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Question: Some people claim that the bar Industry brings a substantial net income to City Hall coffers, and that without it, the City could not balance its budget. Is that correct?
Answer: No. The bar Industry operates with a subsidy from the rest of town, necessary due to the Industry's heavy demand for police and other City services. Much of the money to provide the subsidy came from historical increases in citywide property tax revenue - mostly from the residential sector - up as much as 19% in one previous year (2007).
More recently, the boom ended, and the City began to look for new sources of revenue. In 2009 the City was quietly moving forward to impose a new "sewer fee" to raise $9 million, but on Oct. 27, 2009 the council voted to delay the hiring of a consultant to facilitate the fee. (We already have a sewer tax, the 6% we pay on our utilities, but the money has been diverted for general purposes.) In late 2010 they proposed raising the guest parking permit fee to $300, but dropped the proposal after heavy community opposition. Also in 2010 they set up a committee to begin a review of business license taxes.
They also hired a consultant to do a separate review of other City fees. In March 2011 they received the consultant's report which recommended, among many other new or increased fees, that the Hermosa Arts Foundation be charged for its use of the City's theater and that the Hermosa Beach Little League be charged for its use of the ball fields (see the article in the Mar. 31 Beach Reporter). In June 2011 the Council approved a $750,000 increase in fees applicable to everyone living or working in town.
The Business License Tax Review Committee continued to meet. While this report prepared by Committee members for the Committee's Feb. 2011 meeting noted a subsidy to the Industry of $4284 each day ($1,563,660 annually) ...
Portion of report prepared by Committee members for 2-28-11 meeting
of the Hermosa Beach Business License Tax Review Committee (Peter Tucker,
Kit Bobko, Thomas Brodie, Andrea Jacobsson, Brittny Tacker), also available on the City's website.
... the Committee's current proposal (presented Jun. 6, 2011) was to tax the largest restaurants just $6750 annually.
This FAQ was originally prepared in 2007, during the pendency of the Sharkeez referendum. The portion below is, except where noted, unchanged from what was posted here at that time.
In February 2007 the City's Finance Department staff made a two-page tabulation of the downtown costs and revenues experienced by City Hall during Fiscal Year 2005-2006 (July 1, 2005 to June 30, 2006). We obtained a copy, and those pages are reproduced below, in their entirety. Below each page you will find our detailed discussion of the City's numbers, as we disagree with staff's methodology. [Post-referendum note: We asked the City Council to have a cost-revenue analysis done by an independent expert - and in early 2008 they agreed that they would do so, as part of the study to create a downtown Specific Plan. Unfortunately, the Specific Plan study has not been done, nor has the independent cost-revenue analysis been done. If they ever do engage an expert, we would emphasize independent - that he or she not be associated with any firm which presently does recurring audit work for the city or is likely to be bidding on such work. The City of Fullerton did a detailed analysis, albeit by City staff. Fullerton Report - Initial (8 mb doc file) Fullerton Report - Follow Up (3 mb doc file) ] Questions about Hermosa's tabulation should be directed to the City Manager.
2007: Downtown Balance Sheet
City's Tabulation of Costs
City's Downtown Costs 2005-2006 tabulation, received March 27, 2007 from City Manager's Office.
Our Tabulation of Costs
Below is vivahermosa.com's table, with numbers revised, and added, to reflect City Hall's costs we believe are attributable to the bars, not to the entire downtown. This table does not take into account the costs experienced by the private sector - primarily wear-and-tear on the neighboring residential community. This table was prepared and posted here in 2007.
City's Tabulation of Revenue
City's Downtown Revenues 2005-2006 tabulation, received March 27, 2007 from City Manager's Office.
There is a later version - See Note M. below.
Our Tabulation of Revenue
Below is vivahermosa.com's table, prepared in 2007, with numbers revised to reflect City Hall's revenues we believe are attributable to the bars, not to the entire downtown. This table was prepared and posted here in 2007.
Per our tabulations, the bar scene brings City coffers less than one quarter of what it costs to maintain - an annual subsidy of $3,982,000 flowing from the rest of the town. Those recurring subsidies may explain why Hermosa doesn't have some of the amenities enjoyed by other well-off towns.
DocumentsThe City's 2010-2011 CAFR is available at CAFR 2010 - 2011
The City's 2009-2010 CAFR is available at CAFR 2009 - 2010.
The staff report associated with the 2009-2010 CAFR is available at 2009 - 2010 Staff Report.
The City's 2009-2009 CAFR is available at CAFR 2008 - 2009
The City's 2007-2008 CAFR is available at CAFR 2007 - 2008
The City's 2007-2008 adopted budget is available at Budget 2007 - 2008
The staff report associated with the adoption of the 2007-2008 budget is available at
The City's 2006-2007 CAFR is available at CAFR 2006 - 2007
The staff report associated with the 2006-2007 CAFR is available at 2006 - 2007 Staff Report.
The City's 2006-2007 adopted budget is available at Budget 2006 - 2007
The staff report associated with the adoption of the 2006-2007 budget is available at
The City's 2005-2006 CAFR is available at CAFR 2005 - 2006
The staff report associated with the 2005-2006 CAFR is available at
The City's 2004-2005 CAFR is available at CAFR 2004 - 2005
The staff report associated with the 2004-2005 CAFR is available at
The City's 2003-2004 CAFR is available at CAFR 2003 - 2004
The staff report associated with the 2003-2004 CAFR is available at