Lone Councilman Blocks Duarte's Attempt at Sales Tax Hike

Duarte follows other California cities in considering a fisal emergency declaration

By Melissa Pamer and Samantha Tata

| Wednesday, Aug 1, 2012 | Updated 6:26 AM PDT

Duarte Fails to Declare "Fiscal Emergency"

Duarte Mayor John Fasana, Councilwoman Liz Reilly, an unidentified official and City Manager Darrell George speak in municipal offices. The city is considering a declaration of fiscal emergency that would allow it to put a sales tax hike before voters.

Duarte councilman Philip Reyes cast the single dissenting vote Tuesday, effectively barring the city from declaring a fiscal emergency and thus putting a sales tax hike before voters in November, according to Tom Reyes, Duarte school board member and the councilman's brother.

The City Council voted 4-1 to approve the declaration, which needed the council's unanimous approval to pass, Reyes said.

Duarte, a city of about 25,000 in the San Gabriel Valley northeast of Los Angeles, is the latest financially troubled Southern California city to weigh the possibility of a fiscal emergency.

Earlier Tuesday, Mayor John Fasana, a longtime City Council member, sought in a statement to downplay the term "emergency," saying the municipality was seeking a proactive response to financial pressures.

"The city is not in a bankruptcy situation and we don't want to get there either," Fasana said. "Additional cuts or new revenues need to be found sooner rather than later."

"We don't want to be the next San Bernardino. We don't want to be the next Stockton," Fasana said in an interview.

The measure comes after San Bernardino, Stockton and Mammoth Lakes have taken steps toward bankruptcy in recent weeks.

It also follows a week after the City Council of nearby El Monte approved a fiscal emergency declaration so that it could ask voters to approve a tax on soda and sugary drinks.

As in El Monte, Duarte officials cautioned that the vote made matters sound more desperate than they are. Under the state constituion, cities are required to declare a fiscal emergency in order to place a tax on the ballot during an election date when a regular municipal contest isn't scheduled.

"This is an administrative step," Duarte City Manager Darrell George said.

Revenue collected by the ballot measure put before the City Council Tuesday could range from approximately $1 million dollars annually for 1/4 percent sales tax increase to $2 million per year for a 1/2 percent tax.

George had asked the council to approve one of those two tax rates, which -- if passed -- would have gone into effect April 1 and sunset in six years, according to resolutions before the council.

In a statement that called Duarte a "historically lean" city in terms of staffing, municipal officials blamed continuing cuts and "revenue raids" imposed by state lawmakers, who themselves have grappled with budget difficulties for several years. A staff report said the city's revenues were hundreds of thousands of dollars below 2007 levels.

"It would take a significant, positive turn of economic events to result in the city's existing revenue base increasing to a degree that would eliminate the need for additional revenue and solve the city's structural deficit," the staff report said. "It is extremely unlikely this will happen in the next five years."

The city listed several examples of changes or cuts to services that could be restored by new revenue: park supervision after school and on weekends; Friday closure of public safety offices; cut funding for 1 1/2 Sheriff's Department deputy positions and one probation officer; 50 percent reduction in graffiti removal funding; and a 16 percent reduction in full-time city staffing.

Duarte officials also lamented the loss of its Redevelopment Agency, which was shut down by a state law designed to benefit Sacramento's coffers earlier this year. Cities with redevelopment agencies were able to take an additional share of property taxes to fund local projects in areas that had been declared blighted.

The city had a telephone survey of 375 registered voters conducted to determine a course for how raise revenue among the options of a sales tax, a utility-user tax and a public-safety parcel tax. The sales tax had the most support, the city statement said.

"The Council believes this is the time to give voters a choice," the statement read.