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November 6, 2018 — California General Election
Local

City of South Pasadena
Measure N - Majority Approval Required

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Election Results

Failed

2,313 votes yes (20.18%)

9,148 votes no (79.82%)

100% of precincts reporting (12/12).

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?

What is this proposal?

Measure Details — Official information about this measure

Impartial analysis / Proposal

Teresa L. Highsmith, South Pasadena City Attorney

“STOP UTILITY USERS’ TAX”

Residents of South Pasadena currently pay a Utility Users Tax (UUT) for water, gas, electricity, telephone and cable television service. The current rate is 7.5%. The UUT is a general tax, where revenues are paid into the City’s General Fund. General Fund revenues are budgeted by the City Council annually for general City services, such as police and fire protection, 9-1-1 emergency response, paramedics, parks, libraries, youth and senior programs and street maintenance and repairs. If approved by a majority of South Pasadena voters, Measure N would amend the City’s Municipal Code by repealing the UUT on gas, electric, water, telephone and cable television service in its entirety.

This measure is on the ballot because a number of residents circulated a petition and obtained sufficient signatures to qualify for the ballot under California Elections law. Therefore, the City Council placed this Measure on the ballot. If the measure is approved, the General Fund will no longer receive UUT revenues resulting in a loss of approximately $3.4 million per year, representing a loss of 12% of the City’s annual General Fund budget. The UUT is the City’s second largest source of General Fund revenue (12%) after property taxes.

If the UUT is repealed, there would be a significant impact on the City’s ability to provide services and programs at current levels. The City Council will have to decide, as part of the budgeting process, whether alternative revenues can be found, or whether City services and programs will have to be reduced or eliminated. Options to offset this potential revenue loss were considered in the Elections Code Section 9212 report approved by the City Council on July 18, 2018 which included: eliminating or reducing library services, eliminating or reducing community youth and senior programs, and reducing police and fire services.

Measure N requires simple majority approval of the voters to pass.

A “Yes” vote on Measure N will repeal the Utility Users Tax, and eliminate the General Fund revenue source.

A “No” vote on Measure N will not repeal the Utility Users Tax and will maintain the existing tax and the General Fund revenue source it provides.

Published Arguments — Arguments for and against the ballot measure

Arguments FOR

Vote Yes on Measure N!

Rising pension debt, extravagant pay and benefits and management decisions that favor government unions over taxpayers have put South Pasadena on the verge of bankruptcy.

The fiscal emergency that initially justified the Utility Tax no longer exists, but as revenues increased, so did spending. Since 2011, the City’s general fund has grown by $4.4 million, but general fund spending increased by $9.5 million (49%). And though total revenues increased by $16.3 million (50%), new spending consumed $15 million of that. The City has a spending problem, not a revenue problem.

The main culprit? Unsustainably bloated salaries and benefits. In 2016, median pay and benefits for City employees was $96,119, and many City retirees receive over $100,000/year for life.
(www.transparentcalifornia.com.)

The Stanford Institute for Economic Policy Research estimates that the City’s pension debt – just through 2015 – was at least $26.8 million, but likely as much as $108 million [www.pensiontracker.org] when realistic pension fund investment returns are factored in. The City has grossly underestimated how much money it will have to set aside for pensions. Pension debt, rather than losing the Utility Tax, is the real threat to our city’s survival.

Taxpayers must stop enabling the City’s runaway spending through unending tax increases. Stopping the tax will force the City to start living within its means. Management can make up the difference by stopping raises to bloated salaries, and using reserves as needed until revenue-increases catch up to fill the gap. In the future, the City can save millions by moving to a 401(k)-type retirement plan and negotiating salaries that are fair to City employees AND taxpayers. Vote Yes on N: Stop the Utility Tax!

For further information see www.SouthPasTax.org.

Edward Ristow
Proponent of Measure N

South Pasadena City Treasurer 1972 to 1995
Retired CPA and Attorney

EDWARD A. RISTOW
South Pasadena City Treasurer 1972 to 1995

GUILLERMO GUZMAN
South Pasadena Resident Since 1994

Arguments AGAINST

South Pasadena’s community leaders are voting NO on Measure N. This misguided initiative was forced on the ballot by an out-of-town group that does not know our city or our community.

Measure N would cause $3.4 million in annual cuts to city services and programs that South Pasadena residents rely on every day. It would slow down our emergency response times and slash funding for community resources like our police and fire departments, library, parks, senior center and street repair services.

Firefighters say vote NO on Measure N to:
– Prevent reductions of firefighters and paramedics serving South Pasadena by 25%
– Prevent fire and emergency medical staff from falling below the standard recommended by the National Fire Protection Agency

Police officers say vote NO on Measure N to:
–Maintain neighborhood police patrols to keep our community safe
–Keep 911 emergency response times fast
– Maintain a School Resource Officer to help protect our students and keep our schools safe

Seniors say vote NO on Measure N to:
– Prevent elimination of South Pasadena’s senior programs
–Keep the South Pasadena Senior Center open

Parents and students say vote NO on Measure N to:
– Prevent a 35% reduction in library hours
– Save afterschool and summer camp programs
–Continue providing crossing guards for South Pasadena schools

Community leaders say vote NO on Measure N to:
– Prevent a 70% cut to the street maintenance funding that fills potholes and maintains our roads and sidewalks
–Continue maintenance of our parks and recreation facilities

The quality of city services directly impacts the quality of life in our community and our property values in South Pasadena. We all need to vote NO on N to prevent severe cuts to the services and programs that make our city great.

Join police officers, firefighters, seniors, parents, teachers and community leaders – Vote NO on N!

PHILIP C. PUTNAM
Attorney/C.P.A./Former Mayor

WILLIAM J. CULLINANE JR.
Businessman

SUZIE M. ABAJIAN
School Board Member

SAM HERNANDEZ
Chair Chamber of Commerce

KATY KWOK-NIELSEN
Assistant Principal

Replies to Arguments FOR

The two proponents of Measure N ignore important facts:

Fact #1: South Pasadena depends on UUT funding for essential services that protect our safety and quality of life, like neighborhood police patrols, firefighting, 911 emergency response, fixing potholes and maintaining parks and libraries. Why put these vital services at risk?

Fact #2: The salaries and benefits paid to South Pasadena employees are competitive with neighboring cities and regional averages. Do we want to be the employer of last resort for paramedics, police officers, firefighters and librarians?

Fact #3: No city can withdraw from the state pension system without paying SEVERE penalties and, even then, the City’s obligations to past retirees would remain. No other city has done this. Why would we?

Fact #4: California has a pension problem, but it’s a statewide problem impacting all cities, not just South Pasadena. In fact, South Pasadena already implemented pension reform with reduced benefits for newer employees who are required to make significant retirement contributions. Measure N doesn’t solve the statewide problem that needs a statewide solution. Why slash OUR services for a statewide problem?

Fact #5: Quality services directly impact our quality of life and property values. Because our public safety services keep our city safe and desirable, we enjoy very strong home values. The SMALL savings from repealing the UUT are FAR outweighed by the BIG risk of reduced safety and quality of life. Why mess with a good thing for so little?

Remember, N is for NO because it is NOT worth the risk.

MARINA KHUBESRIAN, M.D.
South Pasadena Mayor Pro Tem

GARY PIA
South Pasadena City Treasurer

ART MILLER
South Pasadena Police Chief, Retired

LISSA REYNOLDS
Artistic Director of Fremont Centre Theatre
Founding Director of SPARC, So Pas Arts Council

SHIREEN CHANG
Former Member of Public Safety Commission
29th Congressional District
Woman of the Year, 2004

Replies to Arguments AGAINST

Advocates of the Utility Users Tax (UUT) contend repealing it would cut funds for essential services by several million dollars, but this is misleading. Residents are presented with a false choice: inordinately high taxes or inferior quality of life.

A third, more reasonable option would be to rein in the salaries, benefits, and pensions of public employees.

In 2017, at least eight City employees made over $200,000/yr in pay + benefits, in some cases collecting more in overtime pay than actual salaries. As for pensions, City retirees now receive as much as $130,000/yr, and annual payouts may grow for the rest of their lives. Total payment over a lifetime could approach $4 million–perhaps more than earned while working–creating a new class of millionaires.

Keep that in mind next time you drive over a pothole, walk on an asphalt-patched sidewalk, or pay your exorbitant water bill. Also remember that revenues from the UUT go to the general fund, so they can potentially be used for pensions and raises, not services.

The UUT will be slickly marketed by outside consultants as being in the community’s best interest, but its real purpose is to continue enriching government unions.

We’ve been repeatedly hoodwinked by new parcel taxes, rate increases, fees, etc. under the guise of preserving our quality of life. By controlling expenses, however, the City can avoid cuts to services as reserves are used and other revenues (property taxes, etc.) grow to offset any shortfall.

Vote Yes on Proposition N.

EDWARD A. RISTOW
City Treasurer 1972-95 Retired CPA/ATTY

GUILLERMO GUZMAN
So. Pasadena Resident Since 1994

HUGH HEMINGTON
Lifetime Resident 58yrs

ANDREW KRINOCK
CPA, Retired

BEATRICE B. BYER
So. Pasadena Resident 29yrs

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