County Threatens Cities With $85-Million Loss

If the city of Ventura doesn’t rethink plans to withhold half a million dollars from the county, local cities stand to lose $85 million a year, according to a measure approved by the Board of Supervisors on Tuesday.

The supervisors’ decision could eliminate a 1% sales tax that would not only cost cities and towns, but would also take $6.5 million from the county.

The emergency ordinance escalated an ongoing feud between the county and Ventura.

Instigated by the city’s refusal to contribute $572,000 in sales taxes, the new county ordinance will be triggered if Ventura does the following three things:

* Passes an ordinance refusing to pay its share to the county, which it has already done.

* Increases its share of the sales tax.

* Submits its plan to retain the tax money to the state Board of Equalization in October.

The county supervisors’ action comes a day after board Chairwoman Kathy Long vowed to “play hardball” if the Ventura City Council doesn’t rethink its June decision to withhold the money.

“We will follow a parallel track on this and litigate if that’s what we need to do,” Long said.

Under a 1956 ordinance, the county created the 1% sales tax, which is collected by the cities. That agreement called for the cities to pay $3.30 of every $1,000 collected from the sales tax to the county’s general fund for a range of services.

But in June, Ventura’s City Council, citing budget shortfalls, decided to stop paying its share.

County officials worried that other cities would follow suit. On Monday, county Chief Administration Officer Harry Hufford put out a report detailing what cities get from the county in exchange for their sales tax dollars.

But Ventura showed no sign of backing off.

So county officials are using an escape clause from the original ordinance, which allows them to eliminate the 1% sales tax completely--no matter the loss to the county.

“It looks like the county is attempting to retaliate and is willing to jeopardize the sales tax revenues received by other cities and the county itself,” said Robert Boehm, Ventura city attorney. “It is surprising that they would go to this extreme.”

But Hufford said the issue wasn’t retaliation.

“It’s good financial planning,” he said.

The county might recoup the $6.5 million it could lose by putting a half-cent county sales tax measure on the ballot, Hufford said, noting that could raise $40 million a year.

Supervisor John K. Flynn said Ventura City Manager Donna Landeros, who pushed the council’s plan, has taken her city to the edge.

“She is playing brinkmanship--or brinkwomanship,” he said. “If the city of Ventura takes the next step, she’ll take the whole county with her.”

Supervisor Frank Schillo said that if Ventura gets to keep the 1%, then it was only fair to let the other cities keep their money and therefore eliminate the tax.

Officials said the ordinance was an emergency measure because the county would lose substantial funds if cities stopped paying their portion of the sales tax.

After Tuesday’s vote, Hufford talked to a number of local city managers in a half-hour conference call.

Hugh Riley, interim city manager of Moorpark, said: “It sounds like a whole lot of saber rattling going on.

“There’s no fat in the budget,” he added. “We can’t afford the loss of tax revenue. So it does scare me, yeah.”

Laura Magelnicki, assistant city manager for Simi Valley, said all city managers in the county will be meeting soon to discuss strategies for dealing with the controversy.

Magelnicki said she suspects that the county’s vote is a ploy to convince cities to pressure Ventura to rethink its decision.

“We’re going to have to see if there’s any way of getting together on this issue before [the county ordinance] kicks in,” she said.

The county’s move was probably the only weapon it had left, said Pat Leary, legislative representative for the California State Assn. of Counties.

“They’re telling [Ventura] that the city has to make a choice,” she said. “They’re betting that Ventura doesn’t want to lose its [sales tax money] by reneging on the agreement. It could get very ugly very fast.”