UKIAH 1/27/2017 — The Howard Jarvis Taxpayers Association (HJTA) filed a lawsuit against the City of Ukiah in Mendocino County Superior Court on January 6. Plaintiffs include the HJTA and eight Ukiah voters. The lawsuit contends that the half-cent sales tax increase passed as Measure Y, which was approved by 51.5% of the electorate in Ukiah, is unlawful. Though Measure Y was a general tax, which requires only a majority to pass, it was accompanied by a non-binding advisory measure, Z, which asked voters if they wanted the revenues raised by Y to be used for street repair.
The lawsuit contends that the use of the tax for a particular purpose means that it is really a special tax, which requires a two-thirds majority to pass. The suit cites violations of Article 13 of the California Constitution, the law that requires a two-thirds majority to pass a special tax. Article XIII C, “Voter Approval for Local Tax Levies,” which was adopted into the California State Constitution on November 5, 1996, states that: “No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote.”
Ukiah City Manager Sage Sangiacomo said no one came forward to complain or talk about suing the city during the public workshops on the measures before they were placed on the ballot. “Starting in 2016 the council actively invited public participation” in determining how to pay for street repair at at least two public workshops before the November 8 election. Though members of the public typically sign in when they attend public meetings, it is not a requirement to do so. According to initial queries from the records of the meetings, “None of the concerns expressed now were brought forward in the workshops...To wait until after the fact...does amount to ambush litigation,” he said. The HJTA, he added, “is supposed to be a benefit to taxpayers, but in the end, it causes litigation, which costs.”
The city has a precedent of passing a general tax with an advisory measure to use the revenue for a specific purpose. In 2005, voters approved Measure S, which raised taxes by half a percent, accompanied by an advisory measure, T, which asked voters if they wanted the money to be spent on public safety. Sangiacomo said no one sued the city at that time.
The lawsuit lists five things the plaintiffs want. They request three separate declarations, stating that the tax increase proposed by the two measures was a special tax; that it was defeated; and that measures like Y and Z be declared “a scheme to circumvent supermajority requirements,” which would be prohibited by the state’s constitution. They are also suing for the costs of the suit, including attorney’s fees, and “such other relief as the Court considers just and proper.”
As Ukiah City Attorney David Rapport points out, “It could be they were looking for a test case.” In 1998, he said, the HJTA unsuccessfully challenged Santa Clara county, which had passed a general tax accompanied by an advisory measure to use some of the money to supplement public pensions. Indeed, political action groups often use test cases like these to try to push for statewide changes, by creating legal precedent. A small city like Ukiah, with a small budget for legal expenses might find fending off a suit from a major political action group more difficult than a large city.
One of the plaintiffs in the lawsuit is Ed Haynes, a local veterinarian who argued against the two measures at a public ballot forum on September 29. Haynes suggested at that time that there were reserves in the general fund that could be spent on street repair, and that the city pays “multiple consultants for opinions that are never put to practical use.”
In an interview with Haynes on January 26, Haynes said he had not attended the workshops. Someone from the Howard Jarvis Taxpayers Association heard about his presentation at the ballot forum and contacted him, asking him if he was interested in participating in the suit. He said he is not a member of the association, though “I support their work. I probably should be.”
He said he believes the “bedrock functions” of government are providing for public safety and public works. “What happened to the city, that we now have to pay extra for public services?” he asked. Paying extra for public works, he said, is “like paying for the air you breathe.”
He added that he believes the problem is that the state isn’t sending enough money to local governments for infrastructure needs, but that he would “like to see government live within its means and follow the law...there’s no question that we need better streets...I was just uncomfortable with the way that it went down.”
Here is the text of Measures Y and Z, as well as Ukiah City Attorney David Rapport’s analysis of Measure Z, from the City of Ukiah’s website:
Shall Ordinance No. 1165 be adopted to impose as a general tax an additional transaction (sales) and use tax of one-half of one percent within the city limits of the City of Ukiah to fund essential City services, including street repair and maintenance? Such tax increase is estimated to raise $2,470,000 annually at a rate of .5%. The duration of the tax will continue unless or until the tax is repealed by majority vote in a municipal election.
Shall street repair and maintenance and related public infrastructure improvements be the exclusive use of the revenues from an additional .5% sales tax in the City of Ukiah and add to and not replace current spending for street maintenance and repair?
Impartial analysis from the city attorney:
Measure Z is a companion to Measure Y. The companion Measure Y seeks voter approval for an ordinance that increases the locally adopted transaction and use tax in the City of Ukiah from one-half of one percent (0.05%) to one percent (1%). Measure Y is a general tax measure that requires a majority vote to pass. General taxes, like the tax in Measure Y, can be spent for any municipal purpose, such as street maintenance and repair, but also for police, fire, and emergency medical services, public parks, city owned recreational facilities, and city sponsored recreational programs, among other things.
Measure Z asks whether the repair and maintenance of City streets should be the exclusive use of this additional general tax revenue produced by Measure Y and whether that revenue should add to and not replace existing spending on the repair and maintenance of City streets. Measure Z is an advisory measure. As that term suggests, Measure Z is advisory to, and not binding upon, the City Council. Nevertheless, the City Council has placed the measure on the ballot to gauge public opinion on how additional sales tax revenues should be spent and the election results will be available to the members of the City Council when it is asked to approve future City budgets.
In the ballot argument in favor of Measure Y, the City Council has stated that if both Measures Y and Z are approved, it has a plan to improve the condition of City streets and maintain those improved conditions over time. Such ballot argument statements are considered evidence of the City Council’s intent in placing Measure Y on the ballot.
Sarah Reith, [email protected]