Tuesday, March 8, 2016

Rick De La Mora: The Proposed 66% UUT Increase Is Unnecessary

Mod: The following information was brought together by longtime Sierra Madre resident Rick De La Mora as a counter to much of the pro-tax propaganda campaign being put out by City Hall. He is also one of the authors of the argument against the approval of Measure UUT appearing in the sample ballot you should be receiving in the mail this week. Rick offers a more complete and accurate picture of the financial issues driving Measure UUT, and takes the side of those who will actually have to pay for this 66% tax increase. This piece contains all the information you'll ever need to win an argument with any misguided neighbor, or even the oftentimes argumentative Mayor Capoccia.

The Proposed 66% UUT Increase is Unnecessary
In 2012 and 2014 the voters of Sierra Madre cast their ballots against City Hall sponsored efforts to raise the UUT.  As a result, the voters have mandated that on July 1, 2016 the UUT be reduced from 8% to 6%.

The City’s official budget shows that the UUT reduction will cause revenues to fall by exactly $400,000 ($1,996,000 to $1,596,000).  The official budget shows that this reduction is offset by increases in property taxes, sales taxes, and various fees.  As a result, the change in actual revenues to the city year to year is only $230,000. That’s it.

The City says that it can’t possibly fill this $230k gap because it has already cut spending by over $2 million. That is false.

The City’s official budget for 2013 – 2015 shows General Fund expenditures of $7,051,508 for 2012 – 2013. By 2015 – 2016 General Fund expenditures had increased to $8,286,216.

The City has therefore not cut spending by $2 million. Instead General Fund spending has increased by over $1.2 million during the last 3 years alone. These spending increases were implemented with full knowledge of the fact that the UUT would be decreasing.
   
The spending increases have largely been driven by increasing employee costs, primarily associated with the police department. Regardless, before seeking a tax increase the City should deal with spending. Not because taxes are bad. But because the City has only a limited ability to absorb tax increases. The City should therefore do everything it can to make sure that any tax increase is applied to improving our civic life and not to purchasing overpriced services.

The City’s request for a 66% UUT tax increase does not pass this test.        

The City’s Rationale for the 66% Tax Increase
The reason for the 66% UUT tax increase is provided by the City itself on its campaign Fact Sheet titled “What Does a 10% UUT Provide.” That Fact Sheet states:

“A 10% UUT will stabilize the current service levels for a few years while the City council continues to explore ways to achieve long term financial stability.”

This confirms that the City does not want the money to fund improvements to parks, the library, senior services, or infrastructure.

Instead, the City wants the money to maintain the status quo “for a few years” so that it can address “financial stability” issues at some point in the future.

That is exactly what the City said when it asked for UUT increases in 2012 and 2014. One could ask, what has the City been doing in the interim? But that would not be productive. We should instead ask what the City can do right now to our secure financial stability.

The Path to Financial Stability
The answer is obvious:  As stated by the Pasadena Star News Editorial Board on February 3, 2016:

“The answer to the problem - to both problems – more than ever would seem to be moving rather quickly toward contracting with the Los Angeles County Sheriff’s Department in order to protect the people and property of Sierra Madre and their taxpayer dollars.”

In fact, contracting with the Sheriff is the only way in which our budget difficulties can be addressed in a way that will secure our financial stability on a going forward basis. This will enable the City to target future revenue increases to tangible civic improvements to our parks, library, senior services, and infrastructure rather than simply funneling it to a police department that can no longer meet the City’s needs and that the City can no longer afford.

Sierra Madre’s Disproportionate Police Spend
Sierra Madre’s 2015 – 2016 general fund revenues are budgeted at $8.9 million. Sierra Madre spends $3.9 million of that amount on police services. That means the City spends .43 cents of every dollar it takes in on police services.

Sierra Madre’s 43% police services spend rate is greater than that of virtually any other city around.

The impact of this disproportionate police spend is illustrated by comparing Sierra Madre’s budget to that of La Canada.


Despite having greater police service needs, La Canada spends significantly less on police services than Sierra Madre.


The reason: La Canada contracts with the Sheriff. Sierra Madre does not.

The Sheriff’s 20/20 Proposal Provides Increased Patrol Hours and Reduced Costs
In May 2015 the Sheriff presented Sierra Madre with a Municipal Law Enforcement Services Proposal – the “20/20 Proposal.”  The key features of the 20/20 Proposal are:


By adopting the Sheriff’s 20/20 Proposal the City will serve both of its stated goals by “maintaining the current level of City services” and providing for the City’s long term “financial stability.”

The Time to Act is Now: SMPD is Incapable of Fully Servicing the City  
In February Sheriff’s Deputies began patrolling Sierra Madre during all nighttime hours. SMPD continues to patrol during the daytime hours.  This means that the City now has two police departments. This is costing the City $100,000 a month for at least the next four months.

The reason we have two police departments is that SMPD is not capable of meeting the City’s full time police service needs. In fact, the City presently has only 11 of the 20 officers necessary to perform its duties.

The City admits that to it must rebuild the SMPD and that it will have to spend more money on recruiting and training new officers.  The City also has indicated that in order to recruit these new officers it will have to offer more “competitive salaries.” The City plans to fund this spending out of the 66% UUT increase.

The bottom line: The City will once again increase its police services spend if the 66% UUT increase passes.

Adopting the 20/20 Proposal Will Ensure that Future Tax Increases are Applied to Tangible Civic Improvements
Rather than seeking to rebuild a new version of the SMPD and asking for a tax increase to fund it, the City should act on the Sheriff’s 20/20 Proposal now. This will enable to achieve the “long term financial stability” that is the stated goal of the UUT increase. The only difference is that the goal would be achieved immediately, rather than after a “few years” of study as urged by the City.

More importantly, it will enable future council’s to approach Sierra Madre’s residents with tax initiatives that will be wholly directed toward improving our parks, library, infrastructure, and other tangible investments that will directly benefit our civic life.

That will not occur if the 66% UUT increase is passed.  

The City's Unfortunate Tactics
As predicted, the City has artificially added costs to the Sheriff's proposal in an effort to hide the actual savings that will result from its adoption. Despite this manipulation, the City itself now concedes that the Sheriff's proposal will yield at least $3.6 million of savings over the next 8 years.    

Reproduced below is a chart the city prepared to compare costs under the Sheriff/SMPD systems.  Consistent with our prediction, the city has added costs designed to minimize the savings. These include:


At the same time, the city has not recognized any of the costs associated with rebuilding the SMPD, including the $400k to $1.2 million the city will be spending over the next 4 – 12 months to retain the Sheriff to patrol from 6 pm to 6 am while this rebuilding is taking place.  

Nonetheless, even if one accepts all of the city's assumptions at face value, under the proposal we discussed (Proposal A below) the city admits that retaining the Sheriff will yield ever increasing annual savings, reaching over $500,000 in Year Five and over $800,000 in Year Eight. The City's analysis confirms that the savings resulting from retention of the Sheriff will total $3.6 million over the next eight years alone while, at the same time, increasing actual patrol hours by over 20%.

If the costs associated with retaining the Chief as Public Safety Director is eliminated, which it should be, the savings increase by $1.2 million ($150k x 8 years) to a total of $4.8 million.

These savings would go a long way to addressing the city's stated goal of attaining long term financial stability and freeing up money for civic improvements. They will not be achieved if the UUT increase passes and the SMPD is retained.  

sierramadretattler.blogspot.com

106 comments:

  1. FYI: the cpi over the last five years is less than 2%, not 3% as assumed by the city. The savings are larger than stated.

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    1. That would mean the savings are less than stated, because the projected future cost of the local police is being overstated.

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    2. So $3 million or so in savings over the next few years doesn't float your boat? Plus with the Sheriffs we know they won't quit on us.

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    3. What doesn't float my boat is the statement that the savings are larger than stated, when the original poster just used evidence that would mean the savings would be lower than stated.

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    4. No. The city put a thumb on the scale and applied a higher "assumed CPI" growth rate to sheriff's costs (3%) than to SMPD costs (2.1% based on COLA). if you apply the same growth rate the savings for the sheriff are greater.

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  2. What is so confusing is why the City is so adamant and loyal regarding the retention of the police. The police department as a whole has never returned this loyalty and affection. How many times has the police dept. sued the city? How many officers have quit? How long has SM police dept. supplemented its patrol with overtime police from other cities? Keeping the police, not matter the cost, is just false pride on the part of the City. Once again, they are serving themselves and not the citizens.

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  3. Excellent post, Mr. De La Mora.

    It appears that the Tax Me crowd with their proposed 66% UUT tax increase doesn't have the, ahem, spine to make the decision to go with LA Sheriff Dept and shut down the half-time SMPD.

    Is the reason to keep the super expensive SMPD so the City can also ram through a parcel tax, too? How irresponsible of them to waste money like this. We're not San Marino.

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  4. You don't understand, the Mayor's email is running 20 to 1 against hiring the Sheriff's full-time. No, really!

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  5. There are no e-mails. Otherwise they would have produced redacted copies.

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  6. The tax revolt in Sierra Madre and the support to write in BARRY GOLD for city council is a reaction against the pyrimid of lies and corruption of government, in Sierra Madre, in the State of California and in Washington DC THANK you Rick and John.

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    1. Oh, how I would love to see those who think there is a pyramid of lies and corruption file suit against the City for those crimes. We could make the news just like Bell and other cities of their ilk. Please, please call the DA NOW!

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  7. Being loyal to SMPD is akin to remaining a loyal Cleveland Indians fan

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    1. No, it's worse. The Indians were in the Workd Series in the 90s.

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    2. At least the Indians never quit the team.

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    3. They never should have traded Rocky Colavito.

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  8. Does anyone know if any more Sierra Madre PD have left? There are rumors that others are on their way out.

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    1. I'm figuring those SMPD officers that are still there know SMPD will be gone within 2 years. In the meanwhile, always working day shifts is a pretty nice gig.

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    2. We will be left with the dregs of SMPD who are such awful candidates that they are incapable of finding another employer.
      Great Management Gianonne/Aguilar !

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    3. 8:36am...Bingo,,get the man/woman a prize The UUT will have zero chance of fixing the problem as long as compensation lags way behind other PD's

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  9. More SGV cities should take heed of any ad all numbers being generated from this LACSD exposure to Sierra Madre cities who have tried in the past to change over have been stopped by their city manager an city council member's wanting only to hid these eye opening numbers. Remember if you want to go shopping you need to know the price's first.

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  10. Two big reasons to contract with the Sheriff's departmen: Its cheaper and you get better service. A third one is that you won't have the lawsuits against the city and you won't have the police union's aggressive involvement and meddling in local politics as you see happening in Arcadia right now.

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    1. Believe me, the cops meddle in politics here as well. Harabedian's infamous SMPOA "patchless" postcard being a good example.

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    2. You mean those "black casual" cop uniforms?

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  11. Don't forget the same people who tried to poison you with that special water now wants to steal your pocket book blind. http://edition.cnn.com/2016/01/13/us/iyw-flint-michigan-water-crisis-how-to-help/index.html

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    1. Nobody tried to poison you,calm down. We are still drinking the same water BTW?

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    2. 7:51, do you mean the Democrats that ran Flint for over 50 years?

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  12. Because of its low sales tax base, Sierra madre is the 4th most dependent city in the state on UUT revenue. Measure UUT restores the rate to what it has been historically. Your solution is to cut our UUT revenue almost in half from historical levels, close our police department and then contract with a sole source for law enforcement. And once the police department is closed the sheriff can jack up its rates with impunity and essentially have us completely over a barrel. So essentially you are a political vandal. You don't have the courage to run for council so you are trying to harm the city financially until you get your way and only then will you support restoring the UUT to historical levels.

    Cutting our UUT revenue by 40 percent from historical levels is suicide.

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    1. So you do not think city hall is capable of negotiating a good longterm contract with the Sheriffs?

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    2. "And once the police department is closed the sheriff can jack up its rates with impunity and essentially have us completely over a barrel."

      Is that why EVERY city that's incorporated in LA County since 1954 has contracted with LASD and LA County Fire?

      Repeating a lie often does not make it the truth.

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    3. "Lakewood was the first city in the nation to contract for all of its municipal services when it incorporated as a municipality in 1954, making it the nation's first "contract city." Many other Los Angeles suburbs, such as Cerritos and Diamond Bar, have adopted the "Lakewood Plan.""

      https://en.wikipedia.org/wiki/Lakewood,_California

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    4. The LASD would have us over a barrel? You mean like the SMPD has all these years?

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    5. Wasn't SMPD the sole source for law enforcement? That is, until a bunch of them quit or retired?

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    6. Excellent info.Factual local basis for the "contract it out" proposal.This idea seems like our route to long term financial survival -once we are through with BK and the collapse in property values this mess will cause.

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    7. Okay, Elaine, thanks for the sermon at 7:59. How's the Benz holding up?

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    8. City Hall committed suicide, 7:59. They signed themselves a sweet CalPERS deal and now that financial ruin is knocking on the door we're supposed to pick up the pieces. Is it OK with you if we say no?

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    9. 7:59am every contract city pays the same rate. Your spreading bullsh.. by suggesting LASD lures with a bargain basement rate...then wammo. Get Lost!!

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  13. Cutting our UUT revenue by 40 percent from historical levels is suicide." Yes it is but it seems to be the only way to get rd of our non functional PD.I also like your idea of restoring funding after we clean house,more should be said to that point.

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  14. What it has been historically?
    Historically, city hall promised the UUT would be temporary.
    Yep, abolished altogether after a few years.
    Historically.

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    Replies
    1. The 6% UUT rate was originally supposed to be "temporary", too. How'd that work out?

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  15. No name calling pleaseMarch 8, 2016 at 8:19 AM

    If the sheriff had any history of "jacking up its rates with impunity" it would be reflected in La Canada's police service costs. In fact, those costs are lower than SM's by $700k annually.

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    1. Stop it, "no name". Those pesky facts are ruining the Yes on UUT campaign

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    2. Reality is such a downer.

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  16. Measure UUT is the CalPERS tax. It doesn't fix the pipes.

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    1. Where's my Platinum Pension?

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  17. so Sierra madre should have it's most important 100 percent local benefit revenue source cut back by 40 percent from historical levels because you want to close the police department and you don't want Sierra madre to be able to pay its debts. Yeah ok.

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    1. Sorry but you leave me no choice.8:36

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    2. The city is well on its way to insolvency, Measure UUT or not.

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    3. If you looked at the warrants often enough, you would see that bills do not get paid on time. They regularly pay payroll. Even the city attorney is not paid on time. Take a look at their bills. Elaine says we have no right to see those bills to the attorney. The fees are horrendous. Not to mention the bond debt and the CalPERS debt. UUT won't help.

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  18. We don't pay CalPers with the Sheriff. Therefore, the need for a high UUT will Di,minister over time.

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  19. With the LACSD if you don't like the performance of an officer you make one phone call and they are replaced. With SMPD you have an officer shoot someone you keep that officer and spend more money training them, and then who knows how good they will performed in a real emergency. Plus, every SM police officer can apply to the SD for a job. This is a no brainier in my book.

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    1. If there are current SMPD officers that can't qualify for LA Sheriff Dept., I'm not sure I'd want them patrolling Sierra Madre as SMPD.

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    2. If they had options they'd have left.

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  20. And it would not cover all the the Calpers obligation !The UUT would need to be increased every year to feed Calpers.

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  21. LETS FACE IT!

    the city council, the city manager, the city attorney are the tax payers biggest problems.

    Co po co can not even grow grass in his front yard, but he can surely spend ALL the taxpayers money!

    He has gotta be replaced!

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  22. No more Calpers & No More Co po co

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    1. You may want to get rid of Calpers but are you willing to commit the city to $60 million to get out? That would be the buy out. And, Mayor Capoccia is only one vote. Even if you don't elect him, there are still 4 other council members.

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  23. Thank god the Tattlers here aren't in the majority. I'm voting yes on the UUT.

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    1. Your choice. But know the facts when you do. Don't cry when they need to go up year after year. Not to mention the fact that tonight's CC may have a lot more suggestions for our taxes. Follow like a sheep or do your homework.

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    2. You probably think a permanent 66% increase will keep SMPD. It will pay for a big ass raise for them before the money runs out in a year or two.

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    3. Okay. Care to share any substantive facts as to why the UUT will benefit us? Or are you just here to make snide remarks?

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    4. Measure UUT exists to bail city hall out. They made some awful deals with city employee unions over the years, and now we're expected to save them. And they won't even say please.

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  24. WE THE TAX PAYER HAVE NO COMPENT CITY MANAGEMENT!

    AND THATS AN UNDISPUTABLE FACT!

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  25. The authors of this attempt to cripple the city financially could have faced the voters in a month as city council candidates but didn't (and your write-in candidate who claims he is "leading the NO on UUT Campaign" supported a UUT rate of 9%) and your solution is to drain the city's cash resources until the Council is forced to close the police department. That about sum it up? Too cowardly to actually campaign for office so you do it this way?

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    1. There you go, the truth is out. The Tattler put Measure UUT on the ballot.

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    2. Is that you, Mayor? Don't think Mr. Gold said he was "leading the No on UUT Campaign." He has said he doesn't support this UUT. He is well aware that a UUT is needed. When he was on the Commission he supported a 9% increase with a sunset. As far as I know he is campaigning. He has come to my door to speak. Cowardly? Cowardly is being led by Elaine and her minions. I think becoming a write-in candidate took guts .

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    3. Wistaria hysteria!March 8, 2016 at 11:31 AM

      It looks to me like the author put his name to the piece. Unlike you.

      And if this a city initiative, why is it you believe only the council and city employees should have a say?

      Finally, the goal is to free up money to spend on improvements to parks, the library, and senior services. The excessive police spend makes that impossible.

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    4. 9:54 aka Martin Truitt, the Pasadena leader of Yes on UUT, you're so cute when you're mad.

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    5. Martin, you're sexy. Come say hi to mama up on over here.

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    6. Martin is celibate for tax season.

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    7. Martin's saving himself for a Reagan Republican.

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    8. He's no Tea Tart.

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  26. What the city needs to say:

    "We screwed up badly and we need you to bail us out. We are very sorry and promise we'll never ever do it again."

    Of course they will never do that.

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  27. Our goal is to drain our enemy's cash resources until we get what we want.

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    1. You sure yours isn't to be paranoid and have anxiety attacks?

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    2. I think that's some of the CC.

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    3. Still here and still babbling?

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  28. With the UUT passing the average bill will only increase about 10 dollars per household. So about $120 a year, which is a huge pittance. I don't get the huge issue with the Tattlers, but I also don't share the philosophy of get rid of the police/library/fire/anything else I don't want because I hate taxes out of principle. It's really not that much, and its a shame its so hard to get things done in this town thanks to anonymous smear campaigns.

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    1. My utility taxes will be over $50.00 a month if this passes..that's $600.00 a year to pay for something that should be out sourced or downsized. So it's ok for me to reduce my use of my utilities so that I can save money on my tax but it's not ok for the city to economize to save money. Just because it's not much for you to pay a little extra it is a lot for a large portion of the city. Not everyone is rollin' in a benz.

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    2. I agree 10:24. Smear tactics such as maligning the mayor and the city manager; misleading the voters by saying the UUT will be a 66% tax increase; using the same argument as last ballot which said the property tax, UUT, and sales taxes would go up to take care of the short-fall in the budget, those kinds of statements. You can fool me once, twice, but this time I'm voting Yes. And, for your information, this is NOT about the sheriff's department. This is about running our city government in a way that can be productive for all. The Sheriffs Department is a fine organization and I would be proud if they became our law enforcement.

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    3. This isn't about the Sheriff's Dept? hahahahahahahahahahahahahahahahaha

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    4. 10:24AM Is that you Mr. Garcia?

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    5. It is a 66% tax increase. Total $ paid will increase 66%, total UUT money collected will increase 66%. Too bad the Yes on UUT people cannot admit it.

      Math is hard.

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    6. Math is easy. Going to 10% from 8% is not 66%.

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  29. Yes on UUT people are employing scare tactics to convince the undecided that they must vote yes. I do not believe that my property value will go down if we have the Sheriff's - what nonsense.

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  30. 25 years ago, people opposed to starting a UUT said long and loud, "Once this tax goes in place, it will never come out" and the proponents said, "It is a temporary measure only, and it will go away! Don't listen to the scare tactics of the opposition."

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    1. And in those 25 years the sky fell and SM collapsed into a failed city with rampant crime and dead end property values. Grover Norquist is calling...

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    2. The City of Sierra Madre thrives in spite of what City Hall does. This town's people are much bigger than the local government.

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  31. WE THE TAX PAYER HAVE NO COMPENT CITY MANAGEMENT!

    AND THATS AN UNDISPUTABLE FACT!

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    1. 11:42 I dispute that indisputable fact. We've had worse.

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    2. I don't know about that, 10:07. Only under the current admin did we give the police chief a $20,000+ raise as a "public safety director" so we could have half of a SMPD police force.

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    3. Thank you, John Harabedian. That public safety director the really worked out, didn't it?

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  32. Short memories concerning the delicious looking and smelling tap water your city manager and city council member's pumped to your faucet's now they want to pump you in a new direction. watch out for scare tactics being spread by those phonies in Sierra Madre City Hall.

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    1. All city hall cares about is the money. Pensions and benefits. That is what Measure UUT is all about.

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    2. UUT funds will not go to water issues, including water pipes and sewer. That's the water dept. to pay with those 5 year water rate increases.

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  33. 10:24,,, you obviously have no experience with a professional police force. Too bad because you would be singing a different tune.

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  34. We the people need to Repeal All UUT taxes and make city hall budget there money correctly. If city hall wants taxation then I want a reduction in all of the utilities I use?

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    1. Oh, now I understand. Pushing your agenda of no UUT at the expense of a balanced budget and city services.

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  35. Here's a good one? Is city hall going to try to charge us a UUT tax for all the rain which GOD provided us?

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  36. Just figured my UUT at 10%. $660 per year. At 6% it would be $400. I say starve the beast and let me decide where and how I spend my money.

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    1. At his Iguanas "State of the City" address today Mayor Capoccia stated the UUT he wants would come to $20 a month. Seems light.

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  37. This comment has been removed by a blog administrator.

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  38. Elaine emasculating Cappocia.

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  39. tony brandenburgMarch 8, 2016 at 8:57 PM

    wtf, how many idiots are actually backing this stupidity?

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    1. Follow the moneyMarch 8, 2016 at 9:08 PM

      The council, the entire city staff and SMPD, each which will benefit directly from this unprecedented 66% tax increase.

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    2. tony brandenburgMarch 8, 2016 at 9:13 PM

      i'm so surprised. haha

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  40. FYI LASD doesn't belong to Cal Pers,,, they are part of LACERA for just LA County employees and it is well run.

    While the county has retirement cost concerns, they have a good handle on it, and has not ever been the budget busting controversial issue seen everywhere else.

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