Fairfax places sales tax increase on June ballot

Fairfax has added a sales tax extension and quarter-percent increase to the June 2 ballot.

The unanimous Town Council decision came during a rancorous meeting Tuesday, when the council received reports praising the town’s fiscal management. The reports were challenged by local activists and questioned by a minority on the council.

But town officials said the portion of the sales tax that Fairfax keeps for services — three-quarters percent of an overall 9% tax, raising $1 million annually — will expire next March, forcing municipal departments to cut their budgets by 10%.

“If I thought the town could get by without this tax, I’d sunset it — I flat out would do that,” said Vice Mayor Frank Egger. “The fact is this little town needs help. Our street department needs help big time. And this is an opportunity to kind of help us get through this time.”

“I’m going to let the public decide if they want to raise this up to the 1%, so our total sales tax would be nine-and-one-quarter percent,” said Councilmember Mike Ghiringhelli.

Ghiringhelli added that he was disturbed the ballot measure would not sunset the tax.

“I don’t agree with that,” said Councilmember Barbara Coler, a three-time former mayor. “I’ve run three tax measures for this town and before you turn around you’re already doing it again.”

“If we don’t grab this others will,” she said. “The most we can charge for sales tax is 9.25%. And there’s a cap … like the county is talking about doing another sales tax. They will grab it.”

The town’s share of sales tax revenue accounts for 7.2% of its $15 million budget. Measure C was approved in 2016 by 77% of voters.

The resolution to place the measure on the ballot came after the council received a glowing report from auditor Whitney Crockett about the last fiscal year, which ended June 30.

During the public comment period of the council meeting, Mark Bell said the audit was insufficient, questioned several expenses and called for a fraud-detecting forensic audit.

“We hear back and forth from the town that we’re in dire financial straits, and at other times that we’re really making a whole lot of money,” he said. “No one’s really delving into what’s going on.”

“I believe we have clarified ad nauseam,” said Mayor Stephanie Hellman. “As far as a forensic audit, there’s no reason to pursue a very expensive forensic audit. Would you agree Whitney?”

“Yes, I agree,” Crockett said. “There was nothing that we saw that would indicate that would be worth doing, and we would suggest it if we did.”

Town revenues will exceed projections by $165,000, or 1.2%, Finance Director Michael Vivrette said during the portion of the meeting dedicated to presenting the midyear budget report. Expenditures through June 30 will likely be under budget by $318,000, or 2.1%. The biggest unexpected expense was $300,000 in legal bills for litigation related to housing development.

During open time, activists said they were upset the tax measure proposal had not been discussed at prior council meetings but emerged during an annual retreat where it was not on the agenda.

“This was the annual goal setting,” said Doug Kelly of the Coalition of Sensible Taxpayers. “And yet there seemed to be a vote on a tax measure, not on this agenda, and nobody was allowed to talk about it.”

Todd Greenberg said officials violated the Brown Act, the state’s open meeting law.

“Why isn’t somebody putting a stop to this?” he said.

Hellman said the issue came into focus during the retreat.

“One of the items that emerged and was discussed was the fact that our current sales tax, which we saw earlier constitutes over 7% of our revenue, is expiring next year,” she said. “So that would be a dire emergency if we did not continue to collect that revenue.”