Only halfway through its fiscal year, the City of West Hollywood has received $5.5 million in building license and permit fees, 15 percent more than the $4.8 million that it budgeted for the entire 12 months ending June 30, 2015. That is a clear sign of major growth in the city, with the increase attributed largely to fees received from developers of projects such as Movietown Plaza and the Domain project, which are under construction, and a new hotel proposed for La Peer Drive.
A report from West Hollywood’s Finance and Technology Services Department cites other increases in revenues for the General Fund over what was budgeted. For example, the city’s hotel room tax, its leading source of revenue, was up 11 percent in the last six months of 2014 compared to the same period the year before. That puts the city on path to realize the $20 million it has budgeted for this fiscal year from those taxes. The city report attributed that increase to a record number of tourists. In July and August 2014, it said, most hotels were reporting occupancy rates of nearly 95 percent. The report notes that those revenues are likely to increase even more when hotels in the planning stages or under discussion, such as the James and Marriott Edition, actually open. The General Fund, which includes revenue that the City Council can allocate at its discretion, is budgeted at $78.7 million for this fiscal year. Other revenue of $23 million gives the city a total budget of $101.8 million.
Sales tax revenue increased 13.5 percent in July -December 2014 period over the year before, for a total of $4.6 million. The city receives 13 percent of revenues from the nine percent sales tax, with the rest going to the state and Los Angeles County. Sales taxes from building supply businesses were up 14.7 percent over the same period last year, reflecting the increase in new construction. Sales tax revenue from restaurants and hotels was up 13 percent. “Finance staff anticipates that sales tax revenue will continue to increase at a moderate pace over the next few years as the economy and consumer spending both continue to improve, new businesses open in the city as real estate development projects are completed, new residents move to the city, and businesses and their workers occupy vacant office space at locations such as the PDC and The Lot,” the report says.
Property taxes, another major source of city revenue, increased six percent from July through December last year. The city’s report cites rising property values and the addition of new buildings such as the Pacific Design Center’s Red Building and the Huxley and Dylan apartment buildings on La Brea Avenue. New projects such as the Marriott Edition, Movietown Plaza and the Sunset/La Cienega development are expected to create future revenue increases.
Parking fine and parking meter fees, perhaps the most contentious source of city revenue, were up eight percent to a total of $8.3 million for the six-month period. The report attributes that increase to extending parking meter hours and higher meter charges, which led to increase enforcement of parking laws. The city has budgeted $13.5 million in parking fine and meter revenues for this fiscal year.
The city’s overall budget for the 2014-1025 fiscal year is $101.8 million. The finance staff will ask the City Council on Monday to amend the budget to incorporate the increases in revenue as well as a transfer of $1 million to the city’s affordable housing trust fund. That money was used to help the West Hollywood Community Housing Corporation (WHCHC) acquire property at 1123-27 Detroit St., which WHCHC plans to incorporate into a new affordable housing project that will include the property now occupied by the Detroit Bungalows.