After discussing feedback the district has received in a series of meetings to inform the public about the details of the measure proposed for the June ballot, the board chose not to include an automatic end of the tax, an element mentioned by several members of the public. In a 6-3 straw poll vote at its Monday meeting, the board decided to emphasize the annual review already built into the tax rather than add a sunset clause that could leave the district in the same financial shape it is now.
Directors Jim Frazier and Kevin Romick of Oakley were joined by Clayton’s Cheryl Morgan in saying they preferred the sunset clause because they’re concerned the tax would not pass without it. Directors Pat Anderson (Oakley), Joel Bryant, Steve Barr, Erick Stonebarger and Bob Brockman (Brentwood) and Robert Kenny (Bethel Island) opposed the sunset clause.
“We know there will be an $11 million deficit in year 11 if the tax goes away,” said Director Steve Barr of Brentwood. “We’ll be right back in the same position we are now, and that’s not viable.”
Frazier, however, believes that should the tax not pass, the viability deficiency would kick in when district reserves are exhausted in June. He said the sunset clause had been a priority for attendees at the two Oakley community meetings he had attended, and doubted that an open-ended tax would garner the two-thirds majority needed for passage. He preferred that the tax automatically end after 10 years, and that the district go back to the voters to either extend or retract the levy.
Romick agreed, saying, “If we (the district board) are doing our jobs, the public will be able to see that.”
The decision came as the board modified the tax plan according to additional input gathered at community meetings. The tax will now increase annually by a maximum of 3 percent or the Consumer Price Index, whichever is lower (it had been at 5 percent). The board also examined the district’s finances through a 10-year window. Earlier models had been limited to five years due to economic uncertainties, especially the recovery of property values whose recent plunge has left the ECCFPD more than $2 million short each year.
Also added into the equation is the full cost of replacing equipment and other capital improvement costs such as station repairs. As of now, the district budget reserve policy accounts for only a portion of the approximate $1.2 million needed annually.
The new 10-year model shows that even with revenue the new tax would provide, the district will spend more than it receives beginning in year five.
“I’m not happy to see red again, but we will have alternatives at that point,” said Director Pat Anderson of Oakley. For example, she said, adjustments could be made to the rate at which reserves are accumulated once they have had the first few years of tax revenue to refill the nearly depleted coffers.
Other directors expressed concern that if property values recover faster than expected or new revenue begins to flow from growth or the completion of the power plant planned for Oakley, the tax might no longer be needed. The district financial model now assumes property taxes will decline an additional 2 percent the first year, stay flat for four years, then begin rising at a rate of 2 percent per year.
As of now, the proposed measure calls for the tax rate to be set annually by the board. If it passes, the board can set the level anywhere between $0 and its cap, $197 plus a maximum cost-of-living increase of 3 percent. Morgan said the language of the measure should emphasize the annual review, which would include public hearings.
“We have to make it clear that the board can always take (the tax amount) down” if the district’s financial picture improves more quickly than forecast, she said.
The board will hold a special public meeting on Feb. 27 to finalize the measure, ECCFPD Chief Hugh Henderson said. A sunset clause could still be added at that point if the board should decide to do so. The proposed measure must be approved by the board and filed with the county by March 5 for the district to begin receiving money this year.
Meanwhile, the district will continue to gather public input at its community meetings. The next one is scheduled for Thursday, Feb. 16 at 6:30 p.m. in the Brentwood City Council Chambers.
In other business, the Board finalized its response "emphatically" disagreeing with findings of a December Grand Jury report saying fire service in East County is "adequate." To view the report, click here.