Inglewood declares fiscal emergency, calls special election

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By 2 Urban Girls

Contributing Writer

INGLEWOOD — The City Council voted unanimously to declare a fiscal emergency during its regular meeting Aug. 3.

The city finance department has reported the city’s revenue shortfall, initially projected to be $9.7 million, has swelled to $12.09 million due to decreased revenue related to the pandemic and various other reasons.

The city has recorded budget shortfalls since fiscal year 2017-18 and expects a budget deficit for the next five years.

“We saved money and have more money in our reserves than ever before,” Mayor James Butts said. “However, it’s like having money in your savings account, but the checking account isn’t gonna pay the bills. Then came COVID and now the Delta variant.”

Butts was observed wearing a face mask, below his nose and mouth for the entire meeting, as his colleagues have returned shoulder to shoulder on the dais.

City Treasurer Wanda Brown has continuously warned the council about its spending, and during the city’s mid-year budget presentation in July 2020, wondered if the city should be considering layoffs. The mayor not only disputed Brown’s concerns, he prohibited Brown from attending council meetings and cut her duties and salary for voicing her concerns.

I will tell you definitively that this fiscal year, the one that ends Sept. 30 and begins Oct. 1, we will not be laying anyone off,” Butts said. “We do have enough reserves so that we don’t have to do the things that Brown talked about, but we will wait until the end of the first quarter (Dec. 31) to see where we are and where COVID-19 has our revenue.”

Assistant Finance Director Sharon Koike-Pitpit said that in order for the city to address its financial shortfall, the council should declare a fiscal emergency, which would trigger a special election to be held Nov. 2.

“The city has been facing unprecedented times enduring the impacts of the global pandemic and it has taken a personal and economic toll on the city, its residents and local business with persistent demand for services with reduced revenue,” Koike-Pitpit said.

The special election ballot will ask voters to increase two taxes to address the severe shortfall, and its ability to identify additional funding for various capital improvement projects.

The city has determined the best solution is to propose tax increases on the real estate transfer tax and transient occupancy tax.

The first ballot measure would ask voters to increase the transit occupancy tax from 14% to 15.5% to maintain essential community services, keep the city clean, address traffic around the stadium and maintain non-existent gang prevention programs.

The transit occupancy tax is added to the bills at all hotels and motels in the city, The increase would generate an estimated $730,000 in annual revenue.

The second ballot measure would ask voters to increase the real estate transfer tax to address public safety, homelessness, address traffic and provide general services. The tax increase, that will be levied on all real estate transactions, would raise approximately $3.5 million in new revenue.

“The real estate transfer tax only comes into play if you sell your property, and will basically hit buyers purchasing properties in excess of $2.5 million,” Butts said.

Councilman Eloy Morales praised the finance department’s presentation, calling it the “right time” to put the proposed tax increases before voters, especially the tax related to real estate sales and acknowledged getting calls from constituents regarding the city’s fiscal crisis.

Inglewood’s 2020-21 budget was projected to have a $9.7 million revenue shortage, and the first quarter budget review last February showed revenue was down in key areas, including sales and transient occupancy taxes. At the time, some cost savings were being achieved due to staffing vacancies, and a reduction in police overtime.

The city continues to expend money out of the general fund to pay for services related to SoFi stadium events.

“You’re having a development that is being paid for 100% capitalized by the developers,” Butts said. “They’re willing to pay up to $8 million per year to provide for increased public safety, park staff, maintenance of the parks, maintenance of the roads out of their pocket.

“The only things that’s required is that at some point when we make in excess of $25 million in a given year, that we begin to pay back those costs that they have front-loaded for us that, ordinarily, a developer would not have to touch.”

At the end of June during a special City Council meeting, the council voted to take $2.4 million from the city’s reserves, to loan to the parking fund to pay for activities related to implementing the citywide permit parking program. According to the Hollywood Park Specific Plan, the developer was to pay for those costs.

On July 14, the council held another special meeting to approve past due invoices from the Los Angeles County Sheriff’s Department for services rendered at SoFi Stadium dating back to September 2020.

On July 30, the city awarded the Sheriff’s Department a $5 million, one-year contract, for law enforcement services provided at SoFi.

The Hawthorne Police Department also was awarded a $1 million contract for the same services. According to the city, those costs are reimbursable from the stadium.

The city has yet to release documents requested under the Freedom of Information Act and Public Records Act as to why the city hasn’t been reimbursed by the stadium.

The city hasn’t mentioned receiving t$35 million available under the Biden adminsitration’s COVID relief bill.

With the expected uptick in events in the city, at both the Forum and SoFi Stadium, there was no discussion to raise either the admission tax on event tickets or the parking tax, where the city can truly reap financial benefits from the influx of attendees.

“I hope the residents and contractors fully understand what the city can do under a formal declared fiscal emergency,” resident Ana Meni said. “They can delay payments which can cause contractors to cancel or refuse to work with the city, which could cause a reduction in services.”

Many residents voiced their opposition to raising taxes.

“Give them more money to misspend, I don’t think so,” said Earl Anderson. “I’ve looked at the budget and we are short every year. How has Butts turned this city around if we’re broke every year he’s been in office and for the years to come?”

2 Urban Girls is a freelance reporter for Wave Newspapers who covers the Compton and Inglewood areas. She can be reached at 2urbangirls@gmail.com.

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