Budget to balance in Agoura Hills, but future isn’t rosy

By John Loesing Acorn Staff Writer

Agoura Hills presented a balanced budget to the city council last week, but officials warned that trouble for the city could lie ahead if the state’s financial woes continue.

Agoura Hills will be able to increase general fund spending by $1 million to $12.38 million, according to the preliminary budget—without tapping into the city’s $7.3 million reserve fund.

Next year, however, city officials say they could lose large amounts of revenue if the state makes good on its threat to take away local redevelopment funds.

The Agoura Hills Redevelopment Agency (RDA)—which funds blight control and affordable housing projects in the city—receives $1.9 million annually from the increase in property taxes that local residents have had to pay since the agency was formed over a decade ago.

The incremental tax revenue is the city’s second biggest source of income behind sales taxes.

Gov. Gray Davis has proposed taking away the local tax increment funds to help solve the state’s $40 billion budget deficit.

"If the governor does what he wants, the redevelopment agency would right out of the chute lose $1 million in housing set aside," said Dave Adams, city manager.

The housing set aside is the city’s affordable housing fund.

The RDA had hoped to contribute an estimated $360,000 to Las Virgenes Unified School District, but that amount that could be jeopardized if the agency is dissolved, Adams said.

Redevelopment agencies have lost favor with the state in recent years because they lack broad constituencies and they often use unpopular methods—such as eminent domain—to obtain property for redevelopment projects.

On different note, city officials said Agoura Hills’ $1.2 million in revenue from vehicle license fees will stay mostly intact following a statewide fee increase expected to take effect soon.

Sacramento plans to eliminate the about $4 billion in annual "backfill" payments the state has been making to California cities since the vehicle fees were reduced in 1998. An increase in vehicle taxes will allow the state to discontinue the costly subsidy without reducing the revenue sent to municipalities.

Also on the revenue front, Agoura Hills will pick up an extra $20,000 a month from the hotel tax paid by the new Hampton Inn and Suites.

As for expenditures, the city has budgeted an unprecedented $6.6 million for capital improvement projects in the coming year.

The bulk of the work is $3.4 million for the start of the Kanan interchange improvement project. Another $1.1 million will go toward the Agoura Road bicycle lane widening and new pavement for almost a dozen city streets.

"We’re following the pavement management program and it seems to be working well," said Jim Thorsen, city engineer.

The city also budgeted almost $900,000—mostly grant money—to pay for final renovation of the Reyes Adobe.

Public works and law enforcement represent the two biggest expenditures in this year’s Agoura Hills budget.

"A lot of what we do pays for itself (through developer fees)," Thorsen said.

The city’s budget for Lost Hills Sheriff’s Station is $2.5 million.

Capt. Tom Martin said cuts in the county budget would hurt law enforcement in unincorporated areas, but not in cities like Agoura Hills that have a contract with the department for services.

Regarding personnel, the city will hire a new recreation coordinator this year, but all other employee moves will be frozen.

Adams cautioned that next year’s budget might be more difficult to balance than this year’s.

"At some point, we’ll be looking at going into reserves or cutting expenses because we won’t have a balanced budget anymore," he said.