Costa Mesa to Vote on Surplus Revenue

The Costa Mesa City Council is going to let voters decide what to do with a $2.1-million surplus that has accumulated in the city’s treasury.

Council members voted Tuesday, 3 to 2, to have staff members prepare a ballot measure on the funds for the November election. It would allow the city to spend the money for capital improvements rather than return it to property owners, as required by the statewide Gann initiative passed in 1979.

The deadline for placing a measure on the ballot is Friday, so the council adjourned to 6:30 p.m. Thursday, when it plans to draft the proposed ballot language.

Earlier Tuesday, the council rejected, 3 to 2, a staff plan to have residents vote next April on whether to let the city spend part of the surplus and rebate the balance to property owners at $44 per $100,000 of assessed property value.

Because the average value of a Costa Mesa home is $150,000, the average city homeowner would receive a $66 rebate, City Manager Allan Roeder said. The rebates would appear as discounts on 1988 property tax bills.

Tax Revenue Windfall

Since the 1985-86 fiscal year, the city has accumulated the $2.1 million in surplus revenues, Roeder said.

Councilwoman Mary Hornbuckle said the “extreme windfall” resulted from increased property taxes reaped the last several years, especially from home sales and South Coast Plaza revenues.

Hornbuckle, who along with Councilman Dave Wheeler supported the staff’s recommendation, said the staff had researched thoroughly.

“I favor the two-pronged attack,” she said. “I feel strongly we have a windfall and should share it with property owners, from whence it came. It would be logical to ask the voters what to do with it, but I feel the timing is inappropriate.”

The Gann initiative imposes a ceiling on taxes state and local governments can spend. It ties budget growth to an increase in population and inflation.