What is interesting about the rebuttal statement we are posting here today is that while it's signed by Nancy Walsh and Josh Moran (both of whom are vacating our sinking ship), along with John Capoccia and John Harabedian, I am not certain that any of them actually wrote the final version. My guess is that the finished product, reproduced below, was probably the work of City Manager Elaine Aguilar. The wordiness of the document, along with a couple of instances where the author clearly plays fast and loose with the truth, seems in line with some of our City Manager's other efforts.
This also fits in with a general pattern that we have discussed before. City Staff has become increasingly aggressive on taxation issues, with a majority on our City Council willing to simply rubber stamp most of their recommendations. Our assumption here is that much of the additional money being raised through the tax, fee and rate hikes put into place over the last few years is being used to offset increases in employee salaries, pensions and retirement benefits.
In other words, staff is in effect writing their own ticket, and the current City Council seems willing to enable that. No matter how much it is going to cost the taxpayers, folks who apparently no longer have much in the way of elected representation on taxation matters.
Here is that rebuttal to the argument against Measure UUT:
Measure UUT will maintain and cap the current 10% rate you are paying today. Measure UUT will also lower the current 9% rate for water and sewer to 6% in 2016. Measure UUT is designed to preserve the existing revenue stream so that current levels of service can continue to be provided to Sierra Madre's citizens.
There are a couple of problems here. First, by capping the UUT at "the current 10% rate," Measure UUT will guarantee that Sierra Madreans, when all categories are combined, will continue to pay more in utility taxes than any other city in the State of California. A distinction that serves to underline just how absurdly high our utility taxes really are.
Additionally, claiming by inference that the lowered utility tax rates for both water and sewer will result in our paying less money to City Hall is just plain false. The reason for this percentage adjustment is the impending 61% increase in water rates, plus 100% increase in sewer rates. To both raise these rates this radically, and then also rake in a revenue increase through the applicable utility taxes, was something even this City Council saw as being wrong. Which is why they lowered the utility tax rate for these two categories.
Claiming this as a water and sewer utility tax cut is therefore disingenuous at best.
Property tax revenue will NOT replace the $1,000,000 in lost annual revenue if the UUT sunsets to 6%. On December 11, 2013 the State Board of Equalization declared that the inflation factor used to calculate property taxes for the upcoming year is 0.454%. Normally the maximum 2.0% inflation rate is applied, as was the case for the previous fiscal year. Thus, property tax revenue could be LESS than what was previously forecasted, despite the recent uptick in local property sales. Furthermore, $50,000 does not solve a $1,000,000 revenue shortfall.
This is pure City Hall bunkum. That 0.454% figure is a statewide average calculation that tells us property taxes are going up, just like they do every year. So even if no properties at all were sold in Sierra Madre in 2013, a place where the value of our homes jump at a hearty pace year after year, property taxes are still increasing. It's just that for City Hall it is never enough.
The City's unassigned General Fund Reserves are now at $282,000, not $870,000. In any case, unassigned reserves have been accumulating over years, and are the result of the City's prudent management of its financial resources. Reserves are accumulated and held to cover one-time projects, not to fund day-to-day operations.
The reason why General Fund Reserves are now at $282,000, and not $870,000, is that our free and easy City Council very recently spent $588,000 of it on storm water issues, plus new roofing for City Hall, the Library and the building housing the Fire and Police Departments. It was only at the insistence of Councilmember Koerber that the balance of $282,000 was held back in case the UUT extension fails. Otherwise who knows what items on their long list the UUT4 would have spent it on.
So much for reserves "that have been accumulating over years."
If the UUT is allowed to sunset, Sierra Madre will lose over $1,000,000 per year in revenue for the General Fund, which pays for public safety, public facilities (including maintenance of trees, parks, streets and sidewalks), community services, and library services. It is not possible to maintain the current level of services with such drastic revenue reduction.
Correct me if I am wrong, but wasn't the UUT increase the voters approved in 2008 supposed to be used to help fund safety services such as Police, Fire and Paramedics exclusively? Since when did the use of this revenue get expanded to include things like sidewalks and trees? Was there a ballot initiative somewhere that I slept through?
Here is how 2008's Measure U, which is the currently applicable voter approved ballot initiative, reads (link):
Measure U: "Shall an Ordinance be adopted increasing the City's existing Utility Users' Tax by up to 6% in order to maintain general City services such as public safety services, including police and paramedic programs, and to reflect technological advances in communications, expand existing exemptions to low and very low income households, and establish a citizen's oversight committee?"
I think some legal clarification might be in order here.
Tomorrow we will discuss the rebuttal to the arguments favoring Measure UUT.