Sales Tax Q&A: An Interview with the City Manager

The proposed sales tax would go to fund infrastructure.


At a special council meeting on Wednesday, March 7, Alameda’s City Council will vote on a proposition to place a half-cent, 30-year sales tax on the June 5, 2012 ballot.

The tax would require two-thirds approval of the city’s voting public, and the money raised, an estimated $1.8 million a year, would be used to fund infrastructure costs of public safety equipment and facilities, including a new emergency response center and a replacement fire station. The dollars would also go toward construction costs on the Carnegie Library building and a new swim center.

I sat down with Alameda’s city manager John Russo last Friday to ask him about the tax. For even more details, you can click on the PDF of city’s report on the tax that is attached to this article (or find it on the city’s website here).

Wednesday’s meeting will be in council chambers at City Hall at 2263 Santa Clara Ave. at 7 p.m. 

So, what is this tax for? It is for facilities and equipment, with a heavy, heavy emphasis on public safety facilities and equipment. Of about 35 million we expect to raise, over 25 million of it is for public safety.

Looking at the proposal, it includes a new Fire Station 3, a new emergency response center, and money for the replacement of public safety vehicles, fire engines and patrol cars. Why these things? Alameda is not alone in failing to properly account for the depreciation of equipment and buildings. Governments at all levels —  there are a few exceptions — but most governments budget poorly. They buy a building, for example, but they don’t put enough in the budget to maintain it. Then, 15 years later, they say, oops, we need a new roof, but we didn’t put any money aside for it. So where is the money going to come from? And what are we going to cut to do that? So you’re always a generation behind from a budgetary perspective.

So are you going to address that? Yes. This measure provides Alameda with a way to get back to even. Going forward, we’re also going to change how we budget. Every piece of equipment is going to be depreciated. What that means is if you’re buying a new firehouse, like we plan to, then we're going to say the useful life of a fire station is maybe 50 years. And let's say, theoretically, you’re buying a fire station for a million dollars, then every year we’re going to put $20,000 in an account to match the depreciation of the fire house.

Why put this tax on the ballot now? The financial gaps that Alameda faces took years and years and years to get to. It’s going to take years to work out, but they can be solved. But if you continue to wait until you’re in a crisis, until you don’t have enough patrol cars or you don’t have enough fire engines, then what’s going to happen? You'll come to a point when you've got to buy that stuff. You can’t go without it. And you might say it was unforeseeable, but actually it was — because of the age of your fire fleet or patrol car fleet or because you have an earthquake and you have earthquake unsafe buildings.

Why put the pool and the library in the mix? Right now Emma Hood at Alameda High School, as best as I can tell, is being held together with sealing wax. And at some juncture that pool will be inoperable and then there will be no pool for the high school kids and seniors and master swimmers who use it. And when that happens, there will be tremendous pressure brought to bear on the government to do something now to fix the pool. It's foreseeable that that pool will be out of service very soon. So unless people say we’re just not going to do it, we might as well plan rationally for it. We should have been planning rationally for it ten years ago.

I saw that the pool is supposed to go in a “mid-Island” location? Where would that be? We have some options that I’m not prepared to discuss at this time because it would depend on getting some businesses up on the north shore near Park Street to move — they want to move, but we don’t have the deeds to the land on the base yet to move them to. There’s also a possibility we could work something out with the school district to lease some space and build a new swim center at the high school. I think what we want people to understand is wherever we build it will be easily accessible to the high school kids.

The tax proposal lays out a plan to complete the renovation of Alameda's Carnegie Library, which was seismically upgraded in 2002, but now stands vacant. Why this? The city spent substantial sums of money to bring the building up to seismic safety standards, but now it’s just sitting there. You’re not going to tear it down. You have to fix it some time. The Americans with Disabilities Act work that has to be done to make the building useable again makes sense to do now. The cost of labor and construction are favorable to us in this economy— and at some point the work has to be done, unless you’re going to leave this big beautiful building sitting in the middle of your civic center unusable.

Why move the museum there? I can’t tell you what the monetary value is of having a repository for the city’s old newspapers, school records, and municipal records is — the Alameda Museum has all of that. That’s why the city pays their rent now. They’re the city’s fundamental archive. I believe that for all cities, especially for a city like Alameda that is so wedded to tradition, having a viable museum and an effective archive for the city is something we ought to do and where better to put it than in a building that is a piece of Alameda history and in fact American history because it’s a Carnegie library.

So the pool and Carnegie building are "moving forward pieces” and the public safety pieces are really more nuts and bolts? I’d say so. But they all fall into the category of facilities that have been allowed to deteriorate to the point that that they are unusable or are on the verge of being unusable. That’s why our six-word slogan for this measure is, “Preserving Alameda’s past, protecting Alameda’s future.” That really sums up what we’re trying to achieve here.

This tax requires two-thirds for passage, how will you get it? I’m looking at what people care about. They care about emergency services. We don’t have an emergency operations center that we can rely on. You can pretend that an emergency is unforeseeable when you’re living near a fault line — or two — and you can pretend that you wouldn’t have a liquefaction problem in event of an earthquake. You can pretend a lot of things, but a natural disaster is completely foreseeable and expected. And if you don’t have an emergency operations center to deal with that then shame on you — because that really is a life and death matter.

Is it a regressive tax? A sales tax is regressive in principle — meaning it falls more heavily on people of lower incomes than higher incomes. But that’s a very simplistic view of the sales tax, because sales tax doesn’t apply to food and it doesn’t apply to housing and it doesn’t apply to services, including medical care. And when you look at lower income families the overwhelming majority of their expenditures fall in those categories. So if a sales tax were applied to food, housing and services, then, yes, it’s regressive. But when you look at well-to-do families, and you look at where their expenditures are, they have many more discretionary good purchases. I think in principle in sales tax is regressive, but in practice it’s not very regressive really.

You think this can pass? I do think it can pass. Absolutely. I think that people in Alameda love their city. They really care about Alameda and they really care about emergency services and emergency response times and this goes to the heart of our ability to provide that. 

Please note: this interview was edited for clarity and brevity. 

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joel March 05, 2012 at 05:57 AM
Another fire Station ???? that will certainly help the economic recovery , another bunch of guys laying lard until retirement. You do not need to raise taxes you need to lower them , then bank on the businesses that are generating revenue , this City has reached a new welfare management style and status . Carnegie librairies around the Country are monument to workers oppression , hidden behind a good name , never forget the workers that were slaughtered by His gun for hire ,never forget the worker that were thrown out of their house , out of their work because they wanted to join the union , have a day off and fair wages , Everyone bragg about Carnegie generosity it came at an extremely high price, it is a fraud and should be considered as such, if the carnegie foundation love their building so much let them pay for the renovation , Hello Alameda Firemen and Women , Hello City Employees , Hello Teachers , Hello Alameda Police Dept and your Unions, do you sincerely believe that we should spend money to honor a man "Carnegie" that spend his life fighting the organisation that represent you . I do not care how much money gave away , it's blood money .
10dB March 05, 2012 at 04:48 PM
My question is a simple one: will the money raised by this new tax be added to the money the city already pays to fund infrastructure or will it simply allow the city to divert those current funds somewhere else with little net gain in infrastructure money?? Has the city made public before- and after- budgets showing the impact of this proposed tax so that citizens can see its exact impact on the budget, or do we just get generalities like "a new pool?" As Mr Russo says, the city has managed its budget poorly in the past. What assurances do we, the citizens of Alameda, have that things will change rather than just more-of-the-same?
John Russo March 05, 2012 at 06:07 PM
To 10dB: Great question. Two answers: 1) As a Special Tax the contemplated revenues can only be used for the delineated purposes. This money will only be used for Facilities & Equipment w/ one exception: we will fund an Emergency Response Coordinator position which is not in the budget now. 2) The contemplated new revenues do not substitute for money already in the budget. THIS is the problem we are trying to solve. Please look at Attachments 1 & 2 to my report and you will see that Alameda sets aside little or nothing for facillities and equipment depreciation and replacement.
Cecelia Leong March 05, 2012 at 07:04 PM
We can debate the revenue source (and we should) but I'm so thankful Mr. Russo is planning for the future of our facilities and showing foresight in budgeting.
a94501er March 05, 2012 at 07:55 PM
More reasons to take my $$$ elsewhere ... I already shop a fair amount in Berkeley/Emeryville, won't be anything different. Typical of the city to propose yet another tax (instead of cutting back on benefits). Add this to the list of taxes being considered for the November ballot ... enough is enough, vote NO.
Mickey Neill March 05, 2012 at 08:04 PM
Oh please we need another swimming pool like we need to fund the ever expanding hospital, or the lovely brick cross walks that were installed in park street then ripped out or the trees that were torn out of park street only to be replaced. It's never gonna stop with that kind of management of our Tax dollars. Just say no to another tax!
Al Wright March 05, 2012 at 11:19 PM
Mr. Russo, on Blogging Bayport today, Lauren reported on a phone survey she participated in recently: http://laurendo.wordpress.com/2012/03/05/order-of-importance/ Was this a City survey, and when was it conducted? If she has the results correct, there are things on the survey that ranked highly by the citizens to fund, that didn't make the final cut, like road and sidewalk repair, and maintaining clean and safe parks. In fact, this survey doesn't ask anything (at least not in the portion posted by Lauren) about Fire Stations, Emergency Response Centers, Training Centers, replacing fire engines and patrol cars. What gives? Is the City trying to scare the citizens into voting for the increased sales tax by threatening to possibly eliminate neighborhood patrols, or to not repair potholes, or to not have safe parks, and then spending the money how it sees fit?
Eve Pearlman March 05, 2012 at 11:35 PM
Hi Al. I just added the PDF of the report on the City's survey to this article (click on the second PDF above). --Eve
Al Wright March 06, 2012 at 12:04 AM
Thanks Eve. Now I'm even more perplexed. We (the City) spent how much money on this survey, and we didn't even tell them to ask the questions that we (or the City Manager) really wanted to ask, about new fire trucks and police cars, a new fire station, Emergency response Center, Training Facility, etc? This is maddening!
a94501er March 06, 2012 at 12:51 AM
Al, classic bait & switch by Russo and team. Happens all the time in Alameda, yet suckers fall for it every time (see recent Measure A vote and the resulting fallout with teachers and AUSD). John Russo, care to answer why the discrepancy in the phone survey vs your stated intentions?
Al Wright March 06, 2012 at 01:11 AM
Here's a thought: Why not use sales tax money to renovate the golf course and add a new club house and a proper event facility there? Then the course could make even more money for the city than it currently does, and the City can use those funds for replacing police cars, fire stations, etc. And then we certainly wouldn't need Cowan and his homes.
joel March 06, 2012 at 06:25 AM
Mr Russo , Himmler once said make the peoples feel unsafe and insecure , they will follow you without questions they did,it worked, many others used the same strategy to manipulate their peoples . How many miles on the odometers of these shiny new fire truck and ambulances ? Police cruiser so new they don't even have a licence plate yet. Parking enforcement vehicle brand new The Motorcycles unit are in better shape than the one leaving the dealership , and for one reason each officer take pride in them . Oh maybe it is for the fire dept to buy T shirt and wear them while posting signs to vote for Ms Gilmore ..... Yes we definitely a swiming pool , should there be one I would be the first to use it and teach Your Firefighters how to pull a 200 plus man from under the water , by the way how many of them do know how to swim? As far as the landscaping on Park street , simply buy bonzai tree , in the summer 1/2 of Park street will be baking and looking for a way to break their lease . Want to keep Alameda safe , let the Police do the work they used to do instead of turning them into counselor , don't like the City , Stay on the other side of the bridge. As far as the Fire dept they did not have any leader to speak of in more than 8 years and they do what ever they want , including framing a Firechief they did not agree with for doing what most of them do because there is no audit on the gas usage City wide .
joel March 06, 2012 at 06:32 AM
Good point just check into Alameda Power and Telecom they burned 100 of millions of dollars in total impunity. Trouble is no one is held acountable at City hall from the top down. But leave your car on a street sweeping day after they have cleaned it ,or on a rainy day as they do not sweep these days and I guarrantee you a nice fat parking citation.
joel March 06, 2012 at 06:36 AM
Mr Russo, In regard of the quality of service delivered by the fire dept , they earned to be housed in sleeping tents , I understand there are plenty left over from the war in Iraq . cost to taxpayers Zero. use the funds for the schools .
John Russo March 06, 2012 at 03:15 PM
Al-- No one is trying to scare anyone. Facts are facts. Alameda has not set aside sufficient money each year to replace its equipment and facilities. As a result we are using patrol cars that are well beyond their "useful life", which means they break down often and without warning. Another example: the useful life of a fire engine according to industry standard is at most 15 years yet we are using engines as old as 27. The City's entire fleet -- both public safety and non-public safety- is unreliable and well beyond industry standard. This must be rectified or service to the public will suffer. As for the poll: we were testing to see whether Alameda would support a tax specially designed to fix Alameda's worn down roads. Together with Facilities and Equipment, Road Repair has not been properly funded in Alameda's budgets for a long time. According to the Treasurer and the Auditor, Alameda MUST start addressing its infrastructure deficits. I agree with them. So the poll showed that the Alameda public is not concerned about roads as much as it is concerned about maintaining public safety response. As a result of what we learned in the poll, we felt a measure built primarily to defend public safety response was in order. I fail to see how that is a "bait and switch". It's public opinion research. As for Joel's comment: I'll thank you to avoid comparisons to Nazi war criminals. That is uncalled for and does not promote civil debate.
Jennifer McGaffey March 06, 2012 at 05:41 PM
I did that survey, and it was very badly designed. It started out saying would I support a tax to improve the roads, limited to that use only, and I said yes - then there were several questions about how to use the funds, including stuff that was wide abroad of fixing the roads. I support helping the library, but if the tax has language that says "roads only, cannot be diverted to other uses" then no, I don't support using those funds to help the library. Very badly designed. I have to say, if I see that Joel opposes something I'm inclined to support it (can't say the other side, as I don't think I've ever seen him support anything). I don't know him in person, but here on Patch at least he comes off as a conspiracy nut. That aside - yes, if Alameda doesn't have a properly-funded reserve fund, with sufficient money going in to repair/replace things when they need it, we need to get one going _now_. It's required for condos, it certainly should be required for cities!
joel March 07, 2012 at 06:27 PM
Mr Russo , I do apologize for quoting Himmler , it was to reflect a state of mind to instill insecurity to achieve a goal . As a side note my Father was a Jews trafficker from 1939 to 1945 and to anyone during that era that was looking to escape that madness and successfully did . MyFather had 2 death penalty bounties on his head one by the governement and the other by the Gestapo . They never until the very last months of the war were able to capture the mountain and villages they were hidding ,when they did , they left nothing behind not even livestock , Oh yes these so call Maquisard , Terrorist were supplied by the American Amunitions dropped at night by parachutes and anything else to use them dropped 100 miles away right in the middle of the enemy turf {fact} waiting for them. As far as the name Himmler only the old timers like me Know who they are , something rather sad when student believe that Turkey is a Bird not a Country . .
Kate Quick March 07, 2012 at 06:32 PM
Just heard a talk by Erskine Boles and Sen Simpson last night, talking about the way to get out of the federal budget/deficit mess and how it needs to involve shared sacrifice, as well as the death of some sacred cows. The cure is a balance of cuts and revenue sources. I think the same goes for the local level budgets. The "cure" is never going to be all cuts (sorry Joel) or all new tax sources, but some of each. Deferred maintenance is widely practiced by municipal bodies - cities and school boards, and eventually those chickens come home to roost. I have always felt that the Museum should be better supported by more aggressive fund raising and the museum should be able to pay its own way. It does seem that the Carnegie could house some city services and the museum, if the museum paid market rent for the space it occupied. In order to have staff and public in the building, it will have to be made ADA compliant. Otherwise it stays vacant, which is a big waste.
carol gottstein March 07, 2012 at 07:01 PM
Converting an old Carnegie library to house the local museum is a concept which has worked thruout California [cf:Petaluma & Healdsburg] It preserves the National Register eligibility of the building & keeps it accessible to all. Ours has stained-glass windows & a mezzanine w/a glass floor, which it would be a shame to lose. The old Boys&Girls Library behind it was the home of the Carnegie's builder, Charles H. Foster, an interesting local character who also wrote books on philosophy & psychology. I worked hard to promote the concept of the Carnegie housing the Museum when I was on the Museum Board & Planning Board in the 1990s. At that time, it was opposed by the HAB & we did not yet have a new library building. Perhaps the Carnegie's time has finally come! I don't understand why any tax has to be for 30 years, tho. China or Iran might have taken over by then.
joel March 07, 2012 at 07:17 PM
Thank you Ms Jennifer in short you endorse the school district paying up to 3 times for goods no open bid are published the same for public work if it is under a certain amount , you believe it is ok and this goes for anything from services , survey and equipment. you most likely support the City Employees that went fishing using City truck , the only reason this came to light is because the Oakland PD spotted the trucks empty on their turf and thought they were stolen , You most likely endorse as well use of City vehicle for private use , and also most likely agree with terminating employees without exit interview {no interview , no traces} agree with the insane reasoning while under recession we have a pool of vehicle which are all hand detailed like on a regular basis . Agree that it's ok for city employee to go to the flea market or spend the morning sleeping in a van between home depot and the glass factory. A total use of City resources and assets without acountability , Alameda Power and telecom burned 100 millions dollars if not more .... I support the schools, Teachers do a good job not the admnistration , strongly support the Police dept ,they are the one that make and keep what this city is , I have no mercy for the fire dept it is a self driven political organisation hidding nehind paperwork. So go ahead and raise taxes. I will be exempt of the school taxes anyway, it will affect the businesses ,growth and prosperity.
joel March 08, 2012 at 04:06 AM
Thanks Ms Kate , sincerely I do believe the City is leaving abvove it's mean as far ar vehicles for instances .... and saw "still do" felt Suncal was their salvation. it remind me of the Greek governement shutting down electricity to homeowner late in their bill but not collectting anything in large corporation . The Carnegie hall , like all of them built around the Country and I do agree they have their charms , is nothing else but the biggest insult to any worker and Unions , several workers were executed by anti union anti democrat Carnegie Goons , their fault wanted a day off and better working condition,countless "in the hundreds" were thrown out of their house never to work at any Carnegie plant or anyone He was doing business , He drove them below misery. It is sad that peoples look at him as the biggest philantropist when actually he was no different if not worst than any slave driver in the cotton plantation from the South , Having given his fortune away did not help the crualty he imposed on his Employees .There is a distinction between demanding Employer and slave driver , He was the later .
Lisbeth Allen June 04, 2012 at 06:09 PM
I think it's time to make perpetual yard sales pay sales tax just like those silly stores that pay them. There is a perpetual yard sale at the corner of Lincoln and Willow (1982 Lincoln) There is one on Santa Clara at the Melinda Ann Apartments (2054 Santa Clara). Almost every Saturday and Sunday during summer, the people have their businesses set up.
Michael June 04, 2012 at 08:03 PM
Also, lots of sales tax is lost as some have figured out that if you order some foods, "To Go," no sales tax is collected -- even if you actually eat it in the restaurant. http://www.brandeating.com/2008/05/for-here-or-to-go-califorinias-sales.html


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