Lindsay city manager Bill Zigler discusses local economy, dependence on Ag and State influence at Lindsay Cultural Forum
By Reggie Ellis @Reggie_sgn
LINDAY – The Lindsay Cultural Arts Forum welcomed someone not too far from home last Wednesday, Oct. 4. Lindsay city manager Bill Zigler discussed three major financial challenges that face the City of Lindsay: 1. the erosion of its economic base; 2. its dependence on agriculture; and 3. state decisions that impact the city.
In order to tackle the lack of tax revenue, Zigler said the city needed to diversify its tax base. The City has worked for years to bring a Dollar General to town last week received news that it will finally happen.
Zigler said the city has tried to attract major employers, such as manufacturers, to reopen in the old Lindsay Olive Growers plant on Tulare Road and have come close a few times. A Chinese dairy producer tried to locate there in 2014 to supply the country with powdered milk but the deal fell through after they were unable to obtain the proper work visas. Zigler said there was also a Texas company wanting to do shrimp packaging at the former plant.
“We won’t take anything off the table,” Zigler said.
The city also passed Measure O in June. The 1% district tax increases revenue by one penny on every in person and online purchase made from a company within the city limits. The City Council has already authorized staff to purchase a $609,000 fire truck with revenue from the new tax, most of which is planned for public safety expenses.
For the first time in many years, Lindsay has upscale housing being built on the northwest side of town. Autumn Hills, the newest subdivision in Lindsay, is an upscale housing project underway on Maple Drive north of Tulare Road. Built by Smee Homes, Inc. in Porterville, Autumn Hills homes start in the low $200,000s and range from three- to five-bedrooms. The homes, which range from 1,616 to 2,117 square feet, feature large open kitchens, walk-in closets and three-car garages. The subdivision also uses its close proximity to the McDermont Field House as a point of interest for potential buyers.
Sales tax leakage is a major problem for Lindsay as most of its professionals, including city and school district administrators and staff, live outside of the community.
Three major State impacts to the city include the dissolution of redevelopment agencies in 2012, changes in water quality control testing, and state agencies demanding repayment of grants that have already been expended for projects that have long been completed. Zigler, and city hall, have long asserted that the Lindsay Redevelopment Agency (LRA), which collected about $1.2 million annually on the incremental improvement in home property values, would have been enough to repay state loans used to build the McDermont Field House and the Lindsay Wellness Center and Aquatic Center. But without the LRA, the city was left with $XX million in debt for those facilities. It also robbed the city of its only source of funding for blight removal and helping businesses to renovate their existing buildings.
Last year, the state tightened its restrictions on testing contaminant levels in the city’s water supply. Zigler explained that the state used to test all nine of the city’s wells and aggregate the contaminant level to see if the entire system met water quality standards.
“Now if any one site fails we fail and we have to pursue a solution,” Zigler said.
But that solution would require a $20 million project to upgrade the city’s water treatment facility. Zigler said they are searching for grant funding to solve the problem but have been unable to successfully obtain funding.
Another State decision that hit rural cities hard is recent legislation that lowered the threshold amount for prevailing wage projects. Prevailing wage is the rate established by the State that employees must be paid when working on public projects. By lowering this threshold to $1,000 nearly every city project falls within prevailing wage, which can increase the cost of a project by as much as 45%.
“We pay for the people who work on those projects San Francisco rates in rural Tulare County,” Zigler said.
Another major challenge, and one that is not unique to Lindsay, is the city’s unfunded liability for employee pensions. Zigler said Lindsay’s total liability to fulfill its current obligations to the Public Employee Retirement System (PERS) is $14.2 million and
“We have a 5% separation between steps, so when you bump the bottom step you step up every other step,” Zigler said. “The good news is we have been paying our unfunded liabilities and are in better position than some other cities.”
That number will likely continue to grow until all of the City’s employees fall under the new system. Under the Public Employees Pension Reform Act (PEPRA), anyone hired after Jan. 1, 2013 pays more of the overall contribution to their pension as public agencies shift more of the burden onto the employee by up to half. Unfortunately, Zigler said most cities will have to do to continue to cut pensions and positions as employees live longer or face fiscal insolvency.
“We are working with the League of Cities to find a solution and are negotiating contracts with our unions, but I am limited on what I can do,” Zigler said. “The solution needs to come from Sacramento.”
In the meantime, Zigler said the city has started to turn its attention to smaller projects that are more tangible to the community. He said the city has a $330,000 grant through the Housing Related Parks Program (HRPP) to fix up the baseball field and amenities at Olive Bowl Park. The entire project will cost between $411,000 and $452,000 so Zigler said they are partnering with service clubs and businesses to find in-kind donations of materials, equipment and labor to make up the difference. The HRPP was funded through Proposition 1C, the Housing and Emergency Shelter Trust Fund Act of 2006, as an incentive for cities and counties to provide affordable housing for low income residents. The money must be spent by next June or the city will lose the funding.
The renovation project at the Olive Bowl is part of a larger park and recreation master plan that Zigler said will also include restoring the east side of Harvard Park for soccer fields and putting shade structures over the playground equipment at City Park to prevent children from burning themselves on it during the hot summer months. The city will be able to take tax deductible donations for these projects thanks to a partnership with Healthy Kids-Healthy Lindsay, which has agreed to serve as a foundation for those projects.
“Overall we’ve been in this position since 2015 and have been in austerity mode and will stay in austerity mode for now,” Zigler said.