The opening of the highly anticipated hotel at The Bicycle Casino turned into a $1 million jackpot for the city of Bell Gardens, which wagered on the success of the project to increase city revenue.
It was only a couple years ago that the city faced a $1 million budget deficit resulting from the economic recession and state closure of its redevelopment agency (RDA), which had contributed millions of dollars to rehabilitate the city’s blighted areas.
Bell Gardens’ luck has since turned around and the city is anticipating a $1 million dollar surplus in its 2016-2017 Fiscal Year Budget of $29.7 million. $200,000 of the surplus will go to the city’s reserves – a fund set aside for emergencies or unexpected expenses.
Mayor Pro Tem Pedro Aceituno credits the surplus to staff being frugal and holding the line during troubled times.
“We didn’t overspend,” Aceituno said.
Bicycle Casino profits continue to play a major role in the predominately Latino blue-collar community’s financial health, with nearly half of the city’s general fund revenue coming from Casino fees.
In 2012, Casino revenue dwindled to an all-time low of $9.3 million, sparking a budget deficit that year. Now on the rebound, Casino revenue is expected to reach $13 million this year, $1.8 million more than in 2015-2016 and $170,000 more than its peak in 2008.
“For years, we were losing players to other casinos with hotels, [but] now we are able to keep them here,” City Manager Phil Wagner told EGP, referring to the opening of the Casino’s new hotel.
However, “It’s not just the economy doing better or hotel improvements, but a lot of it was that we managed our money very well,” he said.
The added revenue will offset $234,000 in lease revenue lost when the city was forced to sell of two city-owned shopping centers, as part of a settlement with the state over the closing of its redevelopment agency. Wagner believes the city is in the “9th inning” of the RDA ordeal, “it’s over when the state says it’s over,” he added.
“The key thing is the loss from the RDA negotiations could have been much bigger.”
Staff worked hard to minimize the damage, which could have reached up to $4 million, said Director of Finance Will Kaholokula.
Mayor Jennifer Rodriguez also credits city staff and elected officials for Bell Gardens’ “thriving” economy. “We’re one of the cities that had a plan to get us through rough times,” she told EGP.
Unlike some neighboring cities, “we have worked efficiently together without worrying about the politics,” she pointed out.
That’s a major step forward from years past when Bell Gardens City Council meetings were often the scene of loud political bickering. Rodriguez and Aceituno, both longtime councilmembers, believe the lack of political turmoil is why food retailers like Dunkin Donuts and Chipotle are now flocking to the city, despite its predominately Latino, working-class demographics and being only 2.4-square-miles in size, factors that have been deterrents to investments in other cities.
As a result, sales tax revenue is up and unemployment is down.
Like neighboring Montebello, the Bell Gardens City Council will continue to grapple with its aging and money losing water system.
After years of putting off a decision, plans are in the works to hold workshops and public hearings on the water utility’s future. Experts say the 50 year old infrastructure needs costly long term repairs, but the utility does not generate enough revenue to even cover current operating expenses. Purchased in 1991, the Bell Gardens water system services about 30% of city residents. Rates have not been raised in over 20 years.
The city can continue to offer the low rates but it will require long term planning, according to Wagner. “The city council will have to decide whether they want to maintain the system, sell the system or increase water rates,” he explained.
Another bright note in city finances has been the significant reduction in golf course related losses, from a deficit of $90,000 per year to $18,000 after turning the facility over to an outside management company.
“We do a lot that doesn’t make money but we want to be able to make enough to cover the costs,” said Wagner.
The rising cost of California Public Employees’ Retirement (PERS) obligations will continue to challenge the city, but Wagener says there’s not much the city can do except save up. City staff has proposed starting an irrevocable trust fund to cover future pension obligations as part of a long-term solution.
Like most southeast communities, Wagner says Bell Gardens must address infrastructure and general capital improvement projects including streets, alleys and parks.
Turf on the soccer field at Ford Park needs be replaced at a cost of $1 million, notes Assistant Manager John Oropeza.
“Now that we have a little surplus we can make sure that comes back to our residents,” said Aceituno who would like to see some previously cut programs return.
But Rodriguez believes a surplus does not translate to a party.
“We can’t start splurging just because there’s a surplus,” she told EGP. “Before we even touch the money we have to exhaust all other options and continue to plan ahead.”