Money to Burn

We've been meaning to get around to a couple other items that have surfaced at recent City Council meetings, but Paystubgate has kept us pretty busy.

One of these other stories is the action pushed by Claremont Mayor Peter Yao at the September 25th City Council meeting to dedicate the anticipated transient occupancy tax (TOT) revenue from the new Hotel Casa 425 to funding programs for the homeless.

Tony Krickl in the Claremont Courier reported on the Council's discussion on the topic.

(Check out the article - there's a large photo of a group of Claremont homeless milling about the Casa 425 courtyard illustrating the extent of the problem.)

According to the article, city staff estimated the city's anticipated TOT revenue from the Casa 425 to be around $60,000. Staff also claimed that approximately 10% of the kids in Claremont schools are "without a permanent home." The article quoted Claremont 400 stalwart Sue Likens as saying that "it's shocking to think that nearly 500 of our young people are homeless."

But is that number really accurate? As Councilmember Ellen Taylor pointed out during the council's discussion, the Claremont School District includes kids living with relatives or living out of motels as among those without permanent homes. So, we're not talking about a Dickensian scene of 500 homeless waifs wandering the streets of Claremont.

In any case, there were two really unusual aspects to this issue. First, the money being discussed, $60,000 per year, does not exist. No one knows how much revenue Casa 425 might generate. It could be $60,000, or it could be half that. There is no data on the hotel to be able to predict the city's revenue stream from the hotel.

The other, larger problem is the fact that the city has allocated this money without having a program identified for it. It's just money in search of a problem, which is not the most efficient or wise way for a city to spend.

Rather than having groups propose programs and give a proposed budget for those programs, the city is saying, "We have $60,000 a year. Any takers?" Cities usually take the proposals first, then allocate the money after approving the programs. Here, Mayor Yao has done it backwards.

In the discussion on the issue, Councilmembers Taylor, Linda Elderkin, and Corey Calaycay all expressed concern about setting a precedent with this way of doing business. But in the end, only Calaycay voted against the funding mechanism.

Mayor Yao says he got the idea from a League of California Cities conference he attended recently. However, Mayor Yao did not know if the cities that had done this sort of earmarking of tax revenue had already identified specific programs beforehand or not.

Mayor Yao, and the other councilmembers, were apparently under pressure from Sue Likens and the local Interfaith Coalition to get that money set aside. In a lot of ways, Yao's and the council's reaction to that pressure is a lot like their initial reaction to Paystubgate - act without thinking.

Will the money be well-spent? Well, Mayor Yao himself mentioned that the money was needed because of the state's cutback on funding for Tri-City Mental Health, the joint agency run by Claremont, La Verne, and Pomona.

How well run was Tri-City? It filed for bankruptcy in 2004. The state's reasoning for eliminating its funding for Tri-City was that there are state-funded Los Angeles County programs that do the same thing, so why have redundant agencies?

As several of the councilmembers indicated, this method of funding is bad precedent, and nothing good will come of it, no matter how well-intended the actions were.