Southeast Elections : Tax on Hotel Beds Splits Candidates in Commerce Race

The candidates vying for three seats on the City Council are sharply divided over whether the city should enact a bed tax, an issue that also will be decided by voters in the April 12 election.

However, incumbents Robert J. Cornejo and Arturo Marquez and their three challengers agree on many issues:

The abandoned, landmark Uniroyal plant along the Santa Ana Freeway should be developed as quickly as possible;

Something needs to be done to alleviate the nerve-racking congestion at the so-called “Mixmaster” intersection, the city’s busiest, and

They don’t want a proposed hazardous waste incinerator built in neighboring Vernon--at least until a complete environmental impact study is performed.

Philosophical Nerve

But the bed tax ballot measure has struck a philosophical nerve. Commerce, incorporated in 1960, prides itself on being a model city that is friendly to business and provides many services to its 12,000 residents without levying city property taxes.

If passed by a two-thirds vote, the bed tax measure would impose an 8% tax on the use of hotel rooms in Commerce. The revenue--projected at $500,000 a year--would be earmarked for public works projects.

“I was around when the city was incorporated,” said Cornejo, who opposes the tax. “One of the points stressed . . . was that we’d provide services without taxes.”

Cornejo, 53, is seeking his second four-year term on the council. He said he also opposes the tax because the city has a comfortable reserve and is not in urgent need of money, and because it would be unfair to impose a tax on only one segment of the business community.

Commerce has a budget of $18.68 million with a projected $4.6-million surplus. The city’s Redevelopment Agency has about $20 million reserved for projects, an official said.

Marquez, who was appointed to his council seat in 1984, said he has not made up his mind about the tax.

“I have a lot of people (constituents) who

are very concerned about it,” said Marquez, 24. “They feel it’s opening up the way for further taxes in the city.”

Candidate Manuel Jimenez, who was the city’s public works director before he retired in 1986, also opposes the tax.

“We have a very, very solid reserve,” he said. “I feel very strongly that if we go into any type of a first tax, then it opens the door to others. (If) in the future we may need that avenue . . . we would have those avenues to go to.” This is the first time the 62-year-old Jimenez has run for City Council.

Candidate Art Navarro supports the bed tax, noting that many California cities, including Los Angeles, have one. Navarro also said the tax would have little, if any, effect on Commerce residents because they do not usually stay in the city’s hotel rooms.

Navarro, 37, a fifth-grade teacher, is on the Traffic Commission. It also is his first campaign for City Council.

“We have to develop new revenues to make up what’s eaten away by inflation,” Navarro said. “It’s not a new tax, it’s just never been used in Commerce before.”

Lukewarm Support

Ruben Batres has thrown lukewarm support behind the tax. He said money from the tax could be useful, for example, to make improvements to alleviate traffic congestion at the jammed intersection of Atlantic Boulevard and Telegraph Road beside the Santa Ana Freeway.

The city estimates it will cost about $20 million to build a bridge on Atlantic Boulevard over the Santa Ana Freeway and into East Los Angeles to alleviate congestion at the intersection. Even if it secures grants, the city will have to pick up a substantial portion of the bill.

“If that’s the only route we have at this time, I can’t see denying it,” Batres said. “Once I’m in there, I’d like to investigate other avenues and find out if there’s some other way we can do it (raise money for public works projects).”

Batres, 55, is a furniture company supervisor and a member of the city’s Planning Commission. He ran unsuccessfully for the City Council in 1982 and 1986.

The local hotel industry opposes the bed tax through a political action committee called Citizens Against Taxation. Owners of the Hyatt Hotel and the Ramada Inn in Commerce have contributed $2,000 to defeat the measure, according to a campaign disclosure statement. As of Feb. 27, the close of the first reporting period for the April election, the committee had spent $1,387 on a mail campaign opposing the bed tax.

Opposes Bed Tax

John Endsley, treasurer of Citizens Against Taxation and general manager of the Ramada Inn, said the group opposes the bed tax because it would drive up room prices. Endsley also said it is unfair to tax one industry, especially when the city has surplus funds.

Cornejo, an account executive with a trucking firm, was first elected to the council in 1984. He said one of his proudest accomplishments was helping the city to balance its budget.

The city had a shortfall of about $3 million in 1985 to 1986 after a decline in sales tax revenue, said Assistant City Administrator Jim Duron. Most of that shortfall was covered by reserves, but some spending cuts were made without layoffs, officials said. This year, revenues are projected to equal expenditures.

Marquez, a leasing representative for an automobile dealership, said his accomplishments include helping to secure a city subsidy for a YMCA day-care program at Rosewood Park Elementary School. The city began funding the program last December and it will come up for review by the City Council for further funding next week, said John Perez, director of community services.

While the councilmen laud their accomplishments, the challengers find room for criticism.

Tentative Agreement

Navarro criticized the City Council for not securing an agreement to develop the Uniroyal plant more quickly. The city entered into a tentative agreement with the Dallas-based Trammell Crow Co. to develop a hotel-office complex in March, 1987, but it is still negotiating a final deal.

“Everybody’s sitting down, not doing anything,” Navarro said. “I want to get that done.”

Marquez said negotiations have been slow, but “I believe we’ve come a long way in the last couple of months. We certainly have a very qualified developer we’re negotiating with, so I hope something constructive comes out of it.”

Cornejo said a final agreement has been delayed because the city is trying to negotiate a lease rather than a sale of the property to Trammell Crow.

“I think that we’ll find when it’s all said and done, it’s going to be one of the most important projects the city ever’s been involved in,” he said.

Navarro and Batres also have injected into the campaign veiled allegations of nepotism in City Hall by calling for fairness in hiring and promoting city employees.

Cornejo’s son-in-law, Tom Maples, is the city’s director of parks and recreation, while Jimenez’s son, Jim Jimenez, is Maples’ assistant.

Both Cornejo and Manuel Jimenez said they did not use their influence to help their relatives get their jobs.

Midway through his term, Cornejo drew criticism for charging to his city expense account air fare to fly his wife, Sandra, to and around Hawaii, where she accompanied him to a conference in May, 1985. He also charged the city for her air fare in June, 1986, when she accompanied the councilman on a city-organized cultural excursion to Washington. Cornejo repaid the city $752 for those flights in February, 1986.

Forget Expenses

Cornejo said he “had forgotten all about” his wife’s expenses and never intended to bill the taxpayers.

Councilwoman Ruth R. Aldaco brought up the issue in her successful 1986 campaign. Former Councilman Lawrence Maese, who lost his reelection bid in 1986, reimbursed the city $2,860.

Jimenez also became an issue in the 1986 election. After Jimenez announced his retirement in 1985, the council voted unanimously to create the position of part-time public works director and to install him in the position. The two-year contract paid an annual salary of $35,000 for 90 days of work a year.

Marquez and Councilman James B. Dimas said they feared millions of dollars in public works projects would stall if the experienced Jimenez were to leave the city. While Marquez voted to retain Jimenez, he opposed giving him a contract that might later require a buyout.

But Aldaco called the rehiring a “misuse of public funds.” Batres also opposed the rehiring in his unsuccessful 1986 election bid.

Then in April, 1987, the council voted 4 to 1 to buy out Jimenez’s contract for $28,400. Aldaco said Jimenez was ineffective because he was at City Hall just one day a week, and City Administrator Louis Shepard said the city needed to hire a full-time public works director with a civil engineering degree who could double as city engineer. Cornejo voted against the buyout.

Jimenez said the buyout was a “misuse of public funds.” He said he was still effective, and if anything, he could have stayed on to assist the full-time director.

Marquez has been the most successful fund-raiser of the candidates, according to campaign disclosure statements.

Marquez has raised $16,328 and spent $12,246. His contributions include $500 from the Industrial Council and $450 from Hayden C. Eaves III, regional partner of the Trammell Crow Co., which is negotiating to develop the Uniroyal site. The Industrial Council is the Commerce equivalent of a chamber of commerce. Larry Herman, a general partner of the Hyatt hotel, contributed $100 to Marquez.

Cornejo has raised $13,581, including a $500 contribution from the Industrial Council, and a $500 donation from Herman. Cornejo also received a $150 contribution from Eaves. Cornejo has spent $8,025.

Batres has raised $14,279, including $100 from the Industrial Council. He has spent $8,200.

Jimenez has raised $7,551 and spent $6,191. His contributions include $500 from the Industrial Council and $500 from Herman of the Hyatt. Jimenez received $143 from the Committee to Elect Robert Cornejo.

Navarro has raised $6,849 and spent $4,416.

Council members receive a monthly stipend of $352. As members of the city’s Redevelopment Agency, they also receive $30 per meeting up to $120 a month.

Councilman Michael V. Guerra, 75, is not seeking reelection. Guerra was first elected to the council in 1972.