By Barbara Zaragoza
(Photo by Barbara Zaragoza)
Way back in February 2016 I attended a meeting of the GMOC, where a city employee said Chula Vista needs $600 million for infrastructure repairs. To address the crisis, the city considered either a half-cent sales tax hike that would bring $16 million per year, or a $200 million bond. Both would fall short of actual needs.
Bond money would come from property taxes. The half-cent sales tax would be paid at the time of the sale of goods and would not apply to certain items, such as groceries and prescription medicines. According to a survey conducted in English and Spanish, with about 880 participants, more residents supported the sales tax measure.
Thus, on our November 2016 ballot, Chula Vistans will have Measure P:
To repair neighborhood streets and sidewalks, replace storm drains to prevent sinkholes, update police, paramedic and 9-1-1 equipment and facilities, improve parks, repair recreation facilities, and for general city services and infrastructure, shall the City of Chula Vista adopt an ordinance enacting a temporary 1⁄2 cent sales tax, generating an estimated $16 million per year, expiring in 10 years, with no further increases without voter approval, with all funds staying in Chula Vista, requiring citizen oversight and independent audits?
Criticism abounds for passing this measure, including both Rudy Ramirez and Mike Diaz — candidates running for Chula Vista City Council District 1. Indeed, traditionally sales taxes are considered regressive. Some argue they discourage tourism and economic activity.
So, why do the San Diego Democrats support the sales tax measure? Why does Chula Vista Mayor Mary Salas support it as well?
An Interview With Richard Hopkins, Director of Public Works
On May 31, 2016, I sat down with Richard Hopkins, director of Public Works for the City of Chula Vista. He spoke extensively on why he supports the half-cent sales tax increase and provided his expertise.
A civil engineer, he says our communities need to think of sustainability not only in terms of our environment, but also in terms of our buildings: “A lot of people think about the environment when they think about sustainability. ‘Oh yeah, you mean clean air and clean water.’ But if you think about your life and the way you live, you enjoy your environment, of course. It’s nice. But your built environment is also important to you. Your buildings. Your parks. Your roadways.”
Hopkins explains that when we erect new buildings, we need to foresee that they will get old. Our infrastructure will wear, tear and even break. When it does, will we have enough money for repairs? Unfortunately, Chula Vista has deferred maintenance for a long time.
Hopkins says, “I think this half-cent sales tax for ten years only will give us some tools to catch up.”
The City of Chula Vista Owns Many Properties That It Can’t Maintain
The City of Chula Vista owns quite a bit of property, including nine fire stations, two libraries, a police station with a jail, about a half-dozen recreational centers, the Norman Senior Center, the Woman’s Club and the Living Coast Discovery Center. The City also has 57 parks and then there’s groomed landscaping, trails and wild area in preserves.
Hopkins explains, “We don’t have the resources necessary to take care of any of our facilities the way we should. So over time, if things don’t change, we’ll lose a lot of our facilities just to age.”
Community Feedback
Hopkins explains that a few years back, “We engaged the community in a big way when we developed the asset management program. Because we had in mind that we didn’t have enough money–we already knew that. So we said, what are we going to do? We could ask the people for a tax measure. We could ask for a bond. We could ask if they agree that we should prioritize: maybe we should close some of the facilities? Maybe we should have less amenities than we have? These are all questions that we wanted to give the information to the Council so that we could make educated decisions.”
So the city invited community organizations, including the Southwest Civic Association, Rotary, Chamber of Commerce, the San Diego Taxpayer Association, the Association of General Contractors, unions and the Friends of the Library, among others. The Asset Management Program Advisory Committee met about ten to twelve times to assess the problems. The group also took tours.
(Photo by Barbara Zaragoza)
The Asset Management Program Helped Identify Problems
In addition, Hopkins and the public works department created a program called Asset Management. Using computer technology, the program developed a computer inventory of city assets. They then plotted out the conditions of each asset, grading them from red to green, with red having a high probably of failure. The condition assessments went “all the way from a segment of street to a section of pipeline under the street to a street light and the bulb that’s in the streetlight.”
Through the asset management program, Hopkins says the city identified about 80 to 100 million dollars of assets in the red zone.
“If a half-cent sales tax is implemented in Chula Vista for ten years, we estimate it will generate about $165 million. We estimate we have between $80 to $100 million assets in the red. And then, you can see we can still spend another $80 million… getting well into the yellow zone as well. Doesn’t completely solve the problem, but part of what we’re tyring to do is talk to people about the fact that we have to catch up. Then we have to keep up.”
What about Mello Roos & Community Facilities Districts?
Could Mello Roos and Community Facilities Districts (CFD’s) take care of infrastructure problems? Western Chula Vista has no Mello Roos or CFD’s, but they are abundant in the east.
Hopkins gives simple definitions for us all–Developers build a subdivision and they can pay for their costs upfront. Their costs may include building a school or erecting a park. Once they build the community, developers receive reimbursement through the sale of homes.
However, if developers establish Mello Roos, they can defer their upfront costs. For the buyer, this brings the initial price of the house down. The buyer then takes on an annual assessment in addition to their property tax. This Mello Roos is paid for a certain number of years, but once the community pays off the investment, Mello Roos goes away. The deferred cost can be used for schools, parks, or whatever the developer would normally have to build.
A CFD, however, never goes away because this tax contributes to annual operating & maintenance costs. For example, if a community builds a fence along a trail, when the fence wears out after 15 years, residents have paid enough money into the CFD to replace it.
“I think it’s more sustainable and I think that the people that decide to buy into that neighborhood, they like those amenities. They like having the trails, the groomed landscaping.”
Are More Resources Going East Rather Than West?
Hopkins says when the city held Asset Management Program Advisory Committee meetings, some participants perceived an East-West divide. However, Hopkins explains, “We would show them a Western Chula Vista neighborhood with a broken street. We’d show them the roots coming up and blowing up the sidewalks.
“And then we would go out to the Sunbow area… Sunbow is not a really new community, but it’s newer. Probably 30 years. So there are some landscaped areas that is an open space district, that the property owners all pay into, and that’s what takes care of the landscape.
“It’s not the city using general fund money that taxpayers in Western Chula Vista are paying for. The people in Western Chula Vista think that their taxpayer dollars go to pay for this beautiful part of the city over there, when it’s really a district. So people pay their taxes and then they also pay an extra fee to have the nice landscaping.”
Measure P: Chula Vista’s Sales Tax Increase
Hopkins explains, “The revenue that would come in from a sales tax is better, in my opinion, because I get it a little at a time and it spreads it out…And if I want to upfront the money sooner, I can because we can go in and borrow money using future revenues in years eight, nine and 10 and bring that forward.
Hopkins also thinks it’s the fairest. “Some property owners already pay Mello Roos. They pay their property tax. Then they pay for CFD’s and yet another hit on a property. I think sales tax allows people coming to the city [to pay]. People coming to visit the Bayfront. People coming to visit our Olympic Training Center. The new hotels that we’re going to be building. To me it’s a better way to spread the cost over more people and so the individual impact is less.”
A sales tax is regressive but so is adding to property taxes. Not all people who own their houses are wealthy. In particular senior citizens who want to stay in their houses are subject sometimes to outrageous property taxes especially with the values of real estate skyrocketing. There are no exceptions for senior citizens when it comes to property tax. There should be.
And instead of a bond paid for by property tax, why not just add the money to the property tax bill and forget the bond? The only time a bond is really needed is if upfront money is needed immediately. That should be the chief consideration. A sales tax obviously would indicate that upfront money is not needed. Shouldn’t this be part of the discussion?
I think the bigger concern is whether or not the added funds will actually go to repairing streets, etc. Even if, in name, they do, can we guarantee that the funds won’t be blown on superfluous projects? Here we’re thinking of the idiotic “walkway” at the Civic Center library which eliminated a bunch of parking spaces, or the continued attempt to make 3rd avenue look like Downtown Disney, with even less functionality.
This issue is a ridiculous tax notion that will never reduce the infrastructure deficit one iota, it will just make all things Chula Vista cost more – if it passes. Take a hard, hard look at the Chula Vista City salary structure first; that’s where the real money management lies. The City Chula Vista has more than 100 employees who are paid more than $100,000 a year. The infrastructure deficit should have always been a part of the annual budget, not a band-aid sales tax increase giving the City even more money to mismanage. I predict the sales tax fails and the City has positioned it so that it might qualify for 50% +1 voting when, as a General Fund tax, it requires 2/3 voter approval; look for a law suit if it barely gets past 50%.
Yeah, they got fat & happy during the housing boom and spent like the world was ending.