Workshop informs about 40 residents on potential tax district options
Workshop informs about 40 residents on potential tax district options
The San Benito County Parks and Recreation Commissioners held a public workshop March 13 to share different types of special districts that could be pursued to support community services as well as the funding mechanisms behind them.
Sky Woodruff and John Bakker, of Meyers Nave Law Firm, led the presentation and answered questions for those in attendance.
“Meyers Nave Law firm has 25 years of municipal finance and special district experience,” said Janelle Cox, a management analyst for San Benito County. “Tonight’s purpose is to learn about different types of districts, the pros and cons, and funding mechanisms.”
With about 40 people in attendance, including some county supervisors, Friends of the Library members, city and county staff members and some residents, Cox explained that there would be no policy discussions at the meeting. Any issues would be noted for a future agenda item.
“We are rich with recreation opportunities,” Cox said, noting Pinnacles National Monument, Hollister Hills State Vehicular Area, Fremont Peak and DeAnza Trail.
The top recreational activities desired by local residents in past surveys have included jogging, running, biking and hiking.
Cox said the group was including library services in the discussion because the San Benito County Free Library provides “passive recreation.”
“It serves as a support for schools and a safe place for kids to get together,” she said. “We are recognizing the need.”
The San Benito County supervisors have started discussions of closing an anticipated $5.3 million gap in the 2012-13 budget. The library is one of the discretionary spending items considered for cuts in the past – last year the supervisors considered com
pletely shuttering the library.
The total cost of library services, and parks and recreation – which includes parks maintenance – is $954,000.
“We are looking at about $1 million and there are several ways to fund those services,” Cox said. “We need to look at all the options.”
Bakker, of Meyers Nave, led a presentation about the process for creating districts, along with pros and cons for each type.
“There is a lot of pressure on the general fund,” Bakker said. “Special districts are separate from the county so it could relieve general fund pressure.”
He explained that a library district could provide just library services, and a parks and recreation district can only provide parks and recreation services. But a community services district could provide both services in addition to other potential amenities. The districts can be dependent, meaning that an existing governing board, such as the board of supervisors, would also oversee the district. They can also be independent, meaning they have a separate elected board that oversees the district. An example of this would be the San Benito County Water District, which has its own board.
Woodruff went over the different revenue options to support a district, including taxes, assessments and fees.
“Special taxes are restricted for a specific purpose,” Woordruff said. “A public safety tax would fund police and fire. They need a two-thirds majority and may appear on a ballot in any election.”
“It is not worth pursuing unless you have had a conversation with the community,” Woodruff said, of moving forward with a ballot measure to approve a district and a revenue stream. “One thing that is helpful is the use of polls.”
He said using a poll firm can help decipher what the community will support and what they would not support. He also suggested community meetings, such as the workshop hosted last week. He said public funds can be used to provide information to community members before an item is placed on the ballot. After that, funds cannot be used to advocate for the measure. Employees and officials can advocate for it on their own time with their own funds.
After the presentation, a few residents asked questions about district boundaries. Since the cities have their own established parks and recreation departments, some residents wanted to know if they would have to pay into a countywide district.
Bakker and Woodruff said the district could be drawn in such a way as to exclude the cities, or a tax rate could be developed to charge less to residents in some areas. Cox noted that the district would likely support regional parks, which would be available for the use of city and county residents alike.
Steve Wittry, of the county public works, asked if it would be easy to increase the revenue as parks are completed and maintenance costs go up. Woodruff said a tax measure could be written in such a way that the tax can go up a specific amount upon the completion of other infrastructure.
“If you anticipate that, you can build it into the formulation,” Woodruff said.
Rich Inman, the county administrative officer, asked if the residents and officials decide to go with a community services district if they would need to go back for approval to fund other services such as fire service, for example. Woodruff said they would have to get approval from Local Agency Formation Commission, which approves a district proposal initially, but if property owners protest it could trigger an election to get voter approval.
“If the revenue is not enough to cover the new services, you would have to go back to the voters for additional revenue,” Woodruff said.
Joe Paul Gonzalez, the county clerk-auditor-recorder, said San Benito has had special taxes on the ballot before. In 1997, Measure G failed to get a two-thirds majority, with 61.9 percent of voters. In 1998, Measure 11 also failed.
“It’s good we are here tonight to discuss this,” he said. “It needs to be addressed with a different vehicle.”
Woodruff said it is not uncommon for communities to have a couple failed attempts before getting voters to approve a special district or tax.
“It is imperative for us to learn about the different ways of funding,” said Dan Dungy, chair of the county’s parks and recreation commission. “People are not just thinking about parks and recreations or libraries today.”
Types of districts and funding
Library districts provide library services only. Property owners must initiate the process for forming a library district. The board of supervisors has approval authority over the petition.
A Parks and Recreation District provides parks and recreation services only. It can be initiated by a resolution of city or county officials, or by property owners.
A Community Services District could provide both services as well as other additional community services. It can be initiated by a resolution of city or county officials, or by property owners. If either a community services and parks and recreation district is initiated by a resolution, a public hearing must be held. The Local Agency Formation Commission can approve or disapprove
of the districts. To approve a district formation, LAFCO has to believe there is enough funding to provide the services.
Revenue sources:
Special taxes
Revenue may only be used for specified purposes
Requires two-thirds voter approval
Requires a simple majority approval of Board of Supervisors to place it on the ballot
May appear on the ballot in any election
Transaction and use tax (excise tax on purchase of goods at retail locations)
Can be levied in increments of .125 percent.
The combined tax rate between county and cities cannot exceed 2 percent
It can only be levied by the county, not special districts
Parcel tax (excise tax on use or availability of privilege of using government services)
Flat annual amount
Tax on the residents of local government agency, including a county, to fund services available to and used by community members
It can by levied by the county or a special district
Community Facilities District (a special tax levied on real property
It requires an engineer’s report to calculate the annual cost of the services and the rate and method apportioning the cost among properties to be taxed (not all property are taxed at the same rate.)
Approval of formation of district and levy of tax must be submitted to voters.
It can be levied by the county, districts and the county may levy the tax within an incorporated city with the consent of the city council
Formation cannot proceed if more than 50 percent of registered voters or the owners of more than 50 percent of the land within the district file protests
An election can be conducted by mail ballot
Utility user tax (excise tax on use of utilities)
Rate is usually set as a percentage of the cost of the service
It is levied on the customer by the utility collect the tax such as water, gas, electricity, etc.
It can only be levied by the county.
Transit occupancy tax (excise tax on use of hotel accommodations)
Rate is usually set as a percentage of the cost of the service
Levied on the occupant by the hotel
San Benito county has an 8 percent transit tax levied as a general tax, but it could be increased with a portion slated for the specific services
It can only be levied by the county
Landscaping and lighting Act assessement
Can be used to fund park maintenance
A district could be formed by the county or special districts
Requires a mail ballot and a public hearing
A simple majority approval is required and ballots are weighted in proportion to the financial obligation
The district can be divided into zones to reflect different levels of service and benefit
User fees
Charges to users of parks and recreation facilities and services, library facilities and programs
Most public agencies find it difficult to fully fund operations through user fees alone
