NEWARK -- As council members consider putting a utility tax on the November ballot, about 18 months before the current one expires, city leaders say that critical public services might be cut without it.
The tax would extend Measure U, which since 2011 has charged Newark customers 3.5 percent of their bills for electrical, natural gas, telecommunications and cable TV services. Measure U, which expires at the end of 2015, this year generated $3.5 million -- about 9 percent of Newark's annual budget.
The new tax rate would be slightly less -- 3.25 percent -- starting January 2016.
"It will pay for some very critical services that the community is enjoying right now," said City Manager John Becker.
The city has used Measure U funds to reopen the senior center, add four police employees, and reinstate several public safety programs, including neighborhood watch groups and school crossing guards. Without the ballot measure, Newark leaders say that next year they'll have to cut those programs, as they did after the 2008 economic collapse.
The city's $40.4 million budget for the upcoming year will have a small surplus, city Administrative Services Director Susie Woodstock told council members last month.
The following year, 2015-16, the city could balance its projected $41 million budget, but only if voters approve the new tax this November, city leaders said.
However, if the current utility users tax expires with no replacement, Newark would have an annual deficit greater than $3 million, city leaders said.
The City Council is to consider the question Thursday and must decide by July 10 whether to place the tax on the November ballot.
It would last five years, expiring Dec. 31, 2020. Low-income residents and senior citizens 70 and older would be exempt.
As Newark's climb back to pre-recession fiscal stability appears to have been steep, it has joined other East Bay cities -- such as Hayward, which won voter approval of a half-cent sales tax three weeks ago -- in turning to new taxes to bridge revenue gaps.
"(Other) cities are looking to place a tax on the ballot, too," Becker said.
Newark's need to extend the tax is partially due, city leaders said, to its property values not having risen as quickly or sharply as the Bay Area's larger, more affluent cities, and its retail base not having recovered "to the extent that some of our neighboring cities have," Becker said.
To change that, city leaders have worked with NewPark Mall's owner, Rouse Properties, to boost the mall's sales.
City staffers will soon complete the Greater NewPark area master plan, which envisions a large mix of retail, housing and entertainment in the 200-acre area surrounding the mall, Becker said.
"We have other retail, but NewPark Mall really is our primary retail center," he said.
Contact Chris De Benedetti at 510-353-7011. Follow him at Twitter.com/cdebenedetti.
Council members are considering putting another five-year utility tax on November ballot. The meeting will begin at 7:30 p.m. Thursday in the Council Chamber, City Hall, 37101 Newark Blvd., sixth floor. Visit www.newark.org for more information.