By Luke Phillips
The Holtville City Council once again debated the pros and cons of the city’s utility user tax at their meeting Monday, but still weren’t able to reach a consensus on what, if anything, should ultimately be done.
As directed, City Manager Laura Fischer brought the council a detailed report on the tax and what city service it pays for. Fischer’s report also mentions council member Jerry Brittsan’s attempts to revoke the utility tax.
“It’s my belief that this action would have disastrous consequences to the community,” Fischer said. “Every effort should be made to ensure the continuation of the utility tax.”
The 5 percent tax on all utilities account for nearly 20 percent of the city’s general fund budget, 48 percent of which goes to public safety services including police and fire protection.
Fischer told the council that the tough decision of how to manage the city’s finances and what services to provide will ultimately fall to them.
“I believe that eliminating 20 percent of the general fund revenue would tie your hand in your ability to provide those services and I think your only choice at that point would be to decide what essential services you cut first,” Fischer said. “I believe that it is the intent of the city, and always has been the city council’s intent, to provide these services and also to improve upon the level of services and thereby maintain a good quality of life without an additional burden to our community.”
The $565,000 in revenues from the utility tax goes into the city’s general fund and is therefore used to pay for all sorts of city services including the city council, the city manager, planning, engineering, the city clerk, the finance department, the city treasurer, legal services, police, dispatch, animal control, fire and parks, according to Fischer.
Fischer provided the council with a pie chart showing that the largest portion of the city’s budget is used for public safety, with approximately 28 percent of the budget being used to pay for Holtville’s contract with the Imperial County Sheriff’s Office and 13 percent being used for the city’s fire department.
“Public Safety, with a doubt, and providing adequate police and fire protection should be, and are, our number one priority,” Fischer said.
Fischer’s argument for keeping the utility tax included increased police and fire protection with the city receiving 34 man hours of police protection every day and 24/7 fire coverage with three full time and 12 reserve firefighters.
If the general fund were cut by 20 percent, public safety cuts would be necessary, said Fischer. She added that revenues from the coverage with three full time and 12 reserve firefighters.
If the general fund were cut by 20 percent, public safety cuts would be necessary, said Fischer. She added that revenues from the utility tax pay the equivalent of seven full time employees’ salaries.
Fischer says that a ballot measure being proposed by councilmember Brittsan to do away with the tax puts city funding at risk.
“If that were to happen your fund balance would be depleted really quickly and there would be no way for you to put that money back in and your city would spiral down,” Fischer told the council. “Your general funds reserves are seriously at risk with that referendum.”
New California Governor Jerry Brown has proposed the elimination of the state’s Redevelopment Agency program which provides $375,000 for Holtville each year, and Fischer says that coupled with the potential loss of utility tax revenues the city could be facing a loss of up to 33 percent of their yearly budget.
Fischer recommended that the council prepare for future losses by developing guidelines for the implementation of fund balance reserve policies.
Right now the city’s general fund balance sits right around 677,000, which Fischer says is less than 3 months of operating budget for the city.
“We don’t have a huge fund balance and that shows that this tax has not been over-collected,” Fischer said.
Fischer says that the city needs to set aside at least a years worth of operating funds in case of emergency.
“We need this so we’re not at the whim of the economy or the governor’s budget,” she said.
The council agreed to take one of the options provided by Fischer in her report to hold a meeting with the city’s finance department to work out the details of what could be cut and how it could be cut in the eventuality of a loss of funds and to hold a public hearing to gather to input from residents and gauge how they feel about the utility tax.
“That way you’ll know exactly what those services are,” Fischer said. “You’ll have a balanced and thorough vetting of all the services offered.”
Brittsan argued that any cuts should be taken from all city departments, and wouldn’t come at the expense of public safety.
“If you have a capable and knowledgeable city manager, that won’t happen,” Brittsan said. “If you have a 20 percent reduction in your budget, everyone shares a part of the illustrious pie that’s been drawn up here.”
Brittsan says he wants the public to know where he stands on the tax and warns that if the council doesn’t take action, he will be taking action to get the issue on the ballot in the future.
Council member Colleen Ludwig was adamantly against revoking the utility tax, saying that she’s become accustomed to the services it provides.
“I like the freedom from graffiti and having a police officer if I need him immediately, having an opportunity for medical aide with the fire department if I need it,” Ludwig said. “Will we be able to sustain those kinds of things if we have no utility tax?”
Ludwig also shared some praise for Fischer.
“The city looks better than it ever has at the present time and it’s because we have a city manager that’s proud of our city, as well as working hard to make these things happen. We need the utility tax. I’m willing to pay my share and I hope all of you are as well.”
Council member Mike Goodsell says that the council needs to pay attention to the voice of the people and find out what direction the voters want the city to take.
“I don’t want to play a game of chicken with the voters in the sense that we don’t own up to our responsibility as a council to address what movement there may be in the public to want to do away with the utility tax,” he said. “We need to own up to those responsibilities as you’ve laid them out. I would agree that your option to go to a finance committee and discuss this in an open forum with the public makes a whole lot of sense. We need to slow down our horses a bit and let the people have input.”
Once again, a packed house gathered to watch the proceedings with several residents speaking for and against the tax.
Former Holtville Police Chief Clifford King represented the angry voice of some residents in attendance; say that the council should prepare for the loss of the tax.
“You guys have done nothing to get ready for when it’s going to end,” King said. “You’ve upped your expenditures, your fire department, your sheriff’s department. You’re going to lose the tax, you just have to decide how you’re going to lose it. Somewhere along the line it is going to end and I’m not the only resident that feels like this. I’ve talked to a lot of people in town, and there’s no doubt in my mind that we can pull the votes together and end this tax tomorrow.”
Council member David Bradshaw asked King how he would feel about the city going back to an all-volunteer fire department.
“We had a pretty good volunteer fire department,” Kind said. “They were all committed and they all were hardworking people. Mike Johnson was on that fire department and he was really good, but it wasn’t just him, there were a lot of people here who were dedicated to it and it can happen again.”
Holtville resident and former editor of the Holtville Tribune Quentin Burke also spoke to the council, but argued in favor of the tax, recalling how he served on the committee that originally put the tax in place.
“The reason we needed the tax then are the same as today: Survival,” Burke said, offering that the other side of the question is ‘oblivion’. “Have we become, over the decades, so narcissistic, so wed to self-indulgence that we can’t spare a dollar for the city’s tax coffers?”