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Two years ago, Golden Hill finally got its maintenance assessment district.

For years some residents and local business owners there had tried to establish a MAD, a tool that neighborhoods across the country have used to collect taxes from local property owners to fund maintenance and improvement services — like trash or graffiti cleanup — beyond base levels provided by cities.

But reception was tepid. Property owners, who vote on whether to be assessed the annual fee, resisted the plans, and they failed.

In 2007, with the help of a city development grant, the MAD’s proponents tried again. They redrew the lines of the proposed district to include a swath of southeastern Balboa Park, and when the ballots came back, the initiative passed.

Next month, the San Diego Superior Court will hear a case challenging the MAD on the basis of its formation. The case was filed by a Golden Hill resident who has argued that by redrawing the district’s boundaries, City Hall, which owns the public park, was granted a disproportionate weight in the vote count. That weight, he argues, tipped it in favor of the MAD and imposed an assessment on property owners that a majority of them did not support.

It’s a complicated case that turns on intricate state legalese governing how special assessment districts are formed. Property owners’ votes carry different weights depending on the size and use of their parcels, and contractors hired by the city to determine those weights can draw the boundaries of affected districts to their liking, improving the chance the proposal will pass. Once passed, property owners pay fees proportionate to that weight.

The wrangling in Golden Hill has raised broader questions, though, about the role that MADs are playing in a city whose severe budget problems have left it unable to provide many of the general services neighborhoods need, like street sweeping and tree trimming. Opponents have argued that MADs are undemocratic, may make it more difficult for cities to raise revenue in the future, and could leave poorer neighborhoods empty-handed in the long-term.

“It’s not about the money. My assessment is $70 a year,” said John Kroll, a resident of South Park — part of Greater Golden Hill. Kroll also serves on the advisory committee for the Greater Golden Hill Community Development Corp., which administers the neighborhood’s MAD funds. “It’s about whether residents of Golden Hill actually wanted this.”

Some like Kroll argue that the city has embraced maintenance assessment districts and supported gerrymandering their boundaries because they relieve the city of having to provide services that neighborhoods will instead pay for themselves. By extending the boundaries of the Golden Hill MAD before the vote, Kroll argues, the city assured that its weighted vote would carry the proposal.

Pedro Anaya, director of the Community Development Corp., said while that may be true, it also means the city is paying into the assessment, and those funds have contributed to the maintenance projects that have kept graffiti off of walls and rodents out of overgrown palm trees.

“We think this would be a blow to the community if there was no maintenance assessment district,” Anaya said. “People are very happy with the progression of the community and they attribute that to the MAD.”

That is progress that wouldn’t otherwise materialize, some have argued.

“Cities like San Diego are financially melting down,” said Marco LiMandri, whose company took the lead in organizing Golden Hill’s earlier MAD efforts, and who has been responsible for several of the city’s more than 40 maintenance assessment districts.

“The general benefits people have come to expect from cities are declining. Without maintenance assessment districts or similar mechanisms, there is deterioration of lives within those cities,” he said.

In Golden Hill, funds from the maintenance assessment levy have picked up the slack in city services.

“Things three years ago, when this assessment developed, are very different than they are today,” Anaya said. “The city is not providing the same level of service as they were four years ago, because their budgets have been slashed.”

But those who question the special assessments’ relative benefits argue that financial difficulties aren’t reason enough to give the city a free pass on its local responsibilities. Although MAD funds are supposed to be used for levels of service above and beyond base city levels, they often completely replace them, irking those who say they’re paying for the same services twice.

Instead, Kroll and others who challenge the MAD believe those funds should be expended on services the city isn’t already supposed to provide.

In Talmadge, local MAD funds have been used to install a decorative traffic circle, and are currently being allocated for ornamental street lights. The use of the funds for capital projects as opposed to general maintenance services hit a snag earlier this year, though, when the city told the Talmadge Maintenance Assessment District that the city would act as the general contractor on the project, over concerns that city requirements for spending money be met.

Talmadge residents opposed the city inserting itself into the project because a middleman would add considerable overhead to the project, said George Diefenthal, who serves on the Talmadge MAD’s board of directors.

Though “it wouldn’t have put a risk to the lighting project, it would have stopped all future projects,” Diefenthal said.

“We’re not here to replace the city standard. We’re here to get above it.” In Talmadge, “I don’t think we’re taking up slack. The city would never have put the traffic circle in there,” he said.

That’s especially true considering the city’s structural deficits.

“It allows for communities to define themselves, and it also from the city’s perspective, enhances property values,” Diefenthal said, “And that’s a good thing from their perspective.”

In response to the group’s resistance, the Mayor’s Office is developing a policy that will allow community groups to use MAD funding for capital projects without using the city as a general contractor.

“The policy will establish, basically, how we ensure compliance with city code governing use of public dollars — and if requirements are not met or something goes wrong, how we ensure the taxpayers are not on the hook,” mayoral spokeswoman Rachel Laing wrote in an e-mail.

But MAD experts have argued that their very existence as a lifeline for city services may present longer term challenges to cities facing budget problems.

“It’s easier to form one of these than to raise taxes,” said Vladimir Kogan, a UCSD doctoral student and former voiceofsandiego.org reporter who studies local governments. “The city is looking at the short term and ignoring the long term consequences.”

The city’s reliance on MADs to pick up the costs of services in some neighborhoods, Kogan said, means others less capable of adopting them — low income neighborhoods, for example — will lose out.

Residents of MADs will be less likely to approve general tax increases in the long term, because they’ll feel they’re already taking care of their own needs and won’t further benefit from general city services, Kogan said.

That will leave the city struggling to collect revenue for older, less affluent parts of the city.

“In the long term, you’re creating a gap between the haves and the have-nots,” he said.

Please contact Adrian Florido directly at adrian.florido@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.

Dagny Salas

Dagny Salas was web editor at Voice of San Diego from 2010 to 2013. She was an investigative fellow at VOSD from 2009 to 2010.

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