Updated: Nevada City Council seeks citizens’ input on sales tax ordinance | TheUnion.com

Updated: Nevada City Council seeks citizens’ input on sales tax ordinance

The story has been updated to reflect corrections in City Manager Mark Prestwich’s comment and to add clarification to the Special Tax Option provisions. The difference between the two measures is $144,000. The review by a Taxpayers Oversight Committee was a recommendation by Prestwich. Furthermore, $722,000 is the money the city is already generating under Measure L, in addition to the annual $299,000 surplus when Measure L expires in April of 2018.

The City Council of Nevada City on Wednesday voted to put the General Purpose Tax measure on the Nov. 18 city council meeting as a sales tax ordinance for the first reading.

The measure would help generate funds that will contribute to the operation of Nevada City Fire Department, while also providing a sustainable monetary source to resolve some of the city’s financial challenges, officials said.

City officials said the decision to adjust sales tax was made after the Nevada County Consolidated Fire District ended an 11-year co-staffing relationship with the city of providing three firefighters to Nevada City’s Fire Station 54.

The termination of that relationship resulted in an annual operational cost of $275,000 of the City’s General Fund.

The change to the sales tax will be placed on the June 7, 2016 ballot before becoming effective.

Council members were divided over the two sales tax options presented by staff.

Vice Mayor Evans Phelps spoke in favor of the General Purpose Tax initiative, pointing out that the two-third votes needed to pass the Special Tax measure, if it ends up on a ballot, would not be easy to achieve.

“I certainly support raising the money…but getting two-third votes is not easy,” Phelps said.

Mayor Jennifer Ray voiced her support for the Special Tax measure.

“We know what the tax will be used for,” said Ray. “I want to know that the Fire Department is going to get the staffing they need, and I think it is consistent with the intent of Measure L, which was fire and maintaining Pioneer Park.”

City Manager Prestwich recommended the city to include a Taxpayers Oversight Committee with the measure that ends up moving forward, adding that both options have their benefits.

“We haven’t tried to overreach at all here. The one-fourth cent measure is precisely what is needed to fund three firefighters on an ongoing basis,” he said, “and there’s really no ability for mischief with an extra $144,000,” he said in reference to the difference in revenue between the two measures.

General Sales Tax measured passed with a vote of 3-2. Mayor Jennifer Ray and Council Member Terri Andersen casted the dissenting votes.

But one thing the council members all agreed on is that more public feedback is needed on the issue.

“I think we need to get the public a chance to voice in on that,” Ray said.

Taxpayers would see their sales tax increase 0.25 percent from 8.50 percent to 8.75 percent until April of 2018, when Measure L expires, if the city adopts the Special Tax Option.

After Measure L sunsets, the sales rate will then decrease to 8.375 percent.

This option would continue to furnish the city with $722,000 in revenue under Measure L. When Measure L sunsets in April 2018, the city would still expect to generate $290,000 annually.

The tax dollars would provide 24/7 staffing for Fire Station 54, if it garnered approval of two-third of voters required to pass this measure.

Tax rate will remain 8.5 percent should the residents opt for the General Tax initiative, the other option the city is considering. Measure L will not expire under this measure.

The city expects to generate $432,000 under the General Tax initiative, which would maintain the city’s current 8.5 percent sales tax rate. The money would then go toward fire staffing in addition to providing extra finance for the city’s maintenance and operational needs. This initiative will require the approval of a majority of voters.

In other business, the council also unanimously approved a resolution that adjusts monthly sewage rates for residents affected by the blended sewage user charge, a new rate calculation rolled out by the city in January, which combines flow charge and a fixed rate.

The city has received complaints from some residents who have seen an increased sewage bill due to “extenuating circumstances.” Restaurants and motels, for example, use more water in January and February.

Staff is proposing to review and adjust a consumer’s sewage rate through comparing the residents’ current usage to his or her previous usage. If no irregularity is spotted, staff will also have the option of analyzing the customer’s water usage in the upcoming year and adjust rates accordingly.

“I would like to see us change the 40 percent fixed rate and 60 flow charge rate and swap it,” said Mayor Jennifer Ray. She said the new rate calculation impacts businesses as well as residents who landscape their gardens. This alternate structure would help water conservation without creating undue burden on certain businesses and residents, she said.

“I would like to see what options we have individually, before we consider a flip,” said Council Member Duane Strawser.

Also on Wednesday, the City Council officially proclaimed Nov. 6 and Nov. 7 as Nisenan Heritage Days in Nevada City.

“I know it takes a long time for us to be visible, but we don’t want to be forgotten,” said Shelly Covert, secretary of Nevada City Rancheria, which is governed by a five-member tribal council.

To contact Staff Writer Teresa Yinmeng Liu, call 530-477-4236, or email tliu@theunion.com.

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