This was transcribed using Microsoft Word and corrected by Saskia Kennedy.

Council Member Deliberation and Vote

Mayor Fred Jung: I probably don’t agree with many of the speakers who spoke, in terms of our worldview. Mine’sprobably very different. But one that consistently speaks at every meeting. I do hear what he said regarding trust in the public and faith in the institution, and that the misallocation of funds has not only been widely publicized, as it should be, but I think it is still cycling through the public at this moment. The timing isn’t great at the moment.

That said, I supported this tax two years ago — or was it last year? Forgive me, I’m bad with dates at this point. Mr. Hahn is probably right. And I supported a public safety tax because 70% of our budget goes to public safety. Not addressing that in a meaningful and very specific way, we’re just putting Band-Aids on. And to the gentleman’s credit, you mentioned polling. Polling shows that public safety isn’t ready right now; perhaps the mood of the country, the mood of our city, just isn’t there. So this is all that’s left, and it’s got a very slim margin of error. I think we’re in the margin. So I’mconcerned again. I’ve gotten to a point where I’m supportive of many taxes, so long as it relieves some of the pressures on the budget right now.

Economic development is a great term, but it means many things to many people, and it requires a lot of time, time that we don’t have right now. You can blame me for that, six years ago — you didn’t do anything then; that’s fair. But that’s not where we’re at right now. We’re looking over basically what looks like a fiscal cliff, and asked to make decisions on how to stop the bleeding in the city once again. Seems to be a recurring thing. So that said, I’m looking forward to the discussion. But I’ve been pretty vocal. I think I’m clear on my position on this, and the reasons why, and how I got here as opposed to where I started. Let’s start with some comments. Councilman Zahra, anything, sir?

Council Member Dr. Ahmad Zahra: I appreciate everyone speaking on this, and I appreciate staff’s work. I think it’s not just enough to admit fault. I think there needs to be accountability. We can’t say that we’ve made errors over the last six years, we’ve wasted opportunities on economic development — and there are many, we can go into details, canceling ordinances, bad deals in favor of some at the expense of the taxpayer — but then we can’t come in and say, at the last minute, “This is last minute, oh, let’s try to salvage all of this by asking the public, yeah, we need money,” when we squandered all this time.

I think context is important. I don’t think we, the public, should expect any difference in behavior just because there’sadded money, because the issue is behavior. Yes, trust is important. We can’t just ask people and hope they’ll say yes. In elections, we all know the public can be manipulated. Campaigns spend money and push certain agendas and points of view. In this case, you’re telling people, “Yeah, we don’t have money for the road, so give us money for the roads.” But what they’re not hearing is that, yeah, we can change some of these funds, pull some things from this department, and put them under Public Works, and now we can pay for it using those funds. And we’ve seen in the past how even presentations are missing information. We have to keep asking questions and digging. There is no transparency in this city. So accountability has to start with transparency and setting policies. And trust has to be built over time, because it has been eroded over time.

Interestingly enough, we were faced with a $14 million deficit. But yet, in the next item, in the last study session — for those who paid attention — there was this little paragraph that said, through efficiencies and other things, we achieved a $10 million reduction. How is it that in just a couple of months there was a $10 million reduction in a deficit, which now brings us to just $3.9 million through efficiencies? Why weren’t these efficiencies seen before? So were we operating inefficiently? Is that what it is? There are a lot of red flags, folks.

This measure does not fix the deficit, unless there are gray areas in which you can maneuver these funds. It certainly won’tfix transparency. It certainly won’t fix poor governance. Yes, economic development is a broad bracket, but within it there are so many things that we haven’t done. I want to make just one point on the cannabis ordinance: that was actually passed. It was passed back in — I guess 2020, right before the election — but then the ordinance, before it took effect, was rescinded. And I also wanted to make another correction: it was actually rescinded. It wasn’t what Katie said. One of the individuals who opposed it was actually doing so for other reasons, but we won’t get into that.

So I think there are a lot of issues here. I still do have an issue with INRAC being given additional responsibilities when they are also responsible for selecting the roads. They are also a politically appointed body. It’s seven members, so there’sno direct — two of the members are appointed by two council members, usually the Mayor and Mayor Pro Tem. So it shifts a little bit on the political spectrum. I think there is also a risk in putting another ballot measure yet, when it is at a time when — yes, the $10 million thing is still a big deal; people, it’s still circulating — and I think we are risking losing a ballot measure because there is no trust. And twice in a row might be quite detrimental to future measures.

I have supported a ballot measure in the past, and I’ve championed it. I’ve taken heat for it from people who are now suddenly championing this. But it was a different time. Since then, I’ve gone through five council members, five city managers. Five city managers. One of them, with all due respect, didn’t have any experience. The first interim had no experience in running a city. And as you saw, we had a CalPERS problem because of hiring practices that were allegedly—I can’t say it was, because it was a settled case —but allegedly hiring malpractice, and that cost us $240,000. Why? Because on a whim you fire a city manager, and then you bring in people who don’t know how to hire people properly.

So the issue is, we have to look at this from a context. I think it’s best to build trust over the next two years and focus on 2028 as a possibility. And in these two years, we need to build transparency, strengthen our transparency laws and policies, follow policies that build trust with the public, and strengthen our disclosure policies and our campaign donor-influence policies. Our lobbyist policies. We need to do all of these things, maybe even bring back the 6:30 council meeting time so that more people can engage. Because right now, I can guarantee you, aside from the people who are actively engaged and the 30 or 40 people who showed up for these two meetings about the budget, probably no one else knows about this. We have not done a good job in engaging the community and letting them know that this is being discussed.

So I don’t know if I can, knowing what I know and what I’ve experienced, and what you’ve all seen — I don’t know if I can, in good conscience, ask people for more money at this time. I think the trust factor is more important than anything. It pains me to do that, but I am not going to make my last major action to put something on the ballot that hasn’t been vetted properly and still has a lot of questions. I think that 2028 might be a better time.

Mayor Fred Jung: All right. Council Member, your turn.

Council Member Dr. Shana Charles: Okay, thank you so much. So, this is not a usual situation for me, where Council Member Zahra and I are on opposite ends. But I will say, today we are on opposite ends. I understand that there have been issues in the past. In economics and in public policy and health policy, we call that sunk costs. And when you’re trying to think about the future, you actually disregard sunk costs. Which is why pharmaceutical companies who say they’recharging so much for drugs because of their research — that’s what it is: sunk costs. Sunk costs don’t matter in an economic equation. And to me, this is an economic equation.

We’ve got two big issues, and I think we’re mixing them up way too much, honestly. This is why they’re separate on the agenda. The budget, the annual budget, has issues. It has a general fund problem, absolutely. We have a revenue problem with the general fund, where we can’t maintain the level of services that people want from us. And yes, that does mean salaries, because services happen when people like firefighters, cops, code enforcement and community — all those people work, and we have to pay them living wages and salaries so they can afford to live and work here. They’re human beings. When all those things are paid for, it adds up to a certain amount of money. And we’re finding we don’t necessarily have that revenue coming in. We’re going to talk about that in a second, and that’s going to be a whole different conversation. That is a separate conversation.

This conversation is about a problem that has existed in this city for — I mean, I’ve lived here for about 25 years. I’mhearing people who lived here for 72 years, I think that’s the biggest one so far we’ve heard tonight, talking about our investment in our streets in a way that gives us the infrastructure that the city wants. And it is not just streets. I appreciate that it’s 75% for streets and 25% for us, because I know we’ve all gotten emails from people whose streetlights have been out for months. And we have to replace streetlights that were installed in the 1980s, right? Forty years ago now — that’snot 20 years ago, that’s 40 years ago — we’re supposed to have a 25-year shelf life. And the companies that can even replace those parts don’t exist anymore. So we have to completely replace a lot of ailing infrastructure.

To do that — to just have the infrastructure that we have now — in an ideal world, I would have loved to have talked about this months ago. We’re not in an ideal world. I have to be where we are now. Where we are now is that we have tonight to talk about this. And we’re hearing from our traffic expert — I’m sorry, our street expert, really, the guy who repairs everything and has been for the years that I’ve been working here, and the years that you’ve been working here. He has presented every year: this is the list of things we are going to be able to do with the money that we have, and here’sthis other list of things we would love to be able to do but we can’t do yet. And we’re putting it off year after year after year. And to do all of that costs about $225 million.

Our annual budget is $290 million right now, depending on how many federal grants and state grants we get. There have been other years I’ve been here that it was $279 million, right? It’s kind of in that range. There is no way to fit a $225 million problem into a $290 million budget and make that calculus work over the long term. One of our speakers mentioned that, at our current level of spending, it takes 100 years to do everything we need to do to fix that. We just aren’t putting enough money into it. And it’s not because we’re wasting it in other places. I really don’t think so. I do look forward to the presentation on the budget and to hearing more about how we’re addressing that deficit. But staff is working there; they took us off — to use a term, my people — they really are. I see them every day. They are very dedicated to this city, and I appreciate every single one that shows up on special meeting nights, on July 4th. They’reworking overtime on weekends. The city folks that are there 24/7 — when I needed an ambulance at 12:30 AM, the EMTs were there. I appreciate that our city services are there for us 24/7, and we can’t expect them to take $225 million worth of cuts so that we can fund our infrastructure. So we’re talking about two totally separate things. We’ll get to the general budget later.

Now, to fund that $225 million, what are we going to do? What can we do? Well, there’s a bond possibility, right? And that’s what the schools did, and they passed those successfully. Those are only on property owners, by the way. I’m a renter. About half the people in the city are renters. I actually don’t pay into that. I could vote for a bond and not pay into it. It would go on people who own homes instead. I appreciate that the homeowners of our city recognize that that’s a good thing to do for the schools.

When I was campaigning in 2022 — and it was just two years ago, by the way. We keep talking about 2020 like 2020 is a normal year. That is not an outlier among all outliers of our lifetimes; it is not a normal year. Political science, by the way, always has this problem whenever we try to look at what things have happened before — the sample sizes are too damn small. I would love to have a sample size, maybe, of a few hundred different measures, right, and be able to look at that. Certainly, looking at 2020 as an example year — oh my God, in 2020 half of us thought we weren’t going to make it to 2021. We were not even thinking about the future. It was a weird, terrible, hard year. We couldn’t even campaign by knocking on doors because we were afraid of making each other sick. Nobody was even vaccinated yet at that point. It was scary as hell. And we asked for a 1.25% general tax; I think that’s a very large tax increase, 1.25%.

And when I was actually able to knock on doors — because, thank God, good public policy, we got vaccinated in 2021, and by 2022 I could actually knock on doors safely — so many times, the first thing people would say to me was, first off,“Oh my God, you’re knocking on my door, no one’s ever knocked on my door,” they’re very happy about that. Still, also,“I would have voted for that 2020 measure. I would have voted for the 2020 measure if it had just been for roads and streets, if it had just been for infrastructure, if it wasn’t so big.” I’ve been hearing that for four years.

So to me, the problem hasn’t changed. We have a $225 million problem. Economically, we have to solve that first before the public can trust us with anything else. Anything I post on my social media, most of the comments come back with,“Why are you talking about this and not talking about fixing the streets?” When I talk about fixing the streets, it’s like,“Why are we doing just slurry?” I mean, because we don’t have the money to do anything else. The public wants us to do something about this problem; I really think so.

And the way to do it, in my viewpoint, is to do this egalitarian measure that’s going to get us the money. We aren’t going to put a tax just on property owners. A sales tax is very broad, in terms of being regressive, because — I very much care about lower-income people. Sales tax does exempt things that are not subject to sales tax, things like food, right? You don’t pay sales tax on your food. You don’t pay sales tax on your utilities or your rent, right? So it exempts all of those things. It is a higher consumption tax; if somebody goes and buys a car — for me, when I bought a car, I’m not kidding, I bought a $15,000 used car, I’ve never paid over $15,000, I’m a public university professor, very frugal — I paid some sales tax on that. Somebody else who’s going to pay $45,000 for a new car, which I understand is what they’re going for now, my God, is going to pay a lot more sales tax, and it’s going to come back to our city. And right now, with the 7.75%, it is the minimum; we only get 1%. If we add another half cent, we’ll be increasing our revenue by 50%.

And there are a lot of safeguards in place. When I hear about this measure, I’m hearing a lot of safeguards in place, a lot of transparency. Anyone’s free to come to the INRAC meetings and make public comment. Those things are even broadcast, right? You can always do public information requests, which I believe we get about 1,000 of them a year. So I’m hearing that we have those things in place to fix this one problem, that I honestly do not want to look back on in two years, four years, five years, and have people say, “Why didn’t you ever do something about the roads and streets?” And I’ll say,“Well, we just thought we would wait another two years.” I don’t think whether a person sitting next to me is liked or not is a reason to care about this. I think a reason to care about this is that we all want to do what’s good for our city. We all want to make sure that we get this problem solved. And this is our opportunity, and this is our time. I don’t know if I’mgoing to be here two years from now. I want to make this time the opportunity that we actually pass something meaningful.

And we’re not even approving it. We’re just asking the rest of the voters — all those folks whose doors I knocked — to say yes or no to this half cent, and they will be able to express their opinions democratically, how they want. And I think that the polling shows that we have a shot. When I look at 67% as the point estimate, and the margin of error is the plus or minus around that, it’s a plus or minus 2. And by the way, the thing could even come down to one vote. That’s happened. There have been ties; you have to flip a coin when there’s a tie in the city, by the way — that could happen, we don’tknow. We need one vote plus over the level. But there’s a shot. There’s a real hunger for this. There are a lot of people in this city that want this, and they want to have the opportunity to say, “Let’s do something meaningful about our roads and streets and infrastructure. Actually make real headway on that.” And have the really tough budget conversation separately about how we have to cut some things this year. It’s really not good. How are we going to deal with this next year? How are we going to deal with it the year after that? That’s an entirely different conversation. And maybe there will be a general tax somewhere down the road on that; I don’t know. Maybe it will be more efficient, maybe it will be something else that we decide on. But this separate conversation — how do we put it on the ballot right now, or do it two years from now, or four years from now when it’s worse and more expensive? That doesn’t seem like a good thing to me.

Mayor Fred Jung: All right. Councilwoman Valencia, then the Mayor Pro Tem. For efficiency’s sake, rather than sit there trying to figure out policy, let’s just figure out if we’ve got four votes. And if we don’t, we’ll just move on. All right, council.

Council Member Jamie Valencia: Thank you. I’m going to be short and sweet and to the point. I am not for the tax measure at this time; I am for a tax measure in the future. I know the city is in a dismal economic situation, and we need support from our whole city — not just certain districts, but the whole city involved. Everybody needs to be a part of this. And the negative publicity that keeps going around in the city is making it worse. It’s ruining the city’s trust — staff and council in each other. It’s putting a big wedge between everybody, and it needs to stop until we can rebuild that trust. I don’t know when it was, because I keep hearing that 70/20, all these years — it hasn’t been here in a very long time. So it needs to happen. So many opportunities are available to make this happen, and right now isn’t the time. I’m for it in the future, so we can do better outreach. As Council Member Zahra said, there’s a lot of vetting to do. There’s a lot of time to put into this, and I agree with him that we need to put better research and education out in our community. So at this time, I’m not a fan of this tax measure, but in the future, yes.

Mayor Pro Tem Nicholas Dunlap: Obviously, I think it’s no surprise I didn’t support the tax in 2020, and I don’t like what we’ve got in front of us tonight either. I think if you look at it — and I know there may be reasons for it because of the way the agenda is structured — but I think it’s interesting that we’re first asking our residents, voters, to support a higher tax rate before we’re actually addressing the spending issues, right? Because that’s addressed in our budget, which is the next item that’s up. And then, of course, I don’t know if it’s ironic or just poor timing, we’re also discussing a tax giveaway a little later tonight that you want to stick around for.

But aside from that, the frustrating thing for me is that there are people who we heard from tonight, and there are people that actually reached out to me and said, “You know what, I am the target voter for this ordinance, but not right now. I’vegone to the financial oversight committee meetings, and I’ve seen what this is like. I’ve seen the budgeting process. I don’tlike it. Earn our trust, and we’ll support it.” And naturally, as somebody who believes that taxes are already too high and that we’re all overtaxed as it is, I thought that that actually resonated with me. And I shared that viewpoint with some other folks. And coincidentally, I actually got other calls from people who shared similar insights: they felt they couldn’tsupport it tonight. They couldn’t support it this year. But perhaps in the future, as we work to make some changes to our budget and work through the deficit.

But even looking at tonight — which of course has been noted several times, a special tax as opposed to a general tax — I think what’s interesting is that this whole 75% to roads, for me, it’s 100% to roads and streets, or not at all. That’s just my own view of how it should be: 100% to roads and streets, or not at all. And there should absolutely be a sunset clause. Because I think that’s part of the accountability process. You’re going to tax people more, you’re going to fund the roads and streets, and then at that point you’re going to report back, and you’re going to show them the ongoing progress, the progress that’s still needed. Like financial advisors like to say, “The trend is your friend,” right, with respect to the stock market or other investments. And I think that’s kind of what has to be shown here — that things are heading in the right direction.

But at the 75% figure, and then this whole notion that somehow these funds are going to be allocated to other things, that money can be moved around and that certain things will be allocated to become infrastructure — that’s bad news. We know how that’s going to go. And unfortunately, as I talked about at the last meeting when we did talk at our budget study session, we’ve got a three-decade history of increases in taxes not going to our roads and streets, but instead going to labor costs and such. And so as we are seeing those incremental increases in tax funds, they’re not being reinvested in our infrastructure as they should be. And that’s why the streets are so bad. That’s really the gist of where I’m at with this. So I’d move that we receive and file the item and move on with our business tonight.

Mayor Fred Jung: Okay, there is a motion.

Council Member Dr. Ahmad Zahra: I’d like to just say one follow-up.

Mayor Fred Jung: Second — there is a motion. Is there a second to receive and file this item? Okay, there’s a second.

Council Member Dr. Ahmad Zahra: Yeah, I just want to say, there are three comments I’d like to just — a little rebuttal on. This is not personal in any way. This is about actions we’ve seen, actions taken or not taken, the erosion of public trust, and the administration of a tax by the same people that everyone is saying we don’t trust. So this has nothing to do with anything personal, so I just want to make sure I say that.

There is also — I think Councilwoman Charles said something important. There may be another future possibility, I think, with very little likelihood, to go back and ask for more money. So I don’t think that is a healthy way of looking at a measure of such. It has to be well, well thought out, and then you only have a few options with the public.

And as for the negative publicity, I don’t see that anyone was putting out any negative publicity. I think what has become apparent is the public is known to say and put out videos of commentary here. The words coming out of our own mouths are being pushed out into the public, and finally people are seeing it. So I think these are all self-inflicted wounds. And I don’t think we should punish the public for it. So I will support the move, the receive and file, for now.

Mayor Pro Tem Nicholas Dunlap: You know, actually, if I could, Mr. Mayor, I want to add one comment. Because, Councilman Zahra, I think you really hit the nail on the head with respect to the spending. And I think I kind of left out of my comments the notion of just how rushed this was, right? It was almost like, hey, it’s third and goal from the one-yard line, let’s punch it. For those of you that aren’t sports fans, the notion is that it was very rushed, trying to score because we’re approaching a deadline anyway. And then the idea that we’re somehow going to come back and ask for more money later, or we could ask for more money — I kind of look at this as, hey, you’ve really got one shot to get it right, and there’sno rush to get it done. I mean, certainly the way it is right now is not done right. And so then we’ve got time to do it right, if that’s really what’s of interest. So that’s all.

Council Member Dr. Shana Charles: Fred, I understand you want to wrap this up, but I do have to say, to quote Wayne Gretzky, “You miss 100% of the shots you don’t take.” I encourage them to do it. It was definitely something I wanted to do. I’ve been working on it for three years, so it’s not that rushed. We had a fiscal sustainability committee meeting; we’vebeen talking about it for many years; we’ve been working on the language for quite some time. I wish we had maybe brought it to council a little earlier this year, but it got a little lost in the shuffle. I just want to say I appreciate staff’s work on this, and we’ll keep seeing how this goes over the coming years, because it’s just going to get worse. And that’s what the urgency is. When you can pick up a piece of your street and come to council, that’s what the urgency is.

Mayor Fred Jung: All right, Madam Clerk, there’s a motion and a second. Let’s take the vote. This is to receive and file the item.

Result: The motion to receive and file passed, 3–2 (Jung and Charles No). The measure was not placed on the ballot.