Herald — November Likely for Seaside Vote on Repealing Utility Tax

Council to Decide Ballot Date at Next Meeting

By Laith Agha
The Monterey County Herald
July 29, 2008

A measure that will give Seaside residents an opportunity to repeal the city’s utility tax is a step away from reaching the November ballot.

At a special City Council meeting on Monday, the council agreed to decide during its Aug. 7 meeting when the tax repeal measure will be placed on the ballot. The council also directed its staff to prepare a fiscal impact report if the repeal were to succeed.

The tax requires Seaside businesses and residents to pay a 6 percent tax on electricity, gas, telephone, water and cable bills. Residents at least 65 years old are exempt from the tax.

None of the City Council members support the repeal. But the council is obligated to place the measure on a ballot, because the Seaside Taxpayers Association submitted more than the minimum number of signatures last week to qualify the measure.

The council will officially decide when Seaside residents can vote on it during the next council meeting. The council members all indicated they prefer putting it to a vote on Nov. 4 rather than hold a special election, which would cost more than $40,000.

The Taxpayers Association, a 30-member group led by Eugene Lee, needed 277 signatures to qualify the measure. The association gathered 369, according to Mayor Ralph Rubio, who pointed out that the figure represented a little more than 1 percent of Seaside’s 33,000 residents.

Rubio said the people pushing for the repeal fail to recognize the importance of the tax’s revenue to the city.

“I wish they knew the bang for the buck they are getting,” Rubio said.

Association spokesman Lawrence Samuels, a Carmel Valley resident who owns property in Seaside, said last week the group was approached by residents who said they were concerned about utility rate increases in recent years.

Councilman Steve Bloomer said he was against repealing the tax, though he suggested providing the public with statistics demonstrating utility rate increases over the last several years, since an increase in a utility bill leads to more taxes paid.

“When you get your PG&E bill, it’s shot up drastically the last few years,” Bloomer said.

The special meeting was attended by only one member of the public, Larry Hopkins, a retired Seaside resident who opposed a repeal.

“There needs to be campaigning by the (council members), explaining to residents the facts of city life,” Hopkins said. “Nobody likes taxes, even when they realize they are important. It has to be explained to (voters) that the fire engine that just went down the street won’t be able to go down the street because there won’t be anyone to drive it.”

The tax provides about 11 percent of the city’s general fund revenue, said assistant city manager Jill Anderson. That’s about $2.6 million for the current fiscal year.

“It’s one of the city’s most stable revenue sources,” Anderson said.

Other taxes, such as the transient occupancy tax, which depends on hotel room business, and sales tax, which draws heavily from automobile sales, are more volatile and are currently sagging, Anderson said.

Seaside residents began paying the tax in 1983, when the City Council adopted it, according to city records, Anderson said. Two years later, residents voted to drop it to 4 percent. The council decided to push it back up to 6 percent in 1991. A state Supreme Court ruling a decade later determined that voters must approve or affirm a utility tax. Seaside residents voted in 2002 to keep the tax.

Nine of the county’s 12 cities have a utility tax. Carmel, Del Rey Oaks and Marina do not tax utilities.

Laith Agha can be reached at lagha@montereyherald.com or 646-4358.