South Pasadena’s City Council Wednesday night addressed what could be an enormous cut in city funding if voters shoot down a tax on the November ballot.
Although the city is legally prohibited from advocating either way for the Utility Users Tax, or the UUT, it can provide information such as what would have to be cut if the tax was voted down.
The UUT, which pays in large measure for police, fire, library, streets, parks and recreations, is the second largest revenue source for the city after property taxes and generates $3.4 million, or 12 percent, of the approximate $27 million fiscal plan. Property taxes provide about 49 percent of the general fund at $13.6 million, while sales tax is the third largest source of city funding at 11 percent and has remained flat in recent years, according to the staff report.
South Pasadena is one of fewer than 25 percent of statewide cities that provide a full range of municipal services within their boundaries rather than rely on other agencies to provide these services, according to the city staff report presented to the council.
The UUT tax is placed on monthly residential and commercial utility bills such as mobile phones, electricity, gas, water, hardline telephone and cable television, according to city officials.
An initiative to repeal the UUT has qualified for the Nov. 6 general election ballot, being pushed by a Tea Party faction known as the California Tax Limitation Committee. If a person wants to keep the utility tax, they vote “no.” If they want to repeal the tax, they vote “yes.”
The UUT was first passed by So Pas voters in 1983, and was renewed by voters again in 2011, ostensibly for a 10-year term.
The Tea Party faction, however, collected the necessary 360 South Pasadena signatures to place the repeal on the November ballot. Members of the California Tax Limitation Committee were unreachable for comment. This group has attempted the repeal of the same tax in Glendale, Arcadia and Sierra Madre. All attempts have failed.
“We are taking this challenge to the UUT very seriously, and planning for the potential loss of a significant source of revenue for the City,” City Manager Stephanie DeWolfe said in an email to The Review. “We have developed a draft implementation plan that will be presented to the Council on July 18. The implementation plan shows that the loss of the UUT revenues would have significant impacts to services and the quality of life in South Pasadena. The cuts would impact nearly every service area, including police, fire and public works. The plan will be considered for adoption by the Council on July 18 but would only go into effect if the UUT is repealed by voters this November.”
The city has proposed the following cuts if the UUT is repealed and they include: eliminating the police officer assigned to the schools, eliminating the school crossing program, reducing fire personnel from four to three per engine, a 70 percent cut in funding for street improvements and maintenance, a 35 percent reduction in library hours, elimination of special programs at the library, such as children’s events and new technologies, eliminating cultural events also at the library such as lectures and musical performances, eliminating after school and summer camp programs, eliminating concerts in the park, and eliminating many of the senior programs. These cuts will be presented at additional public meetings including the Finance Commission as well as other community group meetings for final adoption, according to the city report.
Although the city can’t take a stand for or against the UUT, a community group, South Pasadena Public Services Committee 2018, has recently formed and has already raised more than $2,500 for the campaign against repealing the UUT. The group had its first informational meeting last week that was attended by more than 135 people, crowded into the library’s community room.
Moreover, the city recently funded a survey regarding residents’ satisfaction or dissatisfaction with South Pasadena services. That survey broke out a section just for the UUT issue and reported about a 95 percent approval rating. The survey has a five percent margin of error.
Councilwoman Diana Mahmud, who is running for re-election in November (See related story Pg. 1), echoed DeWolfe’s comments, saying she was excited about the new citizens’ group formed to fight the repeal.
“I was very pleased to see the excellent turnout from the community for the initial Save Our Services campaign meeting,” Mahmud said in an email to The Review. “I think most residents understand that our quality of life in South Pasadena is threatened unless the UUT is retained. We are a small city with a small budget, and when you lose 12-13% of your total budget as we would if UUT repeal is successful, there would be significant cutbacks in certain areas that I believe would be felt by our residents. What makes South Pasadena special is our very strong sense of community. I trust that the community will support UUT retention to ensure it continues to enjoy the quality of life we are privileged to experience here in South Pas.”
Mayor Dr. Richard D. Schneider, as with all the councilmembers, said the UUT is essential to maintain services at the levels they are at now.
“The report before the council shows clearly that the loss of the UUT would bring about a significant and long-lasting reduction in the quality of life in South Pasadena,” Schneider said in an email to The Review. “The report really illustrates what’s at stake if the UUT is repealed. Everyone in our community would be affected. This is a difficult discussion to have as a Council, but it is necessary to prepare for the potential repeal of the UUT.”
City Councilmember Robert S. Joe echoed his colleagues’ comments.
“The UUT is a critical funding source in a full-service city such as South Pasadena,” Joe said in an email to The Review this week. “It funds core services like police, fire, the library, senior programs and much more. The UUT benefits every member of our community.”
Councilmember Michael A. Cacciotti, who is running for re-election in November (see related story Pg. 1) explained the importance of the UUT this way in a lengthy email to the Review Tuesday morning. Here it is in its entirety.
“In 2014 South Pasadena was named by Sunset Magazine as one of the best places to live in the West, Cacciotti said in the email. “It is because of the quality of life that exists in our small town based in large part on the excellent services provided by our city and schools. Without a doubt, the repeal of the UUT in South Pasadena would have serious and very noticeable impacts on the quality of life we all enjoy in our historic city.
The loss of the 3.4 million dollars generated by the 7.5 percent tax on residential/commercial utility bills constitutes 12 percent of our General Fund budget. Some may argue that 12 percent is not such a dramatic cut. But that is not the case. The city has for a number of years now run a very fiscally responsible municipal government. We just approved our 2018 -2019 City budget and, not only is there no fat in the city budget, but we had to make difficult decisions on which programs and projects such as street improvements to fund.
In our city, as in many cities after Proposition 13 passed in 1978, maintenance of city streets, sidewalks, water and sewer systems, public buildings was drastically reduced and many staff eliminated. The city has been working hard in the past decade to dramatically repair/repave our local streets and sidewalks where proper maintenance had been deferred for decades. Our city departments all operate on a fiscally sound budget providing outstanding service to our residents and business owners. In other words, there is no easy area to cut.
Based on community input, the city council would need to cut substantial portions of our community services budget – impacting senior/adult/youth programs; public works projects – impacting street/sidewalk repairs and repaying projects; library budget – impacting services, staffing and days/hours of operation; public safety – impacting police and fire services including elimination of a School Resource Officer assigned to our schools, our school crossing guard program, reduction of staffing of fire personnel on the fire engine, etc.
In summary, the loss of the UUT will be felt by the overwhelming majority of our residents and dramatically impact the quality of life we all cherish in our unique small town.”
Mayor Pro Tem Dr. Marina Khubesrian did not immediately respond to comment for this story.