The Morning Report
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Once the city of Chula Vista decided to ask voters for a sales tax hike to fund infrastructure fixes this November, it had two choices.
It could craft a measure that ensured the money would go to infrastructure, requiring two-thirds support, or it could raise the money with no legal guarantees for how it’s spent, requiring a mere simple majority.
City officials ultimately decided the measure likely wouldn’t pass if it needed a super-majority, so Chula Vista voters will decide whether they want to raise their sales tax by half a cent for the next 10 years and trust that city officials will use it how they promised.
“The City Council has expressed its intent to spend these monies exclusively on City infrastructure, facilities and equipment,” reads the city attorney’s analysis of the measure. “However, because the tax is a ‘general purpose’ tax, the City Council would reserve the right to spend the tax revenues for any lawful City purpose.”
The committee and city staff documented all the public infrastructure, from roads to police cars to parks to fire stations, mapped them out and determined how close they were to failing, the likeliness that they would fail and the consequences to city residents of those failures.
The city determined it had about $71.7 million worth of infrastructure that was high-risk, meaning it was already failing or on the verge and would have severe consequences if it failed. It also found that $279.1 million worth of infrastructure was medium-risk.
“We’re not really that different than most cities in the nation in that we have failing infrastructure,” said Maria Kachadoorian, the deputy city manager. “We do collect gas tax money, TransNet money and we do seek out grants. But we’ve gotten to the point now where we needed to bring something forward or its going to make things more difficult. Finding money in the budget would mean drastic cuts in services.”
The city estimates the measure will generate roughly $16 million in the first year and $176 million over 10 years.
In April, city staff told the City Council it could either put a sales tax on the ballot, or a bond to borrow the money.
The bond would be reimbursed by future revenue from an increase in local property taxes. It would have allowed the city to guarantee a certain dollar amount to be raised and to specify what projects would be included. It would also require a super-majority to pass.
The sales tax, without legally dedicating the money for a specific purpose, would only require a simple majority vote.
“It’s two different thresholds and we know that if you bring this to a two-thirds vote, you are really likely to lose it,” Chula Vista Mayor Mary Salas said during a June City Council meeting in response to concerns over how the money could be spent if it wasn’t legally bound by the ballot measure.
Those concerns persist among people who oppose the measure.
Mike Diaz, a retired firefighter and candidate for Chula Vista City Council, said the tax will hurt the poorest families in Chula Vista and he’s concerned the funds aren’t earmarked for infrastructure.
“There is absolutely no way to guarantee that the money is going to be used for what they say,” Diaz said.
John McCann, the only City Council member who voted against putting the measure on the ballot, expressed similar concerns during public hearings.
“There is no specificity,” McCann said at a July City Council meeting. “There is no accountability and ultimately it comes down to the council.”
Changes to the makeup of the City Council over the next 10 years could also change how those funds are used, no matter what the current Council is promising, he said.
Salas called the concerns unfounded.
In an interview, she said opponents and supporters of the measure alike will watch like hawks how the revenue is used, and funds won’t be diverted easily.
“I’m sorry we can’t convince people that we’ll use those funds for what we say we will,” she said during the July City Council meeting in which the measure was placed on the ballot.
“It’s a temporary 10-year sales tax,” she said. “It’s going to go away. If we swept that into pensions and salaries, we would be setting ourselves up for a financial crisis.”
The city has done several things to try and assuage concerns over the use of the money. The money raised will be separated into a separate line in the city’s budget. The City Council adopted an intended expenditure plan, which provides a detailed breakdown of how the funds should be spent – though it in no way legally binds the use of the money. The measure would also create an independent oversight committee, which would review the spending plan and annual audit reports in public hearings.
City staff will also bring a plan to borrow money with a promise to repay the debt with the tax’s future revenue within 30 days if the measure passes, Salas said. This would provide the city with funds to immediately start fixing the most critical infrastructure issues and would legally bind the money to infrastructure projects, she said.
While opponents have voiced concerns at City Council meetings, there is no funded opposition against the measure.
Salas started her own committee to raise money in support of the measure. She said she’s personally been calling developers who have projects in Chula Vista to ask them to donate.
So far she’s raised around $85,000 that she’s used exclusively on mailers. That includes a $10,000 donation from RIDA Realty Investment Corp., which is building the big hotel and convention center on the Chula Vista Bayfront, and $10,000 from the Building Industry Association PAC. HomeFed and Millenia, which are working on large developments inland, also donated $10,000 and $1,500, respectively.
“I’ve been the sole person who has been fundraising for this,” Salas said. “I have been calling on the development community in particular. Their homes won’t sell if we don’t have good roads, good sewage.”
Salas said she isn’t worried about the content of the measure stopping voters, but one thing does have her worried.
“I think whenever you’re voting on a sales tax measure, you’re asking the community to make a value judgment,” Salas said. “I can advocate to our community and the citizens know exactly where we need to make those expenditures. But my biggest worry is it’s on Page 2 of a very long ballot.”