Controversy Surrounds UUT Ballot Measure

The proposed Utility Users Tax Increase Extension has been the subject of debate and tension at City Council meetings for weeks now. At Tuesday night’s meeting, the Council moved 3-1 to include the UUT increase extension and an accompanying advisory measure on the April ballot.

Mayor John Buchanan has said that the UUT increase extension will be needed to fund the rising cost of public safety in Sierra Madre.

Councilmember Mary Ann MacGillivray was the sole opposing vote, taking issue with the UUT increase extension having a continued cap of 12% (she has pushed for a 10% cap) and with the advisory measure sounding too much like “PR.”

“It’s misleading to say [the UUT] goes to public safety,” said MacGillivray. “The money from the UUT goes into the same bucket as the general fund… [the advisory measure] leads people to believe it’s being tracked separately in a separate fund.”

Money from the UUT goes into the city’s general fund, which provides money for “all non-restricted fund activities of the city,” including public safety.

The ballot measure will read as follows:

Utility Users’ Tax Increase:

Shall an ordinance be adopted to amending the City’s existing Utility Users’ Tax to continue the existing 10% tax, subject to a potential increase to 12% on July 1, 2013, in order to maintain general City services such as public safety services, including paramedic programs, and to reflect technological advances in communications, continue existing exemptions to low and very low income households, establish new sunset dates and continue a citizen’s oversight committee?

Utility Users’ Tax Advisory Measure:

If Measure ___, to continue the existing Utility Users’ Tax of 10%, subject to a potential increase to 12% on July 1, 2013 and establishing new sunset dates, is approved by the voters, should the additional revenue generated by the tax be used to fund public safety services including paramedic programs?

The UUT has steadily increased since 2008, when voters approved a gradual increase from 6% to 12% from 2008 through 2014. MacGillivray lamented that many voters thought they were approving a tax that could only be used for public safety.

Mayor John Buchanan shot back, saying that the Council has only used UUT money explicitly for public safety, and that future Councils will continue to do so.

“When the UUT came in at a rate higher than we were expecting thanks largely to the increase in telephone service and the application of the UUT to cell phones, we, for at least one year, had a substantially greater revenue than we expected,” said Buchanan. “The response was not to take that money and spend it somewhere else… it was rolled over to the next year for public safety.”

Councilmember Nancy Walsh conceded that the measure could be seen as PR, but that it’s still useful to voters.

“Maybe it is just PR but I think it really does tell people that this was the intent… this is what we voted for,” said Walsh.

What Residents Think

Several residents who spoke at the meeting thought that the advisory measure was misleading.

Barbara Leigh Cline, a Sierra Madre resident who walked door to door in support of Measure U, said that she was having remorse over supporting the UUT increase in the first place. She said many residents who she recruited to support Measure U thought the money could only be used for public safety.

"You can't live off the pockets of the tax payers here in town," said Cline.

"This smacks of a sales pitch," said John Crawford, a Sierra Madre resident who writes The Sierra Madre Tattler blog.

What do you think? Tell us in the comments.

Why There's an Advisory Measure and not a Mandatory Ordinance

An Advisory Measure is not law, but a way for the public to advise the government on what they would like to see happen. An ordinance is law. If an ordinance were to be built in to the UUT ballot measure saying that the money had to be spent on public safety, then a two-thirds vote would be needed to approve it.

MacGillivray suggested an ordinance be built in to the new UUT measure at a November meeting, but the rest of the Council disagreed. Councilmember Josh Moran suggested it would be too difficult to get a two-thirds vote in Sierra Madre, and Mayor Buchanan said that majority should rule.

“You can't push this through with a mandatory expenditure,” said Moran in November. “Do you want to go to a two-third vote in this town?”

In 2008 the UUT increase passed with a 64% vote.

What's the UUT Right Now?

Under the current UUT measure, dubbed Measure U, the council has the ability to raise the UUT as high as 12% until June 30, 2014. Then, the rate will start to fall or “sunset” until it reaches 6% in 2016. Measure U was approved by voters in 2008.

If the new UUT increase is approved, the rate could go as high as 12% until June 2018. Then, it would fall to 10% in July 2018, 8% in July 2019 and 6% in July 2020. 

The Council has the ability to override a UUT increase at any time, which it did in 2010, when the rate could have increased to 12%. The council voted to keep it at 10% because of a budget surplus.

The UUT taxes all utilities for residences and businesses. It was adopted at 6% in the 1990s. It did not increase until voters approved Measure U.

Ultimately, voters will decide in April whether they want to continue an increase in their UUT.

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