In hopes of ending the budget problems that have plagued Oxnard for almost a year, the City Council this week voted to put a utility tax on the June ballot.
During the same discussion, City Manager David Mora disclosed that the city has received an unexpected refund of $1.3 million from the state.
However, City Council members agreed that the mini-windfall is not enough to save the city from a financial crisis and voted unanimously to place the tax on the ballot.
"I think we have to take this opportunity and do our best to make it fly," Councilwoman Ann Johs said. "Hopefully when the residents see the situation we're in, they'll come forward and help the city."
The 5% tax would add about $5 million annually to Oxnard's coffers. The additional revenue will be used to make up for a growing deficit as well as to gradually fatten the emergency reserve fund, which has dropped by about $9 million over the past four years.
The council made the decision with less than four hours left before the county deadline for putting measures on the June ballot.
They will vote Tuesday on the specifics of the tax. However, council members said they favor applying the tax to natural gas, electricity, telephone, cable television, water, sewer and refuse fees. They added that all low-income residents probably will be exempted from the tax.
The tax was strongly recommended in the first phase of a management audit released this week by Cresap Management Consultants.
"You've been eating into the reserves up to the point now that it's down below what you consider and we consider acceptable levels," said Bill G. Evans, vice president of Cresap.
"I think you ought to resolve yourselves now to the fact that you're going to have to impose a tax," he added. "There's no free lunch."
Depending on whether the city hits a boom or a recession, the audit showed that by fiscal 1995-96 Oxnard would have at best a deficit approaching $27 million and at worst a deficit exceeding $67.5 million.
The emergency reserve fund now holds $5.7 million. But the audit showed that the city should keep at least $8 million in its reserves.