Despite being characterized as interlopers, leaders of the group that is seeking to repeal the utility users tax (UUT) on the November ballot say they are doing it for the city they love and cherish.
“I have lived here since 1967 and I don’t know how good your math is but that means I’ve lived here for 51 years,” said Edward A. Ristow, one of the organizers of the group that is seeking to repeal the UUT. “I moved here because I loved it then and I love it now.” Ristow, along with Guillermo Guzman and his wife, Marcy, sat down for an hour-long exclusive interview in The Review offices this past Monday. The Guzman’s have lived in South Pasadena with their five children since 1994.
“I love it here,” Guillermo Guzman said. “This is just an unsustainable path if we don’t repeal the UUT.” Guzman is a professional musician while Ristow, who served as the South Pasadena city treasurer from 1972 to 1995, is retired.
Advocates of keeping the UUT have characterized the people that want to repeal it as “an out-of-town group that does not know our city or our community,” according to the ballot statement in favor of keeping the UUT that’s filed with the city.
Ristow and the Guzman’s wanted people to know they are from So Pas, love the city – “cherish it, in fact” – and believe the UUT is not needed. What’s needed, they say, is to rein in spending and the unfunded pension liability. They want to shift the way pensions are calculated to what is known as a defined-category pension instead of basing it on a defined-benefit. The defined-category is similar to a 401k where upon retirement the pension is already fully-funded. The defined-benefit pension is only partially funded, Ristow said.
The UUT provides funds for public safety, fire, senior programs, a school resource officer, crossing guards, street and sidewalk repairs, public library services, the July 4th parade, and summer concerts, among other items.
The repealing of the UUT would require significant cuts to the services provided to South Pasadena residents, according to Ed Donnelly, co-chair of a recently formed committee, South Pasadena Public Service Committee 2018. The committee is against repealing the UUT.
However, Ristow and others say the city is “on the verge of bankruptcy.” Moreover, the ballot statement filed with the city goes on to say that “the fiscal emergency that initially justified the utility tax no longer exists, but as revenues increased, so did spending.”
The arguments for repeal and not to repeal have been filed with the city. Each side had until Aug. 27 to rebut the statements.
“I’m old school,” Ristow said during the hour-long interview. “Way back when, the city was managed with a lot less money than it is today. It’s now become a bloated bureaucracy. Back in the 1970s and up through an early part of 1980s, there was an attorney who managed at one time five cities, at least. [They were] Sierra Madre, San Gabriel, Temple City, South Pasadena, San Marino, and, I think, Irwindale. He was the city attorney and the city manager, also.” The population has remained flat, Ristow said.
Ristow acknowledged that in today’s world this may not be feasible, but the city has allowed spending to grow way beyond revenues.
“Since 2011, the city’s general fund has grown by $4.4 million, but general fund spending increased by $9.5 million (49 percent),” Ristow writes in the ballot statement filed with the city. “And though total revenues increased by $16.3 million (50 percent), new spending consumed $15 million of that. The city has a spending problem, not a revenue problem.”
The offender to all of this, the statement proposes, is intumescent salaries. The median pay and benefits for city employees was $96,119 and many retirees receive more than $100,000 annually for life. The statement attributes this data to www.transparentcalifornia.com.
“The Stanford Institute for Economic Policy Research estimates that the city’s pension debt – just through 2015 – was at least $26.8 million but likely as much as $108 million [www.pensiontracker.org] when realistic pension fund investment returns are factored in,” the statement says. “The city has grossly underestimated how much money it will have to set aside for pensions. Pension debt, rather than losing the utility tax, is the real threat to our city’s survival.”
If the UUT is eliminated, the city would lose about $3.5 million or 12 percent of its $27.5 million budget, according to Donnelly.
If a person wants to keep the utility tax, they vote “no.” If they want to repeal the tax, they vote “yes.”
The tax is on water, power, cell phone bills, cable, electricity and gas, among other utilities.
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 last time the UUT faced the voters, it barely passed with just about 53 percent of the vote.
Ristow and others collected the necessary 360 South Pasadena signatures to place the repeal on the November ballot. This group has attempted the repeal of the same tax in Glendale, Arcadia and Sierra Madre. All attempts have failed.
Ristow also said the likelihood of the tax getting repealed this November does not look good.
“I think you would have to say that the chances of this getting repealed is slim to slimmer,” Ristow said. “But I’m going to tell you something, this is a wake-up call. The way we are going is not sustainable. We have to make some changes.”