There are million-dollar mansions in foreclosure, layoffs on Rodeo Drive. And reservations are no longer a must at all but the most exclusive restaurants.
As recently as the summer, many wealthy Southern California enclaves appeared beyond the reach of the worst recession in decades. But rich cities, it turns out, aren't always so different from the rest.
City officials in Beverly Hills -- a place insulated from most economic downturns -- now project a $24-million drop in tax revenues over the next 16 months. The loss represents about 15% of the general fund budget, said Beverly Hills City Manager Roderick Wood.
"This will be the largest percentage budget reduction, as far as we can tell, during the city's history," Wood said. "Even for a community as well-funded as Beverly Hills, you absolutely feel a 15% reduction in the budget."
A formal hiring freeze is expected as soon as March, though police officers and firefighters would continue to be replaced, he said. Among other options on the table: reducing police overtime and charging clubs to use city sporting facilities, which would be a first.
Santa Monica officials blame falling hotel occupancy rates, tanking car sales and a sluggish housing market for across-the-board reductions needed to close a budget gap that could swell to $10 million next year. Although the city still has excess revenue from last fiscal year to subsidize this year's budget, City Manager P. Lamont Ewell said he is asking departments for proposals to reduce spending by at least 3% now and 5% next year.
In Newport Beach, a precipitous drop in luxury car sales has left the city with an anticipated $3.5-million budget gap. City Manager Homer Bludau plans to reduce spending on capital improvement projects, including the beautification of street medians, by about $1.4 million. He is also asking departments to trim their budgets by about $1.4 million. Most city job vacancies will be filled internally or not at all.
Sales tax proceeds have declined in more than two-thirds of Southern California cities, according to a Times analysis of municipal revenues collected in the last half of 2008 compared with the same period the year before. Among those affected were some of the wealthiest, including Bradbury, Indian Wells and San Marino.
