Jun 24 2014

Sewer Tax Will Not Be on November Ballot

On June 24, 2014, at a Special Meeting, the Council voted to direct staff to cease action to place the sewer tax surcharge on the November 2014 ballot.  With a large surge in Real Property Transfer Tax revenue, the windfall of money produces sufficient funds to cover the cost of an expedited rehabilitation of Piedmont’s sanitary sewer system. 

Council members Teddy King, Bob McBain and Tim Rood addressed potential lack of voter support, use of available funds, and advice of the Budget Advisory and Financial Planning Committee.  Mayor Margaret Fujioka joined the majority with her vote. Vice Mayor Jeff Wieler advocated the tax should continue to be pursued to build up City reserves, and he did not support the motion to cease action on the sewer tax surcharge.

3 Responses to “Sewer Tax Will Not Be on November Ballot”

  1. Piedmont has completed 65% of its mainline sewer system through direct residential taxpayer contribution. Vice Mayor Wieler commented tonight that Berkeley and Emeryville are now ahead of Piedmont in terms of Sewer Replacement. This is inconsistent with published information. According to the City of Berkeley website, Berkeley has completed “over a third of the City’s mainline sewers.” Emeryville has completed about 70%, but of course Emeryville with is monster commercial tax basis is not a fair comparison to Piedmont and Berkeley. And unlike Piedmont and Berkeley, Emeryville has no sewer parcel tax. Piedmont will continue to be the “poster child” for the EPA’s compliance program, as in addition to the aggressive replacement of the sewer mainline, many Piedmonters have voluntarily replaced – at considerable personal expense – their own personal sewer laterals.

  2. It is interesting to contrast the transparency that City Hall applied to this tax windfall to that of the undergrounding cost overruns several years back. Not a perfect comparison but by bringing this information forward quickly, Council was able to publicly discuss options for the tax surcharge whereas with undergrounding, overruns mounted and Council had few options. Credit the new City Administrator and Mayor for quickly disclosing this development.

    Much of the discussion Tuesday night was about whether Council was adhering to the advice of the MTRC and BAFPC, both which advise Council to set aside excess tax revenue for facility repair and employee/retiree benefit programs. That is prudent advice but to what end – simply to build up the fund balances? The 2014 BAFPC reported the Equipment Replacement and Facility Maintenance Funds have healthy balances at this time so why not spend some of those resources now on facility repair? Sewers are facilities and Piedmont is under court order to repair them so Council acted appropriately in using this year’s surplus for the program. And when Council does this, at some later date, it will likely be able to add funds to the reserves anyway. Transfer tax reserves were at $4M as of 6/19 and staff disclosed that only $0.8M may be needed to top off the Sewer Fund so there will still be excess tax revenue to put into reserve. Best of both worlds.

  3. I must extend an apology to Mr. Wieler. The information published at the City of Berkeley website is incorrect. Speaking to a Berkeley Public Works official today, I learned Berkeley has replaced approximately 80% of their mainline sewer. I was in error based on City of Berkeley published but factually incorrect information.

    Garrett highlights the improved transparency issue; Mayor Fujioka responded promptly to timely staff information. The Piedmont Hills Underground Utility District commenced work in Mid-July 2009 and by the end of August the bedrock change work orders exceeded the entire project contingency reserve. After the Mid-October Crest Road utility trench washout, staff finally informed Council in November of the cost over runs. Staff opted to pay for the Crest road repair by transferring out $296,000 from the sewer fund.

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