Tattler: Here's a question I meant to ask earlier. Are any Utility Tax moneys being used to make CalPERS payments?
City Manager: The UUT is a general tax, it is used to fund General Fund activities. The General Fund includes CalPERS payments for any employees paid from the General Fund (mostly non-utility employees, including Public Safety, Public Works, Finance, Library, Community Services, etc). It is fair to say the UUT funds a portion of everything budgeted in the General Fund, including CalPERS payments.
Mod: You might recall that when this question was asked during the run up to the April 2016 election, the answer from the city and the winning candidates wasn't quite that clear. I remember being told by the previous City Manager that it was not possible to track exactly how utility tax money is being spent, therefore we will never know. Very devious, that one. Prompted by yesterday's Tattler post, here is how the rest of this conversation went.
City Manager: When we talk about the future of the library building I don’t think it’s a foregone conclusion the building will be demolished. In fact, I would say preservation of the Library is a likely outcome. I know people assume the future is condos or apartments, with a demolished library, and a new building on the site, but if I were a betting man—at this point—I would not bet on demolition.
When I was at the joint Library Board and Community Services Commission meeting I asked them to vote as if demolition of the building was the probable outcome. I did this so they would understand the gravity of their vote, and all potential outcomes, not to imply that was the course which we would pursue. With that said, all outcomes for the Library building remain on the table.
Things change constantly and trying to predict a decision which is likely a few months away would be difficult on my part as we are still so early in the due diligence process. At this point though, the only conversations we have had among staff internally are preserving the Library building and incentivizing rehabilitation.
The second point you discuss on the UUT is interesting to me. The idea the UUT would “save” the Library is something I had not heard before, at least not in the context you are writing about it. I wasn’t here for the discussion however, so my interpretation is 100% looking back on a historical event. I had always assumed the services the Library provides were the items the UUT would pay for (save), not the building where the services were held. I can actually see how someone’s view of this would be influenced by what side of the UUT discussion they were on.
A “NO” voter on the UUT probably sees a plan to move the Library (which will reduce future costs significantly, while also avoiding immediate costs) as a violation of what was promised in the UUT campaign. A “YES” voter on the UUT probably sees the plan to move the Library as carrying through on the promise to not cut Library services—which is exactly what they were told by the UUT campaign.
A “YES” vote will save the Library! After reading your article I can see this from both viewpoints.
It seems to me the idea to preserve Library services, while simultaneously reducing operating costs and avoiding substantial one-time costs, would be welcomed by the public. Sierra Madre residents appear to want services retained without increasing taxes. I’m not sure where else this makes as much sense as with the Library. I understand people reflexively go to Police service, but the discussion there is on a reduction of costs and a reduction of service, which is a key difference, as the Library is a reduction of costs, but not a reduction of services.
I’m curious on your perspective around the Library. Do you believe moving the Library is a violation of the UUT campaign? Also, if moving the Library is able to reduce annual operation costs, and avoid large one-time costs, while keeping the level of service the same, why do you think people are opposed to it? The sense I get is people fall into three categories:
1. Fine with the move, fine with whatever happens to the Library building.
2. Fine with the move, do not want the Library building demolished, but are okay with a sale.
3. Not fine with the move.
The vast majority of the conversations I have had are with people who fall into category 1 or 2.
I’m sure we each have our own echo chamber, but is this substantially different than what you are hearing? If the Library was moved, but the current building was preserved what would your viewpoint be?
If the community is against new taxes AND reduction of services AND changes to how services are provided we are in quite a pickle!
Thanks for continuing the discussion in the community, I look forward to hearing your thoughts.
Tattler: If the Library is in deteriorating condition, and cannot be repaired by the city because of the cost, who would then want to take on the big expense of both acquiring that property and also rehabilitating that sadly neglected building? What commercial benefit would they see? Property is gold in Sierra Madre, with the cost being about the same. Unless you know someone who is both exceptionally kind and wealthy, I cannot see that happening.
City Manager: I agree, property is gold in Sierra Madre. The high cost should actually work to the City’s benefit in a seller’s market. Keep in mind, we have not had an appraisal of either property completed yet, either as individual properties or together. In addition to this, I have not talked with anyone or any business about potentially purchasing the building. With all of those caveats, there are a couple of scenarios I can see playing out, but for purposes of this discussion, I’ll focus on the scenarios which lead to the rehabilitation of the current building (all numbers are examples):
Scenario Number 1: The properties are valued at $3.0M together. Private market repairs are expected to be $1.0M. The Council determines there is value to keeping the structure in the city and incentivizes repairs through the private market. At sale Council agrees to rebate $1.00 for every $1.00 spent on rehab to the new owner up to $1M. The owner also has the option of selling the attached lot for a single family home (under this scenario the City would restrict the development of the second lot to single family only). The currently vacant lot should receive a good price at market. Now the owner has a building which is fully rehabbed and has a value of more than the $3M, but has spent significantly less through the sale of the second property and the rebating of rehabilitation costs. This is also before State and Federal grants or property tax rebates which the property may be eligible for as a rehabilitation.
Under this scenario the Council has found a way to incentivize the rehab of the Library building, while also moving to a new location which will reduce Library expenditures quite significantly, meaning taxpayers pay less for better service.
Scenario Number 2 would be: It is determined to be too costly to move the Library to the YAC with available funds, even though the sale of the Library property. Instead of selling the parcel the Library sits on, Council instead opts to sell only the lot behind the library. The sale from this lot is used to fund a large portion of the repairs at the current library. The library, because it is too small to host programs, moves these programs to other City locations, likely the Hart Park House, Sierra Madre room, etc. Under this scenario the City avoids large one-time costs and does not need to ask for a tax increase. This option does minimally reduce services as well as annual costs.
I’m sure there will be lots of community discussion on what is best, but at this point I don’t see why rehabbing the current Library building is not a viable alternative.
Tattler: I have no problem with the Library moving. It is a bold and creative move that the happy Library guy has come up with. My gripe is over how the UUT hike in 2016 was sold. Remember, we beat a UUT increase here twice, so the margin of that loss was sobering. The continued survival of the Library, along with the PD, was definitely part of the YES message. Measure UUT passed, and now the Library has been declared too costly to upgrade and in danger of being razed as part of a property sale. That is not going over well with some.
City Manager: I can’t speak much as to how the UUT conversation went, but I would hope it was focused on Library services. Without the UUT passing the Library services we currently offer would certainly be reduced with most eliminated completely. I can see your point of view however, and understand people may feel the UUT was supposed to pay for Library services as well as the building itself.
My bottom-line is we are bringing forward several options to reduce the cost of operations as opposed to asking for more money through taxes. We were very successful using this approach to balance this year’s budget. For me the Library discussion focuses on how to provide the best services we can at the lowest possible cost.
Tattler: One thing that I think needs to be done. A public conversation on the city's debt. It needs to be spelled out and defined. It is the publics' debt. They have to pay it, yet largely folks do not understand the situation. It needs to explained exactly how the city got to this point, and what needs to be done to deal with it. Many cities are dealing with problems just like Sierra Madre's.
City Manager: I agree on the debt. The long-term debt of the city hasn’t been managed very well. We are currently set to bring our refinancing forward in September. At this meeting I intend to have a formal discussion about current debt and each repayment schedule. It fits in nicely with our discussion on infrastructure maintenance, replacement, and repair.
Mod: A lot to mull over. If I am reading this correctly, the good citizens of Sierra Madre could get their first good hard look at Sierra Madre's massive debt problem ever in September. Something most previous regimes refused to do. I can't imagine some people being very excited about that, though I certainly am.