LA PALMA : City Approves Plan for 5% Utility Tax

Arguing that the community’s quality of life is at stake, the City Council tentatively approved a plan this week to institute a 5% utility tax.

The tax would cost the average household about $6.85 monthly and generate an estimated $800,000 annually to maintain current services and boost the city’s dwindling reserve fund, officials said. It would take effect Jan. 1, 1994, and would apply to electricity, gas, telephone and cable television.

“I am not in favor of taxes in general,” Councilman David Lim said after a two-hour public hearing Tuesday night. “But this is the best and only way to keep the city alive and running.”

Because of deep cuts in state funding for the past two years, and more reductions expected, city officials predict their general reserve fund will plummet from $330,000 as of June, 1993, to about $24,500 by June, 1994. With a 1993-94 budget of $5.1 million, city officials said they want a reserve fund of at least $500,000 for city emergencies.

Most of the residents who spoke at Tuesday night’s meeting favored the proposed tax to ensure that city services, particularly the Police Department, remain intact. However, about half a dozen speakers said the council should slice more from its budget before levying a new tax.

The council has scheduled another hearing and a final vote on Sept. 7.

In 1989, city voters defeated a ballot measure to impose a local utility tax.