Council passes sanitation franchise fee

Deirdre Newman

After being considered for the second time, city leaders Monday

approved implementing a nonexclusive sanitation franchise fee for

waste haulers to use the city’s roads.

The added fee could be passed along to customers.

After any action on the sanitation franchise fee failed July 6,

when the council deadlocked, Councilman Mike Scheafer, who was absent

at the prior meeting, cast the deciding vote Monday in favor of the

fee.

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

assess a sanitation franchise fee. Use of this revenue could be used

by the city for any purpose.

The council approved the fee over the objection of some residents,

who feel they will ultimately have to absorb this cost.

“The fact of the matter is, residents will end up paying for this

in one way or another,” said Beth Refakes.

The county average fee rate is 5% for residential customers and 7%

for commercial/industrial customers. This would raise about $1

million a year. Staff members will negotiate with the waste haulers

in the city to decide on a rate they believe is reasonable and will

return to the council within four months for action.

The council also rejected further exploration of increases in the

transient-occupancy tax and business-license tax, both of which would

have to be approved by voters. Mayor Gary Monahan suggested looking

only at the business-license tax at first, because he was afraid that

putting two tax increases on the ballot in 2006 would cause them to

compete against each other, and they would ultimately both be

defeated. But he could not muster support for his idea, so the vote

on putting the two tax increases on the ballot failed, with Monahan,

Councilman Chris Steel and Councilman Allan Mansoor dissenting.

The business-license tax rate -- a maximum of $200 regardless of

gross receipts -- has not changed for more than 20 years. Similarly,

the transient-occupancy tax rate of 6% has not changed for more than

22 years.

Former Mayor Sandy Genis said she supports an overhaul in the

business-license tax.

“The system we have now is very regressive, and the proposed

system will exacerbate that.... I urge you to increase it or change

it to a flat percentage of revenue,” Genis said.

The revenue sources considered Monday are not designed to fix this

year’s budget shortfalls but would increase revenues in future years.