Guadalupe Mayor Frances Romero took the unusual step Tuesday night of announcing that she will publicly ask the Santa Barbara County Grand Jury to investigate the city’s past financial and other practices that have created a quandary today.
Romero said near the start of the Guadalupe City Council meeting at City Hall that “we can’t operate Guadalupe on the status quo any longer.”
“As a citizen of Guadalupe that is also its mayor, and in an effort to have a clean slate for those that come behind this council, and to clear the air for those who have served on the council previously, I would like to publicly request that the grand jury do an investigation into the things that have occurred here over the last 10 to 15 years,” Romero said.
She added that she hopes the panel will look at the “reoccurring things so we can find out why it’s happened, and better yet identify what needs to occur in our government so the same things don’t happen again and again because they impact each and every person here, including the citizens that live here, the staff that work here, and our future generations have a right to a clean slate and a new start.”
Romero, who was elected mayor in 2012 and isn’t running for re-election, said she will make the request of the grand jury “to set the record straight once and for all.”
“I truly feel this is really the only way for us to not go back to the way things have always been,” she added.
However, Councilman John Lizalde said later in the meeting that he doesn’t support Romero’s effort.
“To have a grand jury, I don’t think it’s necessary,” Lizalde said. “I don’t know the process or what expense is involved with staff and so on. … We just need to move forward.”
Councilman John Sabedra agreed.
“I don’t believe we need the grand jury in here,” he said.
Romero’s request drew support from at two members of the audience.
“I think you’re on the right track,” resident Shirley Boydstun said.
Guadalupe resident George Alvarez said Romero’s efforts are “long overdue.”
“We have to clean this town up,” Alvarez said. “We have to get back our integrity, our self respect. Everyone laughs at us in the county of Santa Barbara. It’s amazing how much people look at Guadalupe and say you could’ve, should’ve, never got there.”
Guadalupe officials recently discovered that past financial practices meant the city general fund was being supported by special enterprise funds reserved for specific uses such as street lights, roads, water, sewer and more.
City Administrator Andrew Carter said he found the irregular practice involving large inter-fund transfers in the spring while preparing the budget for the fiscal year that started July 1.
Special enterprise funds are supposed to be self-supporting and have their own reserves for maintenance and upgrade projects for that enterprise.
While some functions can be assessed to the special funds — for instance, the time the city administrator spends on a water-related issue — Carter said he discovered the accounts were charged between 99 percent and 193 percent. This meant expenses such as park irrigation along with City Hall and other facilities’s electricity costs were improperly charged to unrelated funds.
While a noble endeavor to keep the city afloat, Carter said, the practice goes against regulations and even state law in some cases.
The finding meant the city began the fiscal year with a deficit of more than $350,000, and led to the City Council to put three measures — V, W and X — on the Nov. 4 ballot.
If approved, the first measure would increase sales tax by one-quarter cent, and would end after 8½ years.
Another measure would revise the business-license rate, which Carter said had not been updated for decades. Currently, businesses pay $60, $90 or $120, regardless of their size.
The revised statute would base the rate on gross receipts of 50 cents per $1,000 of revenue, with a minimum of $100 per home-based business or business without a fixed location, and $200 for businesses with a fixed location in the city.
The third measure would remove a $2,250 cap on the utility-user tax, which now is 5 percent for water, electricity, natural gas and phone customers. The rate wouldn’t change.
To reach the cap, a customer has to spend $45,000 on utilities, so removing it wouldn’t affect homeowners or most businesses in Guadalupe, Carter said. On the other hand, a large utility user like Apio Inc. with two large facilities for cleaning and cooling vegetables quickly hits the cap.
If approved, the three revenues sources could bring in $325,000 in additional funds to run the city, Carter said.
However, much of that income wouldn’t appear until the next fiscal year so the budget for the current fiscal year has a deficit
Additionally, city staff is again taking unpaid furloughs every other Friday in an effort to cut costs from the city’s budget.
The small city with a population of 7,000 has other big problems. Tuesday night, the City Council issued an emergency contract to install a pipeline for a well to ensure Guadalupe has water.
The city had been relying on just one well, a worrisome situation since its State Water Project supply has essentially dried up due the drought. The city’s small allocation from the State Water Project didn’t make it financially wise to fire up the small pipe from the main line, Carter said.
Instead, the city sold its State Water allocation to Solvang, earning $53,000 to help pay for reactivating a second well.
Romero recalled receiving a call in May 2013 that Guadalupe’s only well wasn’t working. At the time, the city was able to rely on State Water to fill the need.
“Without that, we would have run out of water by noon the next day,” Romero recalled.
But the drought has drastically reduced the city’s supply of State Water, and it wouldn’t be available if the well stopped working.
The emergency project, which would cost about $70,000, calls for installing 300 feet of pipeline from a soon-to-be reactivated well to a transmission line.
“This is your ability to turn your water on and to flush your toilets,” Romero said.