Jun 1 2019

The Piedmont Budget Hearings usually produce few comments on the tax levies or allocation of funds.

On Monday, June 3, at the  7:30 p.m. City Council meeting in City Hall, a Public Hearing will be held on the FY 2019-20 Budget.  The meeting will be broadcast live on Cable Channel 27 and from the City website under videos. 

Below are the staff reports, recommended tax levies, and report from the Piedmont Budget Advisory and Financial Planning Committee.

06/03/19 – PUBLIC HEARING Regarding the Proposed Budget and Fee Schedule for FY 19-20 and the Levy of the Municipal Services Special Tax and the Special Municipal Sewer Tax, Receipt of a Report from the Budget Advisory and Financial Planning Committee, and Consideration of the Following:

Report from the Budget Advisory and Financial Planning Committee

a. Adoption of the FY 19-20 Operating Budget

b. Adoption of the FY 19-20 Other Funds Budget

c. Approval of the FY 19-20 Schedule of Fees and Charges

d. Confirmation of the City’s Annual Appropriation (Gann) Limit

e. Approval of the Levy of the FY 19-20 Municipal Services Special Tax

f. Approval of the Levy of the FY 19-20 Special Municipal Sewer Tax

Comments to the City Council >

citycouncil@ci.piedmont.ca.us.

 

 

May 28 2019

Piedmont Budget Advisory & Financial Planning Committee:

Thursday, May 30, 2019

7:00 p.m.

City Hall Conference Room, 120 Vista Avenue, City Hall

The Committee will consider what to recommend to the City Council regarding taxes on Piedmont properties.  The meetings of the Budget Advisory and Financial Planning Committee are not broadcast. Committee minutes of the meetings are not produced.  No supporting documents are available to the public prior to Committee consideration.  The meetings are open to the public, and upon request at the meeting, any documents distributed to the Committee will be made available to the public.

Agenda calls for 

  1. Discussion of the Municipal Services Special Tax (Parcel Tax) and Consideration of the Committee’s Review of the Parcel Tax Pursuant to Resolution 120-14

Roster 

Council Liaison: Mayor Robert McBain – rmcbain@piedmont.ca.gov – (VM) 420-3048
Staff Liaison: Finance Director Michael Szczech – mszczech@piedmont.ca.gov – (W) 420-3045

Committee Members:

Cathie Geddeis

Bill Hosler

Deborah Leland

Christina Paul

Maya Rath

Michael Reese

Frank Ryan

Alternate:

Chris Kwei

May 21 2019

Piedmont Budget Advisory & Financial Planning Committee

Thursday, May 23, 2019

6:00 p.m.  

Emergency Operations Center, Police Department, 403 Highland Avenue

The meeting is open to the public. The meeting will not be broadcast or recorded.

Regular Agenda

1. Update on FY 18-19 General Fund Revenue and Expenditures: Projected Actual vs Budget
2. Overview of FY 19-20 Budget
3. Review of Ten Year Projections and Long Term Pension and General Fund Projections
4. Review of Facilities Maintenance Fund Projections
5. Discuss FY 18-19 Year End General Fund Transfers
6. Discuss the Process for Reviewing Parcel Tax Renewal

Meeting back up materials have not been publicly distributed. 

The City Council on May 20, 2019 held the first of the two Public Hearings on the FY 2019-20 Budget.  There were no comments from the public at that Hearing.

Presentation by Finance Director Michael Szczech at the May 20, 2019 Council Public Hearing.  >Budget_Council_MTG_May 20_2019_PP

Contacts and Members of the Piedmont Budget Advisory and Financial Planning Committee

Roster *

Council Liaison: Mayor Robert McBain – rmcbain@piedmont.ca.gov – (VM) 420-3048
Staff Liaison: Finance Director Michael Szczech – mszczech@piedmont.ca.gov – (W) 420-3045

Committee Members:

Cathie Geddeis

Bill Hosler

Deborah Leland

Christina Paul

Maya Rath

Michael Reese

Frank Ryan

Alternate:

Chris Kwei

*Updated: May 22, 2019

May 18 2019

ECONOMIC FACTORS AND NEXT BUDGET 

General Fund

Over 60 percent of the City’s general revenue sources are property related. One of the critical sources of General Fund revenue is the voter approved parcel tax which represents approximately 7% of the General Fund revenues and provides discretionary funding to maintain essential services.

In November 2016, Piedmont voters approved a four year extension and increase of the parcel tax, which will run from July 1, 2017 through June 30, 2021. The additional funds will assist with facilities maintenance and the modernization of information technology systems.

Another critical source of General Fund revenue is the real property transfer tax, which is realized when homes are sold. During this fiscal year, real property transfer tax represents approximately 12% of General Fund revenues, the same as compared to last fiscal year. Real property transfer tax is an area to be monitored as tax receipts will fluctuate as they are dependent on the strength of the real estate market in Piedmont.

In FY 2017-18, revenues in excess of the budgeted amount was transferred to the Facilities Maintenance and the Pension Rate Stabilization Funds.

The City’s salary and benefit costs represent approximately 69% of the General Fund and the employee agreements from 2017 provided for salary increases, but required employees to continue contribution to pension and medical costs.

Sewer Fund

On August 4, 2014, the United States Environmental Protection Agency (EPA) issuing a negotiated Consent Decree (CD). The CD is intended to provide an expanded period of time (21 years) to allow the City to rehabilitate the sewer systems in order to substantially reduce the amount of infiltration and inflow (I&I) in the EBMUD system.

The City restarted Phase V preliminary work and has completed the 100% design documents and has submitted State Water Resources Control Board (SWRCB) loan documents since the State provides funding with low interest rates. The SWRCB granted the loan and construction began in the summer of 2017 and was completed in the fall of 2018.

READ the entire Audit by clicking below:

05/20/19 – Receipt of the FY 2017-2018 Audited Financial Statements

READ the May 20, 2019 agenda by clicking below:

http://www.ci.piedmont.ca.us/html/govern/agendas/2019-05-20.pdf

May 15 2019

The Piedmont School District contracted Dr. Timothy McClarney of True North Research for a Tax Survey and the results were presented April 24. Plainly taxpayers are more receptive to a square foot tax of building than the current flat rate levy. Dr. McLarney’s survey report states on p.18: “More tax rate sensitivity for flat rate / less tax rate sensitivity for square foot version.” Dr. McLarney confirmed this verbally.

On p. 7 the survey shows a preliminary voter test with no ballot arguments presented. The survey polled a $3,056 flat rate and a $1.25 square foot tax; both garnered favorable 73-74% definite/probable approval. However this was not an equivalent comparison. $3,056 is a 15% increase over the current $2,656 flat tax. The $1.25 tax generates 25% more revenue than the current flat tax. This is revealed in the May 8 Staff Report which shows that the current $2,656 generates $10.4 million, and that an additional tax of 25 cents per square foot will generate $2.6 million, a 25% increase, for a total of $13 million.

Conclusively, the Final Ballot test is shown on pages 15-17. The Final shows definite/probable votes after all positive and negative ballot arguments are presented within a 5% margin of error. The 25% revenue increase of $1.25 square foot received a 73.5% approval. The 15% increase flat rate of $3,056 received a 62.1% approval on the poll. 66.67% would be needed to pass. Unquestionably a $1.15 square foot tax, equivalent to the $3,056 tax, would poll higher than 73.5%.

Piedmont taxpayers have generously supported our schools and the School Board will now hopefully respect the wishes of voters by placing a single $1.15 square foot tax building tax before voters for virtually certain approval.

– Rick Schiller, Piedmont Resident

Survey > 2019-04-24 VI_A_PollingResultsPresentation_0

Editors Note: Opinions expressed are those of the author.
May 6 2019

Recommendation:

Two parcel tax measures: one for each separate parcel and a second measure, an additional add on tax based on square footage of each Piedmont building including single family residences. See full report linked below.

The School Board will discuss potential School District parcel tax measures at their Wednesday, May 8, 2019 Board Meeting in City Hall, 120 Vista Avenue.  The meeting will be broadcast live on cable Channel 27 and the Piedmont website under videos/school board. The tax measure agenda item is set for 8:40 p.m.

  1. Recommendation for 2 Measures on the November 2019 Ballot 

Given the recent poll results and Piedmont’s current educational needs, District staff recommends that the Board of Education consider asking voters to support the renewal of its existing parcel tax to maintain current programs at the $2,656 flat rate (“Measure A”) and in a separate measure (“Measure B”) asking voters for an additional amount ($0.25 per building square foot) to ensure that Piedmont schools will be better able to attract and retain qualified teachers and staff.  Renewing the existing parcel tax (“Measure A”) would secure, $10.5 million in revenues. Measure A is a continuation, no tax increase measure. We would also recommend an 8-year “duration” of the tax to provide a stable ongoing source of revenue to the District and fulfill the description as a pure continuation of what is in place today.  Additionally, we recommend that a second measure (“Measure B”) be placed on the ballot. This second measure would be set at $0.25 per building square foot and would also have an 8-year duration.

Passage of Measure B would result in an additional $2.6 million to the Piedmont schools. Importantly, the entire community would share the burden of an increased tax (although larger properties would pay more and smaller properties less – $139 per year for the smallest residential parcel). An added benefit is that if this tax were challenged from a legal standpoint, only the supplemental tax would be at legal risk.

If both measures pass, the smallest square foot homeowner would pay $2,795 per year, and the largest square foot homeowner would pay $6,568 per year. Together, both measures would raise $13.1 million.

Read the full staff report on the tax measures: > VII_C_BackgroundSchoolSupportTax_0

Read the full May 8 School Board Agenda > https://agendaonline.net/public/Meeting.aspx?AgencyID=1241&MeetingID=72017&AgencyTypeID=1&IsArchived=False

Apr 22 2019

Discussion of School Support Tax Polling Results:

Piedmont Unified School District, City Hall, 120 Vista Avenue.  The School Board Meeting will be broadcast live 7:15 p.m., Wednesday, April 24th on Cable Channel 27 and from the City website under videos/School Board meeting.

READ the staff reports below:

VI_A_BackgroundSchoolSupportTaxPollingResults_

VI_A_PollingResultsPresentation_

Apr 17 2019

Our Piedmont community will soon be asked to renew the School Support Tax that funds roughly 25% of the Piedmont Unified School District’s (PUSD) budget. Because the State does not adequately fund education, the School Support Tax is critical to maintaining the excellence of Piedmont schools.

The current School Support Tax (Measure A), approved by the community in 2013, taxes each taxable parcel the same amount. In recent letters, Mr. Rick Schiller advocates what he terms a “progressive tax” to replace Measure A. Mr. Schiller proposes that the next tax: (1) apply a uniform tax rate to the square feet of buildings on a taxable parcel, rather than a uniform amount to each taxable parcel, thus shifting more of the cost of schools to owners of large homes; (2) impose a lower rate on unimproved lots; (3) include an “income based senior exemption”; and (4) continue to include “compassionate SSI and SSDI exemptions,” which exempt property owners below certain poverty levels.

The next School Support Tax should fairly allocate a community cost and must indisputably comply with the law. Mr. Schiller’s proposal exposes PUSD to litigation risk that I believe would be imprudent to accept. Further, I do not consider Mr. Schiller’s proposed tax to be “progressive.”

I must start with the litigation risk (excuse the detail), which could impose unaffordable costs on PUSD and potentially leave our schools unfunded. Piedmont’s School Support Tax is a “qualified special tax” authorized by California Government Code § 50079, which provides such a tax “means special taxes that apply uniformly to all taxpayers or all real property within the school district, except that unimproved property may be taxed at a lower rate than improved property.” (Emphasis added).

In Borikas v. Alameda Unified School District, 214 Cal.App.4th 135 (2013), the Court invalidated Alameda’s school parcel tax (Measure H), which taxed residential and commercial properties, and commercial properties above and below 2000 square feet, differently. The plaintiffs argued that Section 50079 “means all taxpayers and all real property must be treated the same, and school districts are not empowered to treat different kinds of taxpayers, and different kinds of real property, differently.” Id. at 147. The Court agreed, holding that Section 50079 “does not empower school districts to classify taxpayers and property, and impose different tax rates.” Id. at 151. The Court found it could “sever” the invalid parts of Measure H, and upheld a parcel tax of $120 per parcel. Id. at 166-67.

Mr. Schiller, and others before him, have argued that Borikas does not bar a tax under Section 50079 based on a uniform rate per square foot (either of land or buildings). Borikas did not expressly rule on such a tax. However, Borikas found it must follow Section 50079’s text, and the text refers to “special taxes that apply uniformly to all taxpayers or all real property.” It does not refer to a uniform rate, but to a tax that applies uniformly.

The tax imposed on small vs. large parcels/homes would be different under a “per square foot” tax. Further, looking to Section 50079’s legislative history, Borikas rejected Alameda’s claim that it would be unfair for “all parcels [to] bear the same tax, regardless of size,” noting: “The Legislature was aware, however, that uniform parcel taxes were considered ‘more inequitable’ than ad valorem property taxes because all parcels, regardless of size, are subject to the same tax. … Nevertheless, the Legislature made no adjustments or provisions in this regard.” Id. at 158 (emphasis added); accord id. at fn. 27.

Nothing since Borikas has removed the risk that a Piedmont “per square foot” tax under Section 50079 will be ruled invalid. In 2014, SB 1021 was introduced in the California Legislature to amend Section 50079 to expressly authorize a “per square foot” tax—it did not pass. In 2018, the Legislature adopted AB 2954, which amended Section 50079 to allow school districts to tax unimproved property “at a lower rate than improved property,” but did not authorize a “per square foot” tax.  While the reference to a “rate” rather than an “amount,” provides an argument that uniformity refers to “rate” also, there is no ruling on point.

Mr. Schiller notes that the Alameda Superior Court has twice upheld Alameda School District’s later parcel taxes, which impose a “per square foot” taxes. However, the Alameda Superior Court also upheld Measure H, and the lawsuits against Alameda’s later taxes were settled before the First District Court of Appeals, which issued Borikas, ruled on appeal.

Mr. Schiller also relies on Dondlinger v. Los Angeles County Regional Park, No. B284932 (2019), but that case addressed Pub. Resources Code § 5566, a different statute, which expressly states that a park district may establish a “rate” which “is to be applied uniformly.” Further, Dondlinger is a Second District decision; Piedmont is in the First District, which is governed by the Borikas decision.

Until the First District Court of Appeals or the California Supreme Court upholds a “per square foot” school parcel tax, or the Legislature amends Section 50079 to expressly allow such a tax, I do not think it is prudent for PUSD to take the litigation risk of asking Piedmonters to approve such a tax. Litigation could cost $100,00 to $500,000, depending upon motions, trial and appeals. PUSD does not have that to spare. Moreover, to feel secure in spending the tax revenue, PUSD would have to file a validation action, but that simply ensures any litigation starts quickly.

While it is possible that no Piedmont property owner would challenge such a tax, there is no way to remove the risk. (Note that Alameda’s parcel taxes have been challenged three times). PUSD could not spend the tax revenue until any litigation is resolved, as PUSD would have no way to pay back the taxes collected if the tax ultimately were held invalid. Further, because PUSD cannot fund its school budget without a parcel tax, if the tax was challenged, PUSD would have to run another parcel tax election immediately, at additional significant expense. Under Mr. Schiller’s proposal, PUSD (and every Piedmont family with school children) would take this risk so that owners of small homes could pay less than owners of large homes. There are times when accepting litigation risk is necessary. This is not one of them.

I also believe that the School Support Tax must be fair to Piedmont residents. The Piedmont schools benefit every resident. For nearly everyone, our children have gone, are going, or will go to school. Piedmont residents have shared the cost of public education no matter where they are in this cycle. Moreover, the excellence of the Piedmont schools is why Piedmont homes are so valuable. Further, an available and excellent public education is fundamental to civil society, and we all have a civic duty to ensure it. Asking the owner of each taxable parcel to pay the same amount seems fair to me. I include unimproved parcels as the Piedmont schools make those parcels valuable.

A “progressive” tax generally is perceived as taxing wealthy people more by increasing the tax rate at higher levels of wealth or income, and is supported by the notion that those who have more money can afford to pay more tax toward community needs. In claiming his proposed tax is “progressive,” Mr. Schiller equates a building’s “square feet” as equivalent to wealth or income, and assumes that owners with more “square feet” can afford to pay more. That may be true in some cases, but certainly not all.

Square feet alone does not establish the value of a home (consider age, quality or location). Owning a large home does not establish wealth other than the home itself (it may have been bought long ago) or a ready ability to pay higher taxes (a young family may have stretched to buy a home with sufficient bedrooms, or a retiree bought a large home years ago).

I also do not support an “income-based senior exemption.” Age does not determine whether a homeowner has a ready ability to pay the School Support Tax.  Nor is current income a true measure of wealth or ability to pay.

Moreover, per the last census, roughly 20% of Piedmont residents were over 65. Assuming roughly 20% of homeowners also are over 65 (it could be higher), exempting any significant number would either underfund the schools or impose a significant burden on the remaining taxpayers.

Further, under Proposition 13, those of us who have owned a home here longer (and are usually older) pay less property tax than young families who have bought a home more recently.  PUSD’s existing income-based SSI and SSDI exemptions (see Section 50079(b)) provide relief to those who are truly in severe financial distress, regardless of their age. That seems an appropriate balance between a homeowner’s ability to pay and the needs of the community.

I support the current Measure A structure—each taxable parcel paying the same amount to support our schools, with narrow exemptions for those truly in financial distress.

Richard W. Raushenbush, Former Piedmont School Board Member

Apr 16 2019

Extensive New Recreation Projects May Call for a New Piedmont Tax Measure

Projects being considered by the City are the Aquatic Center with expanded new pool and facilities, Coaches Field reconfiguration and night lighting, Linda Beach Park improvements, and updating of the Recreation Building and Veterans Hall.  

Volunteers with support primarily from sports and recreation enthusiasts may be knocking on your door to learn about your funding ideas for the numerous recreation projects through a voter approved bond measure.  Door knocking, a common election tool used to estimate specific approval or rejection of potential ballot bond measures, is underway in Piedmont. 

Some Piedmont leaders have indicated gaining more knowledge about Piedmont voter preferences for recreation facilities is needed to learn where support or opposition lies. The volunteer knocking on your door may be a neighbor. 

Larry Tramutola, a Piedmont resident and widely known political consultant on taxing issues involving cities, special districts, school districts, etc., volunteered to advise on methods for approaching and convincing voters to support a new recreation bond measure.

Consultants, planners, recreation enthusiasts, commissioners, and the City Council have for years been fashioning various plans for improved or enhanced recreation facilities throughout Piedmont. The City has expended a significant amount of money and time towards the plans.

To date, no bond proposals have reached the City Council. 

Consideration of voter acceptance of a bond measure was studied by the Council over a year ago resulting in insufficient voter support by polled voters for bond funding of the recreation projects. For approval, the bond measure would require approval by 2/3rds of those voting on the measure.

New Internal Revenue Service laws may impact Piedmonters willingness to further tax themselves, as there is a recent limitation of $10,000 on deductibility of state and local taxes.

Mar 27 2019

Will the properties be converted to multi-family housing?

Piedmonters are shocked and saddened to learn that by April 30th they will lose the Valero gas and service station in the center of Piedmont at Highland Way and Highland Avenue operated by Simon Ho.

Ho has rented the property for over 10 years and gained a highly regarded reputation for his service to the community and its many vehicles. Although negotiations had been occurring, Ho cannot meet the rental increase demands of owner Tarvinder Bains from $8,000 per month to $17,000.  Consequently, Ho has made plans to relocate his automobile repair business to MacArthur Avenue in the Dimond District of Oakland.

Bains has proposed no new plans for the property, however a significant new factor is a potential change of use allowed by Piedmont’s recent zoning change directly impacting the property.

Without voter approval, although required by the Piedmont City Charter, the property was rezoned from Commercial to Commercial and Multi-family housing (Mixed Use). The zoning change allows multi-family housing plus commercial use of the properties in the former Commercial zone. The zoning change allows housing projects with a height of essentially 3 stories to be built in the zone.

The zoning change approved by the Piedmont City Council not only impacts the Valero Station property in the center of Piedmont, but the Shell Station property recently noted “For Sale” at the corner of Wildwood and Grand Avenues.

A subcommittee of the Planning Commission has been meeting regularly to discuss and consider recommendations on Design Guidelines that would impact all zones in Piedmont including the aforementioned properties.  The meetings have not been open to the public.

“[Planning] Commissioner [Tom] Ramsey reported the subcommittee reviewed a complete draft Update of the Design Guidelines and provided comments. The majority of the consultants’ work has been consolidating information from various sections of the Guidelines and receiving feedback from local architects and Commissioners. Planning Director Jackson advised that draft Design Guidelines will be released for public review later in March, and the release will contain the dates for submission of public comments. The draft Design Guidelines will be presented to the Planning Commission on April 8 for discussion. At its May meeting, the Planning Commission will make a recommendation to the City Council. Planning Director Jackson thanked Chair Behrens and Commissioner Ramsey for serving on the subcommittee. Chair Behrens remarked that the use of photographs rather than drawings in the draft Design Guidelines gives more reality to accompanying comments.”  Minutes of March 2019 Planning Commission meeting. 

Planning Commission Agenda on Monday, April 8:

RECEIPT AND DISCUSSION OF DRAFT DESIGN GUIDELINES AND UPDATE – 

Receipt of a draft update of the City of Piedmont Design Guidelines, an informational report from the City’s consultant regarding the draft update, including an opportunity for public comment and Commissioner discussion.

The meeting is open to the public and will be broadcast live starting at 5:00 p.m. on Channel 27 and on the Piedmont website under videos, Planning Commission. 

Once the Planning Commission reviews the subcommittee, staff and consultants recommendations and approves them, their recommended Design Guidelines will go to the City Council for consideration and potential approval.  These meetings will be open to the public.

Valero and Shell Stations:

When there is a proposed change of use, all proposals must go before the Piedmont Planning Commission and the Piedmont City Council to receive Conditional Use Permit approval.  Public notification to nearby property owners is required when changes are reviewed, but, recently, when important changes were made to uses within the city, the city as a whole was not informed. 

Individuals interested in the development of either properties, Valero or Shell, can inform the Piedmont Planning Department and the Piedmont City Council of their desire to be notified when and if new plans are proposed for the two properties.

Planning Department – kjackson@piedmont.ca.gov

City Council – citycouncil@ci.piedmont.ca.us

For more information, contact Planning Director Kevin Jackson:   kjackson@piedmont.ca.gov