Marin-Sonoma Mosquito and Vector Control District seeks new tax

The Marin-Sonoma Mosquito and Vector Control District, which faced criticism for its recession-era spending, is now warning it might run out of cash in several years and is seeking voter approval of a new tax on property to help pay for services and costs related to both current and retired employees.

Agency officials say the district, based in Cotati, has reined in costs and cut services as much as possible without impacting its core mission, which is controlling mosquitoes and other disease-carrying insects and pests in the two counties.

About 213,500 property owners in Sonoma and Marin counties started receiving tax ballots in the mail this week. At the same time, the district issued a news release warning about the early arrival of aggressive mosquitoes in the North Bay, including those that carry the potentially fatal West Nile virus.

The district has reserves of about $10.1 million, which is $1.5 million more than its entire budget for this fiscal year. But officials say the district will be operating at a structural deficit this year and that without additional revenue, will burn through its remaining reserves in six years.

“Like many other local government agencies, we are being squeezed by rising costs and relatively stagnant revenue,” said Phil Smith, the district’s general manager. “The district has for some years been trimming budgets and operations.”

At least one member of the district’s board of trustees, however, is opposed to the district’s strategy.

“I think it’s important that folks understand what they’re voting for,” said Frank Egger, who represents the town of Fairfax in Marin County. “Sure, we need mosquito services. But to raise this agency’s taxes 59 percent is more than I can support.”

The proposed assessment, which requires a simple majority for passage, would amount to $12.86 in the first year for a single-family homeowner. Adding in other current taxes tied to the agency would bring the total annual amount for mosquito-fighting and related services to about $35 a year. The agency receives funding through a share of general property tax paid by residents of the two counties and revenue linked to a number of assessments.

Different arrangement

The proposed new assessment would generate an estimated $3.59 million in revenue for the agency in the first year. The assessment could be increased to reflect the rate of inflation in subsequent years, with any increases not to exceed 5 percent annually.

The funding arrangement is different from the last major voter-approved assessment the district secured in 1996. It maxed out last year at $12 for a single-family home.

Smith said the lack of an overall cap on the proposed assessment meant the district wouldn’t “need to bother the voters again with an additional ballot process,” and also spare the district the cost of putting forth a future initiative. He said the district is spending about $415,000 for the current balloting.

The public’s only recourse for addressing future increases under the proposal would be to lobby district trustees, who would be empowered to set the assessed amount.

“The public is welcome to address the board of trustees at any of its regular meetings and also write to them and convey their opinion,” Smith said.

Smith said trustees approved the levy proposal at a public meeting on Feb. 11. But the only subsequent public hearing is at the trustee’s meeting on April 15, after which voting closes. That’s also the same day when many people will be scrambling to file their state and federal income taxes.

Smith defended the public rollout of the initiative, saying “it’s always a challenge” informing residents in the two counties.

“We try to reach as many people as we can with our relatively lean budget,” he said.

Criticized over spending

The district has faced public criticism in recent years for increasing spending at a time when most government agencies scaled back because of the recession. Critics also said the agency lacked transparency about its finances, committee meetings and memberships.

The district was cited in a 2013 Marin County Civil Grand Jury report as having the highest unfunded retiree health care liabilities among the city, county, school and special district agencies that did not have a plan in place to pay down the expenses. The district’s amount totaled $12.03 million.

Smith, who was hired in 2012, said the district has made progress addressing costs. He said the unfunded pension liability of $7.34 million is expected to decrease next year because of favorable investment returns, and that the district is on a 17-year catch-up plan to eliminate the unfunded liability.

He said the district also addressed unfunded retiree health care liabilities, which total $9.19 million, by establishing a trust fund with CalPERS.

Smith said staff accepted pay and benefit concessions in the most recent three-year contract, and that new hires will receive reduced pension benefits, pay greater contributions and will not receive employer-paid medical benefits in retirement.

“Each year, the budget committee, staff and the board have pored over the budget line by line looking for efficiencies and reductions. So at this point, I am confident that further cuts cannot be made without reductions in services,” he said.

Cotati resident Yvonne Van Dyke, president of the board of trustees, said the district is justified in seeking the new tax levy.

“We have to make sure the monies are in the funds so that people can get their retirements when they come due,” she said.

The district’s budget for the current fiscal year is $8.59 million. At current funding levels, it has sufficient reserve funds to buffer the structural deficit through fiscal year 2020-21. But the district would run out of money by fiscal year 2021-22, according to a financial report prepared for trustees in November.

The district employs 35 people year-round and also brings in seasonal help.

According to the state Controller’s Office, the average wage for district employees is $50,135, with an average $25,088 spent on retirement and health care costs.

Smith, who earns $153,985, is the district’s highest paid employee. Field technicians earn between $65,693 and $87,389.

Egger, who has been a district trustee for a decade, made the case that the district’s administrators are overpaid. He claims the district has failed to explore alternatives to address its financial situation, including seeking more concessions from employees or merging with neighboring mosquito and vector-control agencies.

Support for tax levy

Egger said he and Phil Paisley, the trustee who represents the town of Ross in Marin County, were the only two members to reject the tax proposal. He noted that the proposed assessment represents a 59 percent increase over what district residents currently pay.

“How does a government agency justify a 59 percent increase in one year?” Egger said.

But Smith said a sampling of residents in Sonoma and Marin counties last year revealed more than 62 percent supported the proposed tax levy. Property owners who own more than one piece of property with the same mailing address in the district will have their vote counted for all of their properties, up to a maximum of 14 parcels.

Smith said if the tax levy fails, the district will have to “seriously consider reducing the services that it offers. Exactly how that would play out would be left to the board of trustees.”

You can reach Staff Writer Derek Moore at 521-5336 or derek.moore@pressdemocrat.com. On Twitter @deadlinederek.