Report: Measure DD repeal would be 'devastating' to budget

By Doug Spoon, Editor

Required by law to put the item to a public vote or be forced to take the action requested in the petition, the Menifee City Council last week authorized the placement of an initiative to recall Measure DD on the November ballot.

Council members unanimously voiced their opposition to the recall initiative, which qualified for the Nov. 3 election ballot because of a petition including 2,758 signatures – about 1,200 more than is required to be eligible for the ballot. The council’s only other option was to adopt the repeal of Measure DD, a 1 percent sales tax approved by voters in 2016 to help fund public safety and road improvements.

Prior to the vote to place the repeal initiative on the ballot, council members on May 14 heard a presentation from Assistant City Manager Jeff Wyman about the negative financial impact a repeal of Measure DD would have. Such a report was requested by the council at its April 14 meeting and was delivered in a separate information item.

In the next agenda item, council members voted unanimously to authorize placement of the repeal initiative on the ballot. When Measure DD was first proposed to Menifee voters four years ago, 68 percent of the voters cast a “yes” vote.

Since its approval, there have been three attempts to recall Measure DD. All three were co-authored by Menifee resident John Smelser, who claims that Measure DD is no longer a necessary tax. Smelser’s argument is that the restoration to Menifee of its share of vehicle license fees from the state – funds that were withheld from 2011-2017 by Gov. Jerry Brown – justifies the repeal of Measure DD.

The first two petitions to repeal Measure DD were rejected because they didn’t meet the County’s criteria. This petition is co-authored by Smelser and another Menifee resident, Anne Pica.

In his presentation to council members, Wyman stated that in light of the COVID-19 pandemic and threatened budget cuts by Gov. Gavin Newsom, Menifee’s VLF fee income could again be at risk. In addition, he pointed to the loss of overall tax revenue because of the negative impact on the economy the last two months.

“The governor has stated that the state is facing a $54 billion shortfall,” Wyman said. “They are looking for places to cut. We lost VLF before and it could happen again.

“Measure DD funds remain local. The funds collected through Measure DD since Jan. 1, 2017 are $33 million, and we anticipate about $10 million in 2020-21.”

The $10 million figure is about $7 million less than the amount that has been generated by Measure DD in 2019-20, according to City documents. The revised Measure DD figure for 2020-21 is attributed to anticipated loss of revenue because of the COVID-19 pandemic.

Wyman’s presentation detailed how Measure DD funds have been used to support the creation of the Menifee Police Department, which will launch July 1. He also discussed its positive impact on road improvements and Fire Department improvements. According to City documents, the newly forming Menifee PD will put more officers on the streets at less cost than the city’s expiring contract with the Sheriff’s Department (this will be detailed in an upcoming Menifee 24/7 news article).

But according to a report by HdL, a tax consulting firm, the City of Menifee will lose an estimated $1.47 million in tax revenue if Measure DD is repealed. That loss would be on top of the estimated $7 million decrease in revenue because of the economic impact of COVID-19.

Council members listened as Wyman presented specifics from the HdL report about potential negative impacts of a Measure DD repeal. According to the report, consequences of a repeal of Measure DD would include:

-- A loss of 17 percent of the overall City budget.

-- A loss of 29 percent of the budget for the Menifee Police Department (about a $4.3 million reduction); 25 percent of the Fire Department budget; 33 percent of the code enforcement budget; and 13 percent of the Capital Improvement Project (road improvements) budget.

-- A loss of $4.3 million to the Police Department budget would result in 31 less patrol officers on the force, equating to 174 less patrol hours per day; possible closure of the police substation in Cherry Hills Plaza; and a lack of funds to pay the City’s share of the police dispatch agreement with the City of Murrieta.

-- The loss of the Fire Department’s medic squad, which was added to the new Fire Station 7 in the Sun City community two years ago, and the five personnel dedicated to it.

-- The loss of three code enforcement officers.

-- A reduction in road improvements, including street resurfacing projects. Funding to supplement construction of the Holland Road Overpass, Bradley Road Bridge over Salt Creek and other projects would be decreased.

These losses were calculated based on the proposed City general fund budget that the council will be asked to approve in June. According to Wyman, such a loss to the Police Department would be unacceptable and probably would result in the reduction of other city services instead, such as programs conducted by the Community Services Department and staff reductions.

“Because public safety is the top priority of the City, it probably is not prudent to cut $4.3 million from the Police Department,” Wyman said. “The option would probably to cut other services.”

In addition, Wyman reported that the loss to the Fire Department could affect as many as 15 positions, saying, “That much of a loss might not leave the stations in full service mode. We might have to look at the closure of a fire station.”

Four of five public speakers in the council meeting – sent in by email because of public meeting restrictions – were against the idea of a repeal of Measure DD.

“It’s important to realize that the state money problems will trickle down to the County and the City,” council member Dean Deines said. “Our VLF fees would be at risk. It would be devastating to lose both that and Measure DD.

“I’m excited to see the City start our own Police Department. I would hate for anything to jeopardize that.”