Kenny Majers, owner of San Fernando Majers Coin Laundry, says he is not against the City of San Fernando increasing water and sewer rates to improve the infrastructure of these services.
But Majers considers the proposed rate hikes to be excessive.
“I’m against the 50 percent increase,” said Majers inside his business, near the intersection of San Fernando Road and Hubbard Street.
“It would have a huge impact for me. I would probably have to raise my prices.”
Majers was among those who appeared at the San Fernando City Council meeting on Nov. 18 to advocate for “an increase that is more reasonable.”
Majers told the council members to create a rate hike that “all parties can agree to and residents can accept. What you’re asking is too much for the people of this great city. Fifty percent in 5 years for a combined water/sewer is too much.”
Majers added that such a rate would be “hurting the residents who are on a fixed income” and “on the verge of homelessness.”
“When it comes time for reelection, the people will not forget who fights for the sake of the residents,” he said, receiving plenty of applause from those present at the meeting.
The City, which operates its own water system, has proposed a 10% annual increase for the next five years to its fixed water (8%) and sewer (2%) rates starting Jan. 1. Assistant City Attorney Richard Padilla explained the increase would cover the operating costs for these services: $9 million for replacement of water mains and other maintenance through 2025, and $1.2 million for sewer replacements.
According to a presentation by municipal consultant Catherine Tseng of Lechowicz & Tseng — paid for by the City — if the council goes forward with these new fees, the increases would take the bimonthly fixed water rate from $37.37 to $41.11 for the average residential customer starting Jan. 1. Bimonthly sewer charges would go up from $65.40 to $78.35.
The last water rate increase went into effect on July 1, 2016, while the last sewer rate increase went into effect on July 1, 2014.
The new water charges would not cover other important improvements to these services, which would amount to $20 million. They include nitrate removal from agricultural residues ($2 million), installing automatic meters ($1.5 million) and building a new reservoir ($10 million) as a backup water source for the city.
While the City sent out 6,000 notices informing the residents and business owners about the proposed increases, and a public hearing was held at the Nov. 18 council meeting, council members said they received only nine written protests. If the amount of protests returned to City officials had been more than 50 percent, the Council could not have approved a higher tax.
But that didn’t keep residents like Claudia Lozano from voicing their displeasure at the meeting.
“I don’t think it’s fair for single families to go up higher. We are working families and it’s not fair that you guys are going to raise it and the percentage will not come down in five years,” she said.
Another resident, Diane Raymond, who said she recently had been laid off, also complained about the proposed increase.
“Eight percent is a big chunk, honestly, it’s just too much. I understand infrastructure, I support the city, local businesses, but we can’t afford too much,” Raymond said.
Such protests gave pause to the council.
Councilmember Hector Pacheco advocated for higher subsidies rather than the $16 bimonthly proposal to help out low-income residents.
“The assistance is too small compared to how much we’re going to be increasing over the five years,” Pacheco said. However, he noted that “we need to fix these water mains, because if one of them breaks, it’s going to cost us more.”
Councilmember Mary Mendoza said the hikes “weigh heavily” on her heart, but agreed that “we need to have healthy drinking water. It’s important and vital to our lives and to the future of our children.”
Vice Mayor Sylvia Ballin said she was concerned that if the City doesn’t make the repairs needed to its aging infrastructure, it could end up in a “Flint situation,” a reference to the city in Michigan where cost-cutting measures led to tainted drinking water that contained lead and other toxins.
“I’m not happy about a rate increase, but we want to keep the water flowing,” Ballin said. “I’ve been to Flint. That’s what I don’t want to happen here in San Fernando.”
At the end, the Council postponed a vote on the rate increase, sending the item back to an ad-hoc committee to study the issue further and look into increasing the assistance to poor families. But the proposed increase could be brought back for a vote at the next council meeting.
Majers is not completely convinced the money raised would go exclusively to pay for water and sewer maintenance. He said the last time the fees for those services were increased, the City said it would fix a leaking water reservoir along Foothill Boulevard in Sylmar. And so far they’ve only been patching it.
That’s why he intends to keep fighting this increase and encourages others to show up when the City Council finally votes on this item.
“I’ll be there,” he says, adding that others should do the same.
“Get out and vote against it,” he said.
Sales Tax
Increased water and sewer rates were not the only potential new, higher fees.
The Council would have to decide before Dec. 6 whether to place a quarter-cent sales tax on the March 3, 2020 presidential primary election ballot.
California has a state-mandated minimum sales tax of 7.25%. Counties, municipalities, and districts are allowed to increase the sales tax in specific jurisdictions up to a total of 10.25%. The City of Burbank also charges this amount in sales tax.
The current sales tax in San Fernando is 10%, but the City only receives 1.5% of that. The state receives 6%, 2% goes to Metro for regional transit, and LA county receives the remaining .5% percent for transit and homeless services.
The sales tax rate for the city of Los Angeles is 9.5%. The City of San Fernando is surrounded by businesses of the City of LA, where the sales tax is lower and could put similar business here at a disadvantage.
City Manager Nick Kimball said that despite the recent sales tax increase, “you’re not necessarily keeping your funds local.”
He also said that as an independent city, residents expect a certain level of service from the municipality. And so far they’ve been able to provide it.
“People have been willing to pay a little bit extra for the level of service they get, but that costs a little bit extra,” Kimball noted.
If the City were to receive voter approval to keep the remaining 0.25% sales tax local, then San Fernando taxpayers would not be subject to future sales tax measures put forth by other taxing entities and would retain control of the funding raised in the City.
According to Kimball, the increase would mean that “if you spend $100, it is an extra $0.25 cents.”
A 0.25% local sales tax would generate an estimated $1.25 million per year that would, among other things, be available to pre-fund retiree healthcare costs and reduce the City’s long-term liability. That liability currently runs about $1 million, increasing to $3 million by 2044.
Mayor Fajardo indicated that if not approved, “eventually, we will probably have to do a parcel tax, which has a more direct impact on residents.”
A sales tax, on the other hand, impacts both residents and people who spend money in the city, whether they eat at a restaurant or buy something in a store.
Vice Mayor Ballin said “all of these items are really important. Our long-term employees would be impacted negatively, and that would not be good.”
In 2013, while in the midst of a fiscal crisis, the City passed a 0.5 percent sales tax increase that was supported by 60 percent of voters. The so-called “San Fernando Preservation and Beautification Measure” was supposed to end in 2020. In November of 2018, 69% of voters gave approval to extend the half cent local sales tax indefinitely.
Marijuana Ban
The sales tax would not be the only measure San Fernando would place on the March 3, 2020 election. The City also plans to spend $65,000 to place a measure banning marijuana-related business activities within city limits.
If the council decided to propose said measure, to be called “MJ” or “MB,” City voters would have a simple “Yes” or “No” question to ponder.
“Shall the City ban marijuana storefront dispensaries and all other cannabis business activities in the city?”
The ban would include storefront retail and medical marijuana dispensaries, as well as cultivation. State law prohibits banning delivery of marijuana. from outside the city.