Atwater's sales tax measure goes up for a vote

Atwater residents asked to decideon half-cent bump for public safety

mnorth@mercedsunstar.comMarch 2, 2013 

ATWATER -- A special election that could shape the future of Atwater will soon be upon the voters.

The only item on Tuesday's ballot is the half-cent sales tax proposal called Measure H that's been the source of contention among residents.

Some say the tax is a necessity to support public safety, while others think the proposal is too much for taxpayers who've been saddled with utility rate increases, spikes in gas prices and a bump in the state sales tax rate.

If passed, Measure H would increase Atwater's tax rate by 0.5 percent, which would equate to an extra 5 cents for every $10 spent on taxable goods in the city.

The tax would expire after 10 years. The council would be able to rescind the tax early if the city improves its finances and no longer needs the extra revenue.

Since the funds generated from the extra tax would be specifically earmarked for public safety, the measure will need to be approved by two-thirds of the voters to pass.

An oversight committee would be appointed by the city manager to monitor the funds should the measure be approved.

What led to this?

A general fund deficit of more than $4 million, coupled with deficits in Atwater's water and sanitation funds, led to a financial crisis that's resulted in pay cuts, eight layoffs and other reductions. The city averted bankruptcy late last year, but did declare a common-law fiscal emergency.

In an effort to help the city, the Atwater Police Officers Association took a 22 percent pay cut, though the organization's contract doesn't expire until 2014. Money for officers and equipment has dwindled in recent years.

Police officials have said they'd like to use the funds from the half-cent sales tax to hire at least four additional officers, restore some of the officers' pay and replace outdated equipment.

Arguments for tax

Things started going downhill for law enforcement in 2007, said Bob Calaway, a former Atwater police chief. That's when the department had 36 sworn officers. That number has fallen to 26.

Calaway described the tax hike as "a very small amount of money" people would be paying to enhance emergency services in Atwater.

From 2001-10, similar tax measures have been adopted in hundreds of other cities, he said. When introduced to voters in other municipalities, they've passed 49 percent of the time.

Eric Lee, an Atwater businessman and a backer of Measure H, said this is one proposal that needs community support.

"I don't like paying taxes; most of us don't," he said. "But we understand that there are certain things that we need to pay for in this life of ours and police, fire, emergency services is one of them."

From a business perspective, the tax is necessary to ensure commercial security, said Lee, who's been in Atwater for 60 years. An inadequately staffed Police Department could mean delays for some lower-priority calls.

While many are weary of the City Council since the fiscal crisis that brought Atwater to the edge of bankruptcy, Lee and other supporters of the tax measure stressed the council wouldn't have access to Measure H funds.

Arguments against tax

While there is a group backing Measure H, the sales tax increase has no organized opposition to. However, some residents have spoken out against it.

Jim Price, an Atwater resident since 1981 and vice president of Gemini Flight Support, said a half-cent sales tax added on top of other increases citizens are facing right now is too much.

"A half-cent sales tax, which is being proposed here in March, is going to be one of those items that is going to be very strenuous financially on the people of this city," he said during a council meeting last month. He cited state tax increases, utility rate increases and high gas prices as reasons why people can't afford it.

Price thinks the city should do more to correct its finances before approaching the citizens with a tax hike. More privatization could help accomplish that goal.

Fred Warchol, a planning commissioner, agrees that the city needs to fix its financial problems first.

The city can generate more money for public safety by taking steps such as collecting unpaid business license fees and putting a stop to subsidizing the enterprise funds with the general fund.

"I think it's a misguided way of solving the problem," Warchol said of Measure H.

Where the council stands

A majority of the Atwater City Council supports the half-cent sales tax proposal.

Mayor Pro Tem Craig Mooneyham said there could be dire consequences if the sales tax increase doesn't pass.

"I won't say that if this measure doesn't pass, that the town's going to go under, however, there will definitely be layoffs and there will definitely be reduced services," Mooneyham said.

After reviewing the budget figures, Mooneyham said, the city needs the half-cent sales tax.

Mayor Joan Faul described the tax as "essential" to the safety of Atwater.

"We have to have it -- it's a must," Faul said. "If we want to keep the safety and the well-being of this city, we must have that Measure H so we can re-establish and bring our police staffing up so we can have a safe place because we have major problems with gangs."

Councilman Jeff Rivero wouldn't say whether he's for or against the tax, but he did say he's glad voters get to decide.

Councilman Larry Bergman, a California Department of Forestry and Fire Protection captain who works at the department's Livingston station, said he's supporting Measure H.

"We need to do something to basically get more support for our public safety," Bergman said. "We just don't have it in our finances to get public safety up to where it needs to be. We've got to do something."

Councilman Joe Rivero couldn't be reached for comment despite several attempts by the Sun-Star.

On election day

The polls will be open from 7 a.m. to 8 p.m. Tuesday, said Barbara Levey, Merced County Registrar of Voters.

Poll locations include the Liberty Fellowship-Campbell Hall at 281 E. Juniper Ave., the First Church of God at 2100 Fruitland Ave., and the Atwater Community Center at 760 E. Bellevue Road.

Results will start coming in after 8 p.m. when the county releases the results of vote-by-mail ballots returned before election day. The results will be updated on the county website as the precincts are counted.

As of noon Friday, 1,374 vote-by-mail ballots had been returned out of the 4,135 ballots issued, Levey said. There are 11,645 registered voters in Atwater.

Anyone with a vote-by-mail ballot is encouraged to turn it in to the elections department by Monday.

Tuesday's election is expected to cost the city about $50,000.

Reporter Mike North can be reached at (209) 385-2453 or mnorth@mercedsunstar.com.


POLLING LOCATIONS Liberty Fellowship- Campbell Hall, 281 E. Juniper Ave.

First Church of God, 2100 Fruitland Ave.

Atwater Community Center, 760 E. Bellevue Road

CURRENT

SALES TAX RATES

Merced 8 percent

Los Banos 8 percent

Gustine 8 percent

Atwater 7.5 percent

Livingston 7.5 percent

Dos Palos 7.5 percent

Source: California State Board of Equalization


TIMELINE

AUG. 25, 2009: Despite staff warnings, the City Council chooses not to support Mayor Joan Faul's motion to increase utility rates.

MARCH 29, 2011: The council increases water capacity for users, costing the city about $10,000 to $30,000 a year.

MARCH 2012: Mayor Joan Faul makes a motion to begin laying groundwork for rate increases, but it's voted down by Mayor Pro Tem Joe Rivero, Councilman Jeff Rivero and Councilman Gary Frago.

JUNE 8: The council votes 3-2 to update its water rate model. During the meeting, the council votes 4-0 to search for a consultant to examine possible sanitation rate increases. Councilman Jeff Rivero abstains from vote.

AUGUST: A treasurer's report shows the general fund has a deficit of $5.2 million, the water enterprise fund has a deficit of $9.3 million and the sanitation enterprise fund has a deficit of $1.3 million.

AUG. 22: Atwater City Manager Kathy Kivley is placed on administrative leave. Police Chief Frank Pietro takes over as acting city manager.

SEPT. 6: All city employees are called in for a meeting with management for a briefing on the fiscal crisis and its possible ramifications, including staff reductions.

SEPT. 10: City Manager Kathy Kivley is terminated by the council on a 4-1 vote, with Councilman Jeff Rivero voting "no."

SEPT. 19: City Attorney Jose Sanchez of Meyers Nave announces that he will resign from his position.

OCT. 3: Atwater management confirms that 14 employees were laid off and 24 more got letters saying they may be laid off. The council votes to declare a common-law fiscal emergency so the city can negotiate with employees under contract.

OCT. 11: Members of the Atwater Police Officers Association agree to a 22 percent pay cut to help the city resolve its financial crisis.

OCT. 22: A hearing is set for the council to consider an Assembly Bill 506 fiscal emergency, a precursor to bankruptcy.

NOV. 13: The City Council unanimously approves a motion to end Assembly Bill 506 fiscal emergency hearings, but approves a special March 5 election for a half-cent sales tax aimed at supporting public safety. The council passed the item on a 4-1 vote, with then-Mayor Pro Tem Joe Rivero dissenting.

TUESDAY: Voters will decide whether they want to implement a half-cent sales tax increase to augment public safety.

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