Arcadia Citizen’s Financial Advisory Committee Recommends Increase in Sales Tax

“We looked at the books and realized that service cuts alone could not address this issue without sacrificing Arcadia’s quality of life and safety,” said Vice Chair Howard Ursettie. – Courtesy photo / Facebook, @WestfieldSantaAnita

A 12.5 percent reduction in city services to close the budget gap was considered

The City of Arcadia’s Citizen’s Financial Advisory Committee—an  independent, ad-hoc advisory body of civic volunteers empaneled by the City Council to review the City’s General Fund long-range financial forecast and provide recommendations to the City Council for cost containment and/or revenue enhancements—recently released its final report. The 40-page report includes 15 recommendations for the Arcadia City Council to address the City’s $8 million structural budget deficit.

After careful review, the committee is recommending additional funding options that maximize local control over taxpayer dollars. A key recommendation is for the city to consider increasing the city’s local sales tax rate by ¾ of one cent in order to maintain services at current levels. A growing number of California cities with large malls and retail centers — including other cities in Los Angeles County — have enacted similar measures as significant percentages of sales tax revenues are paid by out-of-town shoppers.

The committee reviewed all possible scenarios, including a 12.5 percent reduction in city services to close the budget gap. Services that are important to the Arcadia community, particularly police and fire, which comprise over 60 percent of the General Fund budget, would be adversely impacted, the committee concluded. As many as two dozen police officers and firefighters could potentially be cut, and the city’s northern fire station could potentially be closed.

“The Committee was primarily concerned about quality of life in Arcadia,” said former Arcadia mayor and Committee Chair Mickey Segal. “Eliminating 13 police officers, 10 firefighters, and closing a fire station would reduce neighborhood patrols and life-saving response times. There are alternatives to these community-changing service cuts.”

“We looked at the books and realized that service cuts alone could not address this issue without sacrificing Arcadia’s quality of life and safety,” said Vice Chair Howard Ursettie. “The revenue options were either to raise property taxes on Arcadia residents or recommend a voter-approved, locally-controlled sales tax increase on visitors who shop at our mall. Also, the prospect of the County grabbing the remaining sales tax increment for another one of their initiatives that doesn’t benefit Arcadia residents is a real concern.”

“Cities are struggling with the rising costs of services, especially increasing pension costs due to policy changes at the state level,” said City Manager Dominic Lazzaretto. “Arcadia was one of the first cities in the state to implement pension reforms in 2011 and the City has taken a fiscally conservative, responsible approach over the years to control costs while maintaining the quality services our residents expect. Despite our early leadership on pension reform, the unfunded liability payments to PERS are overwhelming our General Fund.”

The Citizen’s Financial Advisory Committee is comprised of five well-known residents, all with strong backgrounds in finance and accounting:

•  Mickey Segal, a 34-year resident of Arcadia, a former Mayor, and Chair of the City’s previous Citizen’s Financial Advisory Committee, Mr. Segal has an extensive background as a CPA and financial advisor, with a particularly strong background in municipal pension financing.
• Howard Ursettie, a 45-year resident of Arcadia and Certified Public Accountant, Mr. Ursettie is a long-time financial advisor, providing financial services to individuals and large and small businesses. A well-known figure in the community, Mr. Ursettie brings a deep understanding of neighborhood needs to the Committee.
• Jessica Louie, a 28-year resident of Arcadia worked for an external auditing firm that audited the City’s finances. Mrs. Louie has a deeper understanding of Arcadia’s finances having been a part of that independent audit team. Mrs. Louie has also been involved in the Santa Anita Oaks Homeowners Association.
• Robert Miller, a 38-year resident of Arcadia and current member of the Arcadia Beautiful Commission, Mr. Miller has extensive experience with financial consulting through his award-winning financial consulting firm and sterling reputation in the financial services industry.
• Tommy Thai, a 12-year resident of Arcadia and former member of Arcadia’s Zoning Review Committee, Mr. Thai brings a comprehensive understanding of the City’s real estate environment, focusing on preserving the high property values and excellent services that make Arcadia a desirable place to live.

“I am proud of the work of this Committee,” said Committee Member Tommy Thai. “All Arcadian’s deserve a safe, clean, and prosperous community. Arcadia really is a City that works. We want to keep it that way.”

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