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High Priced Consultants Selling Snake Oil

City Council Hires Consultants To “Sell” Voters On A Tax Hike

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Spending Problem

“We don’t have a revenue problem, we have a spending problem.” — Ronald Reagan

The Scenario

The Ventura City Council is determined to raise taxes again by putting a measure on the ballot in November to increase sales taxes by 0.5%-1%. Two previous attempts failed. As is customary, they are not completely forthcoming or transparent when they are trying to extract more money from the citizenry. On January 30, 2016, the City Council held a special meeting at the Ventura Police Department whose true purpose was to discuss raising the sales tax. The Council spent $118,000 to hire consultants to sell the voters on a tax increase. What they learned should have disappointed the Council.

This City Council is pushing hard for a sales tax incease.

Council hired consultants to direct them on how to sell the voters on a tax increase

 [Only 36% say Yes]

At the January 30th meeting, one paid consultant provided his interpretation of the results of a general poll on citizen’s views asked of 630 citizens. The opinions were favorable in such areas as police, fire, beaches, water, paving streets, serving veterans, and protecting the environment.

When it came to answering two questions specifically focused on the need for a sales tax increase, however, the results were remarkably different.

Question:  Does the City need additional funds for City Services?

Great need = 22%

Some need = 38%

Little/no need = 30%

Question:   If on an initial ballot you were asked to increase sales taxes by one-percent or one-half percent how would you vote?

One-percent                                                one-half percent

Definitely yes = 36%                         Definitely yes = 33%

Probably yes – 12%                           Probably yes = 22%

No/probable no = 39%                     No/probable no = 31%

Interpreting the results, fewer than one in four citizens sees a great need for additional funds and only 36% would vote definitely yes for a 1% sales tax increase.

If 630 citizens surveyed believe the City is doing a favorable job with the funds they have and only 22% believe there’s a great need for additional funds, one might conclude the citizens are content with the current situation.  But, the City Council—strongly encouraged by the consultants—continued to push the sales tax increase forward.

The inference is that voters are not smart and need to be led around

expensive consultants

Ventura spends $118,000 on consultants to “sell” voters on sales tax increase

The pollster then advised the Council that they needed to do more to “educate” the people on why they should vote for a sales tax increase to receive approval.  Without education it was a close call.  His words were – “on the one-percent measure you might have a shot.” One council member commented that the “citizens just don’t understand.”

Next, the paid political consultant outlined that of the 109,000 Ventura residents only 24,000 vote and, of that number, 61% are over the age of 50. It was his view that an intense program was needed to “educate” voters because “they need to know what the city council is going to use the money for.”

In fact, that’s the crux of the issue. If the additional sales tax revenue goes into the General Fund, nobody will know for sure how the City Council will use the money.

MONEY FOR EVERYONE AND EVERYTHING

[The Ventura Essential Services Tax Measure]

At the conclusion of the presentation, Mayor Nasarenko announced, “I have made a sales tax measure a core goal for my year as the Mayor.  I have been joined by the Deputy Mayor [Neal Andrews].”

The discussion then moved to a staff report that listed “all of the needs.”  The list of needs total $1.368 billion. That is billion with a “B.” Excluding costs for Water and Wastewater totaling $661,120,000, which the citizens will pay through a 34% increase in water bills the City Council approved in 2015, which leaves $707,734,532 in needs for the General Fund.

Here are some examples of what’s on the City of Ventura government’s shopping list. It is obvious the city council wants to overwhelm the voters with the sizable need for more taxes.

Community Enhancement $199,360,000
Technology $7,420,000
Streets $298,999,747
Public Art $557,462
Parks $112,192,823
Facilities $42,087,500
Fire $3,400,000
Police $4,853,000

This wish list illustrates the consultants’ concern about Ventura citizens, “they need to know what the city council is going to use the money for.”   But, here’s the rub.

As a General Fund Tax Measure, it is impossible to promise or earmark the new tax revenue to any specific project. To earmark funds requires a two-thirds majority vote (67%) on the ballot. To vote in a General Fund Tax Measure requires a simple majority (>50%).

Given the low interest in approving a sales tax increase cited in the survey (36%, at best), reaching a two-thirds majority will be a struggle. A simple majority seems more likely, if the sales tax increase is to pass at all.

Once in the General Fund, the City Council can spend the sales tax revenue as they choose.

No oversight committee, appointed by the city, has ever challenged spending after it has been spent

Mayor Nasarenko isn’t telling voters that no guarantee exists for the City to spend the additional tax revenue on any of the City needs once the tax receipts go into the General Fund. This Council may intend to use the funds for the projects outlined above, but Councilmembers change, city priorities change and needs change with time. In 2007-08 the signs of an economic downturn were clear yet the City government forged ahead, spending money on experts and projects as if they were immune from economic reality. Who’s to say the City won’t syphon off money intended for street repair to pay for another WAV building, for instance?

Consultants oversight committee

Consultants suggest a citizen’s oversight committee

So, the mayor is creating a smoke screen in his “let’s increase taxes” pitch by promising a Citizen’s Oversight Committee intended to give voters the false sense that “how funds are spent” will be closely monitored.

To monitor the funds that closely, however, a Citizen’s Oversight Committee would have to approve any project expenditure before the City makes it—effectively neutering the Council. It’s unlikely the City Council would approve that. And, even if they did, why would we need a City Council at all if this committee controlled the purse strings?

The truth is no post audit Citizen’s Oversight Committee will track city spending that closely, let alone have the power to reverse any spending after the fact. Once the Sales Tax Increase passes, the fact is nobody will look at it again and nobody will reverse any expenditure.

If you believe a sales tax increase will be spent unwisely, raise your voice. Write to the City Council to share your opinion. In addition, insist Council Members Heitmann, Morehouse and Weir—all up for re-election in the November 2016—thoroughly explain their position on the sales tax increase.  After all, they have a balanced budget, they increased water rates by 34% and they have revenues up $20 million to pre-2008 levels.

Click On The Councilmember’s Photo Below To Send An Email

Erik Nasarenko,
Mayor

Neal Andrews,
Deputy Mayor

Cheryl Heitmann

Jim Monahan

Carl Morehouse

Mike Tracy

Christy Weir

Editors:

R. Alviani,       K. Corse,     T. Cook,     R. Berry,
J. Tingstrom, R. McCord,  S. Doll,      C. Kistner,
W. Frank

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Ventura City Hall

When Spending $118,000 On A Poll Costs You More Money

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VENTURA CITY COUNCIL SPENDS $118,000 TO ASK VOTERS TO INCREASE TAXES – AGAIN

On April 14, 2015, the City Council directed the City Manager to conduct a “community survey” to gauge interest in future revenue options (government speak for  raise taxes) to support community services for a fee of $38,000.  They did that and spent your money for a poll.

high-priced consultants dupe voters

Ventura paid $38,000 to high-priced consultants to “sell” a sales tax increase to voters.

On September 28, 2015, the City Council listened to the expert concerning his interpretation of the answers in the poll, and whether the voters, in his paid opinion would support a sales tax increase of 1/2% or 1% over the present rate of 7.25%.

Given the nature of the questions in the poll (noted below) it was no surprise that he opined that six in ten “perceive the City has at least some need for additional funds for city services. However, only 22% recognized a ‘great need’ and only one-third would definitely vote yes.

One-third however does not get the Council to the required majority in an election, so the expert said that “educational statements lead to a 7% overall gain in support for the one-cent measure and an 8% overall gain in support for a one-half cent measure”. In other words, the voters need to be told (persuaded) what they need.

The paid consultant, of course, was available to provide the needed education to attract more voters at a cost of $80,000.   The Council again voted to spend your money because you need “education”.

The tax increase has not as yet been put on the ballot but the measure will be called – CITY OF VENTURA ESSENTIAL SERVICES PROTECTION MEASURE – if the Council follows the expert’s advice.

RELYING ON A BAD POLL, AGAIN

As is the case with most poorly worded surveys which include ambiguous questions or questions that are too general in their nature, our city council paid for a very misleading assessment. This poll implies that new taxes will go toward any and all of the suggested purposes in the survey, with no details or guarantees.

Interestingly enough, the poll that the City of Ventura commissioned, is quoted in the Ventura Star paper, as asking if the citizens would be willing to support a tax increase, if it provided:

  • protection of local water supplies
  • keep all fire stations open
  • protect local beaches, rivers and coastal waters from pollution
  • maintain and improve fire, police and paramedic emergency response
  • maintain essential city services
  • improve services for seniors, the disabled and veterans

Past City Councils have relied upon poor surveys before and have lost on elections both times in the past.

HOW DID WE GET STARTED DOWN THIS PATH AGAIN?

Ventura now has a new Mayor who has only been in Ventura just over 5 years, coming from Los Angeles. With him comes a desire to tax the citizens of Ventura partly because taxes are lower than Los Angeles and because the Ventura City Council can find more ways to spend more money. However, this desire to gather more tax money is once again being sold to Venturans under the disguise of “keep funds local”.

A SMOKE SCREEN

Before we get too far ahead of ourselves, several of these items, such as water supply, rivers, beaches, seniors, disabled and veterans are already being paid for by county, state and federal agencies.

Our Mayor has started a dialog to have the citizens believe this tax will help our aging water system and our pier.

Blow smoke on taxes

The mayor and Ventura City Council blow smoke about Ventura’s need for more taxes after consultants deliver voter poll findings.

This is an effort to deceive the voters into believing that more taxes are needed for our water system. Ventura Water Department, independent of the city general fund, maintains our water system to the tune of a recent 34% increase in water rates over that last two years. After a 34% increase in water rates, Ventura has the funds for our aging water system.

With regard to the pier, there is over one million dollars in the “pier fund” to repair the pier. The community needs to understand that the pier is protected with an insurance policy that will have it repaired. The policy calls for a onetime occurrence insurance with a $100,000 deductible for each major occurrence. The $1.0 million in the fund, which is money that came from the community, not the city budget, is available to pay this $100,000 deductible each time it is needed. Therefore, no part of the sales tax dollars is needed for the pier.

MORE TAXES ARE NOT ALWAYS THE ANSWER

The other argument most often used to increase Sales Tax rates is that Ventura is lower than other cities, implying that Ventura is falling behind. The only two cities in Ventura County with an 8% sales tax rate are Oxnard and Port Hueneme. Aren’t both of these cities struggling with budget deficits? Los Angeles is at 9.00% for their sales tax. We cannot compare our needs to Los Angeles.

REVENUES ARE ALREADY UP

So let’s first discuss the need for more funds. The truth is that over the last 2 years, the City of Ventura property taxes have increased by 4.0% ($18,479,513 to $19,235,000). Also over the same two years, the City of Ventura sales tax revenue has increased by 9.5% ($16,134,075 to $17, 674,715). Therefore, revenues for the City of Ventura have continued to rise and as our new Mayor has said “we are living within our means and we have a balanced budget”.

WE HAVE THE REVENUE. IT’S A SPENDING PROBLEM.

Now let’s point to the real reason more taxes are being suggested. In 2015/2016, even after the employees’ contributions have been made, the employers’ contributions for the SEIU and Public Safety employees have increased from $15,061,523 to $16,079,104 for a net increase of $1,017,581. And, it is going to get worse.

Therefore, it does not look like the amount that the employees are contributing is keeping up with the cost, investment and the demand by the current and future retirees. Therefore, the percentage of the total city budget is continually going towards increased retirement costs and not services. Employees need to contribute a higher percentage toward their own retirement.

SO WHAT IS THE ALTERNATIVE SOLUTION TO THE PROBLEM?

Using our Mayor’s own words from his 2013 campaign:

Mayor Erik Nasarenko commissioned the voter poll on taxes.

1) When asked how you plan to pay for to improve streets, public safety, water resources, attracting new business, parks, schools and city services his answer was: “By growing the economy… the city must attract and retain businesses that will increase its sales tax base.”

2) When asked what the role of the city is to attract a better economic vitality and his answer was: “The city can bring economic vitality to Ventura by keeping it safe and clean, creating a business-friendly culture at city hall, making sensible, cost-effective loans to businesses, and by promoting trade and tourism both locally and globally”. There is nothing said here about increasing taxes upon the citizens further.

3) When asked whom he would represent, his answer was: “City residents.  Without whom, there would be no tax base—property, sales or otherwise—to provide the core services necessary to support the city”. You shouldn’t be promoting to increasing taxes upon your existing tax base when you have not first tried to introduce your plan for attracting and retaining business that will increase its sales tax base.

4) Where is the action that he promised such as: “As Councilmember, I would like to make Focus Area 1 a top priority, bringing to the Auto Center area a destination retail establishment, like a Bass Pro Shop, and possibly a hotel to support the Players Club casino.”

In our new Mayor’s own words, economic vitality through increasing the business base is the top priority. He led voters to believe that his position was to expand the tax base as a better alternative than increasing the tax rate. We should keep him to his word.

Editors:

R. Alviani,     K. Corse,    T. Cook
J. Tingstrom, R. McCord, S. Doll

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