By Randy Economy
The La Mirada City Council took the first official step on Tuesday to authorize a public vote on a measure that would hike the current local sales tax by one cent.
With the passage of a resolution that authorizes county officials to place the matter on the November Presidential ballot, voters will be asked to help get the city back on solid financial ground.
Members of the La Mirada City Council discuss a new sales tax measure for this November's election ballot.
“La Mirada is facing a dire fiscal outlook, and this decision for a hike in our local sales tax of one cent is not taken lightly,” said Mayor Gabe Garcia.
According to officials, the sales tax hike measure is considered to be a fiscal life line for a city that has been besieged with the recent elimination of its redevelopment agencies by the State of California.
“Throughout its history, the City has lived within its means by operating efficiently, and routinely adopted balanced budgets without many of the funding sources typically used by other municipalities,” said City Manager Tom Robinson.
“La Mirada has also made significant use of contracting with private businesses and other government agencies to provide services more cost effectively. However, the Great Recession and State takes of local funds in recent years have significantly impacted La Mirada,” Robinson said.
The State’s elimination of redevelopment agencies has resulted in significant consequences for
La Mirada including severe impacts to the City’s General Fund and efforts to create jobs, repair infrastructure, eliminate blight, develop affordable housing, and stimulate economic development.
While recent amendments have been made to redevelopment law, La Mirada’s General Fund could lose as much as $58 million from the State’s actions, with the City’s loan to the former Redevelopment Agency comprising about half this amount.
Additionally, $2.5 million in annual interest and service agreement payments to the City’s General Fund were erased by the State’s actions.
The City’s traditional revenue streams of sales, property, business license, and hotel users’ taxes and other funding sources were reduced to a level insufficient to maintain the programs, services, and capital improvement projects normally provided by the City.
La Mirada officials have consistently worked to reduce its expenditures in recent years, according to Robinson. The veteran city manager said that $7,233,672 in expenditures have been erased since 2009, and an additional $2,069,792 in cuts and revenue enhancements
has been included in the new 2012-13 Budget.
Additionally, the number of fulltime City employees has been reduced from 97 to 71, which is a reduction of 27 percent. The number of hourly employees has been reduced by a similar amount.
The State’s actions eliminating redevelopment agencies and the lingering effects of the recession combined to cause the La Mirada City Council to unanimously declare fiscal emergency back on February 14.
Robinson pointed out that the declaration of the fiscal emergency stated that anticipated revenue growth and recent cuts may not be enough to prevent deeper and more severe cuts to essential services.
“It is very clear; we can talk about priorities down the road. It has been a hard press decision and there is no good time for a sales tax increase, but now is the time for all of the residents and voters of La Mirada to get behind this proposal,” Mayor Garcia said.
To make matters worse, recent engineering studies have determined that La Mirada’s infrastructure is in need of major repairs and replacement. “The City recently concluded an Infrastructure Needs Assessment, which rated the condition of the City’s major infrastructure items and provided updated cost estimates to replace these items,” said Jeff Boynton, Assistant to the City Manager.
Robinson stressed that La Mirada streets, storm drains, traffic signals, ADA ramps, curbs, gutters and sidewalks, playground equipment and City facilities are all in the need of repair or replacement that which could cost some $67,250,193.
On top of that figure, an additional $126,932,899 has been identified as being required to fund projects considered “wants” in the community, such as replacing privately owned deteriorated block walls and undergrounding utilities along major thoroughfares.
Also at the meeting, city officials said that they had conducted a telephone survey of 400 local voters about their opinions of the tax hike, and determined that 58 percent of those polled said that they were in favor of the one cent tax hike.
“Local revenue measures have been approved by voters in many California cities to fund necessary services and infrastructure maintenance,” Robinson said.
“La Mirada has been fortunate to operate without a local revenue enhancement throughout its history. However, continued State takes of local funds, the significant decline in key revenues caused by the Great Recession, and the need to improve an aging infrastructure have combined to create the real need for a local revenue measure,” he stated in his report to the city council.
If approved by the voters, the tax would become operative on April 1, 2013, and would expire on five years later in 2018.
Vice Mayor Steve DeRuse said “there were a lot of questions and concerns about placing this tax measure on the ballot, but the survey that was conducted goes a long way to making my decision in favor of it.”
The city council will finalize the ballot measure at their next city council meeting.
A committee of no more than five residents of La Mirada will be charged to review and report on the revenue and expenditure of funds from the transactions and use tax if the measure is approved by voters in November.