City Council Declares Fiscal Emergency
Declaration Paves Way for Possible Extension of Sales Tax
October 31, 2019
Buoyed by the words of Culver City’s Chief Financial Officer Onyx Jones who said that ”our fiscal emergency is today,” the City Council voted 5-0 to declare -- without consulting the Financial Advisory Committee -- a state of fiscal emergency so a special election could be called to extend the 1/2% sales tax increase the voters passed in 2012. Measure Y, as it was called, was set to sunset (expire) in 2020.
In 2012, the Council promised in its statement on the sample ballot that “All tax funds from Measure Y will stay in Culver City and cannot be taken by the State. The 1/2 cent tax will end in 10 years and a Public Advisory Committee will ensure full accountability and transparency.” Mayor Megan Sahli-Wells is the only remaining councilmember who made that pledge.
Former City Treasurer and current member of the Finance Advisory Committee, Crystal Alexander, took the Council and its staff to task for not giving the committee a chance to review the financial declaration. The city committee was formed to oversee Measure Y, she stressed.
“Transparency has been the touchstone for the Finance Advisory Committee (FAC),” Alexander stated. “Transparency is the risk, authenticity is the currency, and trust is your reward.”
Jones, attempting to explain the failure to report to the oversight committee, fumbled around about public meetings and what could be discussed and not discussed. Both the FAC and council meetings are public meetings with agendas. She did not explain the difference between the two and why that would be an issue.
But Jones did acknowledge that “we know we have a deficit even with Measure Y in place,”
Mayor Sahli-Wells offered her apologies to the committee. Councilmember Thomas Small wanted to know the genesis of the item without consultation with the FAC.
Culver City resident Kevin Lachoff stated that he proudly supported Measure Y in 2012 which would expire in 10 years. He argued, instead of making the tax permanent, he would support a 10-year extension.
The primary reason to have a special election is the Council apparently intends to place an additional ¼ cent sales tax on the November 2020 ballot. City Manager John Nachbar told the Council that the polling indicated that voters would not support two tax increases on the same ballot.
Should both tax measures pass, the city would be at the maximum sales tax allowed under state law. Culver City would have the distinction of joining 19 other California Cities with the highest sales tax rate.
Vice Mayor Goran Eriksson initially resisted the move to make Measure Y permanent, citing changes in the future. He pointed to the fact that many of the city’s financial problems were caused by health and pension plans over the past decades that were overly generous and not sustainable.
The city now requires a greater contribution from employees. This move does not affect the current employees or retirees.
Councilmember Alex Fisch offered the compromise of extending the tax out 10 more years thereby requiring the voters to approve another increase if needed past 2032.
Eriksson said he didn’t like it but would support the move. To declare a fiscal emergency, the vote must be unanimous.
There was no discussion Monday night regarding cutting expenses. According to Transparent California, Culver City currently has over 200 employees making in excess of $100,000 per year not including health and retirement benefits.