Most new revenue sources don’t pass

Deirdre Newman

Ideological differences between the community and City Council

members derailed further exploration of the majority of new revenue

sources considered Tuesday.

The one that survived was a fire-medical subscription fee, a

voluntary fee intended to improve the quality of emergency medical

services. The other three choices -- a sanitation franchise fee,

business-license tax and an increase in the transient-occupancy tax

-- failed on 2-2 votes with Mayor Gary Monahan and Councilwoman Libby

Cowan voting against Councilmen Allan Mansoor and Chris Steel.

Councilman Mike Scheafer was absent.

Council members, like the community, split on whether to even

consider new revenue sources without making more serious cuts first.

“I can’t support any increase in revenue without you doing serious

budget cutting,” Beth Refakes said. “You have the same problem as the

state and other agencies in not being able to cut costs.”

The council considered the revenue sources because of the budget

gap between revenue and expenditures the city has had over the past

several years.

In April, the City Council decided against pursuing a hike in

sales tax because of the state’s penchant for digging into local

coffers to cover its financial shortfalls.

The revenue sources considered Tuesday are not designed to fix

this year’s budget shortfalls but would increase revenues in future

years.

Costa Mesa is one of two cities in the county that doesn’t have

some sort of fire-medical subscription fee. The council voted

unanimously to have staff members explore a private model of this

fee, which would generate about $450,000 a year.

Staff members will come up with more specific information on a fee

structure and bring it back to the council for action within four

months.

An annual membership fee of about $30 would be charged to

households that sign up for the service and would cover all the

residents in the household.

The fee would fund all of the paramedic positions in the city,

life-saving equipment and advanced medical emergency training.

Membership also includes coverage for visitors to a household who

have an emergency-medical incident while there.

Cowan said she was interested in bringing this fee back for

discussion to see how Scheafer feels about it.

City management officials had recommended continuing the

exploration of the two tax increases, which would both require ballot

initiatives.

Some community members, like Judy Berry, said they would support a

tax increase.

“We haven’t had one in 20 years,” Berry said. “I think businesses

need to share in the cost. I don’t look at it as a tax to me.”

Despite some community support and a major exhortation from

Monahan, the council deadlocked on continuing to look at both tax

increases, but they can be brought back for consideration in the near

future.

Byron de Arakal, a parks and recreation commissioner who spoke as

a resident, said he was disappointed that ideological differences

prevented Mansoor and Steel from supporting the further exploration

of tax increases.

“I don’t think government should be wasteful with its money, but

this is a growing city, and we need more park land,” de Arakal said.

“When we blindly refuse to accept any increase in taxes ... I have a

large family, and I don’t shrink my budget because they’re eating

more.”

Costa Mesa is one of only three cities in the county that doesn’t

assess a sanitation franchise fee. Typically, a franchise fee is paid

to cities, as a kind of toll, for the use of city streets and

rights-of-way. Use of this revenue could be used by the city for any

purpose.

Staff members recommended a fee rate of 5% for residential

customers and 7% for commercial/industrial customers, based on the

county average. This would raise about $1 million a year.

The fee would be assessed as a franchise fee against waste-haulers

and would only be paid by residents if passed on by the

waste-haulers.

* DEIRDRE NEWMAN covers Costa Mesa. She may be reached at (949)

574-4221 or by e-mail at deirdre.newman@latimes.com.