Budget Analysis of Culver City, CA & Upland, CA. Matthew Harang, M.P.A. The Policy Tree

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1 Budget Analysis of Culver City, CA & Upland, CA Matthew Harang, M.P.A. The Policy Tree March 2009

2 Introduction The purpose of this report is to provide a thorough analysis of the budgets of two separate municipalities in the Greater Los Angeles area of Southern California: Culver City and Upland. This region of the Golden State is quite diverse, and there are thousands of distinct communities which each have their own cultures. To give a brief overview, the cities are located approximately 50 miles apart, with Culver City being in western Los Angeles County, and Upland being in western San Bernardino County. Upland is nearly three times as large in land area, and close to twice as large in population. The cities are both largely middle class, with comparable median incomes. Culver City has a higher cost of living and a higher real estate values due to its proximity to Los Angeles. It also has more commerce as the Heart of Screenland 1, as Upland is largely a bedroom community. Information regarding basic city facts can be found in Table 1 below. TABLE 1: CITY STATISTICS AND DATA 2007 Data Culver City Upland County Los Angeles San Bernardino Population 38,856 72,464 Elevation 94 feet 1300 feet Land Area 5.11 sq. miles 15.1 sq. miles Population Density 7604 per sq. mile 4799 per sq. mile Population Increase since percent 6.6 percent Median Income $65,767 $63, 159 Median House Value $795,314 $575,500 Cost of Living Index High School Education or Higher 87.2 percent 83.8 percent Poverty Rate 8.6 percent 6.5 percent Crime Index Average Household 2.3 people 2.8 people Median Resident Age 39.1 years 34.5 years Source: City-Data.com The demographics are also similar, with the main difference being Culver City s slightly higher African American population. More information regarding the ethnic and racial makeup on the cities can be viewed Table 2. TABLE 2: DEMOGRAPHICS Race Culver City Upland White Non-Hispanic 48.1 percent 54.8 percent 1 See CulverCity.org (2009). The wording on the city seal is: City of Culver City-The Heart of Screenland- Incorporated 1917.

3 Hispanic Black Other race Two or more races Japanese Chinese Filipino Asian Indian American Indian Korean Other Asian Vietnamese Source: City-Data.com Culver City: An Overview Culver City is a diverse community with a population of 38,856 located to the west of Los Angeles. It is boarded by the beach community of Los Angeles known as Marina del Rey to the west, an unincorporated area of LA county and Inglewood to the southeast, and the Los Angeles neighborhoods of Ladera Heights and Windsor Hills to the East, and Los Angeles to the North. A map of Culver City is provided below, as its location, almost within the City of LA, is very significant to the culture, commerce, population and budget of the city. 2 It s proximity to the Pacific Ocean, and LA International Airport is significant, as well. The land area is just 5.11 square miles, and the population density is 7604 per square mile. The approximate median household income is $65,767, and most of Culver City residents are in the middle to upper middle class. Culver City is not far from Beverly Hills and Hollywood, and the influence of the entertainment industry is definitely prevalent in the area, as the city is known for being the home to Sony Pictures, as well as several radio stations. In addition to the entertainment industry, the city also has a presence of technology, medical and electronic companies that add to the job base and help provide tax revenue for the city. In addition, the city has a major retail center known as the Fox Hills Mall, which also helps to generate tax revenue (Malsin, D. S., et al, 2008). Because of its location in an important region on the west side of Los Angeles, transportation is an important aspect of life in Culver City. The major freeways in the area are the 405 (north-south), the 90 (east-west), the 105 (east-west) and the 10 (east- west). Some of the major Boulevards include Sepulveda Blvd, Venice Blvd, Washington Blvd., and Culver Blvd. The city will be transformed by the new light rail project that is scheduled to open in the summer of This rail will run from Downtown L.A. to Culver City, and will help alleviate traffic congestion on the streets and freeways. The rail will eventually be expanded through Culver City to the Marina, near the Pacific Ocean. This project has 2 The source of the map is the City of Culver City website:

4 gotten the city a lot of recognition, and the Transportation department was just named the 12 th Best Fleet in all of North America (CulverCity.org, 2009). FIGURE 1: MAP OF CULVER CITY Upland: An Overview Known as The City of Gracious Living, Upland is located in western San Bernardino County and is adjacent to Montclair and Ontario on the South, Claremont on the West, Rancho Cucamonga on the East, and the San Gabriel Mountains, including Mount Baldy, to the North. It is actually the westernmost city in the county, with the adjacent Claremont being part of Los Angeles County. The city was incorporated on May 15, 1906, after previously being known as North Ontario. It was originally an irrigation colony established by George and William Chaffey The population of Upland is 72,464, and the area is 15.1 square miles. The major streets in Upland are Foothill Boulevard, which is part of the Historic Route 66, Euclid Ave, Mountain Ave, and Arrow Highway. The nearby freeways are the Interstate 10 (east-west), the 210 (east-west), the 57 (north-south) and the 15(north-south). The map below in Figure 2 displays Upland in relationship to Los Angeles and the rest of the Southern California region. 3 Upland has a traditional downtown area with small shops and business, but it is largely a bedroom community with little commerce outside of the strip malls, grocery stores, and small auto dealers. The city has several public parks, as well as several public schools, including a large high school. One of the main landmarks in Upland is the Cable Airport is a small private airport that handles the air traffic in the area. However, Upland the surrounding cities in the western 3 The source of the map is the City of Upland, CA website:

5 part of Inland Empire have larger attractions, such as Ontario s major airport, Los Angeles-Ontario airport, as well as the outlet retail center Ontario Mills; Claremont is home to the prestigious Claremont colleges and Universities, Pomona is home to the fairgrounds, and Rancho Cucamonga is home to the outdoor shopping plaza: Victoria Gardens; and even the much smaller city of Montclair is home to a major shopping plaza. FIGURE 2: MAP OF UPLAND According to the budget document, Upland is set on achieving the following goals: building responsive leadership, forging a sense of community, building community oriented public safety, economic development, historic preservation, and the improvement of city infrastructure. The budget is centered on these goals, and thus many of the financial decisions are made with this vision in mind. Overview of Budget Analysis The body of the analysis will include a survey, review and dissection of the annual budgets for the fiscal year. The paper will be divided into three areas of analysis: revenue, expenditures, and budget format. First, the data and facts from Culver City will be presented, followed by the same for Upland. The presentation of these facts will include tables, charts and graphs. This information will precede the analysis of the budgets. Following the presentation of the facts of the individual municipalities will be the comparison between the different financial approaches of the two cities, as related to the demographics, the nature of the municipalities and their populations and overall ways of life. The project will include a careful examination including what works and does not work for both governments, as well as glimpses of the city budgets from previous years as they relate to the growth and changes that are taking place. The analysis will culminate in some recommendations which will include what these governments can learn from one another s budgets and financial approaches, and what the governments can learn from budget theory. The analysis will also include accounting and other financial recommendations. The analysis will show the relationship between the financial aspects of the city governments, and the social, political, economic and historical characters of the cities, by comparing and contrasting the cities, and the financial aspects of their governments.

6 The Revenues Culver City Revenue: An Overview The first item that will be reviewed is the revenue of Culver City for the fiscal year of The revenue will be presented in three parts before being compared and contrasted to that of Upland: General Revenue, Enterprise Revenue and Redevelopment Revenue 4. Table 3 provides an overview of the city s sources of revenue and includes the per capita information, as well, showing how much revenue is collected per citizen, based on the 2007 population. 5 TABLE 3: REVENUE OVERVIEW, CULVER CITY 6 Revenue Type Per Capita General Fund $83,334,532 $2, Enterprise Funds 43,181,634 1, Redevel. / Capital Improvement 3,410, Other 5,084, Total $135,011,647 $3, General Revenue, Culver City As is the case with most municipalities, the majority of the General Funds revenue is generated by taxes. Culver City accrues a large portion from sales tax, property tax and miscellaneous taxes, as shown in Table 4. The city also generates a large portion of revenue from the fees it collects from charging for services, with such charges totaling over $10 million. Some of the major revenuegenerating services in the city include ambulance services, classes, meeting room and auditorium rentals, and plan checking. Due to the amount of commerce and business within the municipality, the city also generates over $2.2 million in fees for licenses and permits. These licenses and permits include building permits, electric permits, plumbing and heating permits, utility permits, street permits, and residential building records, among others. Other funds are generated by public fines and forfeits which include general court fines, which amount to $1,470,000 and vehicle code fines, which account for $3,118,500. In addition, interfund/ departmental revenue also plays a large role in the city. The 4 The Culver City budget does not list Redevelopment sources of revenue separately, so for the purpose of this study, the Capital Improvement funds will be analyzed. 5 All population figures and related calculations are taken from the 2007 estimates from citydata.com, unless otherwise noted. 6 All facts and info regarding the Culver City budget are from Maslin, D.S. (2008), the Culver City Budget document, unless otherwise noted.

7 interfund revenue is usually higher than the current $6 million, but recent lawsuits have seen a reduction in the funds. TABLE 4: GENERAL FUNDS REVENUE, CULVER CITY Revenue Type Revenue Per Capita Revenue Property Tax $3,393,000 $87.32 Sales Tax 19,491, Public Safety Sales Tax 395, Licenses and Permits 2,218, Intergovernmental 3,098, Charges for Services 10,147, Fines and Forfeits 4,588, Use of Money & Property 1,203, Interfund/Departmental 6,080, Other 1,582, Misc. Taxes 31,136, Total General Fund $83,334,532 $2, Chart 1, shown below, shows the large percentage of revenue that is generated by the various forms of taxes in Culver City. Property taxes, sales taxes, public safety taxes and all other taxes account for approximately 65 percent of the General funds revenue of the city for this fiscal year. This signifies that a large portion of the budget is dependant upon home owners, and sales and business that takes place inside the city. CHART 1: GENERAL FUNDS REVENUE, CULVER CITY Property Tax Sales Tax 38% 0% 3% 4% 23% 12% 6% 1% 7% 2% 4% Misc Taxes Public Safety Sales Tax Licenses and Permits Intergovernmental Charges for Services Fines and Forfeits Use of Money & Property Interfund/Departmental Other

8 Sales tax is a very important part of the Culver City budget. It accounts for $19,491,000 of the General fund, and the largest single source of funding, as it provides over 20 percent of the total fund and 23 percent of the general fund. The city levies a total tax of 8.25 percent, as does the rest of California, and the city received 1 percent of that directly. The city also receives another 1 percent,.5 percent each from Proposition A and Proposition C for transportation funds. The high amount of sales tax revenue is due to the large amount of commerce, business and retail in Culver City. However the amount of tax revenue for this fiscal year actually decreased from the prior year, due mostly to the economic hardship faced throughout the country. The decrease is also partly due to the renovations in the Fox Hills Mall, one of the major retail establishments in Culver City. See Figure 3 for details on the recent and projected years of sales tax revenue. 7 This chart will show that sales tax is expected to rebound in the years to come. FIGURE 3: SALES TAX, CULVER CITY Below, Table 5 shows a breakdown of the miscellaneous taxes generated as part of the annual revenue for Culver City. Again, the high volume of business in the city explains the fact that nearly $10 million is generated from business licenses alone. Over $2.2 million is collected from franchise taxes and commercial industrial development taxes combined. Businesses also will account for a portion of the revenue generated from other high revenue taxes such as the utility taxes (electric, gas, water, telecommunications), and transient occupancy taxes. 7 Figure 3 is taken from the Culver City Budget document, Volume I.

9 TABLE 5: MISCELLANEOUS TAXES, CULVER CITY Tax of Type Revenue Per Capita Revenue Electricity Tax $6,110,000 $ Gas Tax 1,393, Water Tax 929, Telecommunications Tax 5,150, Cable TV Tax 620, Business License Tax 9,706, Franchise Tax 1,248, Real Property Transfer Tax 2,200, Transient Occupancy Tax 2,700, Commercial Indust. Dev. Tax 1,080, Total Misc. Taxes $31,136,000 $ Enterprise Revenue, Culver City The enterprise fund portion of the revenue, which totals over $43 million, can be categorized into four groups: refuse funds, transportation funds, sewer funds, and landscape maintenance. Table 6 shows a detailed distribution of this revenue. The enterprise funds are central to the overall budget of Culver City, as these funds provide a significant amount of the total revenue. 8 The largest contributor to this form of revenue is the transportation fund, which is largely due to the municipal bus that runs through the city. As Chart 2 shows, nearly 50 percent of the enterprise funds are comprised from the transportation system. Refuse and Sewer funds are the next two largest forms of enterprise revenue bringing in over $12 million and $10 million, respectively. In order to increase revenue, the city increased charges for the refuse fund by 4 percent for Landscape maintenance fees add another $47,000 a year, as well. TABLE 6: ENTERPRISE FUNDS, CULVER CITY Type of Fund Revenue Per Capita Revenue Refuse Funds $12,498,009 $ Transportation Fund 20,333, Sewer Fund 10,302, Landscape Maintenance 47, Total $43,181,634 $1, The Enterprise funds account for nearly 32 percent of the Culver City budget revenue.

10 The large portion of funds generated by the Transportation Fund is due to the Culver CityBus system, which just celebrated 80 years of service in 2008 This is an excellent example of public transportation, and in 2002, it was declared to be the Nation s Safest Public Transit System by American Public Transportation Association. For its excellence, the city has no issues with funding the system, receiving revenue from FTA Section 9, TDA, STA and Propositions A and C. The following is an excerpt from the Culver City website that explains more about their bus system and its features: Culver passengers annually with a service area encompassing 25.5 square miles, which includes the Westside communities of Venice, Westchester, Westwood, West Los Angeles, Palms, Marina del Rey, Rancho Park, Mar Vista, Century City, and Culver City. During the past 80 years, Culver CityBus has transported millions of passengers, contributing greatly to the reduction of traffic, air congestion, and pollution in the greater Los Angeles area. In addition, Culver CityBus entire fleet is comprised of compressed natural gas (CNG) buses. Culver CityBus was the first transit agency in Southern California and second transit agency in the State of California to operate a 100% alternative-fuel bus fleet. In addition, the State of California has certified Culver CityBus currently operates seven routes, serving approximately 5.9 million CityBus Equipment Maintenance and Fleet Services Division as a Green Model Shop. 9 CHART 2: ENTERPRISE FUNDS, CULVER CITY Sewer Fund 24% Landscape Maintenance 0% Refuse Funds 29% Transportation Fund 47% Redevelopment Revenue, Culver City The redevelopment based revenue of Culver City also provides some additional funds for the annual budget. The largest portion of these funds is generated from 9 Source: Culver City Bus, retrieved from

11 capital improvement and acquisition, with over $1.3 million coming from this source. Close to another million is received from parking improvement funds. The other sources of revenue are highlighted by the special gas tax which will amount to an estimated $756,000 for the budget year. The details of the redevelopment revenue, complete with the per capita information, are outlined below in Table 7. TABLE 7: REDEVELOPMENT REVENUE, CULVER CITY Source of Revenue Revenue Per Capita Revenue Arts in Public Places $112,000 $2.88 Special Gas Tax 756, Park Facilities 25, Capital Improvement & Acquisition 1,340, Parking Improvement 978, Grants Capital 10, Community Devel. Block Grant 188, Total $3,410,858 $87.78 Upland Revenue: An Overview The Upland revenue will be presented in contrast to the Culver City revenue. Like the Culver City revenue, that of this San Bernardino municipality will be presented in three parts: General revenue, Enterprise revenue, and Redevelopment revenue. Table 8 below provides a brief snapshot of the distribution of the revenue sources, as well as the per capita averages per source based on the 2007 population. Note that like Culver City, the general fund and the enterprise funds are the two largest sources of revenue. TABLE 8: REVENUE OVERVIEW, UPLAND 10 Revenue Type Budget Per Capita General Fund $41,392,260 $ Enterprise Funds 33,411, Redevelopment Funds 14,094, Other 12,044, Total Revenue $100,942,850 $1, All facts and info regarding the Upland budget are from Quincey, R. (2008), the Upland City Budget document, unless otherwise noted.

12 General Revenue, Upland As was the case with Culver City, the majority of Upland s General Fund is also generated by taxes. 11 Table 9 shows the sources of revenue from the General Fund, as well as the per capita information. With a total of $16.8 million, the city accumulates a substantial amount of property tax due to the large number of homes in the city, and the growing population will most likely continue to add to that. 12 The property tax revenue for this year also includes a backfill reimbursement from the state of California in the amount of $5,280,360. Not counting that reimbursement, the city estimates that property tax revenue will still increase by 3 percent from the previous year. This increase is due to increased assessed values which has been the result of new developments within the city. The $12.6 million in revenue generated from sales tax is also significant, but as Upland lacks, a lot of commercial life, the sales tax revenue is not as large as more business-centered cities, such as Culver City. 13 The revenue for sales tax will only increase by 2 percent, and this low growth rate is due in part to the current recession. TABLE 9: GENERAL FUNDS REVENUE, UPLAND Revenue Type Revenue Per Capita Revenue Property Tax $16,848,720 $ Sales Tax 12,592, Public Safety Sales Tax 780, Licenses and Permits 540, Intergovernmental 510, Charges for Services 3,177, Fines and Forfeits 294, Use of Money & Property 187, Interfund/Departmental 5,280, Other 1,180, Total General Fund $41,392,260 $ Chart 3 below shows that besides property tax and sales tax, the largest source of revenue is interfund and departmental monies. This is a very important tool that Upland uses in its finances. Following that source is the city s charges for services, then public safety taxes and licenses and permits. Again, Culver City 11 The property tax, sales tax and public safety tax combined accounts for over 73 percent of the general fund for Upland. 12 As Table 1 showed, Upland s population has increased over 6 percent since 2000, contrasted to Culver City s, which has only increased by.8 percent. 13 Upland s daytime population is percent due to commuting, while Culver City s daytime population is percent. Source: City-Data.com.

13 generates much higher revenue from licenses and permits due to the amount of business inside the city. The revenue for licenses and permits also dropped by 11 percent from the previous year, again due largely to the recession. Other revenue sources also account for over $1 million, or 3 percent of the city s revenue. CHART 3: GENERAL FUNDS REVENUE, UPLAND 0% 1% 8% 1% 1% 2% 13% 3% 30% 41% Property Tax Sales Tax Public Safety Sales Tax Licenses and Permits Intergovernmental Charges for Services Fines and Forfeits Use of Money & Property Interfund/Departmental Other Enterprise Revenue, Upland Enterprise funds are another important item in the Upland budget. These funds add another $33.4 million in total to the accumulative city revenue. As Table 10 outlines, water utility funds are the city s largest source of enterprise revenue with nearly $18 million being generated for the fiscal year. Solid waste utility also makes up a large portion of enterprise revenue, with over $10.3 million coming from this source. Environmental enterprise revenue generates just more than half of that at $5.3 million for the year, which rounds out the three sources of enterprise revenue for the city. TABLE 10: ENTERPRISE FUNDS REVENUE, UPLAND Revenue Type Revenue Per Capita Revenue Solid Waste Utility $10,359,340 $ Water Utility 17,705, Environmental Enterprise 5,347, Total $33,411,710 $461.08

14 Redevelopment Revenue, Upland The redevelopment funds are broken into three project areas that receive funding for the city: the Town Center Project Area, the Magnolia Project Area, and the Merged Project Area. The merged project area receives the largest portion of the funding, with $12.2 million. The Magnolia and Town Center project areas receive $1.5 million and $381,290 respectively. Further details about this distribution of funding can be viewed in Table 11. In total, the redevelopment funds add over $14 million to the budget. Although this is a significant amount of funding, revenues decreased approximately $9.7 million from the previous year. This is due to the fact that in the fiscal year, Upland received a one-time tax allocation bond to add to city funds. This amounted to $10.7 million in additional revenue for the city that year, but the same luxury will not be received for the current year. TABLE 11: REDEVELOPMENT FUNDS REVENUE, UPLAND Project Area Fund Revenue Per Capita Revenue Town Center Project Area $381,290 $5.26 Magnolia Project Area 1,478, Merged Project Area 12,234, Total $14,094,480 $ Comparing and Contrasting Revenues The first item to note when comparing the revenues of Upland and Culver City is the difference in overall revenue. Culver City s revenue is over $135 million, while Upland s is just over $100 million. Couple that with the difference in population and that translates into a major discrepancy in terms of per capita revenue. The average per capita expenditure in Culver City is $3,475 for the fiscal year, while that of Upland residents is just $1, Table 12 provides the overview of the data on the major revenue types. TABLE 12: COMPARING COMPREHENSIVE REVENUES Revenue Type Culver City Culv. per cap Upland Upl. per cap General Fund $83,334,532 $2, $41,392,260 $ Enterprise Funds 43,181,634 $1, ,411, Redev./ Cap. Imp. 3,410,858 $ ,094, Other 5,084,623 $ ,044, Total $135,011,647 $3, $100,942,850 $1,393.01

15 Chart 4 below displays the data from Table 12 to contrast the sources of revenue for the two municipalities. The most visually noticeable difference is the revenues of the general funds. Culver City s fund seems to be approximately twice as large as Upland s and the analysis of the general fund will examine why. It is also quite noticeable that the Redevelopment/ Capital Improvement Funds are much greater for Upland than they are for Culver City. CHART 4: COMPARING COMPREHENSIVE REVENUES Culver City Upland $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 General Fund Enterprise Funds Redev./ Cap. Imp. Other One of the main differences in the budgets of Culver City and Upland, as highlighted throughout this report is the issue of commerce and business. Culver City has a much business. As stated previously, Culver City has a major retail presence with the Westfield Shopping Plaza, and it also has major commerce in industries such as entertainment, technology and medical, while Upland lacks the resources to compete with nearby cities, as it is largely a residential community. The largest retail outlets in Upland are a Wal-Mart and Target. It is for this reason that Upland s sales tax revenue of $12.5 million is much smaller than that of Culver City s, at $19.5 million, in spite of the fact that Culver City has only a fraction of the population that Upland has. In addition, the miscellaneous taxes that generate over $31 million for Culver City are non-existent in Upland, which contributes to the fact that Culver City s general fund is approximately twice as large as Upland s. Additionally, Culver City is able to generate three times the amount of Upland by charging for services. Below, Table 13 displays the differences, side by side, of the general funds.

16 TABLE 13: COMPARING GENERAL FUND REVENUES Culver City Upland Property Tax $3,393,000 $16,848,720 Sales Tax 19,491,000 12,592,980 Public Safety Sales Tax 395, ,000 Licenses and Permits 2,218, ,060 Intergovernmental 3,098, ,000 Charges for Services 10,147,948 3,177,960 Fines and Forfeits 4,588, ,030 Use of Money & Property 1,203, ,500 Interfund / Departmental 6,080,580 5,280,360 Other 1,582,504 1,180,650 Misc. Taxes 31,136,000 0 Total General Fund $83,334,532 $41,392,260 The only field where Upland seems to generate more revenue in terms of the general fund is the property taxes. With fairly high property values, Upland is able to generate over $16.8 million, while Culver City only generates $3.4 million in property taxes. This, however, is largely due to the fact that Upland has nearly 3 times as much land mass as Culver City, considering that Culver City s median home values were much higher than Upland s. 14 One similarity that the two cities have is their use of interfund and departmental funds as part of the revenue. Upland uses $5.2 million or 12.7 percent of the total general fund from this source, while Culver City uses over $6 million and over 7 percent of their total general fund. These figures can be viewed in Chart 5. CHART 5: COMPARING COMPREHENSIVE REVENUES Culver City Upland $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Property Tax Sales Tax Public Safety Sales Tax Licenses and Permits Intergovernmental Charges for Services Fines and Forfeits Use of Money & Property Interfund/Departmental Other 14 The average home value in Culver City was $795,314 compared to $575,500 for Upland (citydata.com).

17 There are several key differences between the enterprise funds of the two cities that must be highlighted. First of all, Upland has a Water utility fund which produces over $17.7 million in revenue. Next, Culver City s transportation fund which is centered on the public bus system provides over $20.3 million in revenue. In addition, the Sewer fund generates nearly twice as much revenue as Upland s Environmental Enterprise fund, which includes the city s sewage system. Similarly, Upland s Solid Waste Utility, which includes refuse collection and disposal, recycling, and green waste is outshined by Culver City s Refuse funds, once again in spite of Culver City having a much smaller population. Another item to note is that Culver City also generates a small amount of revenue from landscape maintenance of $47,000, while Upland has no comparable source of funding. Table 14 gives a glimpse of this portion of the revenues in comparison to one another. TABLE 14: COMPARING ENTERPRISE FUND REVENUES Culver City Revenue Upland Revenue Refuse Funds $12,498,009 Solid Waste Utility $10,359,340 Transportation Fund 20,333,700 Water Utility 17,705,250 Sewer Fund 10,302,925 Environmental Enterprise 5,347,120 Landscape Maint. 47,000 Total $43,181,634 Total $33,411,710 With regards to redevelopment funding, Upland generates over $14 million, while Culver City generates approximately $3.4 million in Capital Improvement funds. Upland has received money from outside sources to help fund it s redevelopment projects, while Culver City has not received the same types of funding, so that is the reason for the disparity in that category. This major disparity can be seen visually in Chart 6. CHART 6: COMPARING REDEVELOPMENT FUND REVENUES $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Culver City Upland

18 The Expenditures Culver City Expenditure: An Overview Culver City s total expenditure for the fiscal year will equal $144,777,337 or $3,726 per capita. Table 15 shows a simplified distribution of the funds along with the per capita information related to the type of expenditure. The table shows that most of the spending is done on for general and enterprise, while the capital and redevelopment spending lag far behind. The analysis will provide further information on the city s spending habits. TABLE 15: EXPENDITURE OVERVIEW, CULVER CITY Type of Expenditure Expenditure Per Capita General Funds $88,454,079 $2, Enterprise Funds 47,951,171 1, Redevelopment Agency 1,868, Capital Funds 6,503, Total $144,777,337 $3, General Expenditure As Table 16 displays, the total General fund expenditures are over $88.4 million for this year, and a large portion is for general government expenses, comprising over $14.2 million. These general government expenses include those related to the City Council, City Manager s office, City Clerk, City Attorney, and Information Technology. Other major expenses include the Police and Fire departments, which together total over $43 million, nearly half of the general expenditures. Public works and parks and recreational services also receive a large portion of the funds. The community development department actually oversees the Redevelopment Agency, so the revenue for that department is actually larger than is shown on Table 16. However, for the purposes of this analysis those two departments will be analyzed separately. The other expenditures in this chart include Section 8 expenditures as the largest source of spending, and this goes to assist low income residents of the city. TABLE 16: GENERAL FUNDS EXPENDITURE, CULVER CITY Department Budget Per Capita General Government $14,220,016 $ Finance 4,565, Human Resources 1,144,

19 Public Works 9,719, Community Development 5,874, Fire 14,919, Police 28,172, Parks & Rec & Comm. Services 6,917, Other 4,788, Total General Fund $88,454,079 $2, Enterprise Expenditure Enterprise expenditure in Culver City equals nearly $48 million, or $ per resident. Over $600 per capita of that spending goes towards transportation operations and administration for the Culver CityBus. Over $12 million goes towards both Refuse and Sewer funding. A notable expense is the $6.1 million that will go toward sewer improvements. Many of the sewers in Culver City are old and dilapidated, so this is an important expense. TABLE 17: ENTERPRISE EXPENDITURE, CULVER CITY Enterprise Type Expenditure Per Capita Refuse $12,056,667 $ Transportation 23,350, Sewer 12,497, Landscape 47, Total $47,951,171 $1, Redevelopment Expenditure Culver City s Redevelopment Agency is within the Community Development Department. The current redevelopment plan is to revitalize the city and eliminate blight, and it encompasses 1,286 acres, equaling 42 percent of the land area of the city. The redevelopment agency currently has several projects: Washington National, Washington Centinela, Downtown, Sepulveda, Baldwin Site and Pleasentview Site. The budget document also lists several other project areas on which the city is currently working. Considering the ambitious plan, expenditures of under $2 million for the fiscal year seem rather low. Detailed numbers regarding the expenditures are found in Table 18. TABLE 18: REDEVELOPMENT EXPENDITURE, CULVER CITY Type of Expenditure Per Capita Redevelopment Agency Funds $1,868,969 $48.10

20 Upland Expenditure: An Overview Upland s expenditures for the fiscal year total $153.6 million, or $2, per capita. Enterprise expenditures are the largest source of government spending, followed by General funds, and the Redevelopment Agency. Capital funds and other expenditures also account for over $33 million of expenditures, which is a significant portion of the budget. Much of the capital funds go towards general capital improvements, park acquisition and development and street and traffic development. The other expenditures include gas taxes among other special funds. Table 19 shows this information in more detail including the per capita statistics. TABLE 19: EXPENDITURE OVERVIEW, UPLAND Type of Expenditure Expenditure Per Capita General Funds $41,766,340 $ Enterprise Funds 49,287, Redevelopment Agency 29,480, Capital Funds 18,832, Other 14,201, Total $153,568,720 $2, General Expenditure Of the General government expenditures, the largest sources of spending are the Police and Fire departments as seen in Table 20. Public works and Parks and Recreation and other Community services also receive a significant portion of the expenditure. General Government, Finance, Human Resources and Community Development also contribute to the general expenditure of the city. TABLE 20: GENERAL FUNDS EXPENDITURE, UPLAND Department Budget Per Capita Exp. General Government $2,313,140 $31.92 Finance 2,279, Human Resources 487, Public Works 5,002, Community Development 1,793, Fire 8,960, Police 16,070, Parks & Rec & Comm. Services 4,858, Total General Fund $41,766,340 $576.37

21 Enterprise Expenditure Enterprise expenditures in Upland total nearly $50 million, or 32 percent of the city s total expenditures. Most of that spending goes towards the water utility, which is allocated over $30 million, or $418 per capita. The reason that spending is so high here is that the city aims to provide its residents with high quality drinking water at low costs. Solid waste and environmental enterprise/ sewage expenditures add another $10.3 million and $8.6 million, respectively. TABLE 21: ENTERPRISE EXPENDITURE, UPLAND Expenditure Type Expenditure Per Capita Solid Waste Utility $10,321,880 $ Water Utility 30,350, Environmental Enterprise 8,615, Total $49,287,890 $ Redevelopment Expenditure The Redevelopment Agency is another department that receives a large portion of the expenditures, with $29.4 million, or $ per capita going into this fund for the year. Table 22 shows these figures in more detail. The mission of this Agency is: To administer the City s Economic Development, Asset Management, Public Finance, Redevelopment, and Affordable Housing programs. These activities are intended to catalyze private and public investment within the City of Upland focusing on City Redevelopment and CDBG target areas. The merged project focuses on these areas to facilitate the overall redevelopment of the city. The goals of the agency are to facilitate housing and economic development, to help produce more jobs and build more efficient and useful infrastructure, and also to expand the tax base to improve the overall quality of life for Uplanders. TABLE 22: REDEVELOPMENT FUNDS EXPENDITURE, UPLAND Expenditure Detail Per Capita Merged Project - Project Funds $21,976,990 $ Merged Project - LMI Funds 7,503, Total $29,480,620 $406.83

22 Comparing and Contrasting Expenditures Do to the different natures of the two cities, there are many differences between the ways that the municipalities choose to spend their funds. Table 23 gives an overview of the overall expenditures of the cities, broken into the major categories. The expenditures of the two cities are comparable in sheer size, with Culver City s equaling $144.8 million, and Upland s being $153.6 million. Culver City spends about $3, per capita, while Upland spends $2, per capita. TABLE 23: COMPARING BUDGET EXPENDITURES Type of Expenditure Culver City Culv. Per Cap Upland Upl. Per Cap General Funds $88,454,079 $2, $41,766,340 $ Enterprise Funds 47,951,171 1, ,287, Redev. Agency 1,868, ,480, Capital Funds 6,503, ,832, Other ,201, Total $144,777,337 $3, $153,568,720 $2, In terms of general fund expenditures, Culver City spends more than twice as much as Upland. Additionally, as a portion of the budget, Culver City spends 61 percent verses 33 percent for Upland. The major differences between the general funds of the two cities are as follows. First of all, Culver City spends $14.2 million on general government spending compared to $2.3 million for Upland. It is interesting to note that Culver City s expenditure is also much higher for services such as Police, Fire, and Public Works. The crime index in Culver City is compared to for Upland, so perhaps that explains the higher expenditures on Police. Or, perhaps since Culver City s revenues are higher than Upland s the city can afford to spend more money on public safety to ensure a high quality of life for its residents. Table 24 shows this data in more detail. TABLE 24: COMPARING GENERAL EXPENDITURES Department Upland Culver City General Government $2,313,140 $14,220,016 Finance 2,279,230 4,565,821 Human Resources 487,910 1,144,481 Public Works 5,002,920 9,719,359 Community Development 1,793,130 5,874,792 Fire 8,960,380 14,919,943 Police 16,070,830 28,172,220

23 Parks & Rec & Comm. Services 4,858,800 6,917,782 Other 4,788,634 Total General Fund $41,766,340 $88,454,079 In contrasting the enterprise expenditures, it should first be noted that in terms of amounts, the spending is nearly equal, with Culver City spending $48 million and Upland spending $49.3. However, in terms of percentage of the total budgets, Upland spends 57.5 percent while Culver City spends 33.1 percent. Still, Culver City spends $1, per capita to Upland s $ per capita, due to the overall per capita edge that the Culver City budget has over Upland. The expenditures on refuse/ solid waste are $12 million for Culver City and $10.3 million for Upland. Expenditure for sewer/ environmental enterprise is $12.5 million for Culver City and $8.6 million for Upland. The major differences, however is Culver City s transportation fund and Upland s water utility fund. Upland does not have its own public transportation system, and thus does not have such a fund. 15 Culver City does not have a water utility comparable to Upland, which will spend $30.4 million this year to provide clean water to citizens. TABLE 25: COMPARING ENTERPRISE EXPENDITURES Culver City Expenditure Upland Expenditure Refuse Funds $12,056,667 Solid Waste Utility $10,321,880 Transportation Fund 23,350,315 Water Utility 30,350,390 Sewer Fund 12,497,189 Enviro. Enterprise 8,615,620 Landscape Maint. 47,000 Total $47,951,171 Total $49,287,890 Perhaps the greatest difference between the two cities in terms of their budgets is related to the Redevelopment Agencies. As Table 26 shows, Upland spends $29.5 million compared to $1.9 million for Culver City. Furthermore, in per capita terms, Upland spends $ compared to $48.10 for Culver City. We saw a similar discrepancy with the revenues, which is a partial reason for the difference in expenditure. These expenditures also differ due to the fact that Culver City s agency is part of their Community Development department while Upland s Redevelopment agency has a much wider range of functions. TABLE 26: COMPARING REDEVELOPMENT EXPENDITURES Upland Culver City Merged Project - Project $21,976,990 Redev. Agency Funds $1,868,969 Merged Project - LMI 7,503,630 Total $29,480,620 Total $1,868, Public transportation options in Upland include OmniBus, Foothill Transit and the Metrolink trains, none of which are run by the City (City of Upland Library Community Links, 2009).

24 Culver City Budget Format Budget Formats For the fiscal year of , Culver City was given a Distinguished Budget Presentation Award by the Government Finance Officers Association. This is proof of the fact that the Culver City budget was prepared very thoughtfully and thoroughly. The budget was prepared in three different formats, yielding the following Volumes: Volume I: The Management Plan This version on the budget document gives an overview of each department and its divisions and projects, clearly outlining the government expenditures and revenue. Volume II: The Capital Improvement Plan This document includes details on projects related to capital improvement Volume III: Line Item Detail This document includes a detailed version of each department s adopted expenditure amounts, including appropriations. These three Volumes result in a complete presentation of the city s finances that can be viewed by anyone by visiting the city website. Each of the volumes provides different information regarding not only the finances, but they also give a glimpse at the nature of each department, the mission and the goals. Upland Budget Format Like Culver City, Upland s budget is presented in a cohesive and comprehendible manner, and it is for this reason that the city was also awarded a Distinguished Budget Presentation Award by the Government Finance Officers Association for the Budget. Upland s budget is a line-item format, but it has elements of Performance and Program formats as well, as it shows resources purchased, activities performed as well as services delivered. The city s budget is also available online and is very complete and coherent. Online, the budget is presented in categories based on the programs and departments so that it is easy to navigate. The city did an excellent job of making the expenditures and revenues available for the public.

25 Recommendations & Conclusion Culver City Based on the comparison between the two budgets, I would recommend that Culver City attempts to expand the Redevelopment Agency. Perhaps the Redevelopment Agency should break away from the Community Development department in order to renew goals and increase its vision. In order to increase the effectiveness of the department, the city should look to increase revenue perhaps by identifying other sources, such as the ones from which Upland receives revenue. In addition, the city should analyze the expenditures in the Fire and Police departments, because this spending is quite high even compared to Upland which has a higher population and a greater land area. Upland Upland should look for ways to increase revenue, seeing that Culver City, a much smaller city has much higher revenues. In order to increase revenue, Upland could increase the charge for services. The main services for which Upland currently charges are Fire assistance emergency related services, for which they are reimbursed. Culver City generates nearly three times the amount of revenue from this source by charging for services such as ambulances, classes, meeting room and auditorium rentals, and plan checking. If Upland were to implement some of these ideas, the city would be able to add to the budget. In addition, the city could increase revenues by increasing the size of the Enterprise funds. As outlined in the body of this report, Culver City generates more revenue from Solid Waste and Sewer service because Upland chooses to give its residents a financial break in this area. However, if the city was to increase revenue here, or by adding a city-run bus system like Culver City, they may be able to provide more services to the public due to the increase in revenue. Conclusion Both cities analyzed have formulated efficient and effective budgets that serve their communities well and provide a good quality of life for their citizens. As the recommendations suggest, I think that the governments could benefits from looking at budgets of other cities to gain ideas. However, Culver City and Upland are two very different municipalities, and what works for one city may not work for another. They have different cultures, different populations and are in two very different geographic locations in Southern California. Perhaps Upland does not need greater revenue, and perhaps its current per capita expenditure works for its population. And perhaps the Redevelopment Agency of Culver city is structured in a way that is best for the city, and currently receives all the funds that it needs to be efficient. These decisions must be made by the government and the residents of each city, but these options should all be analyzed and considered in order to ensure the highest possible quality of life for the citizens.

26 References Culver City, California (CA) Detailed Profile. (2009). City-Data.com. Retrieved on March 1, 2009 from City of Culver City (2009). Culver City Bus. Retrieved March from City of Upland Website. (2009) City of Upland, CA. Retrieved on March 1, 2009 from City of Upland - Library - Community Links. (2009). City of Upland. Retrieved on March from CommunityLinks/index.asp. CulverCity.org (2009). City of Culver City. Retrieved March from Malsin, D. S., et al. (2008). Culver City Adopted Budget & Volume I: Management Plan. City of Culver City. Malsin, D. S., et al. (2008). Culver City Adopted Budget & Volume III: Line Item Detail. City of Culver City. Mikesell, J.L. (2007). Fiscal Administration: Analysis and Applications for the Public Sector. Seventh Edition. Belmont, CA: Thompson Wadsworth. Quincey, R. (2008). City of Upland, California: Annual Budget Fiscal Year City of Upland. Upland, California (CA) Detailed Profile. (2009). City-Data.com. Retrieved on March 1, 2009 from