Monday evening Pleasant Hill's City Council chose to ignore its own budget language describing the use of the budget reserve in the case of economic recession, and unanimously endorsed the Utility Users Tax increase known as Measure T. See the story in the CC Times:

Pleasant Hill council pledges support for utility tax hike

By Lisa P. White
Contra Costa Times


Posted: 10/05/2010 02:24:56 PM PDT

Updated: 10/05/2010 02:24:56 PM PDT


PLEASANT HILL -- The Pleasant Hill City Council on Monday unanimously approved a resolution supporting Measure T, which would raise the utility tax to 1.5 percent and expand it to most utilities, including cable, electricity, gas, water and sewer bills.

The proposal has generated plenty of heat this election season. Opponents say the council should nix the tax increase and instead cut employee health care and pension benefits, which cost the city a combined $2.2 million in the 2009 fiscal year. Supporters argue that the tax hike would provide a stable source of revenue to pay for police, library hours and road maintenance.

On Monday, several residents urged the council to reject the resolution. Kevin Gregory said the utility tax would come on top of possible state and federal tax increases and higher property tax bills to repay bonds for the Mt. Diablo Unified School District.

"When it all adds up, it is a big deal," Gregory said.

Councilman David Durant said he is sensitive to the fact that residents are struggling and the economic recovery remains sluggish. Still, he said Pleasant Hill probably faces another two to three years of declining sales tax revenue, so it's better to have a stable source of funding.

"Do we wait until two years from now to see how bad it is before we turn to the public?" he asked.

Durant also said city workers will have to pay more of their health care premiums and pension contributions, even if voters approve Measure T. Contracts with the city's four employee bargaining groups expire next year.

City Manager June Catalano took the opportunity Monday to correct an error the city has repeated in documents and on the website. For months, the city had been telling residents the current 1 percent utility tax applied only to intrastate landline phone service. However, cell phone service also is taxed.

Although Councilman Michael Harris called the error "regrettable," he said people make mistakes, adding that the city had done the right thing by admitting it and correcting the misinformation.

The city estimates the higher utility tax would generate about $1.2 million annually. Critics question the accuracy of the revenue projections and suggest that the city may reap much more.

The utility tax would apply to residential and business customers, but public schools, Diablo Valley College and residents participating in utility rate reduction programs for low-income households would be exempt. The ordinance also gives the council the authority to reduce or suspend the tax without voter approval.

Vice Mayor John Hanecak said initially he opposed the measure because it would establish a long-term tax to cover a short-term revenue shortfall. He changed his mind, he said, when the council included a provision in the ordinance requiring an annual audit to figure out if the city needs to collect the utility tax.
 
 
Contra Costa Times editorial: We recommend Jack Weir and Terri Williamson for Pleasant Hill City Council  PLEASANT HILL CITY COUNCIL: Incumbent and newcomer have a better grasp on the city's new fiscal reality

MediaNews editorial

Posted: 10/06/2010 12:01:00 AM PDT


PLEASANT HILL faces a new fiscal reality -- and it needs City Council members who understand that. For that reason, of the five candidates running for two seats in the Nov. 2 election, we endorse Jack Weir and incumbent Terri Williamson.


The city's current two-year budget spends $1.2 million more than it takes in. Sales tax, on which the city is highly dependent, was down about 15 percent from expectations last year. To help make up the shortfall, the city is seeking voter approval on Nov. 2 for a utility tax increase.

Yet, at the same time, the city, with a tradition of generous employee benefits, provides nearly free health care and completely free pensions to its workers.

City workers pay $55 a month for medical coverage, regardless of the number of dependents. The city pays the rest, which works out to about $1,000 per employee per month. As for retirement, the city not only pays the employer share of payments to the state retirement system, it also picks up the employee share. As a result, for every dollar of payroll, the city pays another 37 cents for police pensions and 19 cents for the retirement of other workers.

That was bad policy when the city was flush with cash; it's horrible now that revenues have shrunk. As the city enters negotiations next year with all of its employee unions, the council needs to remember that its first obligation is to provide services while being mindful of the taxpayer burden.

Interestingly, if the city required employees to pay their share of retirement, it would free up nearly as much money as the utility tax increase would generate. The pension change wouldn't solve the city's fiscal problems, but it's an obvious move that could save substantial money.

Credit business consultant Weir with pointing that out. He stands above the other candidates in his critical analysis of the city budget. That's not surprising. Weir brings an impressive resume: Founder of the Pleasant Hill Taxpayers Association; board member of the Contra Costa Taxpayers Association; and member of the citizen oversight committees for bond measures in the John Swett and Mt. Diablo school districts and the Contra Costa Community College District. Weir understands numbers and the seriousness of the city's fiscal plight.

For the second council seat, we endorse Williamson because she clearly understands the city faces troubling financial times and needs to restructure its employee benefits. First elected to the council in 1985, Williamson was a driving force behind the wonderful redevelopment of the city's downtown. As the only council member to oppose the city's latest two-year budget, she correctly questioned its optimistic assumptions that city revenues will rise next fiscal year.

In making these endorsements, we pass over incumbent Michael Harris, a smart and thoughtful guy who, unfortunately, seems badly torn between pleasing city employees and making the tough changes that are badly needed. As for challenger Michael Flake, he needs to build a constituency in the community and think more carefully about some of his proposals, such as using the city economic development director to encourage high school students to patronize an In-N-Out Burger to be built on Contra Costa Boulevard.

Finally, there's former Councilwoman Suzanne Angeli. While she has a long record of service in Pleasant Hill, Angeli is also well-known as a longtime union president representing BART workers. In what could be a very tough upcoming year of negotiations for the city, the last thing taxpayers need is a labor leader on their side of the table.

 

 

 
 
Your Turn: Pleasant Hill's Measure T is the wrong tax at the wrong time
By Wendy Lack
Guest Commentary
Posted: 09/27/2010 12:01:00 AM PDT

Pleasant Hill's Measure T will add a 1.5 percent tax on most utilities including cell phones and telecommunication services, electricity, gas, cable, water and sewer on top of the tax currently charged on land line intrastate phone bills.

The city estimates this new tax will generate $870,000 annually from those living and operating businesses in Pleasant Hill.

Pleasant Hill's City Council rushed to get Measure T on the November ballot because city income from sales tax and other sources has declined due to the poor economy. But what has the city done to substantially reduce costs? How can higher taxes paid by residents and businesses benefit the local economy?

The city of Pleasant Hill (population 33,000) has 22 employees -- about 20 percent of its workforce -- whose annual base pay exceeds $100,000. Employees pay nothing toward their PERS pension benefits but if they did so city pension costs could be cut by one-third.

Renegotiating labor contracts to reflect the customary employee pension contributions (9 percent for police, 7 percent for non-police) could save taxpayers over $840,000 annually, which is nearly the same amount that Measure T will generate. Cities throughout the state are revisiting labor agreements to increase employees' pension plan contributions and Pleasant Hill should, too.

Voters should reject Measure T because it is unnecessary and unaffordable for residents and small businesses during

the current economic slump. Why should residents pay higher taxes while the city operates "business as usual"? Raising taxes now will remove any incentive for government to live within its means. Why would the city reduce costs once it is addicted to getting over $1 million of your hard-earned tax dollars every year?

Raising taxes on basic household necessities will hit hardest on seniors and businesses with high utility use at a time when fixed-income residents and businesses are least able to afford it. While city officials are fond of minimizing Measure T's potential impacts, this tax will place an additional strain on taxpayers' overstretched budgets and grow over time as utility rates increase. Good thing the city made sure this new tax also applies to late fees.

The effective unemployment rate in California is 17 percent. Raising taxes on seniors, families and small businesses now simply adds insult to injury. Residents will pay this tax twice -- once at home and again when they shop in Pleasant Hill and pay higher prices that reflect the inevitable pass-through of this tax to customers.

Increasing the numbers of empty storefronts in town will do nothing to boost Pleasant Hill's sales tax receipts.

Pleasant Hill -- with approximately $8 million in cash reserves -- has infinitely more ways to reduce its expenses than do residents. Voters should reject Measure T and tell city officials to do their fair share by getting serious about reducing expenses to ensure Pleasant Hill's long-term financial security and economic vitality.

Wendy Lack is a resident of Pleasant Hill.
 
 
Cell phone service is taxed, Pleasant Hill admits
By Lisa P. White
Contra Costa Times
Posted: 10/03/2010 12:00:00 AM PDT


PLEASANT HILL -- For months, Pleasant Hill has been telling residents the city charges a utility tax only on landline telephone service.

But city leaders acknowledged last week, and several residents' wireless bills prove, that cell phone service also is taxed.

A July 19 city staff report stated that Pleasant Hill levies the existing 1 percent utility tax on intrastate, landline phone service only. The 1983 ordinance, however, says the tax applies to intrastate telephone service.

"Not everybody is as familiar with the language of the ordinance as others, and somehow that got slipped in (the staff report) that it applied to landlines only, and that's not correct," City Attorney Debra Margolis said.

The city has spread the same incorrect utility tax information in other ways. The September-October issue of the Outlook city newsletter repeated the claim that, currently, only landline phone service is taxed. That information also appeared in two places on the Pleasant Hill website until city staff members corrected it about two weeks ago.

And Redevelopment Agency administrator Bob Stewart's statement during a July 19 presentation to the council shows some city staff members didn't know Pleasant Hill is collecting tax revenue on cell phone service.

"The advantages of the (utility users tax) include expanding it to treat all taxpayers equally," Stewart said July 19. "For example, those residents using only landline telephones are subject to the current (users tax), while those using mobile phones are not."

At that meeting, the City Council voted to place Measure T on the ballot. Measure T would raise the tax to 1.5 percent and expand it to most utilities, including cable, electricity, gas, water and sewer bills.

Questions about whether Pleasant Hill taxes cell phone service arose during a Sept. 22 election forum, when council candidate Jack Weir -- who opposes the tax hike -- asked the incumbents to explain why the city utility tax appeared on his AT&T Wireless bill.

Wireless companies have for many years interpreted older utility tax ordinances, such as Pleasant Hill's, to apply to cell phone service, said Verizon spokeswoman Heidi Flato. She could not say when the company started charging Pleasant Hill residents the utility tax, but she said it probably has been levied since the company was created in 2000.

Weir later said he was disappointed to learn the city had misinformed voters.

"They should be better about doing their homework. That's the root of this problem," Weir said. "This is just very sloppy staff work, pure and simple. They made a statement that is patently untrue."

According to Margolis and City Manager June Catalano, the estimates of the revenue the city collects now from the utility tax and the projections for future revenue, if voters approve Measure T, are accurate.

On Thursday, Margolis and Catalano said they didn't think the city needed to act to get the right information about the utility tax to voters before the election.

"We're not sure what to correct because there's no effect, it doesn't change anything," Margolis said. "We have communicated to the voters that we currently tax intrastate telephone services, so why is it so important that voters understand that it applies to both landlines and cell phones?"

But in an e-mail Friday, Catalano said the city apologizes for any confusion, and that a "clarifying statement" will be made at Monday's council meeting.

Kris Hunt, executive director of the Contra Costa Taxpayers Association, said she is disturbed that the city changed the website without acknowledging the mistake.

"This makes everybody nervous about government," said Hunt, whose organization opposes Measure T. "That's the wrong way to handle it. They should be daylighting this. They should have explained, 'Yes we've given you wrong information.' "

Lisa P. White covers Martinez and Pleasant Hill. Contact her at 925-943-8011. Follow her at Twitter.com/lisa_p_white.

 
 
When the UUT first was announced, the City posted information on its own website to explain what would be covered.

Here is what the July 2010 "Utility Users Tax Proposal for November 2nd Ballot Measure" said:

"The UUT would cover all communications (including long distance telephone and cellular phone and data services), cable TV, gas, electric, water and sewer services, and increase the rate to 1.5%.  Garbage collection and satellite TV services are unaffected."

But recently, changes have been made to the list of services that would be taxed. The text in red above does not appear in the new description provided by the City. The September 30, 2010 version states:

"The UUT would cover all communications, cable TV, gas, electric, water and sewer services, and increase the rate to 1.5%.  Garbage collection, internet, and satellite TV services are unaffected."

As you can see, the City dropped the description of the types of communications the new UUT would cover (presumably ones the existing UUT does not).  Even more interesting is the fact that the City has suddenly added "internet" to the services that are "unaffected."  Does this mean internet won't be taxed or does this mean internet has been taxed all along?

All of this began when residents started looking at their utility bills to see what taxes they are currently paying. To their surprise, their cell phone bills contain a tax described as "Utility Users Tax"! So does this mean that the City is already taxing something they said would be a service to be taxed under the new plan? How did that happen? We would like the City to explain to everyone what taxes they are currently collecting and what would be added were "T" to pass. It looks as if the City itself is unclear about the taxes they are collecting! 
 
 
Please join us at the City Council hearing this coming Monday, October 4 at 7:30pm. Be sure to print out a sign to bring! We hope to be there in force to voice our opposition to Measure T!
 
 
As you (hopefully) have noticed, our "No on T" signs have arrived and are starting to be seen around town! There has been so much interest that we have placed a second order for signs. Please contact us if you would like one for your neighborhood!
 
 
Some say Pleasant Hill Managers' Contract Misses Cost-cutting Opportunities By Lisa P. White
Contra Costa Times


Posted: 09/17/2010 06:55:26 PM PDT
Updated: 09/21/2010 05:20:09 PM PDT


PLEASANT HILL -- The recently approved contract with the city's management employees doesn't include a raise.

That's good news for Pleasant Hill, where sales tax revenue is shrinking and budget deficits are looming.

But critics say the city missed an opportunity to cut spending, because the contract doesn't require employees to pay into retirement or raise health care premiums -- two of the biggest budget busters.

Some residents find this especially galling because the city is asking voters to increase the utility tax. Residents point to Walnut Creek and Concord, which both have much larger deficits than Pleasant Hill, where employees have accepted pay cuts or agreed to make retirement contributions.

The days of generous benefits packages for public employees are over, critics say.

"At some point you have to say, 'Stop, this can't go on this way, or we're going to go broke,' " said Kevin Gregory, who opposes the utility tax hike.

Before negotiations with the 17 management employees began, the city formed a committee, including representatives of the four bargaining groups, to talk about ways to cut heath care costs. The committee discussed a range of options, including raising premiums and changing insurers or health plans, according to Mike Nielsen, a representative of the management employees.

The management group received a 4 percent cost-of-living increase in 2009. Nielsen, Pleasant Hill's chief building official, said they agreed to forego a raise this year because of the "economic times."

City Manager June Catalano said everything will be on the table when the management group enters negotiations again in March.

Personnel costs consume about 70 percent of the city's general fund. Pleasant Hill paid about $1.4 million for health care premiums and $840,000 to cover employees' CalPERS contributions in the 2009 fiscal year, according to Mary McCarthy, finance director. City staffers began paying a portion of their health care premiums in 2006, and now pay $55 per month for family medical coverage. 

 (Note - the $840,000 mentioned above goes to pay the EMPLOYEES contribution to CalPERS. This is in addition to contributions paid solely by the City to CalPERS...) - Editor



Nielsen declined to comment on residents' suggestion that employees pay a greater share of the tab for their retirement and health insurance benefits.


Pleasant Hill leaders note the city has cut spending -- the most recent budget froze 22 vacant positions, including several top management posts.

The contract the police officers ratified last year ties raises to the city meeting revenue targets, which didn't happen.

Still, Councilwoman Terri Williamson, who is running for re-election, said the city must do more, and that could include employee contributions to pensions and health care.

But she acknowledged the difficulty of asking employees to take what amounts to a pay cut during a recession, particularly since the city expects to have a $9.4 million reserve fund at the end of fiscal year 2011-12.

Councilman Michael Harris, also seeking re-election, agreed heath care and pensions must be discussed at next year's contract talks.

"I would like to see if we can come up with a way of getting these ever-increasing costs under control. I don't know what the answer is going to be," he said.

The management contract includes perks such as monthly car allowances of several hundred dollars and up to $1,500 to buy a computer or other technology every two years.

Click here for the story.


 
 
We are finding that since there is so much to say about the fight against the proposed utility tax, this might be a better format for posting new information. This will allow us to keep you updated in a more timely fashion to what's happening with the campaign, and allow you to add comments as well! Let us know what you think!