Community Hall Tree

On Wednesday morning,  January 2, the holiday lights were removed from the slender redwood tree in front of the Piedmont Community Center, a sure sign that the holidays are over.

As we begin 2013, the Piedmont Civic Association (PCA) thanks all our readers, contributors and commenters.  It is your interest and support throughout 2012 that made the issues and discussions on the PCA website an even greater success this past year than in 2011.  As the only news organization in Piedmont that does not support or oppose candidates or ballot measures, PCA is committed to providing a community forum open to all points of view on civic matters.

We look forward to your thoughts, ideas and opinions about how best to maintain and enhance Piedmont as a desirable community throughout 2013 and the years to come.

The Editors

On Saturday, December 1, library users celebrated the opening of the Piedmont Avenue Branch Library in temporary quarters at 80 Echo Ave, behind the Piedmont Avenue Elementary School.

The modular unit belonging to the school was painted in a color scheme of white and green, which was carried throughout the new wall-to-wall carpeting, seating, librarian desk, and bookshelves.  Air conditioning, a shared male/female restroom and the acoustical tile ceiling with integrated lighting are also new attributes for the library.

(Read More about the move of the Piedmont Avenue Branch Library.)

Balloons line the new access ramp

Low bookshelves predominate

New chain link fence

Role of New Parcel Tax Subcommittee –

Piedmont Civic Association periodically publishes “questions and answers” on community issues.  The following responses to PCA questions were provided by School Board President Rick Raushenbush regarding the proposed  role of a new parcel tax subcommittee as part of the Board’s Budget Advisory Committee. The subcommittee would replace the independent Citizens Advisory Committee that reviews the $9.5 million in local school parcel tax levy spending each year.  (See original article.)

I am responding based upon my understanding of the function of the Citizens’ Advisory Committee, the Board’s public comments and the text of the proposed Resolution.  As you know, the Board itself does not take positions other than through properly noticed action items on its Agenda.  

• Why does the Board resolution propose to significantly and permanently reduce the CAC’s charge?

In the Board’s view, the proposed resolution does not significantly change the function served by the CAC, but rather moves it to the Parcel Tax Subcommittee of the longstanding Budget Advisory Committee.  The CAC was first created by the Board 4 years ago as part of the last parcel tax measure for various purposes, among them (a) to determine if the trigger for levying the Measure E emergency tax was met; (b) to provide advice on whether to levy some or all, or increase, the Measure B tax based upon consideration of whether the District needed the funds to provide its educational program; and (c) to serve as a resource to the Board by preparing a longer term trend analyses of the budget.  Measure E no longer exists.  The proposed new Parcel Tax Subcommittee will serve the remaining purposes.

• Why is the number of independent citizen oversight members reduced from “at least 7” to as few as 3, while the parcel tax is expected to continue to increase?

It is the quality of the participating citizens, not their numbers, that matters.  In my experience, both the CAC and Citizens Oversight Committee for the Seismic Bond had difficulty in obtaining sufficient volunteers able to commit  the time necessary to serve on the Committees.  Fortunately, some citizens have been willing to serve multiple terms rather than rotate off the Committees, but that has not served the purpose of obtaining different citizens’ viewpoints as well as I would have liked.  Setting the number of the Parcel Tax Subcommittee between 3 and 5 seems likely to ensure a sufficient number to provide diverse viewpoints and collaboration in the work.

• Why will former District staff members be permitted to serve on the subcommittee?

There is no good reason to exclude former District staff members who live in Piedmont and pay the School Support Tax from the Parcel Tax Subcommittee.  They have no personal conflict of interest as the current budget of the District no longer benefits them.  If a former District employee meeting those requirements wants to serve, they are entitled to express their view as a taxpaying Piedmont citizen as much as anyone else.

• How can the parcel tax oversight group be a subcommittee under the BAC  and at the same time report directly to the Board of Education?

The proposed Resolution provides that the Parcel Tax Subcommittee reports directly to the Board.  The Subcommittee will provide its report to the Board and one of the Subcommittee members will present the report at a public Board meeting.  It is a BAC subcommittee in that its members must be members of the BAC, and thus have made a commitment to be educated about the Districts finances and budget.  However, being a BAC subcommittee does not block its reporting to the Board.

•  How can a determination on the need for a levy and 2% annual increase occur without an independent review of the budget?

The Board of Education, whose members are elected by the vote of Piedmont residents, makes the determination whether there is a need to levy the base tax and whether to levy an up to 2% annual increase.  The Board members independently review the budget.  In addition, the Parcel Tax Subcommittee members will independently review the same information and provide advice to the Board about the levy. Thus your assumption that there is no independent review of the budget is mistaken.

• Why will the CAC no longer exist as an independent body permitted to acquire information on the need for the $9.5 million tax obligation?

The CAC is simply the name given to the citizens’ advisory committee regarding the current parcel tax.  The Parcel Tax Subcommittee will be the name given the citizens’ advisory committee under the proposed resolution.  The Parcel Tax Subcommittee is an independent body just as the CAC has been–a group of citizens, who commit to being informed, who will provide advice to the Board.  The key difference is that the Parcel Tax Subcommittee members will be members of the Budget Advisory Committee, who have thereby committed to attending the BAC meetings to learn about the District’s budget.  BAC members have always had the right to ask questions about the budget, and still will have that right.  Moreover, I note that the District’s budgets, and presentations about them, are available to the public on the District’s website.

• Why will the Board President and Vice President approve nominees, rather than a review by the entire Board and the usual public hearing process?

The Board President and Vice President reviewed and approved the proposed members of the CAC and are proposed to perform the same function for the Parcel Tax Subcommittee members.  There has never been any public comment or Board dissent with respect to the members of the CAC or the Citizens Oversight Committee for the Seismic Bond.  As I previously noted, to my knowledge, we have never turned away any volunteer who was able to make the time commitment from either committee.  No one on the Board felt a need to have the Board as a whole review and approve the volunteers rather than to delegate that task to President and Vice-President.

• What is the distinction in “resident of Piedmont” (BAC qualification)  and Piedmont “homeowner” (parcel tax subcommittee qualification)?

A Piedmont homeowners will pay the School Support Tax if the measure passes whereas a Piedmont resident who rents a place to live does not.  The goal was to have those who pay the tax on the Parcel Tax Subcommittee.

• Previous CAC membership has generally been for multiple years, while the proposed change requires an application be made annually.  Will continuity be lost and require an increased learning curve?

Because Parcel Tax Subcommittee members will be BAC members, they all should have the necessary information about the District’s finances and budget, and the State’s system of education funding, to perform their function.  This is one of the key benefits of having the Parcel Tax Subcommittee be members of the Budget Advisory Committee.  Moreover, annual applications may result in a diversity of viewpoints due to the shorter term whereas the experience with multi-year commitments is that we have very few volunteers for the committees.

• What is the meaning of  ”determine” in the ballot measure language? What will the subcommittee’s role be in determining the tax levy?

The proposed Resolution says “report to the Board of Education at the first public hearing held each year to determine the subsequent year’s levy.”  That is simply setting the meeting at which the Parcel Tax Subcommittee is making its report.  The determination whether to levy the base tax, and whether to increase the tax by up to 2%, will be made by the elected members of the Board of Education.  The Parcel Tax Subcommittee, like the CAC now, will provide advice to the Board, but, like the CAC now, will play no role in determining the levy.

Richard Raushenbush, President, Piedmont Board of Education

Very Low Income Residents Who are Blind, Disabled or Over 65 Exempt from Parcel Tax-

New language in a  resolution to be voted on by the Piedmont School Board on November 28 substantially expands the exemption from the proposed new school parcel tax.  The revised resolution contained in the November 28 School Board packet now covers all persons on Supplemental Security Income for any reason.  The exemption will be available to low- income residents who are blind, disabled, or over 65.

The resolution language previously presented to the Board on November 14 offered a narrower “disability” exemption which applied only to residents who were both low income and disabled.

The new SSI exemption is still discretionary, rather than mandated.  If made available by the District, eligibility will be established by the taxpayer’s annual “SSI Award” letter from the local Social Security office.  In 2012, SSI was limited to those with less than $1,010 of gross monthly income.  Earned, unearned, in-kind, social security, and deemed income, as well as assets, are considered, making it unlikely that many Piedmont residents, even seniors on fixed incomes, would qualify.

A “senior” exemption to the school parcel tax based on age will not be included in the draft resolution. 

11-28-12 Proposed Resolution Language 

Parcel Tax Exemptions: Homeowners who are residing on their property and qualify for Supplemental Security Income (SSI) may be exempt. This could apply to adults who are blind or disabled, with limited income and resources, as well as to people 65 years of age and older without disabilities who meet the income limits prescribed by SSI. Individuals seeking such exemption must submit an application to the District, including proof that the individual has been determined to be eligible for SSI by the Social Security Administration, on or before July 1 of each tax year. The District shall provide a list to the Tax Collector on an annual basis, on or before a date established by the Tax Collector of each year, of the parcels which the District has approved for the SSI Exemption, as described herein.

See full resolution in 11-28-12 packet

Will the State Turn a Blind Eye over the Next 8 Years?

Many California residents take their entire County property tax bill as a tax deduction, ignoring the question of whether some parcel taxes and assessments may be non-deductible.  But in the future this could lead to Piedmont residents receiving a “Notice of Additional Tax Due”.

While Piedmont School Bond assessments are clearly tax deductible, the proposed new 8-year Piedmont school tax and other city parcel taxes may not be:  they potentially fail the IRS “like rate” requirement for tax deductibility.  A recent IRS opinion letter states:

“Assessments on real property owners, based other than on the assessed value of the property, may be deductible if they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority’s jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges).”

The California State Franchise Tax Board (FTB) currently tends to overlook errors in property tax deductions for unaudited returns, but may take a more aggressive posture to limit deductibility as the State searches for new sources of revenue.

In 2011, the FTB posted strict new tax guidance on its website and planned to include 3 new lines on 2012 returns:  require California residents to identify their parcel number, “deductible” property taxes, and “non-deductible”property taxes.  While this new guidance was abruptly withdrawn after receipt of an IRS opinion letter rejecting the FTB’s overly narrow construction of deductibility, the FTB website indicates future limits are still on the table:

“We have removed material from our website that limits the deductibility of real property taxes to taxes imposed on an ad valorem basis. Once the IRS forms and instructions are revised, we will provide revised California forms and instructions that are consistent with the revisions made by the IRS.”

The FTB stopped short of telling everyone they can deduct their entire property tax bill and at some point intends to halt the improper deduction of all property taxes in order to capture an estimated $200 million in new tax revenues.

An aggressive stance by the FTB could not only impact the deductibility of Piedmont’s proposed 8-year school parcel tax of $2,000 to $3,500, but other city parcel taxes that are also based on parcel size (see below).

The State has a strong pecuniary interest to interpret the term “like rate” as narrowly as possible.  Residents could eventually end up with an automatically generated Notice of Additional Tax Due (based on their property location and jurisdiction) for deducting parcel taxes improperly.  This would increase the effective cost of Piedmont’s non-deductible parcel taxes substantially.

PIEDMONT TAXES                                 AMOUNT                  INCREASES            TAX DEDUCTIBLE?

• school bonds                               up to $146 per $100,000               0%                           YES
• school parcel tax                                $2,021 to $3,678                      5%                                ?
• city parcel tax*                                       $342 to $576                   CPI up to 4%                    ?
  
• sewer parcel tax*                                   $471 to 849                      CPI w/o limit                   ?
• private undergrounding                             $2,000+                           0%                            NO

*May be tax deductible in whole or in part, depending on the extent to which revenues can be shown to be expended on repairs, maintenance or related interest expense.  Property taxes that cannot be deducted may be added to the basis of the property, if they tend to increase the value of the property.  Future school bonds are anticipated up to $146 per $100,000. The exact amount has not yet been determined. The legal limit is ~$146-$155 per $100,000 of assessed value.

Thefts Plagued the Start of Halloween Week –

Harvest Festival scarecrows

PCA has received reports of five, life-size artistic, handmade scarecrows disappearing from front yards in the nights leading up to Halloween.

Four had been purchased at the Harvest Festival scarecrow auction that raises money for the schools each September.  The scarecrow display and auction is a popular part of Piedmont’s annual harvest celebration.  All the scarecrows are handmade, many by students as classroom projects.  One of the stolen scarecrows was a family project for three little boys and their parents– a masterpiece, with doorknobs for eyes.

Resident urges discussion of financial issues, not “punishment” –

Measure Y  a Regressive Tax –

I imagine you have now received your 2012-13 property tax statement. Have you looked at the 15, yes 15, fixed charges? Well, we collectively voted for these, one way or another.

Now, to many in Piedmont, these charges represent the cost of providing excellent services, a theme endlessly repeated but nevertheless true.  > Click to read more…

 Tax Helps Pay for Many Special Elements in Piedmont –

Since the passage of Proposition 13 in 1980, the residents of Piedmont have realized that for our community to have the things that we as a community value, we needed a City Services Tax.  Our city has had such a tax since 1980, and we have continuously renewed it for the past thirty-two years.  The tax is up for renewal this year and is on our ballot as MEASURE Y.  It will be at the end of your ballot and is not an increase over the past four years.  I urge you to vote YES ON MEASURE Y.  > Click to read more…

Cuts Would Affect City’s Quality of Life-

Dear Editor,

I am working with Piedmont friends and neighbors to inform voters why it is important to renew the existing parcel tax with no increase in order to maintain existing services.

Parcel tax revenues help pay for Piedmont’s police, fire, paramedics, park maintenance, street and sidewalk maintenance and other city services and amenities.  > Click to read more…