(August 24, 2007) -- Deceptively agendized as a mundane budget workshop when it wasn't, then scheduled for midafternoon to attract the least attention possible, LB city management delivered an Aug. 21 City Council presentation that advocated LB tax increases to reverse 60% of the utility tax cut approved by nearly 70% of LB voters in 2000 (Prop J) and impose a LB property tax levy.
Complete with power point slides and pre-printed handouts, city management urged raising LB's utility tax from 5.0% to 8.0% on gas, electric, telephone and water bills, a level higher than the 7.5% sought in 2000 by then City Manager Henry Taboada and Mayor Beverly O'Neill when they tried to derail a petition-initiated utility tax reduction to 5.0%.
City management also urged a LB property tax levy (or possibly a community facilities district or other tax vehicle) for still more revenue.
The item as agendized was "Recommendation to conduct a Budget Workshop to review budget proposals for Fiscal Year 2008 in the following areas: - Infrastructure and Transportation." The official minutes of the meeting omit any mention of the proposed tax increase, which consumed much of the meeting and was clearly pre-planned.
Management portrayed the tax increase as a way to address infrastructure needs, an item popular in high propensity voter areas...and said City Hall needs roughly $60 million a year (roughly $600 million over a ten year period) to deal with aging facilities and deferred maintenance.
Omitted from management's scripted presentation: why LB City Hall (subsidized by the city's port, oil properties and energy utilities) can't provide core services that other cities can and do provide their taxpayers. That answer can be found in part in a costly pension spike (approved just weeks after incumbents were safely reelected in 2002), lavish pay raises (creating a stunning "six figure club" reported by the LB Business Journal), unabated perks plus subsidies and generous deals often dispensed with virtually no Council or public oversight. [A previous Council gave former City Manager Henry Taboada contract authority up to $100,000 left this unchanged.].
The taxpayer consequences of these and other previous City Hall actions continue to have present day taxpayer consequences...yet they remain virtually untouched in the record FY 08 spending budget proposed by management and recommended by Mayor Bob Foster (who in releasing the budget on Aug. 2 complained City Hall is living "paycheck to paycheck").
If a majority of the City Council approves without changes the spending plan written by management (including many in its six figure club) and recommended by the Mayor, LB taxpayers will pay to add more members to City Hall's six figure club AND pay their higher pensions AND pay continuing unabated taxpayer consequences of the 2002 pension spike.
Whether reform-minded Councilmembers will insist on changes in City Hall spending -- before proposing that LB taxpayers pay a second time for costly actions that City Hall shouldn't have taken in the first place -- will be clear in recorded votes in the next few weeks.
The 2002 pension spike -- which candidate Foster used to sandpaper then-Council incumbent Frank Colonna in the 2006 Mayoral race -- took place under now-former City Manager Henry Taboada and now-former Mayor Beverly O'Neill. The action was scheduled for the last day of an outgoing Council and the first day of an incoming one.
Among the Councilmembers who voted for the costly pension spike was Councilwoman [now Assembly candidate] Bonnie Lowenthal (the only current Councilperson who voted "yes" on the pension spike twice) and Councilmembers Tonia Reyes Uranga and Val Lerch (who voted "yes" once on their first day in office).
Although management boasts that it's reduced pension costs by negotiating a "two tier" system for new employees, management and the Council have continued ratcheting up taxpayer costs by approving budgets that include sums, later dispensed by management, for lavish pay raises. The result has created a ballooning City Hall "six figure club," salaries described in the LB Business Journal, (for their report, click here).
On top of the taxpayer cost of the pay raise itself, each salary increase carries long-term pension costs for LB taxpayers.
In mid-2006, then-City Manager Jerry Miller said not one city employee lost his or her job in a multi-year "belt tightening" marked mainly by eliminating "positions" on paper and raising fees paid by those accessing city services. As previously reported by LBReport.com, at a recent 5th district budget summit, City Hall Financial Management Director Mike Killebrew continued to defend this.
In 2006, then-Mayoral candidate Doug Drummond linked the consequences of the 2002 pension spike to LB's decaying infrastructure. "Pension potholes," he thundered on the campaign trail, repeatedly drawing the connection between pockmarked city streets and lavish pension payouts extracted from LB taxpayers.
Ultimately voters chose Bob Foster for Mayor (and Laura Doud for Auditor), arguably signaling a desire to change the way City Hall did business.
In 2007, voters gave Mayor Foster more power to make cuts...but voters didn't march with Mayor Foster when he supported a City Council pay raise.
In the next few weeks, Councilmembers will decide whether to march with the Mayor on the budget and then into proposed tax increases on their constituents...or whether Councilmembers will first insist on changes for LB taxpayers that include:
- A pay freeze for members of City Hall's "six figure club" and a rollback of previously granted pay raises. (We suggest to June 06 levels, when Bob Foster was elected Mayor). If that's not acceptable, layoffs should follow. If some contend these remedies are beyond the Council's power, we want to hear legally binding reasons why from the City Attorney's office...so history (and voters) can hold accountable those who cost us that control.
- Workforce reductions, consolidations, contracting out and privatizing to compensate taxpayers for the ongoing costs of the 2002 pension spike. Even if the pension increases themselves can't be stopped (and we favor serious examination of that option), the net taxpayer consequences can be redressed by reducing the work force, combining tasks, contracting-out and privatizing when possible. If a Charter Amendment would make privatization easier, THAT should go on the April 2008 ballot, not a tax increase. If LB is living "paycheck to paycheck" (as Mayor Foster claims), the Council needs to reduce employees and/or authorize new labor on terms within our price range.
- One day a week closure of City Hall. Worthy of implementation if it will save money. The City of Lakewood and AQMD (among others) already do this.
- Stopping the use of city money and resources to subsidize privately run entities and events. LB city departments should be providing city services, not tithing taxpayer money. "Not-for-profit" entities (including the "Sea Festival Ass'n") whose expenses include serious salaries shouldn't expect taxpayer subsidies...which the Council can and should end in FY 08.
- Ending the sales-tax rebate [kickback] program. Other, smarter cities expect businesses to pay them sales tax in full. In LB, City Hall gives some large business chunks of sales tax that LB taxpayers deserve. The Council needs to send the message that new businesses are welcome here provided they pay their fair share.
- Require Council approval for contracts above $50,000. This measure was suggested years ago by NLB activist Dan Pressburg...and it's the way things were done until Henry Taboada was made City Manager. In a city living "paycheck to paycheck," it doesn't seem responsible to spend up to $100,000 with virtually no Council or public oversight.
In management's Aug. 21 presentation, Financial Management Director Mike Killebrew said the tax increase measures could be put on the April 2008 ballot [when elections are scheduled for Council districts 2, 4, 6 and 8].
Assistant City Manager Christine Shippey said that if the Council wishes to proceed with an April 08 ballot measure, official action should be taken by the end of 2007 and an "ad hoc committee of City Councilmembers, city staff and community members be created" to develop an "effective approach" toward the proposed tax increase.