At its June 28 meeting, the Banning city council directed City Manager Doug Schulze to come up with a ballot measure outlining a potential utility user tax that the city could collect for park maintenance, improvements and general municipal purposes.
Many municipalities impose taxes on utility-type services such as gas, water, sewer, phone and cable television, Schulze said.
According to the city, the average customer in Banning consumes 520 kw at $0.015 kilowatt-hours of electricity each month, with an average tax per customer to be $90 annually.
Schulze explained that the city’s costs have increased toward pensions and labor, rising prices of services and maintenance, and higher costs for capital projects and deferred maintenance, warning that the city’s revenues “have not received the level of funding to meet community expectations,” resulting in increased complaints by residents about a lack of park improvements.
A utility user tax, if passed by voters, could fund nearly $2 million a year in maintenance and improvements for the city’s parks, city officials believe, based on the current population’s size and electricity consumption.
“We’ve delayed a lot of our maintenance,” Schulze said. “During the same time, revenues have not kept pace.”
Schulze proposed an ordinance that would add a 1.5-cent tax per kilowatt-hour in perpetuity, unless rescinded later by voters.
The council would have authority to adjust implementation of a user tax up to, or lower than, $0.015 per kilowatt-hour.
Councilman Alberto Sanchez wanted to know if the ordinance could include a sunset period, after which the tax would simply terminate, to allow voter approval for potential extensions.
Schulze advised against incorporating a sunset, saying, “We’re committing to operational costs at a level of funding based on the $2 million a year,” and cautioned that if the city opted for a sunset clause and the tax is discontinued, “Our operational costs don’t go away unless we’re willing to lay people off. One-time revenues should only be used for one-time uses.”
City Attorney Kevin Ennis explained for the council that the language in such a measure would have to reflect its intentions: two-thirds of voters would have to pass a measure if the city called it a special tax to be used only for park maintenance and improvements; whereas if the tax is intended to be used for general municipal purposes not limited to park maintenance, voters would have to pass it by 50 percent plus one.
“You have a choice: commit to just parks and maintenance” for a two-thirds vote; or apply it to park maintenance and general municipal purposes, and hope for a 50 percent vote, Ennis said.
Passage of a utility user tax would require a five-person citizen oversight committee to review how the tax has been implemented and spent, and the council would have 90 days from adoption of its resolution to compile the eligibility requirements for that committee.
Sanchez pointed out “We’re not imposing this tax; we’re giving the voters the opportunity to make the decision,” and motioned to place a measure on the ballot with a sunset of four years, but his motion died due to lack of a second.
“If we sunset it, it would be my recommendation to not increase level of service at the parks, or look for one-time maintenance, but hiring new staff would not be recommended with a sunset,” Schulze said. “The focus would be on the park improvement side and less on the maintenance side; if we’re going to invest in the parks and put improvements in, and not maintain them, we’re really setting ourselves up” for community discouragement. “We also know we have a lot of growth coming into the city that will eventually generate more revenue,” Schulze said.
Mayor Pro-Tem Colleen Wallace then motioned to place a measure on the November ballot for a utility user tax of $0.015 per kilowatt hour, which would be in place unless voters repeal it down the road. This motion was seconded by Hamlin, and passed 4-0.
Staff Writer David James Heiss may be reached at firstname.lastname@example.org.