Tax Committee Minority Group Delivers Ultimatum

The Municipal Tax Review Committee is in agreement that Piedmont has financial problems, and Aug. 3 for how the city should clean up its act. Three members additionally signed on to a letter promising to hold back their endorsement for the extension of the municipal services parcel tax unless City Council takes the committee's advice.

"We want to see a little evidence—maybe a lot of evidence—that we're going in the right direction," said committee member Eric Lindquist, who, along with Steve Weiner and Tamra Hege, voted in favor of delivering the forceful message to the council. "If we don't see the evidence, then it means … the parcel tax that we are recommending would [still leave Piedmont with] a tremendous shortfall." The city's operating balance would end up about $6 million shy of what's needed to meet a recommended 15 percent reserve, according to the committee's projections.

Underlying the demands in the minority group's letter are concerns over runaway employee benefit costs and that a debacle like the Piedmont Hills undergrounding project that drained city reserves could be repeated. To earn their support for the parcel tax, they want City Council to meet five specific expectations.

• They want the council to obtain an independent analysis of the city's obligations in order to adopt appropriate limits on employee benefit costs, which now equal 53 percent of the amount spent on salaries and consume 24 percent of the city's operating budget.
• The group wants the council to require that at least $1.3 million be set aside each year for equipment replacement, facilities maintenance, and capital improvements. In their letter, they note that in order to pay for the unexpected cost of the undergrounding overruns more than $2 million had to be drawn from the city's reserves, which are now just $2.19 million.
• They want the council to revise policies regarding the management of city construction projects and the associated liabilities, drawing from the recommendations of the League of Women Voters' Task Force and the City Council Audit Subcommittee that studied what happened in the Piedmont Hills district.
• To ensure that the proposed development of Blair Park does not create a similar mess for the city's finances to mop up, the group is demanding that council get an independent cost estimate for the construction and resolve that the project not break ground until the money to build it is in a city account and the backers have guaranteed they will cover all associated costs of operation, maintenance, and legal costs.
• Lastly, the group wants council to resolve that the city will not subsidize the operation of the community pool after July 1, 2012, without offsetting reductions elsewhere in the city budget. The council approved spending a little more than $380,000 to run the pool in the 2011-2012 fiscal year, its first year under city management. But the group wrote that continuing that would run contrary to the city's practice of requiring users to pay for recreational facilities.

Committee member Bill Hosler, who didn't sign on to the letter, called the minority group's set of marching orders an empty threat.

"I don't envision a scenario where I personally wouldn't support the parcel tax. I don't see how the city survives in any way, shape, or form without it," Hosler said at the committee's Aug. 3 meeting. "I am going to vote for the parcel tax … I may or may not vote for various city council members."

Hege suggested committee members could even campaign for candidates next February, when the terms of two council members are set to expire, who would vow to meet the minority group's expectations.