Morro Bay might raise sales tax to pay for road repairs

ktanner@thetribunenews.comSeptember 11, 2013 

Morro Bay

JAYSON MELLOM — jmellom@thetribunenews.com

Morro Bay residents, shoppers and visitors soon could pay a little more in sales tax so the city can accelerate the Public Works Department’s road-repair schedule.

While the City Council also is taking measures to attract businesses, council members acknowledged at their meeting Tuesday night that the city needs more money if they are to accomplish what Morro Bay citizens have told them they want done.

After considering several tax and assessment options, the council unanimously approved taking steps to start the sales tax increase process.

Mayor Jamie Irons reminded council members that most residents at a well-attended, special Public Works “street summit” meeting this year were emphatic about wanting potholes filled, bumpy streets resurfaced and roadways made safer.

The sales tax increase discussed Tuesday ranged from a quarter- to a half-cent. The current sales tax is 8 percent, a rate charged by most cities in San Luis Obispo County. Atascadero and the county’s unincorporated areas charge 7.5 percent.

However, City Attorney Rob Schultz told the council other cities and San Luis Obispo County are considering sales tax increases to balance their budgets and provide funding for needed projects.

He estimated a half-cent increase would generate $839,000 a year for Morro Bay.

The city has allocated about $757,000 for road repairs this fiscal year, including pothole repairs, Public Services Director Rob Livick said Tuesday. But, he added, that money will only serve as a “Band-Aid” for a $40 million roadway system that needs at least $14 million in repairs.

To move ahead with the sales tax, the council must convince its Public Works Advisory Committee of the need. Although revenues from a general tax cannot be officially allocated to specific expenditures, staff assured the council those funds can and would be reserved for road repairs in a process similar to what the city has done with funds for Measure Q, passed in 2006.

The promise made then, essentially door-to-door by members of a citizens committee, was that Measure Q funds would be used solely for police, fire and road maintenance expenses. A Citizens Oversight Committee is in place to ensure that happens.

“That money has been used for nothing but those three” departments, Schultz reiterated Wednesday to The Tribune.

The council unanimously voted Tuesday night to appoint members Nancy Johnson and Noah Smukler to an ad hoc committee that will work with Schultz in crafting potential ballot language. The committee also will create a presentation to be viewed by the city’s Public Works Advisory Committee, probably at its Oct. 17 meeting.

The ad hoc committee is to use the Measure Q format and procedure, including the methods of community contact by community volunteers.

The tax-increase issue then would return to the council in December, after which members would decide whether to move forward.

Also to be considered would be the size of the tax, whether it would have a sunset clause and what kind of tax it would be — general or special, with the latter requiring two-thirds majority approval by voters but providing the ability to officially restrict use of the funds.

Water and sewage treatment rates may be studied

On a parallel but separate track, the city may hire a consultant to study Morro Bay’s rates for water and sewage treatment. That study would cost as much as $75,000. Water rates haven’t changed since 1994, according to Livick.

According to state standards, Morro Bay is no longer meeting its debt-coverage ratio, or balance of expenses to income. The state requires that the city’s income be 125 percent of its expenses.

For details, go to www.morro-bay.ca.us.

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