Impacts of UUT Cuts

 

Repeatedly throughout the two-hour discussion, South Pasadena City Council members lamented, spelling it out clearly saying “this is difficult” or “it’s not easy” as they took on the task of looking at a budget during Wednesday’s City Council meeting without the utility users tax, which generates $3.4 million in revenues each year.

In accordance with a California Elections Code, the council reviewed the fiscal impact of a major vote coming before voters on Nov. 6.

They studied a budget summary and draft implementation plan to cut $3.4 million from city coffers should the measure get a yes vote from local citizens. A no vote keeps the UUT intact.

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The city counts on UUT funds to pay for public services like many senior programs, concerts in the park, police officers assigned to schools, the crossing guard program at local campuses, activities at the library, after school and summer camps.

City officials say it will cut 70 percent funding for street improvement and maintenance and 35 percent reduction in hours at the library.

The UUT is the city second largest revenue source behind property taxes, which generate about $13.6 million or nearly 50 percent of the general fund.

Following a lengthy dialogue between councilmembers, the plan was approved in concept, with the idea of applying more funds toward the South Pasadena Library and to improve the city tree canopy.  Councilmembers approved city staff’s recommendation to modify the allocation at the South Pasadena Library, closing the library one day per week and reducing hours from 57 per week to 37. That is, of course, if the UUT does not continue.

“The (city) staff was given direction to find money for trees, maybe from street (projects) or other funds and come back with an amended alternative,” explained Marc Donohue, the city’s chief city clerk.

The council will look at the potential cuts again in September in an effort to seek final approval.

WHAT IS THE UUT?

• Utility Users Taxes are levied by local governments on the consumption of utility services.
• Services include electricity, gas, water, telecommunications, and cable television.
• Utilities to which the tax is applied vary.
• UUT rates range from 1 to 11% and Average between 8 to 10%.
• 154 cities and 4 counties in the California have UUTs.
• South Pasadena’s tax has been in existence for over 30 years.

BENEFITS OF UUT

• Provides $3.4 million in revenue.
• 2^nd largest revenue sources for the City.
• 100% locally controlled funding source.
• In comparison: only 24% of property tax is retained by City
• Can be used for various community services:
• Police
• Fire
• Street and pothole repair
• Senior programs
• Recreation and parks
• Library services
• Code enforcement

ABOUT THE REPEAL INNITIATIVE

• Brought by Pasadena-based political group, “TeaPAC.”
• TeaPAC is part of the broader Tea Party movement, which generally advocates lower taxes and reduced government services.
• Two previous attempts by TeaPAC to place repeal on ballot failed.
• On third attempt, TeaPAC collected enough signatures (only 363 were required) to place a repeal measure on the ballot.

Measure will be on November 6, 2018 ballot.

REPEAL MEASURE LANGUAGE

• “Shall an Ordinance be adopted repealing the City of South Pasadena’s Utility Users Tax in its entirety, thereby eliminating $3.4 million of locally controlled revenue from the City’s general fund budget which is used to fund police and fire services, street improvement and maintenance programs, library services and park and recreation programs for youth and seniors?”

REPEAL MEASURE

• YES vote would repeal the existing UUT tax, eliminating $3.4 million from the City’s budget.
• NO vote would allow the existing tax to continue to be collected at the current rate to support City services.

POTENTIAL IMPACTS TO THE CITY

• Would require a $3.4 Million cut to the City budget.
• Eliminate about 12% of City’s General Fund.
• Would significantly impact City service levels.
• Would impact nearly all City departments.

POTENTIAL UUT IMPACTS TO BY DEPARTMENT

Library

• Reduce weekly public library hours from 57 to 37.
• Full closure Sundays and Mondays.
• Reduced hours all other days.
• Eliminate special programs for children, author nights, film nights and more.
• Reduce book purchasing budget.
• Eliminate all planned capital improvements.
• Reduce staff by 3 and significantly reduce PT staff hours

Police

• Eliminate crossing guard contract for school sites.
• Eliminate School Resources Officer position.
• Eliminate a Captain position.
• Eliminate cadet program.
• Eliminate FAST air support assistance contract.
• Eliminate crime-prevention efforts such as women’s self-defense courses.
• Reduce staff by 9

Fire

• Reduce fire and paramedic staff below nationally recommended levels (from 6 to 5 per shift; from 4 to 3 per engine).
• Decrease City’s ability to meet current EMS response model of 2 paramedics per engine.
• Significantly reduce CERT (Community Emergency Response Team) training.
• Reduce staff by 3 Firefight/Paramedics

Public Works

• Cut ongoing street repair and maintenance budget by $1 million a year (over 70% reduction).
• Reduce or eliminate many City infrastructure improvement goals.
• Reduce mowing and trash pickup from City facilities and parks from weekly to bi-monthly.
• Reduce tree planting on City streets and parks.
• Delay tree-trimming cycles (6-7 years).

Community Services

• Eliminate entire recreation division.
• Shut down after-school programs such as Camp Med and the Teen Center.
• Eliminate all special programming such as Concerts in the Park and Movie Nights.
• Eliminate Senior Center programming, except for senior lunch program and Dial-a-Ride (funded by Prop A and C)
• Reduce staff by 5 FT and 34 PT

Next Steps

• If the UUT is repealed on November 6, 2018, it would be effective the next day.
• However, the City of South Pasadena will have several months to implement the plan.
• Staff will present a Final Implementation Plan to Council which will include logistical details, such as:
  • Transition of eliminated positions and support for layoff process
  • Disposition of municipal buildings
  • Plans to terminate contracts/lease agreements for facilities, classes and programs

Questions?

www.southpasadenaca.gov/UUT

The City of South Pasadena contributed to this story.