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As we enter 2022, the City has weathered almost two years of pandemic, economic stresses on businesses and residents, civil discord and demonstrations, and yet the City is emerging strong.  We are still in the midst of a pandemic, one that has been devastating to many individuals and businesses.  More than 6,300 residents of Beverly Hills are estimated to have contracted COVID and tragically 36 have died. Thanks to the development of effective vaccines, we have emerged from the most stringent of the lockdowns.  We have achieved high vaccination rates in the City – about 80% of our population age 5 and over are fully vaccinated. That is a number of which we can be proud.  

 

The greatest impacts of COVID are the personal ones. The most effective actions we can do to protect ourselves against the current Delta and Omicron variants and to reduce the risk of the emergence of other variants is to take the appropriate safeguards, including getting vaccinated, 

 

Turning to financial impacts, many businesses, individuals, and the City have felt the economic hit of the pandemic deeply.

 

The City has four primary sources of revenue – known as the Big 4 - property tax, sales tax, hotel or transient occupancy tax, and business tax.  The impact of the pandemic can be seen most clearly by focusing on the calendar year, instead of the City’s traditional fiscal year, because the calendar year better aligns with the onset of the pandemic.  Measured by calendar year, our Big 4 sources of revenue were down in aggregate by 18% from 2019, the year before the pandemic, to 2020, the first full year of the pandemic.  In the second calendar year post-pandemic we have started to recover.  The Big 4 are down about 10% from pre-pandemic.  For the fiscal year going forward, we are budgeting for continued improvement, but not quite yet at pre-pandemic levels, down about 7% from the fiscal year budget pre-pandemic.

 

We - City Council, City management and City staff – were proactive in mitigating the financial impacts of the pandemic.  With my economic background, I played an instrumental role in our actions.

 

We reacted by cutting expenses – through a voluntary early retirement package, decreases in operating expenses, and decreases in planned capital spending.  

 

The result is that we have managed to continue to invest substantially in the City, increase our spending on police and fire, and provide exceptional services, with only a very modest use of reserves.  We are fortunate that we were in a strong position to do so because of prior and present prudent management.  Although many businesses and residents have suffered greatly during the pandemic, we as a City, because of the strength, vibrancy, and management practices of our City, have weathered the financial impacts of the pandemic far better than many other cities, who had to resort to service cutbacks and involuntary layoffs.