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RENT BOARD'S MULTI-MILLION DOLLAR BUDGET GAP
After the City's Finance Director let the Rent Board know on Thursday that Pasadena is already looking at a $5 million budget deficit this year, Board members heard from their staff that their landlord rent registry fees are not keeping up with spending.
The Department expects to spend $3.7 million in the fiscal year ending on June 30th, on top of the $1.5 million they spent in the previous fiscal year. Meanwhile, the $214.71 fee they set to cover both years has barely raised enough to cover this year's spending, leaving the previous year's expenditure to be covered by Pasadena's hard-pressed taxpayers.
A major reason for this failure is that the Rent Board believed figures from the consultancy firm they hired without any bidding process. The Board's friends at bhyv consulting claimed that there were 31,356 tenant-occupied rental units in Pasadena that can be charged a fee. This number of units has shrunk again and again, to the point where the Rent Stabilization Department is now presenting a mere 27,407 occupied rental units to fund the Board's addiction to spending.
Unsurprisingly, this reduction in the number of rental apartments has led to a huge hole in the budget. Despite public comments at Thursday's meeting about this budget gap, the Rent Board's members still insist on ignoring reality. They want to continue hiring and spending in the year to come, despite the tough economic climate faced by the City and their ongoing failure to raise enough money.
We estimate that the Board will again outspend its income by over a million dollars in the fiscal year through June 2026. There is no evidence they have learned any financial discipline.
Why would they? Remember, the Board can choose to balance its budget by increasing the landlord rental registry fees per unit instead of controlling spending, and no matter how much it raises the price, you are not allowed to pass any of them on to tenants.
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