Costa Mesa may consider tax hike

Just what kind, if any, proposed tax increase appears before Costa Mesa voters on their November ballots will be decided at next week’s City Council meeting.

Among the many issues council members will weigh next week is just how to fund the city’s growing number of community facilities, which carry with them added costs for staffing and maintenance, among other increasing expenses.

“We don’t have identified means to meet that additional demand,” said Director of Finance Marc Puckett. “Our revenues we expected for next year from sales tax are significantly less than what we really have.”

The recession has hit Costa Mesa two-fold, Puckett said. The city’s two biggest revenue generators comprising 70% of the city’s general fund, property and sales taxes, have both fallen off significantly, he said.

Council members Tuesday explored the options residents should be presented with in November.

City officials said the city can bring its Transient Occupancy Tax, also known as a hotel tax, closer to the county average at 10.5%. Costa Mesa’s hotel tax is 6%, the lowest in the county and is still below the average when you add the additional 2% the city charges for tourism and promotion efforts. Each percentage point increase equals about $1 million in the city’s coffers, Puckett said.

City leaders presented a similar proposal in 2000, only to see it defeated when less than the required two-thirds majority of residents supported it. A majority of residents, 54%, voted for the tax increase.

City Manager Allan Roeder heeded the council to act on the issue Tuesday.

“Eventually we may have to look at some general tax increase if we’re looking to provide the highest level of service at the lowest possible cost,” he said. “If not now, at some point in time.”

Puckett also presented the idea of increasing business license taxes, but that proposal received less discussion as council members acknowledged it would generate less revenue.

What some anticipated would be a pretty heavy discussion about Costa Mesa’s legal options regarding Time Warner Inc., quickly ended with a sputter when council members told the Time Warner Cable representative they were not interested in hearing her presentation.

Kristy Hennessey’s presentation was stopped in its tracks when she said she was going to present where Time Warner Cable’s operations were in August 2006 when the company took over the city’s customers and where they are now.

Council members were more interested in hearing how many complaints they’ve received in the last few months and whether they’ve improved their customer service, they said.

“We’re at a point where we want some real solutions,” said Mayor Pro Tem Allan Mansoor.

Councilwoman Katrina Foley told Hennessey she still hears complaints from residents, even if they’re not calling Time Warner.

“Maybe people just aren’t calling because they’ve given up,” she quipped.

Hired consultant Thomas Edwards presented a noise analysis of John Wayne Airport and found that new technology at the airport may help with air traffic over the city. Pilots may face even steeper climbs out of the airport, he said.

JOSEPH SERNA may be reached at (714) 966-4619 or at [email protected].