STANTON : Council May Impose 6% Tax on Utilities

The City Council has decided to consider a 6% tax on utilities to help offset a projected $1.4-million budget deficit for the 1993-94 fiscal year.

Council members also said last week that they favor raising the fees for many city services.

The council must hold two public hearings before imposing the utilities tax. The city would not receive income from the proposed tax until June or July. The 1993-94 fiscal year starts July 1.

Finance Director John Hartman estimated that the utilities tax could raise $1 million for the city.

The first hearing will be on March 9, the second on March 23. Both hearings will be during regular council meetings, which start at 6:30 p.m. at 10660 Western Ave.

Rick Kermer, an independent consultant, calculated that the city undercharges for many services, such as planning reviews and inspections. The city could recover about $900,000 by raising fees, Kermer told the council at a special budget session last week.

City Manager Terry S. Matz said the current fiscal year’s deficit is about $700,000. That includes sales tax revenues, which have been about $200,000 less than officials had hoped, Matz said.

The city’s general fund budget for 1992-93 is about $8.25 million.

Kermer, president of Anaheim-based MSI, told the council that it must start managing the city like a business.

Speaking about the utility tax and the fee hikes, Hartman said, “These two things together can put us in a situation where we’re a city again.”

Kermer walked the council through some of his analysis of city services. He said a preliminary plan review, which developers can request from the Planning Department, costs $150. The true cost to the city is about $775, he said.

Planning Manager Mark D. Lloyd(cq) told the council he thought Kermer was correct about the true cost. The review is not required, but it can help developers streamline the review process, thus saving money, Lloyd told the council.

Kermer told the council that taxpayers are subsidizing many other services. “What we want to do is charge what it costs us to provide these services,” Matz told the council.

As a part of budget planning, the council also demanded that department heads defend all their expenditures.

“The budget process is continuous because of state budget cuts,” Mayor Don Martinez said. “Everything is on the table for review, at all times.”

“Justify your existence,” Martinez told the department heads gathered around the table.

“Instead of having a full-time attorney, we could have a paralegal,” said Councilman Sal Sapien.

City Atty. Thomas W. Allen nodded slowly.

The council decided to meet again to discuss Kermer’s study.