The Imperial Beach City Council voted to place a 1 cent sales tax increase on the ballot in November during a teleconference special meeting on July 29.
City Manager Andy Hall presented the item and slides. He explained that since the last revenue budget meeting, the staff was asked to explore new revenue for Imperial Beach.
A pie chart showed how funds are spent in the city: Administrative $2,162,975; General Operations $5,121,167; Non-Departmental $1,406,094; Recreation $738,684; and Public Safety $11,421,610. The general fund expenditures per capita in the city is $760 compared to other cities like Chula Vista and Lemon Grove who spend $718 and $547 respectively. On the high end expenditures by local cities are Del Mar with $3,026 and Coronado at $2,365. Looking at beach cities’ general fund expenditures per capita Imperial Beach is at the low end.
Imperial Beach has a population of 27,440 and a budget of $20,852,550. The average per capita spending of all study cities is $1,349 versus the average beach cities of $1,606. Hall next reviewed the FY 20 general fund major revenue sources: gas tax $ 941,850, sales tax $1,378,000, franchise tax $2,045,000, Port of San Diego $4,826,140, Transient Occupancy Tax (TOT) $840,000, Property Tax $7,050,400 for a total general fund of $20,852,550 and major revenue sources of $17,081,390 or 82 percent. About 70 percent of revenue comes from the Port and property taxes. The other opportunities for revenue growth are TOT and sales tax. TOT is currently at $840,000, the sales tax at $1,378,000.
In comparison to other cities, the sales tax in Imperial Beach is on the low end. For example Lemon Grove is at $5,850,000 and Coronado at $3,670,000. For TOT, Imperial Beach is also on the low end at $840,000 compared to Coronado at $16,700,000. If the TOT is increased in the city by 3 percent it estimated to bring in $1,092,000 and with the addition of the newly opened Hampton Inn it is predicted to bring in $1,242,000.
A 1 cent increase in sales tax could bring the city about $1.3 million in additional revenue which is a number comparable to neighboring cities like Chula Vista and National City.
A survey was sent to residents and what transpired, on the question of funds for city services and emergency response, is that 3/4 of respondents said there is great/some need for additional funds. According to the survey, residents were supportive of a 1 cent sales tax increase and an 4 percent increase in TOT. Residents responses were also supportive of maintaining public safety and preparation for future disasters. In addition, 69 recent were in favor of a 1 percent increase in sales tax, and 68 percent in favor of a 4 percent TOT tax.
To balance the budget, the city has reduced the number of city employees and saved $292,243 in FY20. The Fire Department budget decreased by $380,633 from FY 19 to FY 21. It was stated the 1 cent sales tax increase would provide more funding towards emergency response, recreation and seniors programs.
The timeline for submission to the Registrar of Voters for this measure to be included in the November ballot is before Aug. 7. Hall said he would like to continue to hear from the community and encouraged everyone to log on the city website at www.imperialbeachca.gov/JTC to fill out a survey.
During the public comment a resident said he wanted to make sure that the 1 cent sales tax increase would go to preparation for emergency response, recreation and senior services and not to other fund. More speakers were in favor of the increase. One resident suggested having an oversight committee to ensure the funds are going to the right place. Another resident wanted to ensure the measure would end if residents did not want to continue the tax increase in the future.
During council discussion Councilman Robert Patton also wanted to clarify that residents could vote out of the increase in the future. He encouraged residents to read the explanation in the ballot and dig deeper to see what the increase is offering.
Councilman Mark West had no doubt about the positive sides of the increase. “Unless we want to go the way of Lemon Grove teetering on the edge of bankruptcy we need this. It has been highlighted during COVID 19… If we don’t raise revenue we’re never going to be able to provide the services this city deserves and wants,” he said.
West also added that because the city has funded projects through outside sources the council had to spend half of its time trying to raise money.
Councilman Ed Spriggs was also supportive of the increase. “We’re beginning to eat ourselves like a praying mantas… when we’ve to cut down staff positions, eliminated fire department positions to balance the budget.”
He is in favor of an oversight committee to increase transparency and have citizens involved, so more people can see what it takes to run a city.
Mayor Pro Tem Paloma Aguirre said she supported the measure and that preserving emergency services is super important. She also supported giving residents the option to end the measure. A motion to approve this item by title only was carried unanimously. Another motion to place the measure on the ballot was carried unanimously.
The measure will read as follows “Shall the ordinance to maintain fire protection, paramedics, 911 emergency response, prevention programs, neighborhood/community crime prevention; address homelessness; improve natural disaster/medical/emergency response; maintain streets; maintain lifeguard center, parks, community center, youth/after- school/senior programs; other general services, by establishing a 1¢ sales tax providing approximately $1,300,000 annually until ended by voters, requiring independent audits, public disclosure of spending, all funds for Imperial Beach, be adopted?”
In other business:
Adam Chase, the new Marine Safety Chief, was introduced.
The consent calendar was approved.
The next city council meeting was held via teleconference on Aug. 5 at 5 p.m. For more information or to watch log on www.imperialbeachca.gov.