With Settlement, Rent Board Nearly Erases Red Ink

It's a rosier than expected budget forecast for Santa Monica's Rent Control Board this year, but there's a bit of gloom on the horizon.

This year's deficit is nearly vanished thanks to an approximately $400,000 settlement the agency won recently over past-due registration fees from landlords. What was projected to be a $520,000 shortfall in fiscal year 2011-12 has diminished to $27,000, staffers said Thursday.

However, staffers will face a deficit of about $362,000 the next fiscal year, which starts July 1.

The agency is preparing to dip into its $1.6 million reserve account to shave off the red ink and balance its budget, but the "substantial" shortfall may compel the board to raise revenue the year after, said Rent Board administrator Tracy Condon.

Raising revenue could come by increasing registration fees. They are paid annually by landlords to cover the costs of the agency's services, and may be collected as a monthly surcharge from tenants. Currently set at $156 per unit, the fees could rise as soon as the 2013-14 fiscal year.

In the meantime, staffers, whose salaries comprise 80 percent of the agency's operating budget, will look at ways to reduce litigation costs. In 2011, the board was involved in nine lawsuits, according to an annual rent control report. Condon suggested the board also look to shrink the costs of employee benefits.

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