Nevada County Picayune and Gurdon Times Newspaper Archive

Smith Urges Voting For Prop 1

While much attention has been given to proposed Amendment 4 for the Nov. 3 General Election, little has been shown to Amendment 1.

This proposed amendment to the state constitution would allow, if it passes, cities and counties to enter into short-term lease agreements and pay interest.

By so doing, cities and counties will be able to purchase or lease needed equipment without having to worry about how they can afford them.

Currently, it is against the law for any city or county to enter into a lease agreement for more than 12 months and even then the government in question is not allowed to pay interest on the lease.

Proposition 1 has built in safety measures to prevent a city or county from breaking itself by getting involved in too many leases.

Under the proposal, the total amount of a city's lease agreement can never exceed 10 percent of the assessed value of taxable property within the city limits.

For counties, this amount is 5 percent of the assessed land value.

And, neither a city or county can enter into an agreement lasting longer than five years on any item.

Gurdon Mayor Rick Smith said Amendment 1 is a good thing as long as the governing body involved takes an overall view of its budget, and examines its revenues and expenses for the lease period in question.

Anytime a city or county does any financing, Smith said, they need to be sure money will be available at the time it's needed.

In Gurdon, he said, the city has not been able to afford purchasing a new police car. The city has a special fund it can use to purchase equipment for the Gurdon Police Department, but not enough to buy a new car outright. A fully equipped police car costs about $21,000.

This fund generates about $7,000 annually. Smith said this is enough to pay the note on a new car.

The passing of Amendment 1, he said, would help make a more efficient government. The GPD, until this year, has never had a capital improvement budget and it will take several years for this fund to build up enough money to do much good with.

However, he continued, the need for a new police car is vital and pressing. This is something the city can't wait indefinitely to do. In fact, Smith said, the GPD should be buying a new car every other year.

These cars, he added, have a lot of miles put on them each year.

The street and fire departments in Gurdon have capital improvement funds and have had for several years as established by a bond issue.

This bond will run out in a few years and the money coming in will cease.

Under the existing bond, the city was able to buy a new fire truck for the Gurdon Fire Department and a back hoe and other equipment for the Gurdon Street Department.

When this tax is removed from the books in five or six years, Smith said, the capital improvement funds for these departments will dwindle.

When this happens, the city could conceivably wind up with equipment getting old and having no way to replace or properly repair it, unless another bond issue was passed by Gurdon residents.

By passing proposition 1, Smith said, the city could continue to update its equipment without having to ask the people for another tax.

While he said it's not good to allow cities to pay interest, if the governing body does its job right, has a good accounting system and is able to project its future money, they should be allowed to.

In addition, he said, under proposition 1, cities could simply lease equipment and not necessarily purchase it outright, or at all.