Property tax revenue, the largest source of revenue for the City of Hermosa Beach, increased 2 percent during the last fiscal year, according to an annual audit by a public accounting firm, but the modesty of the increase marks a still-sagging economy.
Hermosa enjoyed the fifteenth highest assessed property valuation among 88 cities in Los Angeles County, according to the audit. However, Hermosa’s growth in assessed values was the lowest since 1999.
“Lower values and sale prices are to be expected in the current economic environment,” states a city report summing up the auditors’ Comprehensive Annual Financial Report. “Median home prices for Hermosa Beach for June 2010 were $900,000, compared to Los Angeles County’s median price of $336,000. The continuation of lower growth has been anticipated in the 2010-11 [city] budget.”
Many other forms of revenue to the city declined.
Sales tax revenue from Hermosa businesses dropped 12 percent from the year before, landing 28 percent below the flush year of 2000-2001.
Revenues from the largest producers, eating and drinking places, dropped 6 percent.
Auto dealers and auto supplies saw the sharpest decline, contributing 29 percent less sales tax revenue that the year before.
Other declines in sales tax revenues included 24 percent from miscellaneous retailers, 22 percent from furniture and appliance stores, 10 percent from the city’s two service stations, and 8 percent from clothing stores.
Broken down geographically, businesses along Pacific Coast Highway provided the city with 46 percent of its sales tax revenue, followed by 35 percent from the downtown area, 15 percent from upper Pier Avenue, Valley Drive and Monterey Boulevard, and 4 percent from Aviation Boulevard, according to city statistics.
Sales tax revenue dipped 16 percent over the fiscal year along PCH, and dropped 6 percent downtown, 10 percent along upper Pier, Valley and Monterey, and 17 percent along Aviation.
The hotel “bed tax” paid by visitors to the city decreased 5 percent, with overall occupancy rates in Hermosa dropping to 66 percent from 68 percent the year before.
The city decreased its general fund expenditures by 2 percent, in part because of frozen and otherwise unfilled positions in the police, fire and community development departments.
The auditors once again said the city’s financial statements offer a fair picture of its financial position. The auditors sometimes rate cities’ financial statements below that mark, if they find deficiencies in accounting, lack of internal controls, or noncompliance with Government Accounting Standards Board requirements.
Hermosa has received a certificate of achievement for excellence in financial reporting from the Government Finance Officers Association each year since 1990. ER
