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City's Argument for Sales Tax and HMU Ballot Measures

The city argues in favor of the two measures that are scheduled to appear on the June ballot.

Below is a message from Hercules City Manager Steve Duran regarding Measure O and Measure N:

Dear resident,

Our city is experiencing a fiscal emergency. In addition to the mismanagement of past administrations, Sacramento lawmakers have recently raided local funding across the state, siphoning off much needed resources to address their own budget mess. Measure O and Measure N are part of a strategic effort by the new City Council and new staff to give the community an opportunity to decide on whether these measures are the right strategies to correct the financial mistakes of the past, stabilize the budget, and get our City on sound financial footing.

As background, last year the City trimmed its budget by $6 million and has cut another $1.5 million since July 1, 2011 to eliminate a structural deficit. Over the last year, we have had to reduce the City’s workforce by over 40%, reduce salaries and benefits for remaining employees, cancel all City special events, and cut many basic services including police protection, library hours, general maintenance, and senior services. Additionally, Hercules’ revenues have dropped over 30% over the last two years.

Unfortunately, we have reached the point where the City is simply out of areas to cut without dramatically affecting our community’s safety and quality of life. Police staffing has already been reduced below recommended levels to ensure the safety and security of the community. This is why the City Council took recent action to declare a fiscal emergency and place Measure O on the June ballot, to help ensure the City’s financial stability during these challenging times.

Measure O is a temporary emergency funding measure that must legally expire after 4 years. It is not a tax on property owners. It is a ½ cent sales tax that visitors and out-of-town shoppers to Hercules share in paying. Any money raised by Measure O will be locally-controlled and will be used only for local needs, which include:

• Hercules police officers and crime investigators
• Local crime prevention programs
• Youth sports and recreation programs
• Maintaining essential city services and maintenance
• Helping the City become more financially stable

Measure O includes tough fiscal accountability provisions including an Independent Citizen’s Oversight Committee and annual, published financial audits. These fiscal safeguards will ensure funds are used efficiently, effectively, and as promised.

In addition to Measure O, the City also placed measure N on the June ballot, which would allow the City to sell Hercules Municipal Utility (HMU). HMU loses money and is a drain on the City’s resources. The projected profitability that HMU was based upon never materialized due to the downturn in the economy and lack of a sound business plan. Measure N will stop the City from having to subsidize the utility, and any proceeds from the sale would be used to repay its debts and to satisfy other contractual obligations owed by the Utility.

Measure O and Measure N will not eliminate the City’s fiscal challenges, but they will help stabilize the budget, get the City back on sound financial footing, and help to protect essential City services such as police protection.

Toni Leance May 01, 2012 at 02:09 PM
I don't know how you ask for more taxes when you have yet to reconcil the current budget so we know exactly where we are. The city needs to do a five year projection before we can really know what the financial picture is. The "fiscal emergency"was called so the city has a better chance to pass tax measures by only a simple majority. The city can't guarantee that this money will go for police services most likely it will go to the general fund to service the debt. It will not bring back laid off cops! VOTE NO on O
Susan D.Keeffe May 01, 2012 at 03:13 PM
We need to unload the HMU as soon as possible. Vote yes on Measure N. the City had no business getting into the power business. A yes vote allows the City to put it up for sale.
Ben May 01, 2012 at 04:08 PM
Has the council even considered a "Plan B" to mitigate the possibility of when Measure O gets shot down by the people who know it's pointless to fill bucket that just has a giant hole in the bottom!?!? Or consider this; the budget is like air mattress, not usable when it’s full of holes, and to make it usable, you have to take the time to find and patch every little leak, or you still going to wake up on the floor if you try and use it!
Wendy Harrison May 01, 2012 at 04:20 PM
When has a tax ever been "temporary"? Yes, it will expire after four years and, then, just as the State did, they will come back and ask for more. I will vote no on the sales tax.
Glenn Abraham May 01, 2012 at 07:06 PM
I will vote No on O because the city's top budgetary priority should be to rebuild our police department, and the funds from Measure O are "targeted" for use in such a broad range of functions ("maintaining essential city services and maintenace", "helping the city become more financially stable") that it's basically a measure to give Steve Duran a bunch of bucks in a bag to be used as he sees fit. (He's running the city now, ya know.) Ranking "youth sports and recreation programs" with "Hercules police officers and crime investigators" just adds to the hilarity of the joke. The council insisted on an expensive poll to determine whether June was a good time for a fiscal ballot measure, and the answer from that poll was No. The council should listen to the advice of the pollsters they hired with our money, and delay this measure to November, and rewrite it so that the revenue raised is for the exclusive purpose of police protection. As the teenaged Hercules-resident Creekside violent armed robber so recently warned us, "Break yourself, motherf****r". Measure O may not be a violent robbery, but it IS a mistake, and passing this thing now will prevent us from getting a proper measure in November.
Jeffrey Boore May 01, 2012 at 08:51 PM
I would like to see the evidence that HMU has not profited because of the "downturn in the economy and lack of a sound business plan." I believe that neither of these was a significant factor. The business plan was sound and was based on developing the waterfront. The downturn in the economy played no significant role in delaying that development. We have continually had a landowner and developer ready to build, with private money available, who have been continually thwarted by the malfeasance of our city leaders. All this city needed to do was get out of the way and stop substituting its ridiculous ideas (like the "Szabo Plan") for what the community wanted, and there would now be a beautiful, prosperous waterfront and a profitable HMU. I am just asking for a little straighter talk from city hall about what really happened.
Jonathan Cantiller May 02, 2012 at 05:43 AM
Why we cannot think simple anymore ? Taken from sales tax , will put public safety in a stable mode. Why not vote for measure O ? Weigh in the pros and cons. It does not take much to decide to keep our officers whom I know are the best I've seen.
Glenn Abraham May 02, 2012 at 07:04 AM
Why not vote for O? Because it is not a measure to fund the police. It is a measure to give city hall staff a lot of money to use as they please, with no serious limitations. Because the city's poll showed that any fiscal measure put on the June ballot is likely to fail. Because if "staff" blow it with the poorly written (because it guarantees nothing to police and everything to "staff") O in June, the voters are unlikely to give them a second chance with a properly written P in November.

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