Board president Bernice King Tingle cast the deciding vote. Director Celeste Farron and Jim Lamb also were in favor of increasing the special taxes for the 2012-13 fiscal year, while Directors Andy Su and Jass Singh voted against.
The directors also approved by a 3-2 vote the overall budget. Singh and Su opposed the budget, while Lamb, Farron and Tingle supported it.
Final budget numbers were not available immediately after the meeting, as directors made several last-minute cuts and adjustments in addition to raising taxes. However, rough calculations by the Press suggest the district’s general fund will run a deficit for 2012-13, with the gap being filled from a reserve fund that has a staff-estimated $4.9 million.
District Business Manager Gay Giles said the district would make precise calculations in the next few days and share the numbers with the Press.
Each tax is put into a separate fund, earmarked for police and fire service; roads and administration; public works; and parks and library facilities. However, all that money is discretionary, according to Giles, and can be transferred at the board’s discretion.
Giles said the special taxes on each household would increase about $50 or $75 for 2012-13, though precise tax burdens depend upon a formula that accounts for the square footage of each house and parcel.
Residents can calculate what their local tax responsibility is at www.mhcsd.com. Giles said the website's calculator feature will be updated to match the tax increases no later than July 1.
Four percent is the maximum each tax can be increased each fiscal year, according to the Mountain House master plan. The special taxes for parks and public were raised 2 percent each for the 2011-12 fiscal year.
Su and Singh were adamantly against the hike.
“If we always raise taxes, what’s the incentive to be more efficient?” Su said before the vote.
Lamb, Farron and Tingle expressed their support for the 2012-13 increases, saying they were necessary to ensure the district’s financial security.
“I don’t want to be short-sighted,” Lamb said. “If costs go up 10 percent (next year) and we can only increase it 4, we’re constantly falling behind. … I’m a pay-go person.”
He worried that the district is putting off big-ticket items like road repairs but hasn’t saved any money for that task.
Community service district staff said it costs about $1 million to superficially repave one of the district’s villages. Lamb pointed out that Mountain House already has four villages, and staff said one of those is already due for a fresh coat of asphalt, work that is being put off.
“We’re putting stuff off that has huge bills,” Lamb said.
Directors approved several spending cuts, including El Paseo, a night of music, beer and wine ($8,455 savings), the musical accompaniment to the annual kite festival ($4,450 savings) and the annual fun run event ($5,000 net savings).
The directors also agreed to forgo $150,000 to remove fescue from the side of major roadways and $135,000 in work for the sewage and water treatment facilities.
The board also discussed possible cuts to staff levels and compensation, an area Su identified as one of the few that could actually be trimmed in the budget. The district has 11 full-time equivalent employees — seven of which are listed as managers — which are expected to cost the district up to $2,112,400 in 2012-13.
Singh proposed cutting staff salaries across the board by 10 percent, taking away staff’s cafeteria-style health insurance plan, and eliminating the employees’ anticipated 3 percent cost of living adjustment.
All Singh’s ideas failed to find enough support to pass.
Su’s proposal for an across-the-board cut of 10 percent also failed.
“If there’s no political will to reduce this deficit, then that’s the will of the board,” Su said, adding that it was inappropriate to raise taxes and also raise employee compensation.
Lamb and Farron supported only approving a cost of living adjustment of 1.5 percent, a $21,500 savings, but did not find a third vote for passage.
General Manager M.L. Gordon missed the meeting, according to Tingle, because of illness.