The Beverly Hills City Council approved its 2018-19 budget on June 19, highlighted by funding for the city’s capital improvement program and CCTV security cameras, among other expenditures.

According to city staff, the top four revenue sources in Beverly Hills come from property tax, sales tax, transient occupancy tax and business tax, representing 80 percent of general fund revenue. It’s projected to conclude the current fiscal year 6.9 percent higher than it was in 2016-17. They are projected to increase another 1.2 percent over the next fiscal year.

Capital improvement projects include $1.5 million for new apparatus doors for the city’s fire stations, $300,000 for LED lighting for city tennis courts and $750,000 for the replacement of the La Cienega Tennis Center irrigation main. Continuing projects include $5 million for La Brea Basin water well development, $4 million for water treatment plant maintenance and $3.4 million for street and sidewalk improvements.

“Adoption of the [capital improvement project] budget allows the city to anticipate future needs for capital funds,” according to city staff. “This, in turn, allows investigation and discussion of alternate sources of funding for such projects. Such early awareness of pending needs allows the city to better balance its limited funds between longer-term (capital) and short-term (operation) needs, reducing the potential for surprises.”

Changes to the capital improvement budget included the removal of $850,000 in new funding for library improvements, leaving $1.2 million in the library capital improvement project account.

One of the issues that arose during the budget study sessions over the past two months was a proposed $5.7 million in funding for workers’ compensation expenses, a $3.45 million increase from previous years. The flat-rate that had been budgeted for six consecutive years was always too low to cover workers’ compensation expenses.

“Prior to the current actuarial analysis received in April 2018, the city had not obtained an actuarial study in many years,” Don Harrison, the city’s budget and revenue officer, said in a report to the council at a study session earlier this month. “This impacted the city’s ability to identify and determine appropriate expense projections as well as funding levels, and budget on an annual basis for funding increases to the workers’ compensation claims liability.”

From the 2012-13 to 2017-18 fiscal years, the city had budgeted $2.25 million for workers’ compensation expenses, but those expenses averaged $4.14 million over that period of time.

“It looks like we’re playing catch up just to get our fund balance to where it should be,” Councilman Les Friedman said at a study session earlier this month.

Councilman John Mirisch asked for a report to describe why the city has been under-budgeting for workers’ compensation expenses, and to identify other areas in the budget where similar oversights might be taking place.

City Manager Mahdi Aluzri said there had been “a failure of staff not to follow up on what the policy is supposed to be.”

“Self-Insurance Reserves (liability, workers’ compensation, other) will be maintained at a level, which, together with purchased insurance policies, will adequately cover the city’s property, liability, and health benefit risk,” Harrison said in a follow-up report to the council this week. “A qualified actuarial firm shall be retained and report on a biennial basis recommended appropriate funding levels. The city shall endeavor to maintain reserves equal to 90 percent of the estimated net present value of such liabilities.”

CCTV in Beverly Hills began with a pilot program launched at the beginning of this year. The areas included in the program were designed to complement existing cameras adjacent to Hawthorne and Horace Mann schools. Cameras were placed in a north pilot area at the intersections of Elevado Avenue and Rexford Drive, and Carmelita Avenue and Rexford Drive; and in a south pilot area at Robertson and Charleville boulevards, Arnaz Drive and Charleville Boulevard, and Hamel Drive and Charleville Boulevard. Council members have said their goal is to have cameras cover the whole city.