District Attorney Nancy O’Malley will speak – Wednesday, December 12, 2012

The League of Women Voters of Piedmont will host its annual holiday program and luncheon on Wednesday, December 12.  The public is invited to the program featuring Nancy O’Malley, Alameda County District Attorney, who will discuss crime in Piedmont and in Oakland with its decreased police force and high rate of violent crime, the effect that Proposition 30 public safety funds may have on crime, and how Alameda County will handle the transfer of prisoners from state facilities to county facilities.

The event will take place at 131 La Salle Avenue, Piedmont, with coffee at 10:30am and keynote speaker Nancy O’Malley at 11am.  The free program is followed by the luncheon from 12:15 -1 pm.  Advance reservations for the luncheon are required: send check for $25 payable to LWV Piedmont, to 40 Highland Avenue, Piedmont, CA 94611 before December 8.

As Alameda County District Attorney, Nancy O’Malley heads up one of the more progressive, innovative district attorney’s offices in the country and is the first woman to hold this position in Alameda County.

O’Malley is a nationally recognized expert on issues involving violence against women and interpersonal violence.  Among her accomplishments are creating:

•          the Alameda County Family Justice Center for victims of family violence, sexual assault, elder abuse, sexual exploitation of minors and child abuse;

•          a diversion program that treats sexually and commercially exploited minors arrested for prostitution;

•          a restitution program for crime victims that has become a model for the state.

Permanent tax abandoned; “low income” exemption becomes  SSI “disability” exemption –

After concerns were raised by the League of Women Voters and other residents, the Piedmont School Board veered away from plans for a permanent (“evergreen”) school tax and, at its meeting on November 14, directed staff to draft a ballot measure proposal for an 8-year tax which authorizes annual increases of up to 2%.  

The draft tax plan eliminates the current independent citizens oversight committee (which will be absorbed into the Budget Advisory Committee), designates the Superintendent to identify and qualify BAC members to serve on a newly created BAC “parcel tax sub-committee”, and removes previous restrictions on use of the parcel tax funds.

The November 14 draft allows an option to offer an exemption to Piedmont residents who are both low-income and disabled and qualify for SSI Disability.  The draft language does not provide for the low-income exemption discussed and supported by 4 Board Members at the meeting and does not make a Disability exemption mandatory.

The tax levy will not automatically decrease if previously lost state or federal funding is restored to California schools in the future. 

The final ballot measure language is scheduled to be approved at a Special Board  of Education Meeting on Wednesday, November 28, in the City Council Chambers starting a 7:00 pm.  Input should be offered prior to this meeting.  See email list below of School Board Members & Superintendent.  Click here to send email to all School Board Members.

Summary of Draft Resolution

• 8 year term (not permanent)
• Up to 2% increase per year
• Independent oversight committee abolished
  • The current Citizens Advisory Committee (CAC) will become a Parcel Tax subcommittee of the Budget Advisory Committee (BAC).
  • The Superintendent will verify eligibility of the 3 to 5 Parcel Tax subcommittee members, who must be Piedmont homeowners and approved by the School Board President and Vice-President. (The CAC currently must have at least 7 members and generally has 9-10 members.)
  • The BAC is a committee consisting of staff, teachers, union representatives and parents chosen by the Superintendent.
  • Current District staff members are excluded from the sub-committee, but not former stafF
• As is current School Board practice, no mailed written notice of 2% increases to property owners will be provided.
  
• SSI Disability Exemption (not senior; not solely low income)
  • Homeowners will qualify for a PUSD tax exemption only if they are disabled and have very limited income and assets as defined by Supplemental Security Income (SSI).  Low income residents eligible for SSI based on age (over 65) will not receive a PUSD exemption under the resolution presented to the Board on November 14.  In response to a question, the Superintendent asserted that low-income residents who are blind (a separate SSI eligibility category from “disability”) would qualify for the PUSD exemption.
  • The Board acknowledged that few homeowners would qualify for the PUSD exemption.
  • Providing this exemption is discretionary, rather than mandated.
• Two School Board meetings to determine levy and up to 2% increases
  
  • At its first meeting in January, the Board will hold a public hearing to determine if the tax levy shall be maintained, decreased, or increased up to 2%.  At a following Board meeting it will vote on the resolution.
    

Homeowners attempting to determine their total school tax obligations can find their additional school bond assessments in the left column of their Alameda County tax statement.  Unlike Piedmont school bonds, however, the tax deductibility of the $2,000 to $3,500 school parcel tax may be in question, depending on current and future State and Federal regulations:  parcel taxes that vary by parcel size may not meet the IRS “like rate” requirement for deductibility.  (See Article).

PIEDMONT TAXES                                     AMOUNT                  INCREASES       TAX DEDUCTIBLE STATUS

• School bonds                               up to $146 per $100,000               0%                             DEDUCTIBLE
• School parcel tax                                $2,021 to $3,678                  up to  2%                                  ?
• 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

Excerpts from Draft Resolution Language

“Parcel Tax Exemptions: Parcels owned and occupied by individuals who receive Supplemental Security Income for a Disability, regardless of age, may be exempt from the tax.”  (Disability will include blindness per Superintendent Hubbard.)

“(e) Parcel Tax Subcommittee: An annual written report shall be prepared and submitted to the Board of Education by the School Support Tax Subcommittee (“Subcommittee”) of the Budget Advisory Committee (“BAC”). All residents of the Piedmont Unified School District are eligible to apply for membership on the BAC on an annual basis. Members of the Subcommittee must be homeowners in the Piedmont Unified School District community and subject to the School Support Tax and not current employees of PUSD. Each year there shall be no fewer than three (3) and no more than five (5) volunteers identified by November of each year to serve on the Subcommittee. It is the responsibility of the District Superintendent or designee to verify eligibility of the volunteers. The President and Vice President of the Board of Education shall approve all nominees to the Subcommittee. The Subcommittee shall work directly with the Chief Business Officer of the District to review School Support Tax uses and report to the Board of Education at the first public hearing held each year to determine the subsequent year’s levy. Members of the Subcommittee commit to regularly attend meetings of the BAC.”

~~~~~~~~~~~~~~

“Proposed parcel tax amounts:

Parcel with Single Family Dwelling:

0-4,999 sq. ft. lot $2,088/parcel
5,000-9,999 sq. ft. lot $2,373/parcel
10,000-14,999 sq. ft. lot $2,706/parcel
15,000-19,999 sq. ft. lot $3,107/parcel
more than 20,000 sq. ft. lot $3,547/parcel

Parcel with Multi-Family Dwellings:
Multi-family dwellings/unit, all lot sizes) $1,389/unit

Multiple Parcel Dwellings: $2,281/dwelling

Commercial Property:
0-10,000 sq. ft. lot $3,547/parcel
Commercial lots greater than 10,000 sq. ft. $5,305/parcel

Undeveloped Parcel $1,059/parcel

The uses and sizes of all parcels shall be determined according to the records of the Alameda County Tax Assessor. For parcels divided by Tax Code Area lines, the payment for the portion of the parcel within the Piedmont Unified School District shall be the same as the above square footage rates.”

Read the entire resolution prepared for the November 14, 2012 Board meeting.

Contact School Board Members and Superintendent:

• Richard (Rick) Raushenbush
  President rraushenbush@piedmont.k12.ca.us
• Andrea Swenson
  Vice President aswenson@piedmont.k12.ca.us
• Sarah Pearson   spearson@piedmont.k12.ca.us,
• Ray Gadbois  rgadbois@piedmont.k12.ca.us
• Roy Tolles  rtolles@piedmont.k12.ca.us
• Connie Hubbard,  Superintendent, Piedmont Unified School District chubbard@piedmont.k12.ca.us

Updated 11/19/2012

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.

Resident objects to proposed parcel tax structure-

November 16, 2012

Dear School Board Members:

I attended Wednesday night’s meeting and was pleased with the free exchange of decidedly held opinions about the proposed new school parcel tax.  Your decision to limit any new tax to an 8-year duration is a positive move.

Piedmont can be justifiably proud of the quality of its schools and I think that almost everyone at the meeting was strongly supportive of keeping the schools adequately funded.  I am in that group.

I was surprised that the issue of our current tax structure and its regressive nature, both addressed by my previous email to the board and expressed by others, was not included in the discussion. Although the to-be-implemented SSI exemption in the new tax is largely symbolic, it does recognize those on limited incomes which is a burden that falls disproportionately on seniors.

I think that perpetuating the inequitable and regressive method of a flat dollar amount of tax by tiered property size is wrong.  Let me demonstrate from the rates being proposed for single dwellings which will be voted upon in March 2013:

          DWELLING LOT SIZE     PROPOSED TAX

• 0 – 4,999 sq ft                                                $2,088 per parcel
• 5,000 – 9,999 sq ft                                          $2,372 per parcel
• 10,000 – 14,999 sq ft                                      $2,706 per parcel
• 15,000 – 19,999 sq ft                                      $3,107 per parcel
• More than 20,000** sq ft                                $3,547 per parcel

(** This should read “more than 19,999 sq ft” or “20,000 sq feet or more”.  As written, 20,000 sq ft lots are technically not included.)

This means that:

•   4,500 sq foot lots will pay $0.464 per square foot.
•   7,500 sq foot lots will pay $0.316 per square foot.
• 10,000 sq foot lots will pay $0.271 per square foot.
• 12,500 sq foot lots will pay $0.217 per square foot.
• 15,000 sq foot lots will pay $0.207 per square foot.
• 17,500 sq foot lots will pay $0.178 per square foot.
• 20,000 sq foot lots will pay $0.177 per square foot.

In other words, a 4,500 sq foot lot will pay 2.62 times the rate of a 20,000 sq foot lot.

As an aside, I believe that the smallest lot in Piedmont is about 2,000 sq ft and the largest is over 80,000 sq ft.  The tax rate difference between these two extremes (1.04 vs 0.04 cents) is astounding:  26 times!

I fail to see the equity in this perpetuation of the status quo.  This is nothing more than a regressive tax on the smallest sized lots in Piedmont which are most probably owned by people with a lower income base.  Why should smaller sized lots effectively subsidize much larger sized ones?

Equitability would be served if a square footage rate of between 22 and 27 cents was adopted.  I base this on a back-of-the-envelope calculation assuming a $9.5 million tax revenue target from 3,750 lots with approximately 34.4 million total square footage.

I disagree strongly with your decision to effectively not provide a full or partial voluntary senior exemption.  The age at which a homeowner is eligible for Social Security is an objective measure.  A member of the board advanced the argument that Prop 13 is the senior exemption.  It is an unwarranted assumption that everyone over 65 has paid lower property taxes because of Prop 13. Those properties with Prop 13 advantaged tax rates belong to residents who have maintained property ownership stability for more than 30 years (Prop 13 was adopted on June 6, 1978).  Is not “stability” a desired outcome of lengthening the time before school parcel taxes are submitted for a new vote? Why is it a negative when it comes to length of home ownership?

Over these 34 years, all homeowners have paid a full slate of school parcel taxes as assessed and many of these same citizens have not used the Piedmont school system while paying these taxes.  Are they now to be penalized for living here a longer time and paying more school parcel taxes than people who do not have similar residency and may pay higher property taxes?

Please don’t incent people to work against what is essentially a good thing by not adopting a more fair and equitable approach.

Thank you.

Jim McCrea, Piedmont Resident

Editors’ Note: The opinions express are those of the author and not necessarily those of the Piedmont Civic Association.

On Thanksgiving morning, Thursday, November 22, 2012, the annual Turkey Trot 3-mile run/walk will be held on the streets of Piedmont, from 8:30 – 9:30 AM.  Sections of the course will be posted, “No Parking” and vehicles may be towed for violation of the posted signs.  There will be temporary road closures during the race to allow for runner safety.  Drivers are asked to plan accordingly.  Check the Turkey Trot website http://piedmontturkeytrot.com for additional information and to see a map of the course.

Letter to School Board Members:

Comments on Proposed School Parcel Tax Measure

Dear President Raushenbush and members of the Board of Education:

The League of Women Voters of Piedmont appreciates this opportunity to provide comments as you develop the school parcel tax proposal this month. On November 7, Katy Korotzer briefed our Board members on various options you are considering. Her presentation and insights were very helpful. To the League, the most significant issue seems to be the term of the tax: whether it should again be four years, “permanent,” or perhaps something in-between.

When the League decides whether to take a position on a ballot measure, the Board looks to the League’s formally-adopted policy positions and weighs all that apply. Education has been a high priority for our League at least since 1948, when it decided to “[s]upport a high level of education within the Piedmont Unified School District.” Based on this position, the League has
endorsed every school bond and tax measure within memory. However, the League also has a strong statewide position in favor of including sunset
provisions in all dedicated tax measures (LWVCalifornia Position on State and Local Finances, paragraph 4h).

During the just-past election, the Leagues of Alameda County declined to endorse the county-wide transportation tax measure precisely because it would have implemented a permanent tax. The League adopted a “neutral” stance.

When the LWVP Board evaluates the school tax ballot measure, it will have to weigh both of these positions in deciding whether to support, oppose or remain neutral.

We understand the Board of Education’s desire to avoid the uncertainty and expense of seeking ballot approval of the parcel tax every four years. We urge you to consider the alternative of perhaps an eight-year tax.

Our members suggested several reasons why this might be a reasonable term, and better than a permanent tax. First, conditions change: State funding, the composition of the Board of Education, the district administration, and the very nature of education might well change significantly over the next couple of decades.

Second, having a school parcel tax on the ballot makes the whole community focus attention on the schools and their current issues, which seems to be a good thing.

Finally, if “only” eight years have passed since the last school tax ballot, there should still be “community memory” about how to rally the public to get the tax passed. A longer term would make this more problematic.

Thank you for this opportunity to give our perspective. We will be following
developments closely. We appreciate all you are doing for the schools and our community.

Very truly yours,

Julie E. McDonald
President, LWVPiedmont

cc Constance Hubbard, Superintendent
Katy Korotzer

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.  

During the recent Measure Y campaign, the Piedmont Civic Association (PCA) received numerous Comments and Opinions, some of which have raised the need to restate our publication guidelines.  PCA encourages reasoned discussion of civic issues through Comments and Opinions, and readers’ responses to specific Comments and Opinions are welcomed when they further debate and discussion. Personal attacks directed at individuals, however, do not meet PCA guidelines.

PCA is pleased to provide a public forum for Piedmont residents to  express their views. Ideally, opinions, comments, and responses to comments offer thoughtful insights and add new perspectives. Often, the most persuasive arguments acknowledge the valid concerns and objectives of those on the other side.

The PCA  goal is “to  maintain and enhance Piedmont as a desirable community through the informed participation of its residents.”  Comments and opinions that do not comply with PCA guidelines cannot expect to be published.

. . . Or a 2% Annual Escalator?

The Piedmont School Board has requested public input before its next meeting on Wednesday, November 14, on a new draft resolution for a permanent (“evergreen”) school parcel tax to which the League of Women Voters has expressed objections. The primary decision on the 14th will be whether to propose a measure to approve a flat permanent tax . . . or a permanent tax with a 2% annual escalator.  Another important decision will be whether to abolish the Citizens’ Advisory Committee (CAC) as an independent oversight entity.  Final revisions to the permanent tax resolution will made on Nov. 14 to allow staff to prepare language for a final vote on Nov. 28. (Further details.)

Click here to send email to all School Board Members.

A second draft resolution, for an additional emergency tax in case Proposition 30 failed, has been dropped following the passage of Prop. 30.

Draft Resolution

• PERMANENT  TAX of $2,088 – $3,547 per parcel  (no voter approval required in the future ) two public School Board hearings prior to Board determination of tax levy
  
• FLAT OR UP TO 2% ANNUAL ESCALATOR  (to be decided by Board on Nov. 14)
  • no increased written or public notice to taxpayers of proposed increases
  • continue existing notice at two public School Board hearings prior to increases
• LOW INCOME EXEMPTION BASED ON SSI INCOME LIMIT
• RESTRUCTURE INDEPENDENT CITIZENS’ ADVISORY COMMITTEE (CAC)
  
  • Convert to subcommittee of the Budget Advisory Committee (rather than totally independent oversight committee)
  • Members appointed by Board President and Vice President
    
  • Limit to 3-5 members (rather than at least 7)
  • Allow past district staff (who are residents of Piedmont)

A Close-Up Look at Piedmont School Finances

• Part 1:  A $1 Million Problem – Temporary or Ongoing?
• Part 2:  Piedmont Parcel Tax Facts
• Part 3:  Piedmont Schools Face a Quandary
• Part 4:   The Ongoing PUSD Deficit

School Board Members:

• Richard (Rick) Raushenbush
  President rraushenbush@piedmont.k12.ca.us
• Andrea Swenson
  Vice President aswenson@piedmont.k12.ca.us
• Sarah Pearson   spearson@piedmont.k12.ca.us,
• Ray Gadbois  rgadbois@piedmont.k12.ca.us
• Roy Tolles  rtolles@piedmont.k12.ca.us

Updated 11/13/3012

A member of the School District Citizens’ Advisory Committee comments on the proposal for a “permanent” school parcel tax –

Outlined herewith are my serious concerns regarding this proposed new parcel tax:

• First, I am distressed and appalled by the prospect of making the parcel tax permanent.

• Without a doubt, future Boards and administrations will become so accustomed to such a permanent tax that it will simply fade into the basic tax structure that will no longer have the special importance as it does today.  It will be treated in the same manner as the advalorem tax is today.

• Once the “permanent” tax is no longer sufficient to satisfy the ever growing needs of the District, there will, without question, bring forth appeals for more “special” or “emergency” parcel taxes to heap on the taxpayers of Piedmont.  Just look no further than the so-called “emergency” tax proposed with this round of measures if State Proposition 30 had not been approved. There’s no doubt in my mind that this will happen once the state politicians figure out how to redirect any $$$$$ from Prop. 30 receipts to other priorities in a year or so!

• The only part of this proposed measure that I can support is the limitation of the annual escalator to 2%, mirroring the Prop. 13 limitation on assessed value growth.

• As to the so-called “Low Income Exemption for SSI Recipients”, I see this as very close to meaningless.  How many, if any, Piedmont property owners fall within these circumstances?  Few I wager!  A more realistic “senior citizen” or “lower income” provision should be incorporated into the measure.

• In relation to the proposed abolishment of the Citizens Advisory Committee (CAC), I see this as an unfortunate loss of the public’s ability to view the activities and results of the use of the taxpayers’ money.  The current CAC is obliged to provide an independent report of its findings annually.  The proposal to fold the CAC duties into the Budget Advisory Committee is unlikely to provide such clarity.

• Based on my concerns indicated above, I must strongly urge that the Board reconsider the measure described.  If not, I will find it necessary to strongly and actively oppose the adoption of this parcel tax.  We must retain the ability to have the voters review the performance of the District and this Board at least every 4 years.

• And to the likely argument that the voters could, by initiative, reverse the proposed measure in the future, I would counter with my view that any such effort would be unlikely to muster an effective campaign.  Reversing a law, no matter how unpopular, is seldom, if ever, possible to accomplish.

George Childs

Piedmont Resident and member of the School District Citizens Advisory Committee

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.

Recreation Commission Seeks Input –

The Piedmont Recreation Commission will hold a public hearing on Thursday,  November 15,  at 7:30 pm in the City Council Chambers, 120 Vista Avenue, continuing its consideration of use patterns and restrictions at Beach Playfield.  Feedback from neighborhood residents is particularly encouraged.

On Nov. 15 the Commission will consider limiting full-field adult play to certain hours and restricting play at all other hours to half-field play only. Two fields of equal sizes would be created in the East to West orientation (Linda Avenue toward Howard Avenue) with one of the fields designated for use by children and families only.

Beach playfield use has been the subject of ongoing hearings for several years.  Previously, in July and September, 2007, the Recreation Commission held public hearings that ultimately resulted in new rules for adult use of the playfield. “In February 2008, the City Council approved these modifications, which included new rules limiting adult use of the playfield by groups of 12 or more persons 21 years of age or older concurrently participating in the same activity (ies) or game (s) including substitutes or alternatives but excluding coaches or spectators.“

The Recreation Commission held additional public hearings in November 2010 and 2011. Further rule changes or modifications were delayed, pending the implementation of a park monitor program to document use patterns.

Neighborhood concerns include safety and field access for children and families on weekends after organized use by the Piedmont Soccer Club/Baseball­-Softball groups.   The Commission previously conducted public hearings on July 18 and September 19, 2012.  The Commission’s recommendations will go to the City Council for final action on the matter.

Public testimony and commentis encouraged. Written comments should be directed to Dick  Hunt, Chairman, Piedmont Recreation Commission, 358 Hillside Avenue, Piedmont, CA 94611 or by email to:  mdelventhal@ci.piedmont.ca.us

The hearing will be televised live on KCOM Channel 27 and will also be available through streaming video on the City Web Site under “on-line video.”

For further information, contact Recreation Director Mark Delventhal at 420-3073.