As the general election looms just weeks away, city officials briefed the City Council this past Wednesday on what they characterized as false ballot statements regarding Measure N, the ballot measure that could repeal the Utility Users Tax (UUT).
Voters are going to decide Nov. 6 whether to repeal the UUT, which provides about 12 percent of the city’s general fund. That translates to about $3.4 million of the city’s approximate $25 million budget.
City officials presented the council with an informational report that outlined the misstatements on the ballot. In fact, the report prepared by Craig Koehler, the city’s recently appointed finance director, and Mariam Lee, human resources manager, states that the “statements are incorrect and misleading.”
The city is not allowed to lobby for or against the measure but is mandated to put forth cuts if the repeal were to be approved.
Among the ballot arguments, UUT proponents claim: “Since 2011, the city’s general fund has grown by $4.4 million, but general fund spending increased by $9.5 million (49 percent)…The city has a spending problem, not a revenue problem.” The ballot measure goes on to say that the this has occurred, in large measure, because of “bloated salaries and benefits.”
And it further states that the city has not appropriately managed its pension obligations and suggests that the city should exit CalPERS and switch to a 401(k) plan as a means to saving money.
City officials say that is incorrect information. In the report given to the council, city officials made a strategic decision in 2011 to increase investments in long overdue street repairs, among other infrastructure needs.
“The additional general fund spending was the direct result of these infrastructure investments, not employee salaries and benefits, which have been and continue to be among the lowest in Southern California.”
The report states that the local streets were in dire need of repair and had been long neglected. The condition of the streets came out low on the Pavement Condition Index at a score of 61 on a 100 point scale.
“The backlog of street repairs citywide was estimated at $60 million,” the report states. “In total, the city has spent over $11 million to fund street projects out of the city’s general fund since FY 2012-13.”
City officials also dispute the claim that salaries are excessively high.
“Employee salaries are below the median salaries of adjacent cities,” according to the report. “Medical, dental and vision insurance benefits are among the lowest when compared to other public agencies in the region. Pension formulas are the lowest permitted by the state retirement system. Staffing is conservative with the number of employees per capita significantly lower than in surrounding cities. Employees pay 100 percent of the employee contribution for the retirement plan.”
The report puts the median salary for a full-time local city employee at $68,184.
“In summary, the city has a conservative budget and spends strategically on community priorities,” the report states at the end. “More than 50 percent of general fund revenue is allocated to public safety through police and fire departments. As described above, several million dollars per year are also spent on public infrastructure such as streets and sidewalks. The city also maintains an extensive program of community services and an exceptional library. These expenditure patterns align with community priorities and values, as expressed most recently in the community survey of April 2018. This survey further revealed that 95 percent of the community highly ranked the quality of life in South Pasadena. The Utility Users Tax is a significant source of revenue to the general fund and is necessary to support these priorities and maintain the quality of life valued by the community.”
The proponents of repealing the UUT stand behind their ballot statements, saying they are accurate.
“They have made a big picture statement as to why they disagree with us,” said repeal proponent Marcy Guzman during an interview at The Review offices Monday morning. “From our vantage point, we just don’t agree. They are spending too much on salaries and benefits and pensions. We just disagree, I think.”
Marcy’s husband, Guillermo Guzman, said the city is comparing salaries with other cities in the region and it’s not a good comparison.
“They try to compare the salaries with other cities and not knowing that South Pasadena is so small compared to Pasadena or Alhambra or Los Angeles,” Guillermo Guzman said during the same interview at The Review offices. “It’s like cleaning a five-story building versus cleaning a one-story building. The cost should be according to the size of the city.”
Ed Ristow, another repeal proponent and former So Pas city treasurer from 1972-1995, put it this way.
“If you take a city like Alhambra, they pay their city manager over $400,000 a year with benefits,” Ristow said during the same interview at The Review offices. “South Pasadena doesn’t have to match that and it’s ridiculous.”
Moreover, the group is not advocating to leave CalPERS but to not offer the same pension to new employees.
“A new employee should get the 401(k),” Ristow said. “That would stop the train wreck and give us time to figure out the rest. There are just so many ways to finance the city that our officials are not doing.”
The UUT places a 7.5 percent levy on utilities such as cable television, water, electricity and phone service, according to city officials.
The proponents of the repeal have created a website, southpastax.org, that has information regarding their position. Marcy Guzman said she believed a public forum would be helpful where both sides would have the opportunity to explain their positions. However, she was concerned that such a forum would not be helpful if it became emotionally polarized. Ristow agreed with the caveat that the exchange of ideas and information was done in a civilized manner.
However, Ed Donnelly, co-chair of the South Pasadena Public Service Committee 2018, which is against repealing the UUT, said in an earlier interview that a forum probably would not be helpful at this juncture.
“I’m not sure we would have a very good turnout for a third event, especially as it would likely occur after voters get their mail-in ballots in about a week or so,” Donnelly said in an email to The Review. “Without good attendance, and ballots already being mailed in by roughly 40 percent of the voters in town, a forum probably wouldn’t be very helpful to South Pasadena residents.”
Meanwhile, the city has predicted the following cuts if the tax is repealed. These cuts were approved by the council at its Sept. 19 meeting. If the repeal is successful, city officials will bring back the proposed cuts for final disposition:
* Layoffs of 12 public safety employees, including three paramedic-firefighters and six police cadets.
* The elimination of all city crossing guards, police air support, and a school safety officer.
* The elimination of all library special programs, technology upgrades and capital improvements. Reduced hours are possible.
* Reduction of about $1 million a year in street repairs and maintenance.
* Elimination of the entire recreation department and all of its programs, including those for seniors and children.
* Elimination of community-based crime-prevention programs.