Issues From Hotel Taxes to Special Prosecutors

Anaheim voters could close a rancorous chapter in city political history when they consider a ballot measure barring city officials from hiring special prosecutors.

And in Costa Mesa and Garden Grove, voters will consider raising taxes on out-of-towners, while Huntington Beach voters could yank a power company’s tax exemption. Along with the more high-voltage growth initiatives in Newport Beach, Brea and San Clemente, the measures--some mundane, some merely technical--will be weighed by local voters on Nov. 7.

The Anaheim measure, which has been championed by Mayor Tom Daly--the past target of a special prosecutor brought in to investigate alleged abuses--is just one of a handful of measures stemming from a review of the City Charter. The other measures seek to remove gender references from the charter; prohibit city employees from holding the position of mayor or council member; update finance provisions to include electronic transfers; and allow the city to charge market rates for utilities.

Four years ago, a divided City Council hired a special prosecutor to investigate possible campaign violations committed by the mayor and others. The investigation, which resulted in dozens of misdemeanor charges, was heavily criticized as being politically motivated and extremely costly. Ultimately, the special prosecutor, Ravi Mehta, was fired and a judge tossed out the charges against Daly, saying the city lacked authority to hire a special prosecutor. The city is also reimbursing other officials for fines levied against them during the prosecution.

In advocating approval of Measure K, Daly said the change would prevent future “politically motivated witch hunts.”

Another Anaheim ballot item, Measure J, also has roots in the special prosecutor controversy. One of the council members who hired the prosecutor, Lou Lopez, worked as an Anaheim police officer at the time. Lopez no longer serves on the council.

While Measure J would not prevent employees from running for office, it would require that they be terminated once they were sworn in as mayor or as a council member.

In Garden Grove and Costa Mesa, voters will consider raising their hotel and motel guest tax 2%--a plan that has generated controversy in Garden Grove, where voters torpedoed a similar measure in March.

Garden Grove officials are hoping to cash in on six new hotels--hotels that intend to attract guests from the nearby Disney resort. Measure P would raise the tax from 10% to 12%, adding roughly $340,000 to the city’s general fund the first year.

“Visitors who come to Garden Grove have the benefit of basic city services, they can go to our parks, use our streets or get service from the Police and Fire departments if necessary,” Deputy City Manager Cathy Standiford said. “The thinking is that they should help pay for the cost.”

Opponents say the city is shooting itself in the foot. Former Councilman Bob Dinsen says that tourists will go to cities with lower hotel taxes, such as Westminster, which has a so-called bed tax of 8%. “People think that if they just tax the other guy, they don’t have to think about it,” Dinsen said. “They need to think about it though.”

In Costa Mesa, where officials hope to polish the city’s image as a commercial and tourist destination, City Council members have proposed raising their own bed tax 2% and using that cash to spruce up street medians and build new parks and recreation centers.

Costa Mesa’s bed tax is now 6%--the county’s lowest--and officials say approval of Measure O would generate $1.2 million a year. That money would be placed in a special fund for the acquisition and development of parks, recreation facilities and open space, officials say. The measure requires two-thirds voter approval.

In Huntington Beach, council members want to impose a 5% utility tax on the privately owned AES Power Plant. Officials say that when the plant was owned by Southern California Edison, it was given an exemption from the tax because it was a publicly regulated utility. Now that the plant is owned by a private firm, officials believe the tax is justified.

“Everyone else in the city pays this tax, from private homeowners to businesses,” Councilman Dave Sullivan said. “Why shouldn’t they pay like everyone else?”

Measure Q, if approved, would allow the city to tax all of the natural gas AES burns to generate electricity, which would funnel $1.2 million into the city’s general fund annually.

Opponents of the tax, AES President Ed Blackford in particular, say the measure will force the company to pass the tax along to consumers in the form of price increases.

City officials say the measure will probably result in an increase in electrical rates for many in Southern California, but said the increase will amount to pennies on each bill. Blackford says it will be much higher.

A second measure on the Huntington Beach ballot is nonbinding and asks voters if the city should use the utility revenue from the power plant for the maintenance, construction and repair of infrastructure, such as sewers, storm drains, streets, alleys, street lights and parks.