A Note from Greg
City-County Study Session
County officials invited City officials and staff to a study session, Friday, June 7, as part of the County's High-Involvement Planning Process. The County is taking a hard look at their unsettling financial situation, and asked City Finance Director Mary Mannix-Decker to provide information on the City's difficult climb out of the recession and into a more stable financial position.
As you know, the City and County have a positive and collaborative working relationship, and we were happy to open our books and provide insights on how we emerged from our dire financial situation a few years ago in hopes of being even better than before, once our revenues fully recover. I'm proud of how our organization responded during the recession by taking quick and significant action.
We made difficult decisions and tough sacrifices. We're not out of the hole yet, but are now in a much better position because of the way you responded. I was also asked to provide information on the 1997 Law Enforcement Sales Tax (LEST 1), a ¼-cent sales tax collected to support public safety initiatives countywide. Revenues from the tax – about $11 million per year – are divided based on population.
A binding agreement, signed by City and County leaders, calls for the distribution formula to be adjusted every five years based upon population data. We use our funds from this tax (in addition to the $855,000 we must subsidize the tax because revenues fall short of our expenses) to keep the commitments we made to the voters as part of that 1997 ballot initiative – pay for 60 police officers, 12 civilian police staff, and the construction and operation of the South District Police Station.
While the County's LEST 1 revenues do not fully cover their commitment expenses, neither do ours. In fact, we have been forced to subsidize our LEST 1 commitments by $6.7 million from the General Fund over the past five years. But keeping our commitment is vital, and we will continue to keep it.
In the past couple of weeks, two County officials have brought proposals to the media, suggesting the City donate some our LEST 1 tax revenues to the County. It has also been proposed that we break our commitment to the voters on the Police Fire Pension Sales Tax by “changing our promise” and not allowing it to sunset once the pension fund is 100% funded. I will in no way support either of these proposals.
We must retain the trust of our citizens. In my opinion, breaking our commitments in order to donate some of our revenues to the County would be irresponsible and would likely damage the City's (and County's) trust with citizens for decades.
The Mayor made it clear in the meeting that the City isn't interested in any change to the current police and fire pension tax. He further said the City is not in a position to donate funds to the County without jeopardizing our financial stability. We will support the County in looking at other solutions to their revenue problems.