, he said, and the opening of some new hotels is expected to provide the city with increased revenue from hotel bed taxes.

But something of a surprise has been a sharp rise in revenue from the city’s utility users tax, which was expanded in 1989 to cover long-distance phone calls. Increased use of telephones and fax machines is the main cause of the surge, Jalili said.

Police Chief James Keane said he did not request the additional officers in his original budget because he still had not hired three of the 19 new officers the council had approved over the past two years. Keane, who is retiring in September, said he also wanted to leave the decision for his successor.

The additional 20 officers would increase the number of sworn officers to 195.

If the city decides to increase the hotel bed tax above the current 12% to pay for the officers, it would make Santa Monica’s hotel tax the highest in the state. Now it shares that distinction with several other cities.

An increase of a percentage point in the hotel tax would mean only an additional $600,000, however, so it is likely that the larger tax increase will come from the real estate transfer tax, which is collected every time property is sold.

Currently, $1.10 is collected for every $1,000 in real estate sold in Santa Monica. The tax is evenly split between the city and the county. However, if a city decides to increase the tax, the county keeps the entire $1.10. The tax due upon the sale would be the new city tax figure plus the $1.10 for the county.

City Finance Director Mike Dennis said that if the entire $2 million needed to pay for the police officers was raised from the transfer tax it would mean establishing the city’s tax at $3.14. For a $500,000 home in Santa Monica, that would mean paying taxes of $550 to the county and $1,590 to the city for a total of $2,140.

The city of Los Angeles this year raised its transfer tax to $4.50 to provide $52.7 million to balance its budget.

The Santa Monica budget, adopted in the early morning hours Wednesday, also included an increase from $1.5 million to $2 million for the Santa Monica-Malibu Unified School District. The council agreed to meet jointly with the school board to discuss what specific programs should be funded with the additional money.

Dennis, the finance director, said Santa Monica has an advantage over most cities of comparable size in that it has more than one shopping district. In addition to the downtown area, which includes Third Street Promenade and a regional mall, Santa Monica Place, there are small but upscale retail districts along Montana Avenue and Main Street.