City Wants to Tax Cell Phone Usage

A 5 percent User Utility Tax (UUT) will be placed on the November 2013 ballot just over three months away in the hopes to balance the City of Grand Terrace’s budget and generate $1.1 million yearly, city leaders told residents at a town hall meeting on July 31. During the hour-long meeting, presenters Mayor Walt Stanckiewitz, Council Member Darcy McNaboe and Planning Commission Vice Chair Ryan Stephens discussed the City’s accomplishments, the state of the City after the dissolution of the Redevelopment Agency (RDA) and Grand Terrace’s future. Leaders assured residents that though stark financial days lie ahead, the City has no plans to disincorporate. “Disincorporation doesn’t mean our debts will go away,” Commissioner Ryan Stephens said. Mayor Stanckiewitz opened the meeting by highlighting the accomplishments of the City during the last year, including the building of a new baseball field in Pico Park and the recent opening of the Grand Terrace Fitness Park. Holds have been put on the Michigan Street improvements by the California Department of finance (funds for the project were paid for by RDA funds), and DeBerry Street rehabilitation, funded by Measure I, which allocates anywhere from $117,000 to $130,000 yearly to the city, will work to repave areas between Michigan Street and Mt. Vernon, with work tentatively scheduled to begin on the project in the late summer. Unfortunately, noted Mayor Stanckiewitz, “The loss of the RDA means no funds for city projects.” Mayor Stanckiewitz pointed out that the dissolution of the RDA translates to a $737,848 impact on the City, who must now pay RDA debts and sees no incoming funds for city projects. According to the General Fund Multi-Year trend, the City budget is slated to hit critical levels in the 2014–2015 fiscal year and will continue to slope down steadily from there if no further revenue is generated or cuts are not made. “Without RDA funds, our general balance is going to dip into the negatives,” said Commissioner Stephens, who pointed out that deep cuts have already been made, including a 57 percent cut in City Hall staff, indefinitely suspended cost-of-living and staff pay increases, 10 percent wage cuts, the removal of one traffic deputy, a sheriff’s service specialist, crossing guards and the outsourcing of Parks and Recreation personnel. Further cuts could include the elimination of remaining city staff, an 18-hour work week, closing parks, cutting senior center funding, reducing existing contracts with the Finance Department and City Attorney, having monthly council meetings and eliminating the planning commission in order to balance the budget. Stephens said, “That would still leave us short over $248,000.” One other solution to generate revenue included the implementation of a User Utility Tax, which would tax residents for utilities including phone services, television, Internet, water, electricity, gas, sewer and trash, said Council Member McNaboe. On recommendation of the Budget Advisory Committee, the City declared a Fiscal Emergency and on the November 2013 ballot will place a 5 percent User Utility Tax—which many residents said in a citizens poll they would support, McNaboe shared. Mark Jolstead, a concerned citizen and an advocate for a just government, indicated that there were several residents and businesses who have voiced to him their opposition to implementing a UUT to cure the City’s ills. The suggested that they would like to see a more thorough review of other revenues or expense cuts that could be identified without taxing them more for services before a UUT is implemented. “Originally, it was suggested that the UUT would only cover the basic utilities (electricity, gas, sewer charges), but now it is an across-the-board 5 percent on all utilities going to households and businesses including cell phone use on all family members living in a home and those businesses who operate both land lines and cell phones to provide their services,” said Jolstead. Furthermore, Jolstead indicated that a group of citizens was researching the high costs of services that the city was paying including the sheriff’s contract, high-end salaries, medical and retirement costs, and ongoing city servicing contracts. Jolstead said, “The council’s ploy to say the parks will be closed, services cut drastically, and the senior center utilities will be discontinued is a rhetorical argument that was used once before and failed. We want to be told the truth and not scared into doing something that will cost us over and over again for the next six to nine years. Many of our businesses are already teetering on the edge [of bankruptcy] to stay open, and a UUT that is unreasonable could put them over the edge. We want a budget that works, and is defensible and transparent.” McNaboe continued to say that if the tax is instituted the tax will bring in $1.1 million to the city’s funds, less than the recommended $1.5 million (to cover debts and begin a reserve), but could help the budget woes. Other revenue-generating options include the I-215 interchange project, which could attract businesses due to convenient freeway access. If the tax does not pass, the City Council will have to consider further cuts, including those described by Commissioner Stephens. Council Member McNaboe shared that the Council hopes to see the tax sunset in six years, if passed.