Oakley City Council Votes to Places 3.5% Utility User Tax on November Ballot

On August 9, the Oakley City Council unanimously voted to place a 3.5% Utility User Tax on the November Ballot aimed at allowing voters the choice to improve fire service response.

The city originally sought a 4.5% UUT with no inflator to raise $2.6 million per year to allow Oakley to have a second fire station to improve response times and increase service.  The UUT includes an additional tax on electricity, gas, cable TV, water and sewer—it does not include telecommunications.

Councilman Randy Pope argued that voters would not pass the measure and suggested a 3% UUT. In the end, a compromise was 3.5%. The measure requires a 50% + 1 voter approval.

According to City Manager Bryan Montgomery, the UUT is anticipated to cost residents somewhere between $230 – $260 annually.

The ECCFPD had dropped from a total of 8-stations down to 3-stations since 2010. In July, the District was able to open the Knightsen Station given them 4-stations with a joint-funding effort between the cities of Brentwood and Oakley along with the County.

Meanwhile, the latest CityGate report shows the District requires at least 9-fire stations to provide “adequate” fire services. They also said in the report that the ECCFPD is the most under-deployed and administratively understaffed fire department they have seen in over a decade for the size of the communities to be protected.

The cost for the City of Oakley to place this on the ballot is estimated to be somewhere between $10,000 to $20,000.

Council Recap:

Firefighters battle an Oakley House fire in February 2016.

City Manager Bryan Montgomery explained that covering 250 square miles with three station puts every resident and visitor in risk and most people do not understand the critical crisis.

“To address that problem, and it’s not a perfect solution and rarely do we ever come up with a perfect solution, as a Task Force evaluated what was available, the concept of a Utility User Tax, which is a general purpose tax, is what is presented,” said Montgomery. “The timing is tight and this is your last chance to thumbs up or thumbs down for the November ballot.”

Montgomery is explained that the general purpose tax is general purpose and would go into the general fund—the advisory question allows residents to help guide the council on spending while staff is recommending this be used for fire services.

“The fact that this is a general purpose tax, and some of the attractiveness of this proposal is that passage requires 50%+ 1 in favor of the measure to pass,” said Montgomery.

He explained that the proposal in the staff report is a 4.5% UUT Tax with no inflator applied to electricity, cable, gas, water and sewer—this would allow the City to raise enough money for a single fire station.

Montgomery noted that tonight the council is voting to place the item on the ballot and the Ordinance before them would only go into effect if voters approve the ordinance via the ballot.

“As councilwoman Vanessa Perry stated previously, the City Council is not raising anyone’s taxes if you approve the measure, what the council is doing is allowing the voters an opportunity to decide for themselves if this is a measure if they think this is worthy,” explained Montgomery.

Exemptions include schools, special districts, low income individuals who would not pay this tax. The city is also recommending that the East Contra Costa Fire Protection District reimburse about 600-homes in Oakley who already pay a fire assessment already—Summer Lakes Area.

Mayor Kevin Romick asked about what the average tax per resident would be.

Bryan Montgomery called it difficult to assess, but stated the conservative average would be around $230 to $260 per year for the typical home but would varies. He stated businesses, based on electricity used would be substantially more.

Doug Hardcastle questioned the UUT exemptions suggesting some didn’t want to pay.

“So the water district would not be charged, sanitary district would not be charged, schools, but they all benefit from the fire department but they don’t want to pay for it,” said Hardcastle.

Oakley’s legal team stated this was a constitutional provision.

“You remember from high school, the power to tax is a power to destroy,” said Bill Galston, City Attorney. “You certainly do not want to be destroying other governmental agencies.”

During public comments, it was asked what would happen should Shea Homes not build the fire station.

Councilwoman Vanessa Perry explained it was her understanding from a discussion with Bryan Montgomery was that the council would likely vote to move the funds to keep the Knightsen fire station open until a station was built.

“This is a general purpose tax, that discussion is sort of a next step. Unfortunately we are in litigation with Shea and it takes longer than we anticipate the most logical location would be Knightsen but it’s something we need to discuss,” said Montgomery. “We wouldn’t be collecting revenues that would just be sitting here; they would go towards helping what the advisory question on the ballot will likely tell us.”

Susan Morgan, Ironhouse Sanitary District Director, suggested during Public Comments that the City of Oakley needed to replace sewer with telecom.

According to Ironhouse Sanitary District General Manager Chad Davisson, inclusion of sewer rates on the UUT will require a Prop 218 notification and trigger Ironhouse Sanitary District to alert the ratepayers of the collection of additional funds on a property tax—a prop 218 public hearing will be required along with public outreach which will be costly. Ironhouse also stated that the District will seek reimbursement of the cost associated with the Prop 218 process.

Davisson also responded to an earlier comment by Doug Hardcastle about not wanting to pay.

“It’s not about not wanting to pay for the benefit of fire protection you will be receiving, its to protect the ratepayers from having to have double jeopardy of paying twice. One time directly and one time indirectly,” said Davisson.

Oakley resident Dawn Morrow asked the council to consider what happens when Oakley needs a third fire station because according to the recent CityGate Report, it suggests the City have 3-fire stations.

Dezi Pina, candidate for city council, asked for a guarantee as to whether or not this tax revenue will go to fire services since the revenue goes into the general fund and nothing prevents it from being reallocated later down the line.

Mayor Romick stated they will have an advisory committee and the ballot question. City legal noted that every year during the budget process, it will be allocated during a public meeting.

Montgomery explained the reason they applied  sewer versus telecommunications because they thought it would be more “palatable” than cell phone noting that they were unsure if the community would even support adding another station.

“We are looking for this to pass and if a family with four or five cell phones are looking at this and they have to pay more of that bill, they are less likely to vote in support,” said Montgomery. “Something is better than nothing.”

Firefighters battle fire in Knightsen which includes Oakley Station 93

During Council Discussion, Randy Pope suggested it was important that they find a way to fund the fire district and ensure this UUT passes.

“I don’t think it’s going to pass at 4.5%. There is too much negatives out there,” said Pope. “We need to find a way to get this tax closer to where Brentwood’s is. They are talking about 3% the first year, build the first fire station and then go up to 6%…It would be really clean if we came in at 3% as well. It would cause less confusion with the voters. Eliminate the argument of why is Oakley 4.5% and Brentwood is only 3%. Why is Oakley so much more expensive?”

Pope suggested they make this UUT become part of a package saying both residents and the city both tighten their belts—saying they take 1% of new money coming in to make up the difference while putting a tax on new construction.

“I don’t have an opinion whether it be sewer or telecom because they are both utilities. But what I do have an opinion on is this being as low as it can get,” said Pope. “I also do not want an escalator. Just 3% with no shenanigans.”

Montgomery noted some concerns of what was proposed saying Brentwoods base is more than Oakley’s which is why they can go at 3%. He also highlighted that every 1% in the UUT is $600,000.  Every 1% in property tax is about $40,000.

Pope highlighted that the 4.5% proposed was more needs based, his suggestion was more “strategy talk”.

Councilwoman Perry stated she supported Councilman Pope’s idea suggesting Oakley does need to put some of its own money in like the City of Brentwood is doing.

Montgomery explained that he feared the idea of having “new development pay for everything” noting in this case, it would take a 100-years to pay for a fire station if only new development was paying.

The council then discussed what percentage should have.

“I would think 4% because 3% is not going to be enough. I get trying to passing but it’s not going to provide enough even with the city putting in money,” explained Perry. “I agree with t

Councilwoman Sue Higgins played devil’s advocate saying if they did nothing tonight, it would not be on the ballot and they would not gain a fire service.

“We need this to pass,” said Pope. “I don’t want to be melodramatic but this is people’s lives, businesses, and livelihood.”

Montgomery explained that the council should also consider insurance rates increasing if new fire stations are not opened while councilman Pope also noted they were already receiving reports of insurance rate increases far greater than what they are asking.

“At the Brentwood City Council meeting, an insurance representative was there and he said they are already seeing increases of $580 for insurance for those not located within 5-miles of a fire station and they will continue to increase each year,” said Perry. “I feel like its irresponsible for us not to act, Brentwood has acted, the council is not acting. We can’t just benefit off Brentwood stations. We have to do this too. That is not going to work.”

Pope agreed saying we cover two cities and the unincorporated.

“We have to do something. We are not the county, we are a city and have been a city for 15-years but have county level fire protection,” said Pope. “We need some action.”

Hardcastle stated that when he was walking precincts, he came across nobody willing to pay more for taxes.

“There was nobody. I walked a lot of miles and knocked on hundreds of doors because this was a priority for us there was not one person who said that they were willing to pay more money. I think they realize its always somebody else’s house who is going to catch on fire, someone else’s kid who is stuck in the back of a car until they take it personally,” said Hardcastle. “Its going to be a tough road to get something like this to pass.”

Perry said they have to try and start outreach by getting as much people to help.

Romick suggested they compromise at 3.5%–telecom stays out, sewer stays in.

The council approved Mayor Romicks motion in a 5-0 vote.

“Once again, this is not the city council raising taxes, the choice is left up to the residents of the city of Oakley. We are simply giving you a choice to improve fire services within our community,” said Romick after the unanimous vote.