Delay in tax revenue won't halt street project, officials said

Christopher Maher, Alice Echo-News Journal

Residents of the City of San Diego will have to wait at least a year before finding out if the city will implement its first-ever property tax, although the project the tax was to fund may start as early as next summer.

Interim-City Manager Ernesto Sanchez said Wednesday the city has chosen to delay pursuit of an ad valorem tax until next year, to allow for proper notice and more research on the issue.

"(The council) really didn't understand that we have to give the citizens at least one year notice that we intend to do a tax levy on them," Sanchez said. "And then when they adopt the new rate, the citizens will be invited to come to address the council on their concerns."

In order to implement a tax that would go into effect Jan. 1, the city was required to vote to approve the tax rate by Sept. 30, Sanchez said. City officials chose not to attempt a tax vote in order to provide proper notification to the taxpayers and to allow for input from bond counsel.

Sanchez said the numbers given to him most recently by engineers for the city had indicated a tax rate of $.67 per $100 valuation was needed in order to fund the $4 million project.

The city recently advertised for proposals from attorneys who could provide bond counsel for the impending project, and the San Diego City Council is expected to appoint an attorney to that position during its next meeting, Sanchez said.

"The council wants to proceed as soon as possible, but of course it won't take effect until 2009," Sanchez said. "I have to submit a budget, along with an ordinance adopted by the city council by Sept. 30 of next year."

Although the city cannot begin collecting property taxes before January 2009, Sanchez said the street and drainage project the revenue would fund does not necessarily have to be delayed.

"I talked to the engineers, and they said it wouldn't delay the project," Sanchez said. "But what the city might have to do is consider a short-term loan until the taxes do come in."

With a loan, the city could begin work on the project as early as May 2008.

In August, the council voted to approve the option of creating a city ordinance to implement the new tax, which would assess $1.25 per $100 valuation, but did not vote on an actual ordinance.

The purpose of the tax is to fund a $4 million street and drainage repair project in the city, with a requirement that at least 90 percent of the funds raised from the tax be dedicated to the project.

The city council's next meeting is scheduled for Oct. 10.