Parcel Tax Renewal: Pro, Con and Impartial

Piedmont voters will decide in November whether to renew the city's municipal services tax ("parcel tax"). The measure will require two-thirds approval to pass. The city attorney's analysis and arguments for and against the measure have been submitted to the City Clerk's office. They are printed below and are also available on the City of Piedmont website. [Editor's note: "Measure Y" has been substituted where it was left blank on items below.]

Rebuttal arguments must be submitted to City Clerk John Tulloch by Aug. 27 to be included with voters' materials.

The tax will appear as Measure Y on the ballot, with the following description, according to the Alameda County Registrar of Voters:

MEASURE Y
City of Piedmont – Parcel Tax
To maintain essential police, fire, and paramedic service, to prevent the reduction in maintenance in City parks, greenspaces and other public areas, and to prevent the loss of youth, family, and senior recreational and safety services, shall the City of Piedmont continue to authorize a parcel tax, replacing the existing Municipal Services Tax, as is more specifically set forth in Ord. 707 N.S. which is on file with the Piedmont City Clerk.

IMPARTIAL ANALYSIS BY CITY ATTORNEY

Measure Y would continue an existing Municipal Services Tax that has been collected in Piedmont since 1980. Every four years thereafter, the voters have approved extensions of the tax.

Revenue from the Municipal Services Tax goes to the City's General Fund and therefore can be used to fill gaps when residents' demand for city services exceeds the funds generated by real property taxes, sales taxes and other revenue. The General Fund provides Piedmonters with basic services such as police and fire protection, street maintenance, building regulations, library
services, recreation, parks maintenance, planning and public works.

Measure Y does not increase the current tax rate or change the procedure for setting the rate; it merely extends the life of the tax for another four years to June 30, 2017. The tax rate would continue to vary by parcel depending on the size and the nature of a parcel's use (i.e., residential/commercial). Advanced notice and a public hearing would continue to be provided before the City Council sets the annual tax rate.

The Municipal Service Tax must be used locally and will undergo annual financial
rev1ew.

A "Yes" vote on Measure Y means the voter is in favor of continuing the existing tax.

A "No" vote on Measure Y means the voter is opposed and the existing tax would no longer be collected.

Two-thirds (66%) of the qualified voters casting a vote in favor would approve Measure Y.

The above statement is an impartial analysis of Measure Y. The full text of Measure Y 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.

Thomas R. Curry
City Attorney

ARGUMENT IN FAVOR OF MEASURE Y

Measure Y RENEWS an existing tax that provides funds to maintain existing city services. Measure Y provides funding for Piedmont’s: superb police, fire and paramedic services; library access, and other services as well as park and playground maintenance; street and sidewalk repairs; capital improvements; equipment maintenance and replacement.

For the past 32 years, Piedmont voters have approved a special tax called the Municipal Services Tax (“the parcel tax”) to supplement our city budget. The average property pays slightly less than $400 per year. Unlike most cities in California, Piedmont receives virtually no sales tax revenue. Without Measure Y, cuts in essential city services will be unavoidable.

Measure Y is not a new tax; it RENEWS an existing tax. The citizens who served on both the Municipal Tax Review Committee (MTRC) and the Budget Advisory and Financial Planning Committee determined that renewal of the existing Municipal Services Tax is essential if Piedmont is to maintain its high standards of municipal services. The MTRC report stated: “Parcel tax revenue has become an essential component of the City’s fiscal picture, totaling about $1.5 million annually in a general fund expenditure plan of about $21.5 million. Therefore, it will be essential to renew the parcel tax at its current level before it expires on June 30, 2013.”

All the money raised by Measure Y will stay here in our community to provide services and benefits to Piedmont’s residents. The Municipal Services Tax would not be necessary if the State of California was not taking approximately $1.6 million per year in property tax revenues from Piedmont. As a special tax, parcel tax revenue cannot be diverted by the State.

The City Council unanimously supports RENEWAL of the existing Municipal Services Tax, because Measure Y is essential for the maintenance of city services.

Please Vote YES ON MEASURE Y.

Signed
John Y. Chiang
Mayor
Valerie Matzger
Former Mayor
Bill Hosler
Chair, Budget Advisory and Financial Planning Committee
Mary M. Geong
Member, Budget Advisory and Financial Planning Committee
Steve Hollis
Member, Municipal Tax Review Committee

ARGUMENT AGAINST MEASURE Y

Short-term taxes don’t solve long-term problems. Thus, the majority of the Council-appointed Municipal Tax Review Committee (MTRC) opposes Measure Y.

In recent months, MTRC and the Council’s Budget Advisory Committee reported on the City’s long-term fiscal problems, determining that current trends are unsustainable. These revolve around over-spending and out-of-control budgets. The Council has so far ignored the most serious recommendations presented. Ill-advised spending continues its upward trend.

Among the worst examples which have led to millions of dollars of unneeded expense are:

• The Piedmont Hills undergrounding fiasco

• The aborted Blair Park plan

• Overstaffing

• Higher costs for service than in comparable small cities

• Uncontrolled employee benefit contributions

The last category has been rising at double-digit rates for years because the Council chose the richest pension plans in California without adequate analysis or appropriate employee cost-sharing. Thus, today Piedmont has a $40 million unfunded liability for these benefits – twice the size of the annual budget, a future obligation of $10,000 for every household in Piedmont and a risk to taxpayers and employees alike.

Rather than tackling these problems, the Council has used the parcel tax as a bail-out to paper over the lack of budgetary control. The parcel tax does not support critical services but simply gives the Council a way to avoid making hard decisions.

The majority of MTRC now says it’s time to stop the bail-out and force those decisions. The Council will have to set priorities and establish proper controls.
We are not opposed in principle to parcel taxes. If the Council takes needed actions to control costs, we will support one for essential purposes in the future. Today, however, the tax is not being used wisely or efficiently.
Insist on fiscal responsibility from the Council and vote No on Measure Y.

Ryan Gilbert, Member, Municipal Tax Review Committee
Tamra Hege, Member, Municipal Tax Review Committee
Eric Lindquist, Member, Municipal Tax Review Committee
Steve Weiner, Member, Municipal Tax Review Committee
Michael Rancer, Chair, Municipal Tax Review Committee

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