REVISED—News Analysis: Committee Recommends 1 Cent Sales Tax Increase in Pacifica

BY LIONEL EMDE
RIPTIDE CORRESPONDENT

The Financing City Services Task Force met January 7 in what appeared to be the last of four meetings to determine what to recommend to City Council as a substitute for the Fire Assessment, which expires in July 2009. Current yearly income from this assessment is $1,038,000. The committee recommended a 1 cent sales tax increase to council, with possible consideration of a sunset clause at some future date. Timing of the vote for this tax increase is the June 2009 state ballot. It requires a simple majority to pass.

Consulting firm Fairbank, Maslin, Maullin & Associates conducted a phone poll designed to gauge community sentiment for the three alternatives: a sales tax increase, a utility user’s increase, or a new parcel tax. Budget for the consulting firm is a maximum of $30,000. The City of Pacifica started this fiscal year with a $4.6 million balance, information which was not communicated to the public in the poll. Answers from the polled public indicated a preference for a sales tax increase over the other two alternatives, and the committee rejected the utility user’s tax increase outright during the meeting. The committee’s recommendations are nonbinding on the council.

How much money raised?
City Manager Steve Rhodes estimated that a 1 cent sales tax increase would raise approximately $1,674,000, based on fiscal year 2007-2008 figures. Several audience members questioned the "stopgap" nature of such a tax increase, and called for more commercial development in Pacifica. Committee member Omar Saleh agreed, adding that the city needs to agree to development but that everyone should tell 10 friends to come to council meetings and hammer home this idea.

Undiscussed was the issue of employee salaries, benefits, and pensions, which the city is struggling to pay for, and which make up the vast majority of the city budget. Bernie Sifry talked about money raised by a sales tax increase being "earmarked" for purposes it is advertised for (fire, police, etc.), but Rhodes made clear several times that the general fund is where the funds would go, and there is no specificity of expenditures from there.

Was this process open?
Mark Stechbart raised the issue of lack of documentation of the committee’s work before this meeting. Staff revealed that no one had seen the final reports from the consultant until this meeting, and Stechbart asked who was responsible for circulating draft documents and then withdrawing them, despite there having been public meetings about them. This reporter had submitted a Public Records Act Request for any and all documents relating to the committee’s work previous to this meeting, and the answer relayed from the city manager was that there were no such documents or emails, despite these drafts' existence and use at public meetings.

What happens next?
The matter will be taken up at the first council meeting in February. Rhodes said that two city budgets will be prepared prior to the election—one showing cuts equivalent to lost revenue from the Fire Assessment and one showing projected added revenues if the sales tax measure passes. Rhodes estimated an election cost of $6 to $7 per voter to put the issue on the ballot, for an estimated total cost of between $144,000 and $168,000. Costs may go down if other issues appear on the ballot, but currently there are none. Uncertainty about the state’s budget picture complicates the matter, because a state sales tax increase also has been floated as a way to plug the huge state budget gap.

 

Comments

[Lionel Emde]

Great thread, thank you all.
It's really important that the debate continue on this subject.
Peter is correct, it's a national problem, and unless the Obama administration goes Roosevelt, we're all in trouble, IMO.
But there's a problem here in Pacifica with access to public documents. Staff apparently believes that docs circulated at a public meeting can be hidden from public view until some internally-reached conclusion is reached.
Sorry, that is wrong and a violation of the Brown Act.
I dissent.

[Dan Underhill]

I would suspect that those of us who have incomes could take a 1% sales tax increase in stride. I am curious as to whether there is anyone (including those who don't live here but sometimes shop here) among us who would spend their money over the hump to avoid paying Pacifica's 1%. We need to pay close attention to how the poor are doing if we institute such a tax but it may be the best idea going.

And yes, Peter, it is important that we all remember that it was not the City Council who trounced the blank check for Mr. Peebles to build whatever the heck he pleased, but rather it was most of Pacifica. If Mr. Peebles had proposed or were to now propose a project that was not at odds with the zoning of his property I expect that he, even though we all meet with some resistance regardless... in this town, would stand a better chance of success.

[Jeffrey Simons]

I know this is very confusing (we had an exchange at the meeting as to what this increase actually is)

it is a 1 cent additonal sales tax on every dollar that goes directly to our General Fund. which is 1% more of every dollar (8.5% up to 9.5%).

we currently get 1 cent of every dollar from the 8.5% sales tax, so yes adding another cent just for Pacifica would be doubling the money Pacifica receives from the sales tax in the city.

Its hard for me to see why this is called a tax increase for "vital services" when the city is spending $50,000+ on a streetscape consultant for Palmetto, $50,000+ on a facilities study, $200,000+ for a garbage service RFP, $80,000 just for legals services on the last contract negotiation with Coastside Scavanger, $100,000 for a Pedro Headlands trail, etc . . .

There's definitely some meat in that budget that could be trimmed before we the citizens are asked for another handout, even if its only $42 per man woman and child in Pacifica.

[Lance]

Mr. Bray (with two D's) what you are saying is also correct. We all have calculaters. So try this one:
existing 1% (12%) plus 1% (12%) equals 2%.
12+12=24
Isn't that double?
I know, it's only a penny. What the hey, a penny here a penny there. Pretty soon all you got is a dollar. And it's only a dollar and so on. The point is, the city has not promoted ANY development in this city of any significant kind for 30 years except the Waste Water Treatment Plant.
Oh, one other point, the fact that only Pacifica will be subject to this tax makes me tingle all over. "Hey shop Pacifica and pay a higher sales tax than Serramonte." Now there's a whoopee!

[Peter Loeb]

"What would YOU suggest to council." Nobody out there has any answers, so turn the question back on me, eh? I have no sage advice, and neither do you. That's the point. Saying that the Council's job is to come up with magic solutions when there are none is foolish.

There's not much the Council can do about stalled projects and empty storefronts. They're the result of the collapse of the capital markets and the national economy. Nobody can come up with a plan to grow the local economy when the nation's economy is failing. Sorry, Virginia, there is no Santa Claus.

One solution for our local financial woes that is on the table is a local sales tax increase. I don't like it, but it is a solution. Nobody can come up with something better, including the City Council and the professionals who consult on these matters. If anyone out there has a specific and usable idea about how to improve our local economy, let's hear it.

And the solution is NOT "If the Council wants more money, they should have approved more development, such as at the eye sore gravel pit." The Council has ultimately approved all development plans that have come before them. (No project plan for the quarry was submitted to the city.) The Council can't approve more development if they don't have development plans to approve. If they had 'em, they'd probably approve 'em.

[Bruce Hotchkiss]

Mis-state? I am sick and tired of the political BS whether it comes from the right or the left. These were no mis-statements, these were intentional attempts to misinform. I will come right out and say it, someone lied to us.

There should be an impeachment process for City Council. If Bill Clinton was impeached because he lied to hide a bj, what should the consequence be for this lie?

[Lance]

Peter, You spent time in the hallowed halls of council land. What would YOU suggest to council. I'm not so sure that stalled projects at Pedro Point, Manor Center, Harmony@1, or Propects are going to be of much help in this current economy. Nor are the empty store fronts in Linda Mar, Rockaway, and Eureka Square going to add to our tax-take. As a wise old grizzled statesman, I would suspect that this council would be very receptive to your sage advice.

[Eric Steiner]

Why is our City Council, which we elect and to represent us, always looking for sneeky ways to pick our pockets. Instead of sticking their grubby hands in our pockets to steal our money, they should live on the already high taxes that are already collected from Pacifica residents. Tell the Council, no more taxes. If the Council wants more money, they should have approved more development, such as at the eye sore gravel pit. More development will bring in more tax revenue. Of course, now it appears they have missed their window of opportunity. Nothing will be developed now, not for many years to come after the ecomony revives from George Bush's disasterous policies. So for now the City will just have to cut back on spending. But please no more taxes. Vote NO on any more taxes. And please don't be tricked into voting for a tax because the Council says it is needed for some important goal, like the fire tax. They always do this to get you to vote yes. But money is fungible. So ultimately, the money goes for the least important projects no matter what the council says. The Council has become our enemy. Please make them take their grubby hands out of my already empty pockets. And if you got kids in school, don't ask me to pay for them. I already pay way to much for your kids. Pay for yur ouwn kids.

[todd bray]

Lance writes: By the way, a 1% increase in the sales tax collected by Pacifica will effectively double the amount that the City of Pacifica takes out of our pockets.

The one cent sales tax increase recommended by the committee is a 12% increase in sales tax not a 1% increase Lance. Of the 8.5 cents sales tax collected currently by the state as a revenue stream Pacifica gets back one cent of that tax or 12%. If we as a community pass this tax increase it will apply to purchases made within the city limits of Pacifica only. I'll be voting for it if it reaches the ballot. The impact on me personally will be $5 a month, way less than a property tax assessment, even less than a six pack of beer or soda's or bottled water.

[Scotty]

Apparently, the officials that we elected and are being paid to solve these problems are not responsible for the solutions -- you are.

I guess council's only responsibility is getting their buddies' pet projects shoved through.

[Peter Loeb]

"The only way I'll vote for a sales tax increase is if there's a plan put forward by city council that CONVINCINGLY includes ways to increase taxes through growing the local economy over the next several years."

What specifically would have to be in such a plan for it to be convincing?

[Lance]

mis·state (ms-stt)
tr.v. mis·stat·ed, mis·stat·ing, mis·states
To state wrongly or falsely

Hmmmm. Wrongly or falsely. Either way, it's interesting. I love election fluff. Like handgrenades and horseshoes, as long as your close. So entertaining.

By the way, a 1% increase in the sales tax collected by Pacifica will effectively double the amount that the City of Pacifica takes out of our pockets. Hmmmmmmm, double. One more interesting number, the amount of money this will increase our revenue stream by (read "what council gets to spend") is 5%. How many of you got a 5% raise last year? How many had a negative raise, I.E. laid off?

[Frank Siciliano]

Said President-Elect Barack Obama today: "Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent."

Maybe Pacifica can budget for a significant modernization program, put all their documents online for citizens to read, whenever they like, and thus remove the inefficiency of dealing wtih constant "drop down and give me 20" demands for documents from the various activist groups in town.

[PACIFICA RIPTIDE]

We must increase his rum ration.

[Steve Sinai]

Good reporting, Lionel. I hope Maybury is paying you well!

Pete D. (and his friends on the council) misspoke? I'm shocked. Actually, the term "misspoke" is pretty annoying. Pete and the city council were challenged over and over on the $7 million surplus, and they consistently claimed it existed. To use the term "misspoke" makes it sound like a slip of the tongue, when it was really a con-job perpetrated on Pacificans by council.

It's pretty unlikely that the solutions to our problems are going to be found by getting Sacramento to change it's ways when it comes to things like tax rates and redistribution. The state has enough problems of it's own, so they don't have any money to give out.

What we do have control over is our economy, and our refusal to develop one is a major, long-term problem. The only way I'll vote for a sales tax increase is if there's a plan put forward by city council that CONVINCINGLY includes ways to increase taxes through growing the local economy over the next several years - not by simply increasing tax rates or asking the county/state/federal governments for handouts. And given the history of pure bs that has been squirting out of city hall over the last few years, it better be awfully convincing.

[stechbart]

here's a factoid: city screwed up poll report supply. 2. it was my suggestion the tax be sunseted and not be permanent. That the city be required to make a case to the voters to re-instate the tax.

----- Original Message -----
From: mark stechbart
To: O'Connell, Kathy

Sent: Thursday, January 08, 2009 9:53 AM
Subject: public records request Re Fairbanks poll copy

1. I need documents describing number of poll report binders produced by pollster Fairbank and delivered to client City.

2. I need documents from city to Fairbank outlining number of report binders requested.

When I commission a poll, pollster and client always agree on numbers of report binders to produce. Printing the report is a cost item and therefore a contractual condition. I always request additional copies from the pollster for distribution. That's the cheapest way to generate extra copies.

Given the city commissioned the report and the report is a public document, I would assume the city would have planned for distribution of copies to the public. I am astounded I was informed today no extra copies are available for the public; the 700 page document would have to be copied in-house and the cost would be, at $.025 a page, around $170.

My suspicion is the city has made access to this public document as difficult and expensive as possible

[Lionel Emde]

I'll answer what I can:

Re the "$7 million surplus": Rhodes said that Pete DeJarnatt misspoke and that after last year's deficit was subtracted from the balance we had a starting balance of $4.6 million.

The committee: (an incomplete list) Chair-Flo Derby. Also: Bruce Banco, Pete Shoemaker, Omar Saleh, Suzan Getchell-Wallace, Sue Vaterlaus, Don Eagleston, Bill Bent
Both Rhodes and Ann Ritzma were there, as well as Julie Lancelle and Sue Digre.
Apologies to those people I didn't know.

"4. Any attack on City workers re: pensions, wages, obligations to them and their families---is not acceptable to me, esp those in line-level services. Any internal structuring of cost considerations should prioritize CUTTING
A. consultant fees
B. management salaries"

I'm not attacking workers, but there is no separating management from workers in this situation because management benefits directly from the contracts they negotiate for themselves and workers.
It's killing us, fiscally speaking, and I agree that the state has to take comprehensive action.
But we have to look at our own situation as well; if we can't even identify the problem, how can we address it?

"It must be pointed out how time consuming PRA request can be on an already understaffed city government. Especially if PRA's are being made daily and in numbers."

They had draft docs, which they chose not to produce in any time frame.

Mayburrito will be posting a revised article with a bit more info--please see that as well.

[Jeffrey Simons]

to answer the $7 million reserve question . . . a member of the public asked if the poll questions took that into account (i.e. how would people feel about supporting a sales tax if they knew the city had a $7 million reserve)

The short answer was, according to the city manager, that we never had a $7 million reserve, this was "mis-statement" by city government, and our actual "reserve" (which is not an actual "reserve", but a balance carried over to next fiscal year) is around $4.6 million.

and no, the pollsters never asked how people would feel about a sales tax knowing the city had extra money on hand.

[Dan Underhill]

I'm not sure I would even notice a one cent sales tax but sales taxes by their nature are disproportionately harder on the poor than income taxes are. If a rich person and a poor person buy the same widget at the same store the percentage of the poor persons income that goes to sales tax is far higher than that of the rich person. Also a relatively small amount of money can decide if a working poor family is on or off the slippery slope. It may be a necessary evil but this is just an example of how it is evil and how evil it is.

[Tom Edminster]

a number of comments:
1. Lionel: good job. but WHO is/was serving on this committee?
2. 1 cent is steep for a city. I worked in SF years ago for a quarter cent sales tax and and then an extension, that was divided between City College and SF schools (K-12). Comparatively, really, a penny is steep.
3. sales taxes are regressive.
4. Any attack on City workers re: pensions, wages, obligations to them and their families---is not acceptable to me, esp those in line-level services. Any internal structuring of cost considerations should prioritize CUTTING
A. consultant fees
B. management salaries
note: Pension obligations need to be looked at systematically, not just as a Pacifica phenomenon.

The political case for
1. OUTSTANDING and deferred needs, and
2. revenue and useful spending
NEEDS to be made by the political leadership of this town. WHEN the administrative leadership cannot PROVIDE public records on a BASIC request for the info related to the work of the FINANCIAL SERVICES Committee., that means the admin leadership is NOT being transparent or serving the POLITICAL needs of the citizens or the allegedly transparent and allegedly generally progressive character of the current political leadership. Some ass needs to kicked. Public bureaucracies MUST be made to serve the public.

I think the City should fight for
1A. better State apportionment of revenue to localities
2A State level tax/budget reform:
more local options that are NOT regressive
a spit between commercial and residential (non speculative) property tax
corporate tax reform (chapter S corp taxes, no tax abatement unless clear public benefit is demonstrated over time...)
raise upper level income tax brackets--ESPECIALLY on an emergency basis
remove the 2/3 stranglehold that currently gives bonehead Republicans (a minority) control over the budget and revenue options @ State level.

Transparency, accountability, an assessment of revenue flows over time, and assessment of deferred needs over time, an assessment of needs for appropriate apportionment of State generated funds---- are what we should push the Council to provide.
a 1 cent sales tax.... should only be proposed
** as an emergency interim measure (2 years)
** AFTER & WHILE the above general efforts to inform and make accountable are PUSHED by Pacifica's political leadership.

GENERAL NOTE: "tax & spend" liberals did not push us into this economic crisis. Less-regulated monopolies...in financial 'services' etc. .... exacerbated capitalism's inherent tendencies... NOW... the commonweal is left with LESS revenue; the rich are definitely richer (look @ distribution of wealth since Reagan years), AND workers--public and private sector---are going to be dumped from their jobs and homes...

[todd bray]

Well done Lionel, concise, to the point and unbiased, I feel I was there.

The benefits issue is obviously being put off until this sales tax business is concluded.

As for the openness of this continuing drama and the lack of documentation the City Manager is willing to share with the public it most likely will take court actions to pry documents from "their cold dead hands" NRA style.

It must be pointed out how time consuming PRA request can be on an already understaffed city government. Especially if PRA's are being made daily and in numbers. The staffer who chases down the paperwork is being diverted from other work. A computerized archive of PDF files would surely be preferable to everyone.

[Bruce Hotchkiss]

I am not against tax increases in general but I have to question this one. I am sick and tired of the shell game played by Council and the City Manager regarding Pacifica's budget. One minute there is a surplus, the next minute we're struggling to pay our employees. Just stop the B.S.

There's been more than enough money to pay for Council's pet projects - we all know what they are - but for some reason when it comes to meeting our obligations to our employees and public safety, well that's another story.

To add insult to injury the proposal is to raise the sales tax! Many Pacifica businesses are struggling. Will this increase drive more shoppers "over the hill?" If so, will that drive more businesses under? What will that do to our tax base?

It is about time that Council pulled their collective heads out of their collective butts and stopped playing shell games with our money.

Maybe after all we do get the elected officials we deserve.

[Cynthia Montanez]

What happened to the $7 million reserve? Was any of this discussed, or was it just election BS?

[Summer Rhodes]

How can the budget be assessed if all outstanding calls against it are not taken into account? A small salestax seems fine-- no one person is out that much, and the results are enough, if the City is conservative. Perhaps pension / benefits should be rolled back. We are in a recession and even before that admission most workers did not get a pension or the best benefits. One way to do this easily might be to require City workers to work longer until retirement age, with no additional increase in pension and benefits. Another option is to remove management that is not needed.