‘73 Ojai Tax Action Stirs Up Bitterness

Talk about timing.

Back in 1973, apparently when no one was looking, the city of Ojai quietly ended a tax-sharing deal with the county. No fuss, no lawsuits, no hassles.

Almost 30 years later, the city of Ventura tries the same thing and triggers threats of a fiscal Armageddon. The county, fearing copycat legislation in other cities, is threatening to deprive local cities of $85 million, itself of $6.5 million and Ventura of $15 million by eliminating 1.25% of the county sales tax.

A stunned Ventura City Council, looking to save half a million dollars for street repairs, now asks: If Ojai can do it, why can’t we?

“Right now Ojai is being treated with favoritism and no one is saying anything,” fumed Ventura City Councilman James Friedman.

But times have changed, say county officials, money is tighter in post--Proposition 13 government and relationships between counties and cities also have changed.

Ironically, the men and women responsible for passing the Ojai ordinance, which lets the city keep an extra $30,000 in taxes annually, can’t even remember doing it.

The mayor who signed the ordinance doesn’t remember, the clerk who did the paperwork can’t recall, the city manager is stumped and the various council members who signed on profess ignorance.

“It’s flattering to think that I can remember something that happened 27 years ago,” said former Ojai City Clerk Hattie Bowie, who processed the ordinance. “I guess it didn’t seem important.”

Johnny Johnston, who was Ojai’s city manager in 1973, would like points for being ahead of his time but he, too, is stymied.

“I’d like to take full credit but I can’t remember,” said Johnston, who now heads the county’s General Services Administration. “That was on my watch, too. Who knows, maybe my fingerprints are all over it--I did a lot of creative things back then.”

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Two former Ojai mayors who dealt with the ordinance share in the collective amnesia.

“I’m a cipher on this thing,” said James Loebl, five-time mayor of Ojai and a councilman for 28 years. His signature appears on the bottom of the Nov. 27, 1973, ordinance. “I just have no independent recollection of it whatsoever.”

Whatever the reason, the Ojai measure, like Ventura’s proposed ordinance, severs a 1956 agreement between the county and its cities. The agreement held that the cities would give the county $3.30 of every $1,000 in sales tax it gets in exchange for services. Ojai backed out of the deal and voted to keep all its tax money.

In 1976, the ordinance was approved again, and then-Mayor Jack Fay signed it.

He too remains clueless on the details.

“The fact that I don’t recall it leads me to think it wasn’t a big deal,” Fay said. “It was a very small amount of money.”

Ojai’s present city manager, Andy Belknap, has two theories on why Ojai did what it did.

Back in 1973, local cities wanted to use sales tax money for animal control. Ojai, being home to the an animal shelter, felt it was already doing its fair share and passed the ordinance to escape the deal. The other theory is that since 75% of Ojai’s population lives outside the city limits and the city provides services to residents on county land, why should Ojai pay additional money to the county?

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But unlike the epic battle that has broken out over Ventura’s similar plan, Ojai’s provoked no reaction.

“It was kind of a stealth move, nobody had any knowledge of it,” said county litigation supervisor Noel Klebaum.

Frank Sieh, assistant county counsel, said the county didn’t learn of the ordinance until it had been passed.

“Once the action is taken the only weapon the county has is invalidation of the sales tax,” Sieh said. “There was no lawsuit filed, and I don’t believe any legal action was taken.”

Sieh said Ojai’s sales tax contribution was probably too small to make much of a difference to county finances, so drastic steps were not necessary.

But times have changed and Ventura is not Ojai.

“It’s apples and oranges,” said County Chief Administrative Officer Harry Hufford, who has no plans to force Ojai to again share tax dollars. “It was pre-Proposition 13 and any revenue loss would have been easily absorbed through some other tax. Their sales tax was probably a drop in the ocean. It’s a different world today.”

Officials say the money back in 1973 was likely no more than $10,000 a year.

Hufford has been working in county government since 1973 and says the relationship between cities and counties has changed. Money is scarcer now and both sides are scratching around for any source of revenue. Also, sales taxes are a much more important source of income than before.

Ventura wants to keep the $572,000 it would have given to the county this year to fix roads. But if it persists in withholding its taxes, Ventura stands to lose $15 million, which is about the entire budget of the city Police Department. Other cities and towns would also be devastated by the financial fallout if the county were to eliminate the entire sales tax.

Ojai, said Belknap, would lose $1 million, or a third of its annual budget.

“It would have a huge effect on us,” he said.

Hufford says he wants to set up a negotiating process with Ventura to head off the doomsday scenario.

“We need to get on with this and resolve this issue,” he said. As for Loebl, he still tries to recall the ordinance.

“I just don’t recall,’ he said, chuckling in frustration.