Calabasas a Model of Post-Prop. 13 Funding

Welcome to Calabasas.

Here, where iron gates shield the rich from the merely middle class, the streets are paved and the sidewalks weed-free.

The schools are excellent and the city recreation center still has signs up from when it was a country club.

Just across Mulholland Highway in the city of Los Angeles, though, in the affluent western section of Woodland Hills, fuzzy grasses poke through cracks in the pavement, and untrimmed trees wave back and forth on a dry California afternoon.

This is one of the best neighborhoods in Los Angeles. But living here means putting up with constant reminders of the city’s troubled finances, from the 300,000 sidewalk cracks citywide (someone actually counted them) to graffiti in the parks. And don’t even start some of the neighbors on the schools.

On one level, the reasons for the differences aren’t so hard to see. Calabasas is new--built since the 1960s and incorporated as a city in 1992. Los Angeles is older, and many of its residents are poorer.

But there is another divide between the two communities, rooted in an odd mix of arcane budgetary practices and social and civic psychology.

It is what makes residents of Calabasas willing to pay $70 a month to use the public swimming pool and tennis courts and pay extra taxes for landscaping, schools and even street lights, while civic leaders in Los Angeles decry such payments and provide little in the way of public services as a result.

Calabasas was, for the most part, conceived, built and paid for wholly in the era after the 1978 ballot initiative known as Proposition 13 forced cities to abandon the traditional method by which they were funded.

The initiative, which passed 20 years ago next month, rolled back property taxes--previously the bedrock of most city budgets--and capped them for existing homeowners.

Faced with a devastating loss in income, older cities struggled--with varying success--to change the way they raised money.

But cities like Calabasas didn’t need to learn to think anew: They’d never had property tax to work with in the first place.

Calabasas City Manager Charles Cate said he had not worked for a city whose budgeting practices were developed before Proposition 13. So the old style, in which city officials collected a pot of money and then decided among themselves how to spend it, never had much influence in Calabasas and other new cities.

Instead, the community skirted traditional methods of financing and moved to what urban planners call the pay-as-you-go approach.

Sure, Calabasas is beautiful and the schools are great. But residents pay extra for that. It gives them a sense of pride and feelings of confidence that their money is going toward something useful, appropriate and--perhaps most of all--close to home.

And they don’t like outsiders coming in to mess things up.

That beautiful lake by the rec center? It was built and paid for by a homeowners association, and there’s a guard to keep out anyone who doesn’t have a permit. Just this year, after much controversy and the threat that some locals would withhold support for an education fee, Las Virgenes Unified School District cut back the number of students allowed in from other jurisdictions.

“People were saying, ‘We moved here; we paid for it,’ ” said Stuart Hoffman, who is president of the Mulwood Homeowners Assn., one of the city’s many powerful resident groups. “There’s a pride of, ‘This is our neighborhood, and we want to maintain it as such,’ ” said Hoffman, an orthodontist who lives and practices in town. “As opposed to what has happened in a lot of Los Angeles, where it’s really run down and the maintenance is really poor.”

Such sentiments are fairly common in cities built in the post-Proposition 13 era, said William Fulton, publisher of the California Planning and Development Report and author of a recent book on development in Los Angeles.

“Since Proposition 13 people have a different sense of ownership about their communities,” Fulton said. “If they’ve paid a lot of fees . . . they tend to view the local park and local school as belonging to them and no one else.”

Indeed, in Calabasas, the political unit with which many people identify is not the city itself--though it’s small enough to be accessible. Rather, residents here tend to align themselves with one of the 42 homeowners associations that represent the city’s neighborhoods.

Membership in an association is mandatory in many neighborhoods, and dues can run into several hundred dollars per year. The homeowners associations control the City Council and pay for services that in another city might be considered the responsibility of the municipal government.

For example, the Calabasas Park Homeowners Assn. last year donated 170 camphor and Chinese fringe trees to the city and hired a firm to plant them on city property along Parkway Calabasas.

“This kind of community involvement in Calabasas has worked very well,” said Sharon Nessim Elzein, president of the Calabasas Park Homeowners Assn. “The city has features that it wouldn’t have had otherwise.”

It can get expensive. The nearly 2,000 households who belong to the Calabasas Park Homeowners Assn. shell out between $75 and $200 a year in annual dues. In addition, they pay landscaping, school and other fees that can top a property tax bill by $1,200 or more.

Just last year, after another ballot initiative, Proposition 218, forced cities to win voter support for such assessments, residents of Calabasas overwhelmingly approved extending the landscaping fee--though it would cost some homeowners $1,000 per year.

Such charges are not unheard of in Los Angeles, but they compose a tiny portion of the city’s budget--just $130 million out of more than $4 billion.

Keith Comrie, city administrative officer for Los Angeles, said it is nearly impossible to entice voters in the larger city to agree to tax themselves--even if the money goes to something most people support, such as hiring more police officers or librarians.

A property tax bill for a 3,000-square-foot home in Woodland Hills shows a total of extra annual assessments just a few cents shy of $300. Of that amount, just $68.85--including $23.34 for county parks and $22.88 for city parks--was approved by voters.

“Some of my neighbors would be willing to pay [for city services], but most of the people want the free lunch and then have you do the dishes,” said Gordon Murley, president of the Woodland Hills Homeowners Assn.

Los Angeles homeowners are unwilling to ante up for several reasons, Murley and others said. Many are simply not accustomed to thinking about paying extra for services that have traditionally been the responsibility of the city. Others are alienated by what they perceive as fiscal irresponsibility on the part of city officials and don’t wish to hand over any more money.

Calabasas, by contrast, has a civic culture that was developed directly out of the understanding among residents that if they wanted something done, they’d better tackle it--and pay for it--themselves.

Even before cityhood, when the community was unincorporated land governed by Los Angeles County, residents learned quickly that it was up to them to make things happen.

Homeowner groups organized to fight unchecked development, and to provide services that members believed the county was not providing. After becoming a city, that do-it-yourself tendency was strengthened by the realities of developing a budget in the era after Proposition 13.

Unlike Los Angeles, which even after Proposition 13 continued to receive 26% of the property taxes collected within city limits, Calabasas receives just 4.7% of the taxes residents pay.

Only 11% of Calabasas’ $7.5-million budget comes from property taxes, while fees charged to developers and others amount to 19%. Sales tax, another major source of municipal funding after Proposition 13, amounts to another 19%, and a utility tax accounts for 24%.

“Knowing we didn’t have the property tax to rely on, we started out with a much more entrepreneurial spirit,” said Cate, the city manager.

The city funds its recreation programs, for example, in part through dues paid at the Calabasas Tennis and Swim Center recreation facility, where a full membership for a family runs to $70 per month.

The center was once a local country club, but the city bought it after it went into bankruptcy, and now the facility is actually making a profit, said manager Dan Huncke. The money is plowed back into the budget for recreational programs, Huncke said.

“People don’t mind paying,” said former Calabasas Mayor Lesley Devine, a past president of the Calabasas Park Homeowners Assn. “But they want to know what it’s for. They want to know they’re getting what they think they’re going to get.”