West Hollywood’s coffers are lined more heavily than anticipated. While the city had a robust $22 million surplus last year, a budget update to the City Council during its Feb. 5 meeting showed that 2023 left the city with more than $31 million extra in the bank.
In recent years, the City Council has received criticism from residents regarding some economic policies, with business owners taking particular issue with the $19.08/hour minimum wage. However, Councilwoman Sepi Shyne, who was mayor virtually all of last year, said that the surplus points to the city’s economic health.
“Two years in a row, we have had higher revenues than we have ever had in the city of West Hollywood. And that’s under new leadership – new progressive leadership,” she said. “This is proof that when cities pass progressive policies, specifically in the area of workers’ rights and economic recovery, [it makes] the health of cities stronger. Our economy has recovered and is recovering astoundingly. No other city can claim that in this region.”
Mayor John Erickson echoed Shyne’s sentiments.
“Good governance and good policies bring about a wonderful surplus,” he said, adding that the end of the pandemic also helped bring tourists back to the city.
“We have so much to be proud of as a city. Our surplus speaks to long-term visioning and leadership, dedicated city management and staff stewardship and adherence to our values as a city,” Vice Mayor Chelsea Byers said. “As a city, we have demonstrated that a bold, progressive approach to policy making can both enrich the lives of our community members and create a world-class, globally recognized landscape fertile with opportunity.”
Councilman John Heilman pointed out that the city has long been careful with money, which helped to prepare it more ably for emergency situations. He advocated that maintaining a healthy surplus is important.
“Our foresight and the hard work of our staff ensured that we had sufficient reserves to get us through the worst period of the pandemic,” Heilman said. “We have also been very conservative in estimating revenue and anticipating expenses. We need to make sure we have enough money set aside to help the community and maintain essential services if another disaster hits or we are faced with a significant downturn in the economy.”
“I’m pleased to see the city recovering financially after the Covid shutdown,” Councilwoman Lauren Meister said.
Meister added, though, that the surplus does not address all of the economic issues facing West Hollywood.
“We still have a number of vacant storefronts and approved development projects that are dormant, so, I think there’s still much to be done in terms of economic development, as well as making sure we are attracting diverse businesses to our city,” she said.
The city has many capital projects to which some of the surplus could be used. Erickson mentioned that he would like to see progress on the Coast Playhouse redevelopment and the renovation of the Log Cabin, as well as using some funding to invest in the arts and social services. Both he and Byers also mentioned the importance, as Heilman also noted, of building the city’s rainy-day funds.
Shyne agreed with the need for an increased rainy-day fund, and also mentioned using the surplus to help with improved infrastructure, social service funding and helping progress streetscape projects, including on Fountain Avenue, which the city intends to make safer and more ADA compliant. Heilman said figuring out how to help West Hollywood residents is the most important use of the funds.
“It’s important, however, for the council to recognize that our reserves and any surplus be used to help our residents and improve our city,” Heilman said.