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 Strictly Business
| March 19, 2009
Waste
Not, Want Not
With
all of the ills and challenges facing us every day, it is
difficult to think that the one thing that appears to be endless
may be the most in danger. However, California has suffered
through an extreme drought for three years now, and our water
supply is quickly dwindling due to decreased snowfall and other
factors. The time has come to focus our attention on this issue,
so that our state may continue to provide the resources that
California residents and businesses have enjoyed for so long.
When Governor Schwarzenegger declared a drought emergency in
February 2009, it was the first that many had heard of the
issue. But, its effects have been hitting businesses for some
time. The agricultural industry estimates 80,000 jobs and
billions in revenue lost to the lack of crop production. The
Governor called for urban cities to reduce consumption by at
least 20%, in part so that rural production may continue. But
even some farmers are being forced out of their water supplies,
which has not happened since severe droughts in the late 1970’s.
Here in Long Beach, its residents and businesses have made
significant strides in setting an example for the entire state
of California on how to save and conserve. The Long Beach Water
Department recognized the problem early, and declared a
“Declaration of Imminent Water Supply Shortage” in September
2007. A massive and fruitful educational campaign was launched,
encouraging residents to conserve. Long Beach has been a
benchmark since that time, enjoying sixteen record-setting
months of low consumption.
California’s water systems are outdated and deteriorated and
further action is needed. Farmers and rural food production
industries have been hit hard by the drought and many have left
the business due to ruined crop opportunities and a bleak
future. Without improvement to our state systems, these
businesses will face rough times ahead.
The situation is too dire for our elected officials to
ignore. Until our state decides to take action, there
are ways for you to contribute to the solution.
I urge you
to visit
www.lbwater.org for information on water
conservation.
Also,
you can join the Long Beach Water Department
conservation efforts by click on the following online
resources:
Twitter,
YouTube,
Blogger,
Ning,
Facebook, and
MySpace.
It is up to us to return California to its place atop the
agricultural industry as a provider of jobs for thousands and
food for millions…
...and that's Strictly Business.
Randy Gordon
President and CEO
February 1,
2009
Infrastructure Stimulus Plan: Let’s Build Responsibly
As President Obama takes office and California legislators
continue to struggle with the state budget deficit, both are
talking about fast-tracking infrastructure projects in order to
stimulate the national, state and local economies. We applaud
these steps to improve our aging infrastructure while putting
our residents back to work; however care must be exercised in
executing these specific infrastructure plans.
In order to get the
biggest bang for our scarce tax dollars we encourage our state
and federal legislators, as well as our County Supervisors and
City Councilmembers to develop specific guidelines on how such
contracts will be allocated to the private sector to maximize
employment of residents within the region in which the
infrastructure project will be undertaken.
By having a
competitive bidding process open to both union and non-union
contractors, along with clear goals for staffing projects with
local residents and priority allocation of at least 20% of such
contracts to local small businesses, we will lower overall
contract costs while improving employment in infrastructure
regions.
Since many of these projects will take place in older,
inner-city, communities such as Long Beach where unemployment
and poverty rates are higher than average, we can make the
biggest impact by ensuring that these local residents
participate in these stimulus projects.
The additional benefits associated with awarding a reasonable
percentage of these projects to contractors in the region is
that the contractors will more likely obtain tax incentives
under the California Enterprise Zone or Federal Empowerment
Zone/ Renewal Community programs as a result of hiring employees
in the surrounding neighborhoods.
These projects will
also increase sales tax, payroll tax and income tax receipts. In
addition, new private sector projects will likely follow many of
these government sponsored projects.
The time is also
perfect for private companies to partner with state and local
governments in the Public Private Partnership (P3) format
championed by Governor Schwarzenegger. The joint planning and
execution of critical projects throughout the state can bring
together the best minds from the private sector and the
government to address other local, state and national projects,
while spreading the risks and rewards to the public and private
sector. We also support the expediting of environmental
approvals requested by Governor Schwarzenegger in order to start
these (often) fully funded projects as soon as possible.
We have a very fragile federal and state economy, but this
period also offers us the opportunity to creatively develop
long-term solutions. Therefore, the sooner we award and start
these projects, the sooner we can get people back to work and
improve our infrastructure as well as our economy.
Blake Christian, CPA/MBT is Chairman of the Long Beach Area
Chamber of Commerce and a Tax Partner in the Long Beach Office
of Holthouse, Carlin & Van Trigt, LLP.
August 8,
2008
Take Our
Survey: The Long Beach
Infrastructure
Reinvestment Act
The Mayor’s office is
proposing a parcel tax be levied to repair and
upgrade city infrastructure; this plan is referred
to as the Long Beach Infrastructure Reinvestment
Act. This proposal has been placed on the November
2008 General Election ballot by the city council.
Click
here to take our survey on this issue.
Infrastructure Improvement Projects include:
- Streets – 100 miles of arterials, 300 miles of
local
- Sidewalks – 163 miles of repairs and replacements
- Alleys – 75 miles of overlays and new construction
- Public Safety Facilities – fire and police
stations
- Coastal Water Quality Upgrades
- Parks and Recreational Facilities
- Libraries and Health Facilities
Background
On August 21, 2007, a report to the city council,
titled “A City in Need of Capital Investment”
reported the following:
Only 49 percent of arterial streets and 36 percent
of local streets have condition rating of “Good” or
“Very Good”.
30 percent of the City’s storm drain facilities are
undersized
Many of the City’s public buildings are rated as
“poor” and have exceeded usefulness
90 percent of asphalt alleys and 12 percent of
concrete alleys have outlived their useful life and
need to be replaced
Over 160 miles of sidewalks are in need of
replacement or repair
Fiscal Impact
City staff indicates that the infrastructure
requires $836.7 million to repair and upgrade the
infrastructure and city facilities. Earmarked
funding from anticipated funds totals to about
$265.4 million, leaving a $571.3 million shortfall.
To meet this need, the Mayor proposes city hall
issue bonds to be paid via a parcel tax on
residential and commercial properties. Except for
those who are from limited income residents aged 65
or older, all are expected to pay the following
qualified taxes:
- Single-Family Residence will pay $120 per parcel
- Multi-Family Residence will pay $120 per unit
- Vacant land and parking lots will pay $0.0746 per
square feet
- Recreational-Golf Courses will pay $0.0040
The Following classifications will pay $0.0878 per
square feet:
- Commercial buildings
- Office buildings
- Hotels/Motels
- Shopping centers
- Light industrial
- Heavy industrial
In its first year (FY 2010) the new tax will
generate $31.5 million in revenue.
Arguments in Support
- Long Beach’s current property tax rate of 1.06
percent is the lowest of California’s ten largest
cities and LB’s overall tax burdens are generally
less than most large cities.
- When factoring in the
Enterprise Zone benefits, LB’s tax structure is very
favorable for most businesses.
- The quality of
degrading infrastructure for the last 30 years is
equivalent to loss of funding throughout that period
of time.
- The degradation of
infrastructure costs the city of Long Beach millions
each year in economic development
- All residents and
businesses in the city benefit from decent, safe,
sanitary and optimally functioning infrastructure
and the resulting elimination of blighting
influences.
- A portion of the
infrastructure costs will be funded by the feds.
Further postponement will increase overall costs and
may see the loss of federal funds which are
available now
Arguments in Opposition
- At least 1/3 of the tax burden will borne by
commercial property owners, and since the majority
of residents are renters, the property owner burden
may exceed 50%. Many owners may not reside in LB and
cannot vote on the proposal
- The parcel tax will
proportionately hurt businesses; companies such as
Boeing will expect to pay an additional $800,000 a
year, which may be passed down to the consumers/
lessees
- The infrastructure
improvements should be confined to just streets,
sidewalks, alleys sewers and , coastal water quality
upgrades
In this downturned economy, businesses and residents
are already suffering from income shortfalls;
hurting their bottom line makes things worse.
- A $571 million tax
would hurt the desirability of Long Beach as a
destination for business and economic engine.
Interest costs not yet quantified,
More
Information
Click
here for a
Long Beach
Business
Journal
article on
this issue.
Click
here for a
PowerPoint
presentation
on the Act.
Click
here for a complete outline of the Act.
Click
here to take
our survey
on this
issue.
Email
us for more information. |
