Sales Tax Battle Brews in Alameda

Measure C on the June ballot would raise money for public safety and infrastructure, but opponents say it's just a gift of public funds.

In a time of dwindling city revenues, austerity, and the end of the cash cow that was redevelopment, cities are continuing to explore ways to plug gaping budgetary holes and raise cash for projects. Alameda — struggling with a $4.4 million budget deficit and a public safety infrastructure that officials say is obsolete, decrepit, and unsafe — is asking voters to approve a half-cent (0.5 percent) sales tax increase this June to safeguard the city against emergencies. But the tax increase is pitting the political establishment and the firefighters union against a group of residents who are crying foul at what they consider to be a gift of public funds to the money-flush union that has donated generously to local politicians.

Alameda has always taken its politics seriously, whether it involved the years-long development war between residents and SunCal over a proposed massive housing project on Alameda Point, or the controversial ousting of former Interim City Manager Anne Marie Gallant by the recently elected city council majority.

From the moment this tax measure was placed on the city council agenda on March 7, and subsequently put on the ballot by all members of the council, Measure C came under fire by critics. First, they attacked the city for how quickly it brought the tax measure forward, and then over how little time the opponents had to respond in the form of a ballot argument. And to further infuriate the opposition, a misunderstanding that denied their argument from making it to the ballot led to a court battle that the opposition ultimately lost.

“The whole thing reeks of bureaucratic chutzpah,” said former Alameda Councilwoman and attorney Barbara Thomas, referring to the way Measure C was hastily moved forward by the city.

If Measure C is approved, the city would increase its sales tax from 8.75 to 9.25 percent until 2042. To put that in regional perspective, the city currently has a comparable sales tax to most Bay Area cities, but if Measure C is approved, it would join Union City as having the highest rate in Alameda County. That extra tax bump is expected to bring in an estimated $1.9 million a year until the tax expires, which Alameda City Manager John Russo says is a conservative estimate.

As with all special taxes in California, Measure C requires a two-thirds vote by residents. It also requires that the funds raised by the new tax be earmarked for a specific use. In this case, the tax proceeds can only be used for one salaried “Emergency Coordinator” position; public safety infrastructure and equipment; parks and recreation facilities and equipment; and cultural facilities. Specifically, the city plans to spend an estimated $4.5 million on a new Emergency Operations Center and on Fire Station 3; $5 million on an Olympic-size swimming pool with locker and bath facilities; $3.5 million on a revamped Carnegie Library; and a list of other items, including a renovated training facility for police and fire officials, new fire trucks and police cruisers, and e-books for the library.

Although Measure C will do nothing to address the city’s budget deficit in the short-term, Russo argues that it will give Alameda more flexibility, especially because the city will not have to spend non-Measure C money on replacing or fixing vehicles and buildings that are becoming old and unsafe. “It would create an independent source of revenue based on a rational approach,” Russo said of Measure C. “In the long run, it definitely helps the general fund.”

In terms of priority, Russo said the city would take half the revenue from the tax to fund a thirty-year bond in which the city hopes to get about $15 million for the construction of the large projects. But the city would have to pay an estimated $29 million total to pay off the bond, including interest.

Given the volatility of sales tax revenue — Alameda lost 35 percent of its sales tax revenue between 2000 and 2010 — the city runs the risk of not raising as much as expected. When asked whether there was a possibility that the city would have to spend money from its general fund beyond revenue raised from Measure C to pay off the debt, Russo said the city’s sales tax revenues would have to bottom out for that to happen. “We’re never going to get stuck,” he assured.

The city pushed the measure for June in a strategic attempt to not compete with other tax measures in November and to take advantage of low construction costs. But the rush to the ballot box did not come without controversy. It will also cost the city as much as $206,000 to hold the election in June.

Opponents of the ballot measure were under the impression that they could submit their opposing arguments to the tax measure to the Alameda County elections office by March 16, yet learned shortly thereafter that that was not the case. Actually, they had to submit their arguments to the city by March 15, since the city was closed for business on Friday the 16th.

The opposition to Measure C, which includes Thomas, David Howard, and Liz Williams, argue that in the city’s haste to put the sales tax measure on the ballot, it silenced public comment. The fourteen-day period normally afforded for ballots arguments shrank to about a week. “It just seems like they violated, if not the letter of the law, the spirit of the law,” Thomas said. “And they did it in a way that deprived citizens of any input.”

Thomas said they were assured by county officials that their ballot argument submission was valid. But it wasn’t. That led to a court battle to either get their argument on the ballot or invalidate the measure. But the court ruled against the Measure C opponents. Alameda County Judge Evelio Grillo wrote in his ruling that “although the Court has grave concern as to whether posting and providing only seven days notice is sufficient notice to all interested parties, it is clear to the Court that the City complied with the letter of the law; and it is for the Legislature to address any shortcomings in the statutory scheme.”

Opponents of Measure C also contend that it represents a quid pro quo with the Alameda firefighters union. The union, a political heavyweight in the city, spent lavishly on city council contenders in 2010, showering a total of $56,100 on candidates that year: $15,300 to Vice Mayor Rob Bonta; $14,300 to now-Mayor Marie Gilmore; $17,000 in mailers and a letter against Gilmore’s competitor Doug DeHaan; $7,500 to Councilwoman Lena Tam; and $2,000 to Councilwoman Beverly Johnson.

Thomas argues that the kush facility and equipment upgrades for firefighters that will be paid for by Measure C are payback for the lavish donations that four of the city’s elected officials got during and after the 2010 race. Domenick Weaver, president of the Alameda firefighters union, didn’t respond to a request for comment.

When asked whether the city was gifting firefighters, Russo dismissed the assertion as “nonsense.” He went on to say that the city is pushing the union to contribute more to its pension — another time bomb issue waiting to explode in the city.

But Thomas and the measure’s opponents aren’t convinced, particularly when they look back at how city managers who challenged the union, like Gallant, ended up losing their jobs. “The firefighters bought themselves the city council,” she said. “It’s real clear.”


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