Expenditure Adjustments.

Past Spending Blunders. In the past the City has wasted money on such things as lap-top computers for the councilmembers ($20,000), prison-style stainless steel benches on the Plaza ($24,000), improper inspection/planning of the repairs to the pier ($780,000 overrun), and "musical chairs" involving tennis courts and the skateboard park, which made the project cost $550,000 more than leaving the courts where they were and building the park elsewhere. It spent $300,000+, $165,000 of which was wasted, when it prematurely sidelined a perfectly good fire engine. (Fire Engine Letter.) It wasted $230,000 replacing the traffic signals on Hermosa Avenue at 13th and 14th Streets, locations where the old signals worked just fine. (Had those old signals become unserviceable, they should have been replaced by stop signs.) The City Hall remodel of Winter 2001-2 began life with a (approx.) $700,000 budget; now the budget has swollen to over $2 million. (City Hall Remodel Page.)

Past Spending Blunders, continued. The council refuses to take control of a downtown club scene that continues to be the source of incidents costing the City huge sums of money for legal bills, judgements, police time spent investigating and attending trial, as well as for disabling injuries to police officers. The recent Roger Clinton incident, although an international embarrassment to our town, was probably one of the less expensive of those incidents. In January 2001 a woman accused a Northern California man of raping her as she was walking home from a downtown club; a few days later her husband discovered the accused man in the same club, followed him to the men's room, and shot him. A couple months before that, the City paid $440,000 to settle a suit brought by a man whom police shot when he refused to stop his car, endangering officers, after an incident that began when, as he left a downtown club he "patted a woman's posterior, angering the woman's boyfriend." (Daily Breeze, 11/10/00.) In addition to the settlement cash, there was also the money spent to defend the City, as well as the wages of the police who investigated and testified. Judging by the duration of the case and the thickness of the case file, that defense plus those wages cost another $400,000 to $500,000. Before that, there were the criminal and civil (ongoing) trials involving a nightclub manager/bartender accused of raping patrons - one of whom was 19.

Police and Fire Overtime. Police and Fire overtime amounted to at least $456,000 in Fiscal Year 1999-2000 (ending June 30, 2000).

We believe that the figures provided to the councilmember are overtime wages paid and do not include the cost of benefits, insurance, retirement, supplies, equipment, and other overhead. The true cost to the City of this overtime work is more in the range of $800,000. We believe that currently the City is continuing to pay similar amounts of overtime. Hermosa should take a lesson from the City of Redondo, and carefully examine overtime expenditures.

Car Allowance. Hermosa is only 1.3 square miles. The automatic $350 per month car allowance given councilmembers and department heads should be reduced, or changed to reimbursement for actual miles driven, saving $25,000.

Assistant Fire Chief. The newly created position of assistant fire chief, not yet filled but about to be, should be eliminated, saving $180,000. The employment brochure issued by the City indicates that the salary will be as high as $97,197 ($7751 per month plus 1/2 of the City-paid 9% PERS retirement). Our previous fire chief had sufficient spare time to be made coordinator of the City Hall remodel. Our current full-time chief no longer carries that responsibility. In addition to him, fire department management includes three fire captains, who last year made $121,440, $96,794, and $126,113 (2000 Wages, includes 1/2 of the City-paid PERS retirement). The duties identified for the proposed assistant chief should be spread among the chief and the fire captains. If for some reason the money must be spent, it should be used to add entry level firefighters (or policemen), not to add another layer to management.

Bed Tax. Hermosa's Transient Occupancy Tax (TOT) rate is presently 10%. Some cities charge 14%, such as Inglewood, Los Angeles, and San Francisco. The City keeps 100% of the bed tax. Increasing Hermosa's rate to 14% would bring in $405,000 additional.

Sales Tax. The City can, through inexpensive measures such as thorough street and sidewalk cleaning, the abatement of weeds and excess signage, the siting of small-scale special events there, as well as simply talking about those areas, stimulate business in areas of town that have been neglected and whose sales tax receipts have not increased in step with the economy. (See Broken Windows by James Q. Wilson and George L. Kelling, Atlantic Monthly, available at http://www.theatlantic.com/election/connection/crime/windows.htm or http://socsci.colorado.edu/~mciverj/2481_BrokenWindows.PDF.) A 10% increase in business on PCH, Aviation, and Pier Avenue (Valley to Monterey) would bring in another $110,000 of sales tax annually.

Event Security. The City's hourly charge to provide City police to special events ranges from only 1/3 to 2/3 of the actual hourly cost to the City. Adjusting the rates charged to big event promoters up to actual cost level would bring in $50,000.

Grants for Police. The City is not participating in the GALE grant program for under-age liquor enforcement. The neighboring 3 cities have had a $100,000 grant. If Hermosa particpated in the GALE program (and other similar ones) it could get approximately $40,000.

Sidewalk Dining Rent. The City presently charges $1 per square foot. In many locations the space is worth $2 or more per square foot. Get $100,000.

Permit Fee for High Risk Businesses. The City continues to provide an extraordinary level of police presence in the downtown, in effect pumping the taxpayers' money into private companies that have doggedly refused to pay for legitimate security upgrades. Two years ago the businesses downtown said they were going to form a Business Improvement District and assess themselves in order to pick up some of the costs. They haven't. The City should now enact a new sales permit fee on liquor and other high-risk businesses, as the City of Santa Cruz has done. Get $200,000. See part of the Santa Cruz ordinance, below.

 

Inter-Fund Transfers. On a one-time basis, move back to the General Fund the $300,000 of Compensated Absences Fund money the council was going to take for the City Hall remodel. (City Hall Remodel Page.)

The total of expenditure adjustments and revenue sources above is at least $1.4 million, $1.1 million of which is repeatable annually. There are numerous other possible expenditure/revenue adjustments available to the City. For example, at the 6-12-01 council meeting, with a stroke of the pen the Council increased parking fees to bring in an additional $667,000 annually.