We hear frightening things about Government finances every day. The situation in Seaside seems no different. Even though the City claimed to have a balanced budget, it heavily and successfully promoted Measure R (a 1% increase in the sales tax) just this past spring, indicating services would be reduced if the measure were not passed.
[At the City Council meeting of October 2, 2008 the City disclosed that the final 2007-2008 budget actually had a shortfall of more than $2 million!]
While the analysts suggest this incremental tax will add approximately $3 million in annual revenues, what is the downside?
Vacancy rates on Broadway and in other commercial areas are sky-high. Indeed, in the newest commercial complex (the City Center at Broadway and Freemont) the vacancy rate is about 50%!
With this kind of tax environment is it any wonder that businesses might prefer Monterey, Sand City or Marina where sales taxes are up to one full percent lower? If it isn’t out of the way (and Monterey, Sand City and Marina are not), shoppers will generally flock to stores with the lowest total costs, taxes being one element.
What’s worse, the City Center was a government giveaway of multimillion dollar proportions. (See Monterey County Weekly articles here and here.) If the land had not been sold at such a tremendous loss, the City would not have needed to raise taxes. What’s more, the developer would have had more incentive to lease his property as he would be operating on vastly slimmer profit margins.
Other developments have reaped similar or even larger giveaways. For example, during initial review of the Seaside Highlands housing development during the late 1990s, the developer initially was expected to provide for various public amenities such as a police substation and possibly a fire house when asked by planning commissioners. In the end, the City only got a small office for police officers to do some paperwork during shifts.
Now the City must renew its effort to provide a police substation to provide adequate coverage for patrols in the Northern areas of the City. While this is once again promised as part of a forthcoming development, it is critical we make it actual. We need council members who do not follow the poor examples provided in the past, but rather insist on the best deal for the City’s residents.
On another note, the City Council frequently doesn’t ask enough finance related questions of its staff. See the video page for information on how a $5 million “City Checks” request went through without any call for explanation except from me. So too with a $400,000 overrun on another City Checks request.
Proposed Solutions:
All Council members must be vigilant (especially about finances) every moment of their service to the City.
When elected, I will ask the toughest of questions and not allow public funds to be squandered. Developers will need to pay their fair share of improvements and the business environment will be stimulated with an appropriate tax policy to the degree that the Council can determine taxation within the City.
With attractively planned businesses, higher occupancies and a commerce friendly sales tax rate that does not put us at a competitive disadvantage, it is entirely likely that the City will reap much greater revenues. This would be the direct result of a future of increased retail sales within the City — sales that may now be occurring “next door.”
Paid for by Felix For Seaside City Council