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Political scuffle spotlights Goleta revenue-sharing deal with county

By   /   Friday, January 24th, 2014  /   Comments Off

Renegotiating the RNA has emerged as a potentially explosive issue in the 2014 election where Goleta City Councilman Roger Aceves is challenging incumbent Janet Wolf for the 2nd District seat, which represents part of Goleta.

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Henry Dubroff

Goleta Mayor Michael Bennett is mad as hell and he’s not going to take it anymore.

That’s what you would think if you sat through the Goleta Valley Chamber of Commerce policy roundtable luncheon on Jan. 17. There, Bennett all but pounded the table in favor of renegotiating a deal that gives Santa Barbara County 30 percent of Goleta’s sales tax revenue and half its property tax “in perpetuity” — i.e., forever. Last year, the take amounted to $5 million.

Bennett said he was “cautiously optimistic” about the prospect for renegotiation with the county’s Board of Supervisors, which got this major concession out of Goleta when it voted for cityhood in 2001. While other new communities have paid some sort of an escape fee, “it’s the only one of its kind that’s in perpetuity,” Bennett complained about the accord, formally known as a Revenue Neutrality Agreement or RNA.

Why now? Well for one thing, renegotiating the RNA has emerged as a potentially explosive issue in the 2014 election where Goleta City Councilman Roger Aceves is challenging incumbent Janet Wolf for the 2nd District seat, which represents part of Goleta. Aceves flat out wants renegotiation; Wolf has said she is amenable to talking about the issue.

Meanwhile, the Goleta chamber has begun circulating a petition hoping to persuade a number of influential business leaders to sign on to the idea of RNA renegotiation. City Councilman Jim Farr, a proponent, said he wants to see the RNA head into the sunset. It would be quite an understatement to say that his ex-wife, 3rd District Supervisor Doreen Farr, doesn’t exactly see it that way.

For another, the county is just beginning to reach the point where talk about renegotiating the accord will be anything more than a sick joke. After being caught flatfooted in the recession, the county has cut between $30 million and $70 million in expenses in a budget of $850 million — that is not chump change.

Although Jim Farr told me the county could “cut out the $5 million a year and not even miss it,” the payments the county has received from Goleta during the past five years have been an important ingredient to balancing the books. Farr and Bennett say the county missed an opportunity to raise hotel taxes to 12 percent when Santa Barbara and Goleta did the same.

A savvy player who recently arrived from Marin County, new Santa Barbara County CEO Mona Miyasato, who joined Bennett at the podium for the Jan. 17 session, deferred questions on the RNA to her elected bosses. But she said that advancements in technology mean the county should look for ways to become more efficient.

As Santa Barbara County returns to fiscal health, rebuilding county government is not a simple process of replacing staff one-for-one. It means forging partnerships with community groups and using technology to deliver services more efficiently. “We are not a vending machine, where you put in money and out come services. We are a resource-based organization,” she said.

Meanwhile, other governments are getting stronger. Ventura County, which broke away from Santa Barbara County 141 years ago, recently achieved a rare AAA rating for its general-obligation bonds.

That’s slightly better than Santa Barbara County, although Miyasato pointed out that if her new employer issued GO bonds, the implied rating would be AAA. Ventura County’s taxpayer groups and at least one supervisor are backing a plan to replace its defined benefit pension plan with a 401(k)-like product.

It may be that a bit of bluster and bravado from Goleta will be enough to end the neutrality accord. If you believe that, then I have a bridge to sell you.

More likely the best way for Goleta to get out from under a big fiscal burden will be to present a plan to reinvest some or all of the $5 million in revitalization of its Old Town and other infrastructure improvements that will provide an economic lift for the city, produce more jobs and raise the overall tax base. In that way the county coffers as well as city finances will benefit. In the meantime, don’t hold your breath.

• Contact Henry Dubroff at hdubroff@pacbiztimes.com.

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