Santa Paula Council: Money, Taxes and East Area I Tax and Timeline

City trying to push through a 1% sales tax increase

By Sheryl Hamlin

After several public presentations and commentary, the Santa Paula City Council attended to the business portion of the meeting on March 7, 2016. Recurring themes were money, taxes and East Area I, whose revenue benefit is at least twelve (12) years away, according to Mayor Hernandez.

Item 10 A. Adoption of Wastewater Rebate Revenue Rebate Policy

sandra_easley_finance_director

Sandra Easley, Santa Paula Finance Director

This item had been brought up conceptually at a previous meeting, wherein Terry Maas of FirstSouthwest, the city’s bond consultant and underwriter, explained the concept of the rebate. The language was hence drafted and presented for approval. Because of software issues, the first rebate of $60 will be seen in the May bill, but will reflect the period of January, February and March 2016. Council Member Gherardi said that with the issuance of the RFP for a new operator of the plant, there may be more savings.

Item 10 B. Fiscal Year 2015-2016 Mid-year Budget Report

Presenting both items 10 A and 10 B, Finance Director Easley informed the council that she had manually projected each account in the General Ledger Chart of Accounts through June 30, 2016 yielding the following table. As the table shows, the revenue shortfall exceeds $400,000 of the budgeted amount. Note that the Fiscal Year 2014/2015 also ended with a decrease in the General Fund and a warning from the auditors.

 

 


revenue_projection_2016

On the expense side of the General Fund (GF), the expenses are projected as follows:

expense_projection

Director Easley noted that Planning revenue is down due to lack of activity and permit revenue is down. After the closing, she expects the year to end slightly negative at $(43,149).

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Connie Tushla

Not spoken by council or Director Easley or the Planning Director or the City Manager was the amount of revenue the city received or plans to receive from East Area I in the current fiscal year. Note that the Planning Department revenue was short of budget by $197,090 and Permit revenue was short in all departments. In spite of the shortfall, Director Easley asked for approval of six (6) part time field technicians to go door to door asking people to turn in their water softeners in order to improve the chloride problem in the water, plus a project to prepare, plan and profile storm drains to the River.

Connie Tushla spoke during Public Comments. She chairs the Economic Development Committee of the Chamber. After interviewing 27 people who live in Santa Paula, 95% listed cleanliness of Main Street as a headwind against economic development. Also mentioned by those surveyed was security, to which the Chief has been walking the streets, she said. She asked about the machine to clean the sidewalks. Brian Yanez, Interim Public Works Director, said they had picked a vendor and planned to present at a future council meeting for approval to proceed. Ideally, Ms. Tushla said, there would be a person assigned to this task on a regular basis.

Item 10 C.

10C_agenda

Item 10 C became a contentious game of parliamentary chess between Council Member Gherardi and Mayor Hernandez. With no discussion, Council Member Procter opened the discussion with a motion to put a General Sales Tax of 1% with a 12 year sunset, a citizen advisory committee and an “advisory” distribution of funds of 50% Police, 30% Fire, 20% Youth Programs.

Council Member Gherardi responded by saying that Mr. Cotti’s calendar showed there was plenty of time before the language of the resolution must be finalized. The $50,000 council approved study was not finished. Therefore, it was premature to craft language without this study. She gave the analogy of a “leaky boat” saying “you can’t bail out a leaky boat continually … at some point you have to plug the hole”.

Mr. Cotti reminded the council that the Election Code 92.22 required the full text of the resolution 88 days before the election. Mr. Tovias asked for clarification of the council vote for approval. To which, Mr. Cotti said 3 out of 5 for a motion to draft language and 4 out of 5 to put a general tax on the ballot. Council Member Tovias then gave the history of Measure F from his perspective. Recall that Measure F was a “Specific Tax” which required 2/3 voter approval. It failed. A general tax requires 50% plus one vote, but the distribution of funds is only “advisory” and can be changed from council to council. Mr. Tovias said that Measure F was a response to a crime problem at the time. Council Member Procter said we must get the ball rolling with straw language for dialogue. Mayor Hernandez said that “East Area I is years and years off” and that the twelve (12) year sunset clause of the proposed tax was an estimate when East Area I would be producing revenue to the city.

This discussion also revealed that Mayor Hernandez and Council Member Procter had been meeting with the Police and Fire Department management, as well as the union, to arrive at the 50, 30, 20 split, saying that the Brown Act would only allow two council members to meet without public notice. To this, Vice Mayor Crosswhite said she felt “sideswiped” because the entire council was not included. How can we write a resolution, she said, without benefit of the discussion? Have you no reports for the council? What rationale did you use to develop this proposal? The council members are also stakeholders and they must be apprised of these meetings, she said.

Council Member Gherardi reiterated that Council Member’s motion was premature. The citizens are asking for details and the council should give input. There must be a presentation from this subcommittee. Note that this was an unofficial subcommittee, not selected by the council in a public meeting. Council Member Tovias said that the citizens must be polled. The streets are falling apart. He agrees that it is premature.

Sensing a rift in the council, City Manager Fontes provided this information. By March 11, 2016, Phase I of the study would be finished comparing election alternatives. By April 8, 2016, the restructuring component would be finished providing the advantages and disadvantages of all options. Mayor Hernandez, realizing that the timeline was essential in ending the rift, suggested a modification to delay the resolution language until the study is complete.

Council Member Gherardi said that a “Tax is the court of last resort”. She suggested they look at the taxes Oxnard has implemented and still have not fixed their structural issues.

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Martha Brown

Mayor Hernandez reiterated that revenues from East Area I would not be forthcoming for twelve years (12). Without the benefit of a Planning Department report on this project, one can only assume this information was provided to the council in the closed session. The Mayor allowed Martha Brown to speak in the middle of the discussion who described an incident recently where she was threatened by a knife when issuing a citation saying support for the police is essential.

After more discussion Council Member Gherardi moved to table Council Member Procter’s original motion. This passed 3-2. A new motion was presented to hold a public workshop as soon as the possible prior to April 8. Mr. Cotti will attend to synthesize the meeting. At the April 18th meeting, the council will give final direction to the City Attorney for the language in the tax measure. This will allow time to set up a committee and prepare the campaign. This passed unanimously.

Staff Comments – Community Facilities District (Mello-Roos)

Another notable item was presented in the City Manager’s Staff report. He said that they have been working with Terry Maas, their bond consultant, on the creation of a “Community Facilities District” for city controlled properties in East Area I. Mr. Maas’ firm will be the underwriter, he said. There was question from the council if this funding mechanism related to the presentation by Kosmont and Lynn Jacobs earlier. To which Mr. Fontes said “CFD has been around for years” without answering the question. Council Member Procter asked if the CFD required a vote, to which Mr. Fontes said that “it depends”, but the city may authorize it. With this lack of clarity, Mr. Maas provided further information after the meeting explaining that the Community Financial Districts are formed under the Mello-Roos act of 1982 and encompasses the area being developed, only taxing the properties benefitted. Although not said aloud at the meeting, it appears that East Area I will have a Mello-Roos tax. Mr. Fontes promised details at a future meeting.

The agenda and staff reports may be downloaded here. The video is available here.

The next installment of this meeting will cover notable presentations and citizen comments.


For more information about the author, visit sheryhamlin.com

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Sh
Sh
5 years ago

The last vote was 4-1 … not unanimous … Mayor Hernandez voted no…sorry…