Election Campaign Begins November 30 –

The Board of Education members at their Special Meeting on Wednesday, November 28, voted unanimously to approve a resolution and place a new School Parcel Tax Measure on the March 5, 2012 ballot.  Concerns regarding tax deductibility were overridden by the need for school funding.  The current tiered-rate structure will be retained, allowing a lower tax for smaller parcels, rather than implementing a flat rate per parcel charge.  The ballot measure requires a 2/3rds vote to pass. 

The School Parcel Tax measure includes:

• A tiered parcel tax at an initial $2,000-$3,500 per year
• An 8 year term
• Up to a 2% increase per year allowed (if levied by the School Board) 
• SSI recipient exemption
• No senior or low income discounts or exemptions
• Tax oversight will be provided by a subcommittee of the Budget Advisory Committee rather than the current independent committee.  Any interested citizen or staff may attend as a member of the public.
• Oversight subcommittee members must be Piedmont homeowners and not a current member of PUSD staff; former staff will be permitted.
• Oversight subcommittee members will be limited to 3 to 5 members selected from the Budget Advisory Committee by the President and Vice President of the Board of Education.
• An oversight subcommittee charge will be approved by the Board at a future time.
  
• Oversight subcommittee meetings and Budget Advisory Committee meeting will be publicly noticed and open to the public.
  
• A tiered parcel tax based on current parcel size ranges will be retained, rather than changing to a per square footage charge for structures or lots or a flat rate per parcel.
  

Final refinements to the resolution and ballot measure will be made by the Superintendent prior to submitting them to the Alameda County Registrar of Voters and Alameda County Board of Supervisors.  The Board thanked the numerous individuals who communicated with the Board, the Advisory Committee and the Chairs of the Parcel Tax Campaign Committee.  The kick off for the campaign begins on Friday, November 30.

Editor’s Note:  “Like-rate” generally refers to a flat charge,  for instance $100 per parcel.  Legal counsel to the Piedmont school district has advised that, to the extent the school levy is tiered or graduated (based on square footage or otherwise), the levy risks being considered an ad velorem tax, which is illegal and subject to challenge by any taxpayer as unconstitutional.  (See School Board discussion of the tax levy of October 10, 2012.)

Resident concerned about seniors and tax deductions-

Re: Nov. 28 Board Meeting consideration of the  Mar. 6, 2013 School Tax Election

President Raushenbush and Honorable Board Members,

As the Piedmont school tax is already far more expensive than virtually all of the other 245 school support taxes in the 1,045 public school districts in the state, I am troubled that soon this tax will be even more expensive by a likely lack of tax deductibility. Fortunately, the Board can adopt a “like rate” tax. Doing so will allow sufficient funding as the Board deems appropriate, create a far more equitable tax system and most likely maintain the tax’s deductible status.

A “like rate” tax was approved in the recent November election for Measure CL in Los Angeles at 2 cents per square foot. Since 2004, West Contra Costa Unified has Measure G on the books, based on 7.2 cents per building square foot, renewed again this November. Alameda Unified School District Measure A, at 32 cents per building foot, passed March 2011. The “like rate” methodology, especially utilizing the building square foot approach, is far more equitable than our current tiered system which is sharply regressive to small home owners. Another advantage to the “like rate” tax structure is the apparently permanent deductibility.

All taxes mentioned above include a senior exemption, and all high ranking California districts have a senior exemption except for Piedmont, which is alone in denying compassion and equality to those who need it most, seniors on fixed incomes. I urge you to add a senior exemption to Measure A. The lack of a senior exemption is troubling and especially regressive as the Piedmont tax is so much higher than other school taxes. One example is the Piedmont tax being up to 2,493% more than the San Ramon Valley school tax with its accompanying senior exemption. That a person in the twilight of their life would be forced out of the community and home they love because of a lack of a senior exemption, when such an exemption is far more the rule than the exception, I find regrettable.

As to the low-income SSI exemption, quite literally no one can afford to live in Piedmont with the $2,000 SSI resource limit. Therefore the SSI exemption is a meaningless gesture, and the Board should seriously consider a senior exemption and dropping the pointless SSI exemption.

Just and equitable solutions have been presented that leave the Board with sufficient funding and, if enacted, will demonstrate that this Board can both provide Piedmont with a quality school system and equity for all residents.

Respectfully,
Rick Schiller, Piedmont Resident

The technical answer to your question would require a legal opinion.  My understanding, however, is that a Board Resolution reflects the Board’s direction to the District Administration, which would stand until the Board gave the District Administration different direction.  A voter-approved tax measure would be binding upon the Board and the District during the term of the measure.  The tax measure requires at least one public hearing. The Resolution directs the District Administration to hold two public hearings, which is consistent with the Board’s practice at least since I joined the Board in 2008 and I am told before then as well.

There is a balance between setting minimum requirements in the tax measure and leaving room for the Board to refine and improve the oversight process based on experience.  The tax measure requires creation of the Parcel Tax Subcommittee, consisting of 3 to 5 tax-paying members of the BAC selected by the President and Vice-President of the Board, preparing a report to advise the Board, making a presentation at the first public hearing on levying the tax.  Whether the Parcel Tax Subcommittee members are solicited and selected at the first or a later meeting of the BAC, whether there will always be 5 members, etc. are issues where experience may teach us which is the best approach, and therefore the Board, the President and Vice-President have some flexibility in determining how to best accomplish the Parcel Tax Subcommittee goals set forth in the tax measure.  

I have read the concerns about a conflict of interest, but do not agree with them.  The concern is that former District employees have an interest in current District budgets because those budgets could affect them financially.  That is possible, but not very likely.  As for actual pensions, the District has no control over Cal STRS pension benefits or contributions, which are set by state law–once an employee is retired, the employee receives payment from STRS, not the District.  As for other benefits, retired employees are entitled to the benefits available to them under the collective bargaining agreements in place when they retired.  As a result, when the Board capped health insurance contributions for current District employees starting in 2011-12, retirees under CBAs that give retirees what current employees receive also were capped, while retirees under CBAs that gave them what they had received when they retired were not affected.  All District retirees lose District-paid health insurance when they reach Medicare eligibility age and, as of July 1, 2014, will be limited to no more than 5 years of District-paid health insurance or until they reach Medicare eligibility age, whichever comes first.  Unlike the City of San Jose, which sought to change retiree benefits based on economic infeasibility, the District does not have outstanding pension obligations and only a relatively small exposure to paying health insurance benefits for retirees temporarily.  The financial interest of a former District employee as a result of their former employment almost certainly is less than their interest as a taxpayer, i.e. they would save more by opposing the tax than they would gain by supporting it.  I also note that every taxpayer has a financial interest in the Board’s decision.  Ultimately, the Parcel Tax Subcommittee only provides advice to the Board–and the elected Board members will decide on the parcel tax levy and all other budget issues.

All community groups are entitled and encouraged to provide their views to the Board on the parcel tax levy as well as other issues.  The BAC, as a group of individuals who follow the District’s budget throughout the year, provided their view on the need for the levy.   Ultimately, the elected Board members take into account all public comment in exercising their responsibility to decide whether to levy the parcel tax.

The CAC’s work assessing the District’s budget and the need for a parcel tax levy occurred during roughly the same time frame because the Governor’s budget is delivered in January, thus providing at least some idea of the amount of State funding that likely will be provided to the District.  The remaining role of the CAC was to provide information of interest and use to the Board, which has consisted of long-term trends in funding and compensation, and how the District compares with other comparable Districts.  If the tax measure is adopted by Piedmont voters, the Board will decide whether to ask the Parcel Tax Subcommittee if it is willing to update such reports (and prepare any others that the Board may find useful) and the Subcommittee members will decide whether they can devote the time and energy to do so.

As noted above, certain fundamental requirements for a Parcel Tax Subcommittee are included in the tax measure.  The Board has that ability to ask the Parcel Tax Subcommittee to do more, or even to set up other committees, if it feels that oversight needs are not being addressed.  Ultimately, however, the elected Board members are responsible for oversight, including determining the need for parcel tax funding and ensuring the funds are well-spent.

Email input to the Board of Education can be provided at the following addresses:

• 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

Will Decisions on Oversight Procedures, Appointments, and Charge Be Taken Out of the Board’s Hands?

Piedmont Civic Association (PCA) readers have raised a number of questions regarding the proposed demise of the School District’s independent Citizens Advisory Committee (CAC), which since 2010 has studied and analyzed the school parcel tax levy and reported its findings directly to the School Board. The CAC has consisted of 7 to 10 Piedmont residents, appointed by the School Board, who have provided vigilant oversight of parcel tax expenditures.

Under the proposed school parcel tax ballot measure presented to the School Board by staff on November 14, the CAC will be replaced by a 3 to 5 member parcel tax subcommittee of the District’s Budget Advisory Committee (BAC).  The BAC currently consists of up to 32 members, including School District employees, union representatives, and parents.

While the BAC is open to the general public, the District Superintendent selects the Committee members. According to the Board resolution, parcel tax subcommittee nominees will be “identified” (presumably from BAC members) prior to being “approved” by the School Board President and Vice President.  The process required by the resolution has the potential effect of limiting subcommittee members to persons selected by the Superintendent and allowing District staff to participate in the selection of their own oversight.

Unlike the CAC, former District staff members may serve on the parcel tax subcommittee (provided they are Piedmont homeowners).  

A More Limited Charge?

 The CAC’s current charge is not only to advise on the tax levy, but also to:

“. .  . help review and project the financial needs of the PUSD with respect to the levy”

“conduct an independent examination of the District’s budget”, and

submit an annual report on “The amount of funds collected and expended from the proceeds of school parcel taxes  . . .” and

“a high level, comprehensive analysis of the District’s budget, including relevant metrics, historical trends, and comparisons with similar school districts, that provides an analytical basis for the Committee’s recommendations.” 

See charge.

In contrast, the language of the proposed parcel tax ballot measure creates a “parcel tax subcommittee” with a more limited charge, without the option to adjust or expand that charge through Board action over the next 8 years:

“. . . 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.”

At the November, 14, 2012 Board meeting, School Superintendent Constance Hubbard proposed the changes to the CAC structure, stating she felt staff time would be saved by reducing  the number of required Brown Act notices and avoiding duplicate staff presentations.  Reasons for the limited charge, reduced number of members, and altered selection procedures were not offered or discussed at the meeting. The proposed ballot measure language basically takes decisions on the Committee composition, appointment procedures, and charge out of the Board’s hands. 

Questions to the School Board regarding the proposed change of the Citizens Advisory Committee to a Parcel Tax Subcommittee: 

• Why does the Board resolution propose to significantly and permanently reduce the CAC’s charge?
• 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?
• Why will former District staff members be permitted to serve on the subcommittee?
• 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?
•  How can a determination on the need for a levy and 2% annual increase occur without an independent review of the budget?
  
• 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?
• Why will the Board President and Vice President approve nominees, rather than a review by the entire Board and the usual public hearing process?
• What is the distinction in “resident of Piedmont” (BAC qualification)  and Piedmont “homeowner” (parcel tax subcommittee qualification)?
• 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?
• What is the meaning of  “determine” in the ballot measure language? What will the subcommittee’s role be in determining the tax levy?

 Proposed ballot measure language:

“(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.”

. . . 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

Two-Thirds Majority OK  City Parcel Tax –

After a spirited discussion among residents about the state of Piedmont finances, Piedmont voters approved Measure Y  by 68.33% .  To pass the parcel tax 66 2/3% Yes votes were required. The measure extends the Municipal Services Tax four more years to June 30, 2017.  The tax funds will go into Piedmont’s General Fund to support city services.

For the first time in memory, there were lawn signs supporting the passage of Piedmont’s parcel tax.   The green signs with white lettering posted throughout the City urged renewing the existing parcel tax, while opponents hung door hangers urging a No vote on Measure Y.

The Alameda County Registrar of Voters reports the “final preliminary result” of the vote on Measure Y:

Yes  4549    68.33 %

No 2108      31.67 %

Additional information can be found on The Patch.

Updated 11/21/12

Rewarding Friends and Punishing Critics –

Organized opposition to Piedmont’s parcel tax makes it very clear that the City Council presides over a divided electorate.  This divide opened only in the last 5 years after two decades of relative harmony.  Why?  Because many Piedmonters believe that the Council majority allocates benefits to friends at the expense of the rest of the community.  Under circumstances still unexplained, the Council provided utility undergrounding to the city’s most exclusive neighborhood at a cost of $2.3 million paid by the remainder of Piedmonters. The Council also gave a $2 million subsidy to sports lobbies by building a soccer complex at Havens School, paying consulting and legal fees for a private scheme to build another soccer complex in Moraga Canyon, and assuming responsibility for a swim facility.  And city staff, despite the recession, continued to enjoy benefit packages that two Council-appointed committees reported we could not afford.

Mere profligacy might not have evoked organized opposition, but resistance emerged when the Council majority began using its privileged position to punish those who questioned pork barrel politics. The Council spent hundreds of thousands of tax dollars for lawsuits to intimidate homeowners who resisted utility undergrounding.  Council members used their access to the local newspaper to attack citizens who dared criticize subsidies to sports lobbies, and to chastise voters who spoke out against the failed sewer surtax.

Now this abusive and divisive Council wants 66% of Piedmont voters to extend the city parcel tax.  The Council, however, continues to give voters new reasons to reject the tax.  The Council majority allowed those who wrote the ballot argument in favor of the tax to falsely claim that the Council unanimously endorsed the tax.  Council members have kept opponents of the tax from speaking at Council meetings, resumed attacking critics in public fora, and tried to extort support by threatening to cut police and fire services if the tax fails. The Council shamelessly persists in this extortion despite the fact that proceeds from the tax since the last extension have gone for undergrounding utilities in our wealthiest neighborhood, subsidizing private sports clubs, and pursuing vicious legal action against homeowners.

The Piedmont City Council, in short, continues to behave in ways that make it unfit to manage the proceeds of a voluntary surtax.  Those proceeds have become nothing more than a “slush fund” used to reward friends and punish critics. The residents of Piedmont deserve better governance and should withhold this tax until we get it.

 Ralph Catalano, Piedmont resident

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.  The Piedmont Civic Association does not support or oppose candidates or ballot measures.

Long-Time Resident Voting NO on Measure Y-

Having lived in Piedmont for over 40 years and thus placing a high value on the services provided by the city, I am concerned about the controversy surrounding the parcel tax renewal. Over the last few months I have attempted to educate myself regarding the arguments posed by both sides of this important public policy issue.

The supporters of Measure Y have insisted that it is necessary to pass Y to ensure continuation of the essential services that the citizenry of Piedmont have come to expect. Opponents of Measure Y contend that the City will be able to provide the necessary services without the revenue from the parcel tax. Furthermore, their view is that the city council and the city administration need to be held to account for the mistakes over the last few years that endanger the future financial well-being of our community.

It is clear to me that the council and the administration have not performed up to expectations in recent years. The undergrounding debacle that cost the citizens of Piedmont several million dollars and the attempt to create athletic playing fields in Moraga canyon in the face of significant detrimental environmental impacts are but two examples of poor decision-making on the part of the City. In addition, failure to deal adequately with the looming employee benefit crisis reinforces my concern regarding the management of the city’s resources.

To arrive at these conclusions I have relied on, among other sources, Michael Rancer’s comprehensive assessment of Piedmont’s financial situation made when he was Chair of the 2011 Municipal Tax Review Committee. In particular, Rancer’s analysis suggests that the current administration has failed to address the escalating costs associated with City employees’ salaries and benefits. These costs have increased by over $6.4 million over the last decade, an amount greater than the overall increase in city expenditures.

Currently a quarter of the city budget goes to pay for employee benefit costs. A “No on Y” vote will begin the process of holding the council and the administration accountable for bringing costs under control and laying the groundwork for a sound fiscal future for Piedmont.

Ken Jensen, Piedmont Resident

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.  The Piedmont Civic Association does not support or oppose candidates or ballot measures.

With respect to Vice Mayor Fujioka’s recent opinion piece on Measure Y, I’d suggest that threatening yet again the ambulance service brings to mind Ronald Reagan’s famous comment in his debate with Jimmy Carter: “There you go again.”

Any Council member who says the ambulance service is on the chopping block is basically telling the voters that the service isn’t important enough to be among the top 93% of the City’s priorities.  So in the final days of this contentious election, let’s try to keep a grip on the reality of budget making.

I honor Vice Mayor Fujioka’s stated commitment to make necessary changes, but the evidence of real progress is minimal 14 months after MTRC delivered its final report.  Short term agreements have been reached with some City employees, but when the contracts were brought to the Council, no savings were projected.  The two-tier pension system will have no significant effect for maybe a decade, while our pension liability grows unchecked.

The Council chose to proceed with  the Municipal Tax Review Committee (MTRC) report’s sewer tax surcharge and parcel tax recommendations, and not the recommendations on controlling spending.  Although the MTRC endorsed the sewer tax surcharge, the voters disagreed.  We’ll see on November 6 what they think about renewing the parcel tax without significant progress on reining in spending.

A core issue is benefits whose costs have been growing at double digit rates for the last ten years.  Today for every $10,000 of salary we pay a public safety employee, we incur at least $6,600 in benefit costs.  For a public works employee, every $10,000 in salary can mean $8,000 in benefits.  And these costs keep on growing as does our future liability, so that one day we may see benefit costs greater than salaries.  These are not only staggering numbers, but they are double the size of anything that is considered reasonable in other cities.

Some may think that those opposing Measure Y don’t care about Piedmont.  On the contrary, it is because we love this town that we volunteered to help with City governance.  And our involvement has caused us to conclude that the only way to get significant movement on this problem is to turn off the spigot until the problem is addressed, because uncontrolled benefits spending is a major risk to our valued public services.  It doesn’t mean the City will lose the parcel tax forever, or even for 4 years.  With meaningful Council initiative on the spending problem, maybe it only means for one year, which the City can easily weather with reserves.

A “NO” vote on Measure Y supports Piedmont’s long-term financial health by sending the Council a message that stopgap fixes are unacceptable.

Kathleen Quenneville, Piedmont Resident, Member of Undergrounding Task Force

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.  The Piedmont Civic Association does not support or oppose candidates or ballot measures.