June 7 City Parcel Tax Election: Support and Opposition Statements
City Parcel Tax Measure F awaits Piedmont voters’ decision.
Piedmont will hold a Special Election on June 7, 2016, at the California Primary Election. Statements in support and opposition are printed below. Prior to the election, this information can also be found in the Voter’s Information Pamphlet sent to every voter’s home address.
Support for Measure F:
Measure F provides funding to maintain Piedmont’s excellent public services. This is not a new tax. For the past 36 years, Piedmont voters have approved the Municipal Services Tax (“the Parcel Tax’). The Parcel Tax is indispensable to maintaining the quality services Piedmont residents appreciate. These services include responsive police and fire, attractive parks and robust recreational programs. Our City looks and works as well as it does because of the Parcel Tax. The Budget Advisory and Financial Planning Committee (“BAFPC”) recommends that the Parcel Tax be renewed and increased by approximately $150 per parcel. The BAFPC said, “The continuation of the Parcel Tax at least at its current level is critical for the City to continue to provide the services that Piedmont residents enjoy today.” The BAFPC added, “The committee believes the City is still significantly underfunding its facilities maintenance and replacements needs.” To meet these needs, the Parcel Tax should be increased. The Parcel Tax was last increased in 2004. Piedmont needs to address long‐standing deferred maintenance of its facilities and update the City’s aging infrastructure. The City must take on projects like replacing old wiring in the police and fire stations. Our technology infrastructure is antiquated, unreliable and insufficient for the 21st century. This isn’t about new facilities. This isn’t about increasing staff or benefits. This is about plumbing, roofs, safety and electrical. This is about the nuts and bolts of the City. We must act now to make repairs and improvements to ensure the City can support its residents. Many recommendations of the 2011 Municipal Tax Review Committee were implemented that strengthened City’s finances, controlled costs and addressed long‐term liabilities. Now we need to follow the BAFPC recommendations and invest in Piedmont’s facilities. Unanimously approved by the Piedmont City Council. Vote Yes on F.
Signed by:
John Y. Chiang, Former Mayor
Bill Hosler, Chair, Budget and Financial Planning Committee
Valerie Matzger, Former Mayor
Andrea Swenson, President, PUSD Board of Education
Jeff Wieler, Vice Mayor
Opposition to Measure F:
This proposition not simply a renewal of Piedmont’s Municipal Services Special Tax, it adds a 30% increase. The need for such a dramatic increase has not been substantiated by the City Council nor by the Budget Advisory Financial Planning Committee’s report. That report severely underestimates expected revenue from property transfer taxes and the post-transfer reassessments which will continue to increase property tax revenue. Piedmont’s rising property values assure rising tax revenues. There is no need to raise taxes at this time. The report actually admits that it discounted the facts that (1) retirement of the City pension “side fund” debt in FY 2020 will free up additional cash resources to cover projected increased expenses, and (2) the significantly over-funded Police and Fire Pension Fund can be rededicated to Other Post-Employment Benefits expenses. Raising our parcel tax is unjustified. Even if the unlikely pessimistic revenue estimates turn out to be true, Piedmont’s Reserve Fund, currently funded near its legal limit, can make up the difference until a truly justified parcel tax measure goes before the voters. This proposition implies that without passage, municipal services would be reduced. Yet, it fails to detail how much new tax revenue would go to facility maintenance, how much to pension liabilities, and how much to unspecified services, compared to the current budget. Piedmont has one of the highest tax rates in the state. The current tax continues until June, 2017. At this time, there is no need to scare Piedmonters with service reduction. Vote against this proposition now, so that a more reasonable and justified parcel tax measure can be considered next time.
Signed by:
Bruce Joffe, Piedmont Resident
Rick Schiller, Piedmont Resident
Support for Measure F Rebuttal:
The Parcel Tax opponents are wrong and miss the point. The 7 year projections show property tax revenue growing at the same pace as the last 10 years. Transfer tax has always been volatile. The 2011 MTRC recommended against projecting a growing transfer tax and this year transfer taxes are running 30% behind last year through February. Opponents are betting that real estate prices will continue to increase and that large numbers of homes continue to sell. This is unsupportable given history and an irresponsible way to plan for the future. The City Council took important steps to improve the City’s financial condition: refinancing the sidefund, establishing prudent reserves and managing expenses. The opponents misrepresent the BAFPC report, arguing that sufficient funds are available to maintain services and make needed investments in the City’s infrastructure. This isn’t true. The shortfall is significant and growing. The BAFPC, and prior tax committees, strongly recommended the City reduce this shortfall and take immediate steps to address the City’s aged infrastructure in a planned and affordable manner. BART’s recent problems show the impact of deferred maintenance, obsolescence and making patch work fixes. Piedmont must avoid those problems. City services will be degraded and unreliable without renewed investment in the city’s infrastructure. These aren’t scare tactics. This is just about basic arithmetic and what it takes to repair and maintain Piedmont. And the 30%: that’s about $150 per parcel. This is an investment in your City and its future.
Signed by:
John Y. Chiang, Former Mayor
Bill Hosler, Chair, Budget and Financial Planning Committee
Teddy King, Councilmember
Andrea Swenson, President, PUSD Board of Education
Tim Rood, Councilmember
Opposition to Measure F Rebuttal:
An honest proposition would inform the voter of a tax increase. Measure F masquerades as a simple renewal, but contains a 30% increase. To justify this tax increase the City underestimates new revenue coming into Piedmont from ever increasing tax reassessments. And growth rates in the transfer tax are well above what the BAFPC projects. The BAFPC estimates the transfer tax at $2.8M but the last two years are $3.9M and $4M. And this spring the average Piedmont sale price is $2.75M indicating a record revenue season is again likely. This healthy revenue stream is back-stopped by a City $4.5M reserve, Pension funds with a $10M surplus, and the Facilities Maintenance Fund at $1.94M. In 2010 reserves were 13%. In 2015 they are 21%. The 2011 Municipal Tax Review Committee recommended the city undertake long-term financial planning and facilities maintenance, streamline city services, and cap employee and retiree benefit levels. Instead Measure F increases taxes and spending on facilities without having the other goals in place. Rather than asking for a tax, the City should continue to press for increased cost sharing and capping of employee benefits costs in this summer’s contract negotiations. We support improving Piedmont’s facilities but Piedmont’s taxes are among the State’s highest. Let’s not add an unneeded increase to the tax burden of young families and seniors. Vote NO on Measure F.
Signed by:
Garrett Keating, Former City Councilman
Kathleen Quenneville, Piedmont Resident
Jim McCrea, Piedmont Resident
Impartial Analysis of Measure F
by City Attorney
Measure F proposes to adopt an Ordinance that amends Chapter 20B of the Piedmont Municipal Code authorizing the collection of a Municipal Services Tax (“Tax”), which has been collected in the City of Piedmont since 1981. Revenue from the Tax goes to the City’s General Fund and is used to finance Municipal Services such as police and fire protection, street maintenance, building regulations, library services, recreation, parks maintenance, planning, and public works. The current Tax will expire on June 30, 2017. Measure F authorizes the continuation of the Tax until June 30, 2021, and proposes to increase the maximum Tax rate in accordance with the rate schedule set forth in Section 20B.4 of the proposed Ordinance. The maximum Tax rate will vary by parcel depending on parcel size and the nature of use (i.e., residential/commercial). Measure F would correspondingly increase the appropriations limit under Article XIIIB of the California Constitution. Pursuant to Measure F, the City can only levy the Tax if in any fiscal year the City Council determines that municipal services are necessary for the public good, and that the cost of providing such services will exceed the amount of funds generated from revenue sources other than the Tax. The Tax collected during that tax year, if any, may not exceed the maximum Tax rate established in the Ordinance. Under Measure F the maximum Tax rate will be adjusted on an annual basis by an amount equal to the percentage increase or decrease in the Consumer Price Index for the San Francisco-Oakland-San Jose, California area, as published by the United States Department of Labor, Bureau of Labor Statistics. Measure F authorizes the Tax to be collected by the Tax Collector of the County of Alameda.
A “Yes” vote on Measure F means the voter is in favor of continuing the existing tax with the proposed increase.
A “No” vote on Measure F means the voter is opposed and the tax would no longer be collected.
Two-thirds (66%) of the qualified voters casting a vote must vote “yes” for Measure F to pass. Measure F, or any provision thereof, may only be amended or repealed by approval of a two-thirds majority of the voters voting on the proposition at any initiative or referendum election. The above statement is an impartial analysis of Measure F. The full text of Measure F is printed in the Voter’s Information Pamphlet and is also available on the City of Piedmont’s website at: http://www.ci.piedmont.ca.us.
Michelle Marchetta Kenyon, City Attorney
Additional Measure F information from the City can be found here.
