An Introduction to the Taxpayers Right to Know and Vote on Taxes Initiative

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Marlene McGee
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1 An Introduction to the Taxpayers Right to Know and Vote on Taxes Initiative

2 WHAT IS THE TAXPAYERS RIGHT TO KNOW AND VOTE? City Charter Amendment set for June 3 rd Statewide Primary Election - Requires a 2/3rds vote on local taxes, fees, and assessments. Voters would be responsible for making many complicated, technical, and inter-related fiscal decisions on the City s behalf. Initiative reduces ability of elected City Council and City staff to manage the City s budget and fiscal affairs. Instead of 5 council members making fiscal decisions on behalf of the community, the Initiative requires 2/3rds of all voters to fulfill this role. Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page 1.

False burglar alarm penalty fees Parking ticket rate fees Picnic table reservation fees in city parks Recreation fees Police

3 WHAT WILL IT DO? Election would be required for all fees including:* Water rate fees Overdue charges for library books Garage sale permit fees False burglar alarm penalty fees Parking ticket rate fees Picnic table reservation fees in city parks Recreation fees Police department vehicle impound fees Building permit fees All construction-related inspection fees Business license fees Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page 6.

4 HOW DO THINGS CHANGE? Initiative impacts the City Council s ability to implement fiscal policy consistent with the City Charter and State Constitution. Each increase in individual fee or rate upward would require an election with a two-thirds vote to approve a fee. EXAMPLE: The City of Signal Hill Library charges 35 cents per day for overdue books. If an adjustment is needed to cover growing library expenses, an election would be required. Any increase in the fee, even by 1 cent would require a 2/3 voter approval. Long- term risk of Initiative is the decline in the City s financial ability to continue to provide the high quality services valued by the residents. Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page 1.

5 HOW WILL IT IMPACT THE BUDGET? General Operating Budget ($17.8 Million) Community Services 7% Community Development 4% Legislative 2% Administrative 7% Police 43% Finance 14% Public Works 23% Impact to General Fund: $2.1 Million / Impact to Water Fund: $3.5 Million 13% of the City s budget is impacted

6 $2.1 MILLION IMPACT Public Works $772,833 Gen. Govt. $175,844 Community Development $530,881 Comm. Services $209,463 Police Department $452,641 Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page 14.

7 IMPACTS TO POLICE DEPARTMENT* Police budget is $8.1 million or 43% of the budget Independent fiscal analysis predicts that over time, the measure could: Impact the City s ability to recover costs for services and eventually erode public safety, especially proactive patrol programs The City would be unable to provide matching funds for state and federal law enforcement grants that would be subject to voter approval Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page

IMPACTS ON EMERGENCY RESPONSE Initiative does not deal with emergencies (i.e. earthquakes, public disturbances, etc.). Signal Hill sits atop active Newport Inglewood Fault line.

8 IMPACTS ON EMERGENCY RESPONSE Initiative does not deal with emergencies (i.e. earthquakes, public disturbances, etc.). Signal Hill sits atop active Newport Inglewood Fault line. Earthquakes can collapse water wells and rupture water mains. Fiscal consultant states that City may need the ability to raise water rates while repairs are underway. Instead of a fast acting City Council, a special election would be required with a 2/3rds vote (no sooner than 88 days after event) to repair the water system.

9 FISCAL & OPERATIONAL IMPACTS Initiative would expire fees in Elections would be required for other important items (i.e. CPI increases):* $685,000 - Franchise Fees $900,000 - Oil Barrel Taxes $308,000 Permits & Licenses Economic development incentives to maintain or attract certain businesses would be difficult to implement in a timely manner Limits municipal bond repayment to a 20 year term and limits flexibility Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page 6.

10 POTENTIAL IMPACT TO THE CALIFORNIA CROWN MAINTENANCE DISTRICT The Maintenance District exists for upkeep of common landscape areas. 90 homes will be impacted in the neighborhood. The annual maintenance assessment was approved by a majority vote of the parcel owners in $54,688 Annual Maintenance Assessment paid by property owners. With the approval of the Taxpayers Right to Know and Vote on Taxes Initiative, it appears that CPI adjustments could or may require a City election and need to be approved by a 2/3rds majority vote, instead of by California Crown property owners only. *Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page

11 WILL THERE BE ADDITIONAL COSTS IF IT PASSES? New costs to the Signal Hill government are anticipated if the initiative passes. 2 ½ new staff members will need to be added in City Manager s, Finance and City Clerk s offices to manage the many items that will have to be placed on the ballot and to implement a 6-month budget cycle. Estimated additional Staffing Costs: $400,000 Estimated new costs of election: Regular Election Costs: $35,600 Legal Costs: $20,000 Other costs: $19,400 Fiscal Analysis: $32,665 If initiative passes, there may be potential legal expenses and litigation over interpretation of disputed provisions. Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page 48.

12 WHAT ARE THE PROPONENTS ISSUES & VIEWS? Proponents say they are concerned over City s economic assistance to developers. Individuals concerned about economic assistance could vote on future development incentives. Proponents believe Initiative is consistent with State laws regulating taxes, fees, and assessments. Proponents believe Initiative does not apply to California Crown. Proponents state that the Initiative only applies to new taxes, fees, property based fees and bonds.

13 WHAT ARE THE LEGAL ISSUES? Unclear if Initiative applies to California Crown Landscape and Lighting District No. 1. Many taxes, fees, and assessments are regulated by State Law authority. City Charter can be more restrictive. Initiative is very broad and states it applies to a fee or charge for services and benefits received to mitigate any activity. Inconsistencies of the Initiative with State Law Proposition 218 There are no legal precedents for the Initiative to guide interpretation.

14 CITY S INDEPENDENT FINANCIAL CONSULTANT CONCLUSION The Initiative would fundamentally alter the management of the City s municipal finances, and budget planning, by impacting the City Council s ability to implement fiscal policy consistent with the City Charter and the State Constitution. * Over time, requiring a vote to adjust fees for enforcement activities could impact the City s ability to recover costs for services and potentially erode public safety, especially the proactive patrol programs. ** * Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page 1. **Source: City of Signal Hill Know and Vote Initiative Independent Fiscal Analysis, Urban Futures, November 2013, Page 21.

found: Right direction 75% 3 out of 4 residents believe things are going in

15 HOW DO RESIDENTS PERCEIVE CITY SERVICES? Community Satisfaction Survey* conducted in November and December 2013 found: Right direction 75% 3 out of 4 residents believe things are going in the right direction Don't know 15% Wrong track 10% *Survey completed by Fairbank, Maslin, Maullin, Metz & Associates

16 SIGNAL HILL VOTERS RATE THE DIRECTION OF THEIR CITY MORE FAVORABLY THAN VOTERS IN OTHER LA COUNTY CITIES Right Direction Signal Hill 75% 2013 Long Beach Santa Monica Downey Los Angeles 59% 59% 57% 53% Culver City 78% 2012 Pasadena Commerce 62% 69% 0% 20% 40% 60% 80%

17 WHAT LEVEL OF SERVICE DO RESIDENTS WANT? I would like to maintain current city services and oppose cuts to police, road repairs, after school programs and library services 77% I am alright with having a reduction of some city services, such as cuts to police, road repairs, after school programs and library services, as needed 14% Both 4% Neither/Need More Information/Don't know/na 5% 0% 20% 40% 60% 80% 100% By a 5-to-1 ratio, residents want to maintain current city services

18 WHAT ELSE DID SIGNAL HILL RESIDENTS SAY? 84% residents view the City of Signal Hill Police Department positively. 72% residents positively view the City of Signal Hill Parks and Recreation Department. 71% residents believe the City is well-run. 69% residents positively view the Signal Hill government overall. 66% residents think Signal Hill provides better services than other nearby cities. 62% positively view the City Council.

19 HOW CAN I LEARN MORE ABOUT THE TAXPAYERS RIGHT TO KNOW AND VOTE ON TAXES INITIATIVE & SEE THE RESULTS FROM THE COMMUNITY SURVEY?? Go to: Register to Vote by: Vote by Mail Applications Received: to Election: June 3, 2014

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