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Treasurer: Pensions and Parking 'Drain' City Funds

Eliot Finkel reports to council members the findings and recommendations of the Citizens' Budget Review Committee.

Treasurer: Pensions and Parking 'Drain' City Funds Treasurer: Pensions and Parking 'Drain' City Funds Treasurer: Pensions and Parking 'Drain' City Funds

Pension obligations and the parking enterprise fund are Beverly Hills' main financial concerns, City Treasurer Eliot Finkel told the City Council on Tuesday just before members approved the .

"Even substantially improved revenues would not be sufficient to cover our current pension obligations," Finkel said. "This is indeed a big problem for the city with potentially dire financial consequences and the best we can say right now is we aren't clear how bad it is because there isn't enough information available."

will cause a "significant impact" to the general fund over the next two to three years, City Manager Jeff Kolin said in May. Of the $4.5 million shortfall that began this year's budget process, "nearly $3.4 million of it is retirement costs."

Finkel heads a task force established by the council to address the pension squeeze.

"The information that is available, or the assumptions that are made, are not necessarily ones that people would go for from CalPERS [California Public Employees' Retirement System]," Finkel said. "And you have to then try to estimate, 'well what if CalPERS is wrong?' "

Finkel is also chairman of the Citizens' Budget Review Committee, which is composed of community members and recommends fiscal policy to the council. In addition to employee pensions, the committee set its sights on the parking enterprise fund.

"It was established to be self-sufficient and promote retail spending," Finkel said. "We feel it has done neither of those."

The fund "is a $4.5 million drain on the general fund" and isn't providing for itself or adding reserve funds like other enterprise accounts, according to Finkel, who noted this limits resources for other fiscal priorities and "makes it more difficult to develop new parking facilities in South Beverly Drive, Robertson and the southeast in general."

The city treasurer and his team of fiscally minded locals recommended doing away with free parking by charging $1 an hour for the first two hours of parking.

"According to Chad Lynn [director of parking operations], that would probably cover a current $2.5 million operating deficit as well as $2 million needed for maintenance," Finkel said. "It would also be appropriate to at least explore some public-private funding combination for additional structures needed in the city to promote retail."

Without a revenue boost "new parking facilities are hard to contemplate," he said, noting the associated displeasure of local merchants.

"[Citizens' Budget Commissioner] Jim Jahant said that his worst fear as a manager of with his customer parking was his customers' last memory of Beverly Hills will be of a run-down garage that smells of urine," Finkel recalled.

His presentation also listed these areas of focus for improved financial health:

  • Commercial development in southeast Beverly Hills
  • Energy cost reduction: vehicles, solar power, compressed natural gas
  • Evaluate outsourcing city functions or using public-private partnerships
  • Investigate ways to mitigate unauthorized use of handicapped parking placards
  • Promote and review operating plans for capital improvement program projects
  • Streamline the commission review process for local businesses and residents
  • Revisit commercial property management to handle the city's property
  • Review enterprise and general fund budgets

The with the Beverly Hills Unified School District also came up in Finkel's council presentation.

"School funding levels in some way should reflect what's going on in the city for the last several years where we have cut our budget by somewhere in the 10-15 percent range, whereas the JPA has not been cut at all," Finkel said. "The schools should be accountable to the city for their funds just like all other [city-funded] organizations.

"I think it would be good for the public to know in general if we're spending $10 million, how specific can we be as to what that money is going for, how specific can the schools be with what that money is going for so that people can review it and voice their opinions," Finkel said.

Toward improving the financial information flow and improving customer satisfaction, Finkel advised "random samplings through 'mystery shoppers' or customer/supplier surveys for feedback on quality of city services," according to his presentation.

Early in his presentation, Finkel noted the "streamlined" budget process.

"For the committee the process was a little too fast for us to get back to you before you'd already approved the budget," Finkel said. "It went very fast because it was so clear and ... since the committee wasn't really allowed to see anything before the council ... [committee members] really didn't have a lot of time because we only get together once a month with the details."

To further streamline the process, the committee suggested reorganizing categories of salary and benefit costs as well as clarifying the designation between Public Works employees who draw their pay from the enterprise fund and those who don't.

"Obviously our goal is sustainability," Councilman John Mirisch said. "It's on a year-to-year basis not to have to make cuts, not to have to share the pain, and your feedback and input is important."

Since forming in April 2009, the Citizens' Budget Committee has studied 68 topics of fiscal concern to date.

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