Herculeans Vote Tuesday On HMU, Sales Tax

-By Bay City News

Voters in Hercules will decide Tuesday whether to approve two local measures meant to help keep the financially troubled city afloat and maintain key city services ranging from police staffing to recreation programs.

"We've still got a structural deficit of about a million and a half dollars we have to solve," said City Manager Steve Duran, who was hired last fall. "It would really help our financial stability if both of these passed."

Measure O asks voters to approve a four-year, citywide half-cent sales tax projected to raise up to $500,000 each year. The money would help the city fund critical programs and prevent further police layoffs, Duran said.

The measure, which needs a simple majority vote to pass, would bring Hercules' sales tax rate to 8.75 percent.

It is backed by a broad group of city leaders and others, including the City Council -- which placed it on the ballot -- the Hercules Police Officers Association, and members of the city's chamber of commerce.

No ballot arguments against the measure were submitted.

In their ballot argument, supporters say city leaders have already taken drastic steps to stabilize Hercules' finances by cutting the city's workforce by 37 percent, and slashing salaries and benefits. During the past years, they say, the city has cut police staffing, library hours, children's and seniors' programs and special events, just to stay solvent.

Now, the measure's proponents say, there is nothing left to eliminate.

"We can only cut so far. In order to maintain operations for the city, we need to bring in revenue," said Alex Abetkoff, president of the Hercules Police Officers Association.

Abetkoff said that during the past two years, he has watched the Police Department dwindle from 30 to 20 officers. Backers argue the measure would give the city the boost it needs to maintain police staffing.

"Being able to fix the city's finances is going to help the Police Department because we are 60 percent of the general fund," Abetkoff said.

Measure O would also protect funding for other key programs, such as crime prevention, youth sports and recreation programs, supporters say.

Spending of proceeds from the sales tax would be subject to regular review by an independent citizens' oversight committee and annual audits.

Hercules residents will also vote on Measure N, which would authorize the city to sell its municipal utility and use the proceeds to repay the utility's long-owed debts. Any remaining proceeds would go to the city's general fund.

Established in 2001, the Hercules Municipal Utility serves an area bounded by San Pablo Avenue, the San Pablo Bay, Hercules Avenue and Linus Pauling Drive.

When it was created, city leaders believed the utility would serve more than 1,800 new homes, and service was expected to expand to the North Shore Business Park, the measure's proponents said.

But the economic downturn and other factors thwarted that growth, and today the utility only serves about 800 customers, according to an argument for the measure written by four City Council members, who also blame the utility's failure on "lack of a sound business plan and best management practices".

Since the utility never made a profit, the city has had to subsidize it utility and will continue to do so if it remains under city ownership, according to city officials.

The four council members project that Hercules will lose about $330,000 annually this fiscal year and more than twice that amount in 2013 if Measure N does not pass.

"It's a money-loser every year ... maybe someone can take it over who knows about running a utility," Duran said. "We really don't know yet whether or not it will be feasible to sell it, and we can't go to the marketplace to find out unless the citizens pass this measure."

No arguments have been filed against Measure N.