Grass Valley Hosts Town Hall Regarding Proposed Sales Tax Measure
GRASS VALLEY - On October 3, 2023, the City of Grass Valley hosted a town hall at the multi-purpose auditorium at the Sierra College Campus in Grass Valley in order to inform the public about the City’s needs related to fire resiliency and vegetation management and its proposed sales tax measure in order to fund these programs. Grass Valley City Manager, Tim Keiser, ran the town hall along with the Grass Valley fire chief and another member of the Grass Valley Fire Department (GVFD). In addition to City staff, the town hall was attended by all five city council members as well as a little over 20 people scattered through the auditorium which seats over 220 people.
Grass Valley May Propose Half-Percent Sales Tax for City’s General Fund
Keiser presented the proposed general sales tax measure as a half-percent sales tax within the City limits which he said would fund fire resiliency and vegetation management. The proposed sales tax, if sent to the voters as a measure on the ballot in March 2024 by the city council, would generate about $3.4 million dollars for the City’s general fund per year. While a concrete sunset date for the proposed sales tax measure has not been determined, Keiser stated that he suggests a seven-year sunset provision.
In order to get the proposed sales tax measure on the ballot in March 2024 and start receiving the sales tax funds before the next fire season, the City would have to declare a fiscal emergency, and if the City did not declare a fiscal emergency, the proposed sales tax measure would be placed on the ballot in November 2024 with the funds being available for the 2025 fire season.
Tax Revenue May Be Allocated to Fire Resiliency
During the town hall, Keiser presented two options for allocation of the potential funds generated from the proposed sales tax measure with each option dividing the anticipated $3.4 million between fire resiliency (GVFD staff and a new engine) and vegetation management (inspection staff; public education; and grants to residents, businesses, schools, hospitals, and care facilities).
In support of the proposed sales tax measure related to fire resiliency, the GVFD chief argued that the department is understaffed from an industry standards perspective and from 2020 through 2022 experienced a spike in the requests for service related to both fire and EMT incident calls. Upon questioning by an attendee of the town hall, the chief did admit that such spike in calls directly coincides with the inception of the nationwide COVID crisis in January of 2020. The GVFD chief also asserted that GVFD needs additional staff, but it was unclear what would happen to such staff after the expiration of the suggested sunset clause to the proposed sales tax measure when funding for such additional staff would no longer be available.
The GVFD chief also asserted that understaffing has a great impact on insurance rates for residents. Martin Wood, vice president of the Nevada County Contractors Association, pointed out to the fire chief that the company which rates fire departments and surrounding communities for insurance purposes (“ISO”) currently gives the City a rating of two on a scale from one to ten with one being the best. Wood also asserted that there is no city in the state with a one rating arguing that the City cannot get a better rating and, as such, any funds from the proposed sales tax measure would have no impact on insurance rates. Without offering any evidence, the fire chief countered that ISO ratings are generally used in commercial settings and not really much in residential settings. Wood also asked the fire chief what the total budget for GVFD was for the last few years to which the fire chief responded that he had no idea but could get the figures to Wood in the near future.
Grass Valley’s Budget Has Increased Nearly Six Fold over the Past Eight Years
Reviewing the City’s budget for fiscal year 2022-2023, total planned spending for the City of Grass Valley for fiscal year 2022-2023 was $59.7 million with a little over $3.4 million dedicated to the City’s fire department. For context, the City’s total expenditure for fiscal year 2014-2015 was a little over $10.3 million with about $1.9 million dedicated to the fire department.
Tax Revenue May Also Be Allocated in a Greater Share to Vegetation Management
The City also seeks to utilize potential funds generated from the proposed sales tax measure for “vegetation management and community risk reduction” by allocating funds to three areas: inspection and mitigation, fuel reduction, and grants to residents and businesses as well as to hospitals, schools, and care facilities. Arguing that the current regime is based upon a complaint driven system, Keiser advocates for a change to an inspection based regime in which new staff in the form of a manager and two inspectors who will inspect properties for compliance with the City’s vegetation management plan and force mitigation. Matthew Coulter asked the fire chief how many mitigations have occurred in the past two years. The fire chief responded that there were three mitigations in 2022 and none for 2023 thus far. Resident Pam Young stated that the public may not be aware that the City currently has a complaint based regime and that public education of that fact may help generate more complaints from neighbors in order to better inform the government of citizens’ failures to comply with vegetation management standards.
In addition, Keiser proposes one option to spend about $700,000 of the $3.4 million on fuel reduction and anticipates about 100 acres would be affected. For context, an area of 100 acres is about three percent of the total acreage of incorporated Grass Valley. Another option would be to take $800,000 from fire staffing detailed above and allocate it to vegetation management affecting 200 acres instead of just 100 acres.
The City also proposes to use $700,000 for grants to local residents and businesses as well as to hospitals, schools, and care facilities. Susan Rogers, a member of the Nevada County Coalition of Firewise Communities, suggested to Keiser that her largely taxpayer funded group could be granted the funds generated from the proposed sales tax measure to educate the public about the dangers of wildfire and the need to mitigate its causes.
Grass Valley’s Proposed Tax Measure Funds the General Fund and Is Not a Special Tax
Similar to Measure V, which was a half-percent sales tax measure proposed by Nevada County that failed to pass in the June 2022 Election and for which the County is being investigated by the Fair Political Practices Commission, the City’s proposed sales tax measure is a general tax. As a general tax the City can use the funds generated by the proposed sales tax measure in any way they so choose and are legally bound to expend the funds on neither fire resiliency nor on vegetation management. Govt. Code § 53721 provides that “[a]ll taxes are either special taxes or general taxes. General taxes are taxes imposed for general governmental purposes. Special taxes are taxes imposed for specific purposes.”
Govt. Code § 53722 provides that:
No local government or district may impose any special tax unless and until such special tax is submitted to the electorate of the local government, or district and approved by a two-thirds vote of the voters voting in an election on the issue.
As such and in order to ensure that the funds generated from the City’s proposed sales tax measure are spent only on fire resiliency and vegetation management, the proposed sales tax measure would have to be a special tax approved by a two-thirds majority. Kathy Hinman, executive of the Nevada County Association of Realtors, questioned Keiser about the assurances that the community would have that, despite not being a special tax which mandates the specific purpose of the sales tax revenue, the City would use the unrestricted funds as the City promises the residents. Kesier responded stating that, by resolution, the current City Council promises to utilize the funds potentially generated from the City’s proposed sales tax measure for its intended purpose much like the City has done with general funds from Measure E which increased the sales tax in the City of Grass Valley by one percent in 2018. Keiser stated in very clear terms that such a promise is being made by the current council and staff and that directives from a future council and staff could allocate the general funds pursuant to its own desires and contrary to the desire of the current office holders and staff.
The City Must Declare a Fiscal Emergency in Order for the Proposed Sales Tax Measure to be on the March 2024 Primary Election Ballot
In order to get the City’s proposed sales tax measure on the ballot for the March 2024 Primary Election, the City must declare a fiscal emergency. Otherwise, by state law, the proposed measure would have to be placed on the November 2024 General Election ballot. Martin Wood questioned Keiser that, if the City has balanced budgets every single year, how can there be a fiscal emergency. Keiser explained that the law is written in such a way that, if the City budgets for something without the funds to pay for the budgeted item, a fiscal emergency can be declared. Wood countered that, in that case, anything could be a fiscal emergency, to which Keiser conceded the logic of Wood’s argument. Hilary Hodge, current Grass Valley vice-mayor, explained the legal fallacy and how the fiscal emergency declaration is a legal fiction as follows:
Fiscal emergency is the legalese used by the State of California and attorneys with regard to how this procedure works. It’s a little confusing, because you're right. You're, like, what kind of emergency are you declaring? But this is, this is, like, law school, third, third semester terminology for civic law, but it’s really just a procedure. And yes, it sounds like, oh my gosh there is an emergency, but that’s what it’s called…like Sicilian cheesy bread is really just pizza.
The next meeting of the Grass Valley City Council will be held on October 10, 2023, at 7:00pm at Grass Valley City Hall located at 125 East Main Street, Grass Valley, California.
