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Humboldt County, CA November 7, 2006 Election
Measure U
Continuation of Utility Users Tax
City of Eureka

Majority Approval Required

Pass: 4432 / 51.62% Yes votes ...... 4154 / 48.38% No votes

See Also: Index of all Measures

Results as of Nov 30 5:02pm, 100.0% of Precincts Reporting (32/32)
63.9% Voter Turnout (8586/14168)
Information shown below: Impartial Analysis | Arguments |

Shall an ordinance be adopted to continue the current utility users tax for four years, provided that low income families are exempted from the tax, and that annual financial audits are conducted to assure that the general tax is propertly collected and used for essential services such as police, fire, street maintenance, and parks and recreation?

Impartial Analysis from City Attorney
Measure U, if approved by a majority vote, would authorize the continuation of the collection of a utility user tax in the City of Eureka. The tax would be imposed at the rate of three percent (3%) of the usage of the following utility services:

(1) Communication services that are primarily used within the City's boundaries;

(2) Electrical energy services supplied by an electric corporation or non-utility supplier and used within the City's boundaries; and

(3) Gas services supplied by a gas corporation or non-utility supplier which is transported either through pipes or by mobile transport and used within the City's boundaries.

Several exemptions to the tax are expressly provided upon adequate proof to the Tax Administrator. First, persons who receive Low Income Rate Assistance ("LIRA") from a gas or electrical corporation would be exempt from the tax on gas or electrical utility usage. Second, persons who receive "Universal Lifeline Service" from a telephone corporation would be exempt from paying the tax on basic telephone services. In addition, the City Council may, by ordinance or resolution, exempt additional classes of persons or utilities.Finally, the tax would not be levied against persons or entities exempt by law including federal and state agencies and public schools.

The tax would be computed on the basis of monthly usage and service charges, and would be collected by the service provider. The maximum cumulative tax payable by any service user pursuant to this measure would be $2,000.00 per fiscal year. A service user with more than one meter or billing invoice per utility service at a single contiguous location may combine all billings for purposes of calculating the maximum tax amount.

The utility users tax is a general tax. All revenue generated by the tax would go to the City's general fund to provide essential governmental services including, but not limited to: police, fire, environmental programs, public works, parks and recreation, job retention and expansion efforts, and other essential government services. It is estimated that the tax will generate approximately $1,400,000.00 of the City's general fund budget of $21,000,000.00 for fiscal year 2006-2007. The tax as proposed in Measure U is similar to the present utility users tax, approved by the voters in 2002. The principal difference is that the maximum taxation limit for each service user is $2,000.00 instead of $1,000.00.Voter approval of this Measure would amend the City's present utility users tax by extending it to June 30, 2011.

This measure must be approved by a majority of the voters.

s/ David E. Tranberg, City Attorney
City of Eureka

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Arguments For Measure U Arguments Against Measure U
For the past decade the City of Eureka ("City") experienced declining revenues due to the increasing loss of local resources to financially "bailout"the State of California. The State Legislature fails to recognize that the monies spent at the local level have the greatest impact upon citizens.

Due in large part to the State fiscal "bailout", the City raised fees, deferred maintenance, depleted reserves, reduced operating budgets, and in 1994 the City Council enacted a 3% utility users tax on natural gas, electricity, telephone and cable TV services in order to maintain balanced budgets.This critical source of revenue supports such essential services as police, fire, roads and streets, parks and recreation, and other essential services provided by the City to its citizens.

In 1997 and 2002, voters of the City of Eureka decided to retain a 3% utility users' tax. It was a vote to keep our City safe and maintain a quality of life that members of our community expect and deserve.The City must once again seek a YESvote to approve this tax. A YESvote will simply allow the City to keep in place what it already has, while a loss at the polls will cut General Fund revenues by $1.4 million annually.

The City's Finance Advisory Committee has reviewed the City's budget and has recommended the continuance of the utility users' tax through June 30, 2011. The City will continue to exempt citizens from the utility users' tax who receive low income rate assistance from a gas/electrical corporation, or a universal lifeline service from a telephone corporation.

The City Council has the option to lower the tax rate. Should the City experience a "spike"or dramatic increase in Utility Users Tax revenues, the City Council has the option to lower the tax rate for a twelve month period to compensate for this increase.


By: s/ Mary Beth Wolford, Councilmember

s/ Virginia Bass-Jackson, Councilmember

s/ Jeff Leonard, Councilmember

s/ Chris Kerrigan, Councilmember

s/ Mike Jones, Councilmember

Rebuttal to Arguments For
Why you should Vote NO on Measure "U"

City talks about declining revenues due to state action but fails to mention that Eureka's own Redevelopment Agency (ERA) has diverted, over the redevelopment years, $10,000,000 from the city's general fund. And, that ERA currently owes the city over $5,000,000, that is collectable! Remember too, that the Eureka City Council is also the ERA and controls the spending of both.

Don't be fooled, by the Finance Advisory Committees (FAC) recommendation either, they actually recommended higher taxes, higher maximum, and for a longer time period. Then it was heard at a FAC meeting that in so doing it would make it easier for the taxpayers to defeat the tax at the polls! Remember also, that the two previous FACs included the option of the ERA repaying what they owe. That option was ignored by the council.

Don't be fooled, by the new option to lower the tax rate. The council has always had the option to reduce or completely eliminate the tax. Adding that option to the ordinance is a joke, simply to make it sound better for the voters.

Remember this is a tax increase, as costs go up, so does your tax, businesses will increase their prices to cover their increases and the taxpayer gets a double whammy! The city has the ability to provide required services without this unfair, so called "temporary tax".

Agree with the Humboldt Taxpayers League recommendation and VOTE "NO"ON MEASURE "U".

s/ Howard Rien

s/ Richard T. Twiddy

s/ Eugene J. Senestraro

s/ Phil Nyberg

s/ G.L. Partain

The Humboldt Taxpayer's League recommends a NO vote on Measure "U", the Utility Users Tax.

The City has the ability to retain all its present services + and more + without renewing this tax.

The Eureka Redevelopment Agency (ERA) owes the city millions of dollars that are collectable.

The City has land worth millions of dollars that could be sold to cover budget needs.

The 2002-03 Grand Jury recommended that the city search for alternatives for long range funding to replace this tax.

The 2002 and 2004 Finance Advisory Committees recommended that the Eureka Redevelopment Agency pay the millions it owes the city's General Fund.

They refuse to use the assets they have to properly fund the police and fire departments. Public Safety is the councils first and foremost obligation.

Then they try to tell us that we are not getting the public protection we deserve because they don't have enough money.

Public safety should be funded BEFORE anything else. Public safety positions have been budgeted but not filled and City's Redevelopment Agency (ERA) has even hired outside security. City's annual expenditures now exceeds $800 per citizen. This is excessive for levels of service received.

Don't be fooled by the juggling of funds at city hall.

This "temporary tax" has gone on long enough.

Voting no on this tax renewal will tell the City that we want them to use the millions they have available through the land sales and the millions it is owed before we will give them more of our hard earned money.

The Humboldt Taxpayer's League recommends that you VOTE "NO"ON MEASURE "U"

s/ Howard E. Rien

s/ Richard T. Twiddy

s/ G.L. Partain

s/ Eugene Senestraro

s/ Phil Nyberg

Rebuttal to Arguments Against
We wish the solutions to financing the City's complex operations were as easily found as the opponents to City's Utility User Tax would have you believe.

First, Redevelopment Agency funds are not legally available to spend on recurring City operations. The purpose of redevelopment is to eliminate blighting conditions within a community just as Eureka has successfully done in its Oldtown and along the City's Waterfront.

Secondly, to say City services such as public safety, streets, parks and recreation, and environmental programs can be paid for by money that does not exist until property is sold, is fiscally irresponsible.This is because land held for resale by the City, should it be sold, is a one-time source of funds.Paying for multi-year ongoing operations of the City with one-time funds would not be fiscally practical.

The City's Finance Advisory Committee has supported placement of the Utility Users Tax Measure on the ballot in 2002 and 2006.They recommended this because the Utility Users Tax is a critical funding source for essential City services.

As you consider your position on Measure "U" do not be mislead by the opponent's statements, we need real solutions to these financial issues not quick fixes. The question before Eureka's citizens in November will be simple; Do you wish to maintain the level of public services you currently enjoy?


By: s/ Mary Beth Wolford, Councilmember

s/ Virginia Bass-Jackson, Councilmember

s/ Jeff Leonard, Councilmember

s/ Chris Kerrigan, Councilmember

s/ Mike Jones, Councilmember

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Created: January 4, 2007 09:33 PST
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