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Huntington Park Calls Special Vote on 7% Utility Tax

June 08, 1989|RICK HOLGUIN | Times Staff Writer

HUNTINGTON PARK — This city, prevented from taxing utility users by a court decision, will take its case to the voters in an effort to raise $2.74 million a year to hire 15 more police officers and retain services scheduled to be cut from next year's budget.

The City Council on Monday scheduled a special election Sept. 12 on the proposed 7% tax that would be applied to electricity, natural gas, water and telephone bills. If approved, the tax would take effect by December, Administrative Officer Donald L. Jeffers said.

"It's up to the people now," said Mayor William P. Cunningham. "If the voters don't pass it, then I would say city services will be cut. I don't see any way to get around it."

City Council members thought they had solved Huntington Park's budget problems last month when they approved the 7% utility tax, to take effect on July 1.

Symphony Subsidy Cut

They took the action after reviewing a preliminary budget for 1989-90 that included no raises for city employees and drew from reserves. The budget outlined more than $200,000 in cuts for tree trimming and other city maintenance. It also reduced spending for items such as Christmas decorations on Pacific Boulevard and a subsidy for the Huntington Park Symphony Assn.

The City Council initially approved the tax based on an appellate court decision in a lawsuit spawned by Proposition 62. Approved by California voters in 1986, Proposition 62 says a city may not impose a tax to fund general governmental services without the approval of local voters.

But on March 7, a state appellate court decided in a Sonoma County case that several provisions in the measure were unconstitutional. The decision appeared to clear the way for cities to impose utility and other taxes without a vote of residents.

The Huntington Park City Council moved quickly and approved the utility tax on May 15. But the council was rebuffed three days later when the California Supreme Court ordered that the appellate court decision not be published. The action prevents the ruling from being used as precedent, and Huntington Park would be vulnerable to a lawsuit if it were to impose the tax without that precedent.

City Atty. Steven N. Skolnik has asked the state Supreme Court to reconsider its decision. But city officials, who are not optimistic that will happen, decided to press ahead with the special election.

If the tax wins approval, the City Council said it intends to use about $1 million of the revenue it will produce annually to pay for 22 Police Department positions, including two sergeants, 13 officers and seven support positions.

The tax also is expected to provide money for employee raises, tree trimming, maintenance and other services. City employees received a 4.2% raise this year at a cost to the city of about $300,000 annually.

Jeffers, the city administrator, said the city is in a financial bind because of Proposition 13, the 1978 tax-cutting measure, and the recent reduction or elimination of state and federal subsidies.

Revenue Stays Same

Revenues entering the city's general fund, which pays for most city services including law enforcement and fire protection, have not increased.

The city's general fund revenues in 1989-90 will be about $9.7 million without the utility tax, about the same as 1987-88 revenues, according to the preliminary budget.

The preliminary budget projects overall revenues and expenditures of $27.7 million. That includes money to pay for public transportation, the city retirement plan and other items in addition to daily operating costs.

The Huntington Park Redevelopment Agency also has contributed to the city's financial pinch. The city has been forced to lend the Redevelopment Agency hundreds of thousands of dollars in recent years to help it meet its bond debt. Project delays in the mid-1980s prevented the Redevelopment Agency from generating expected revenues to make its bond payments, officials said.

Public testimony was equally divided during a hearing before the council approved the utility tax on May 15. Some residents said they would gladly pay the tax if it meant improved police services. Others said it would be a financial burden.

On Monday night, only one person testified. Resident Emilia Kitchen referred to a recently released study that indicated Huntington Park was the seventh-poorest community in the country with a per-capita income of $6,298.

"I don't think the majority of the people will be able to afford the tax," she said.

The special election will cost the city $15,000.

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