Just a week after voting to end discussions about any new tax measures, the Lompoc City Council took a slight step back on Tuesday night and made plans to consider moving forward with one new tax instead of three.
The move was made as part of the council’s ongoing deliberations of the 2017-19 biennial draft budget. The budget talks, which began May 2 and have now continued across four meetings, took up the majority of Tuesday night’s City Council meeting, which lasted nearly four hours. Tuesday’s talks included continued discussion about the specter of bankruptcy, the potential of cutting several city services and/or shuttering parks, and even an offer from one of the members of the council to refuse her stipend and have it instead go into the city’s revenue stream.
Tuesday’s meeting took place one week after the first of two special meetings strictly for budget discussion. That first budget-only meeting, held May 30, ended with the council voting 3-2 — with Mayor Bob Lingl and Councilwoman Jenelle Osborne dissenting — to move forward without considering the three new tax measures that were proposed by City Manager Patrick Wiemiller in the initial budget presentation. Also as part of that action, the council directed Wiemiller to return with a balanced budget that did not take into account potential revenue from the tax measures — an obligation that Wiemiller fulfilled on Tuesday, though not happily.
The tax measures, which were proposed to be included on the 2018 ballot, included a half-cent sales tax increase, a 2-percent increase in Transient Occupancy Taxes, or hotel taxes, and a 6-percent utility users tax.
Councilman Dirk Starbuck, who had been outspoken against the tax proposals at previous meetings, made a motion Tuesday night to bring the half-cent sales tax back on the table to be discussed at the second budget-only special meeting, which is scheduled to begin at 5:30 p.m. Thursday. Starbuck’s motion passed 3-2, getting support from Lingl and Osborne, both of whom objected on May 30 to the idea of removing the taxes from the discussion.
“I’d really like to look at the (half-cent) sales tax increase,” Starbuck said, noting that he still considered the other two tax proposals to be problematic.
Also as part of Starbuck’s motion, he requested that the city continue funding the victim’s advocate position within the Lompoc Police Department, as well as continue its funding to the Lompoc Chamber of Commerce and the Lompoc Museum, which were all among several city-aided entities slated to receive either reduced or no funding in the upcoming budget cycle.
Wiemiller noted that the half-cent sales tax is projected to bring in about $618,000 annually, so those services could be restored if that measure was placed on the ballot and approved by voters.
Wiemiller opened Tuesday’s presentation by reaffirming to the council that he still believed that all three tax measures were the best way to proceed. With that said, he presented the new budget — with many more cuts — that was requested by the council at the May 30 meeting.
The new budget he presented — which he said was strictly to fulfill his “assignment” from the council — included $1.37 million in cutbacks to make up for having the potential tax revenue removed from this budget cycle.
Among those cuts was $710,000 taken away from the parks department, including cancellation of the city’s animal control services agreement with Santa Barbara County, the closures of Ken Adam Park and River Park, reduced maintenance at River Bend Park, and the elimination of maintenance of multipurpose trails.
He also proposed $239,000 in additional cuts to the Lompoc Police Department; $159,000 in increased cuts to economic development; and $262,000 in reductions to the city’s general administration costs, which includes costs associated with events like the Flower Festival Parade.
“Please note that I do not recommend any of these budget reductions at this time,” he said after noting that his recommendations remain unchanged from that May 2 presentation.
Those specific reductions weren’t discussed at length from the council members, but some members of the council and the public suggested that the city look at making reductions in staff. Wiemiller said that was an area he was trying his best to avoid.
“I hate talking about that,” he said of potential layoffs. “It’s one of the worst things you can do in terms of trying to maintain … morale.”
Along those lines, Osborne offered to have her $600 monthly stipend, which she receives as a member of the council, instead go back to the city to cover labor costs. She said she’d happily give up that money, and any other benefits, if it meant that a city employee would keep his or her job.
At the May 30 meeting, Wiemiller introduced the possibility of bankruptcy as the only alternative he could envision, outside of the tax measures, for the city to remain solvent and pay off its $70 million obligation to CalPERS, the pension system that is crippling municipalities throughout the state.
Wiemiller reinforced Tuesday that he doesn’t want to see the city go into bankruptcy proceedings, and he said that he did not bring it up as a way to make a threat or as a ploy.
“(It’s) the last ditch we want to consider,” he said of bankruptcy.
Still, some members of the audience said that simply bringing up the term — which Wiemiller later referred to as “the b-word” — has already caused them angst.
Two of the city’s hotel owners said they’ve had discussions with investors who became troubled after hearing that the city was talking about bankruptcy.
Those same hoteliers asked that the council not consider a TOT tax, as they said it would have a net negative effect on visitation to the city. They noted that they typically compete with Buellton and Santa Maria for bus companies, which work on wholesale, to bring tourists to the city. They said that they are able to lure the buses because they can undercut the other cities’ prices, sometimes by less than a dollar.
If hotel prices in Lompoc were to rise by just $1 or $2, they said, those thousands of visitors would go elsewhere rather than pay the difference.
Councilmen Mosby and Vega both reiterated that they are against the tax proposals overall, and Mosby took a deep dive into the city’s cost allocation strategies as he tried to make the case that money could be redirected from some areas to cover costs in others and that the taxes weren't critically needed.
A couple members of the public spoke in favor of giving the voters the chance to decide on the new taxes, while a couple others said that there should be no discussions of introducing taxes. The voters who spoke against the measures noted that there is a large segment of the city that is already struggling to survive financially.
Wiemiller said he considered putting the taxes, which are estimated to bring in about $5 million annually beginning in 2020, on the ballot to be the most equitable way to try to increase revenue. He said the city is doing well financially, as far as retail growth and other metrics, but that the CalPERS obligation was just a “gorilla that we’ve got to tackle.”
“The tax measures, no doubt, do allow us to preserve services that otherwise will have to be stripped and cut,” he said, before acknowledging that arguments can be made for both sides of the issue.
“What I’ve asked for is to let the voters decide,” he later added. “Regardless of your or my opinions about the (enjoyment) or lack thereof of paying taxes ... I think it’s important to let the citizens make the choice about the services being provided and whether they’re willing to pay some amount more to preserve and protect those services.”
Thursday’s budget meeting will be the final of the two that have been scheduled, though the council reserves the right to schedule more at that meeting if they deem it necessary. Lingl asked that the meeting start an hour earlier, at 5:30 p.m., to give the council members more time since he said he’s noticed a lack of progress thus far.
The next regular meeting of the City Council is scheduled for 6:30 p.m. June 20.