Good evening. We'd like to call the
meeting to order.
So, with that, can we do roll call? And
Mary Hefty's missing, but we're we think
she's coming, so we'll get her included
once she gets here.
>> Council member Walter,
>> present. Council member Hasco
>> here. Council member Flynn
>> here.
>> Mayor Taylor,
>> present.
>> We have a core out.
>> Thank you. All right. So, we have no
presentations this evening. So, then the
next item up is the town manager report.
Mercy.
>> Yeah. [laughter]
Sorry.
» Sorry. Was I
>> I've got orders to move along. In my
>> defense tonight, Hel me to task.
>> Asking Vice Mayor Hufty where she is.
Okay, hold on. I have a beautiful
PowerPoint because there's a lot of
exciting things happening in town.
Excellent.
>> Starting with the Hold on. The music
series which will be
Thursday night. Hold on. I have a great
graphic that shows you who's playing.
It's a fancy guitarist.
Steel guitar, I think. Hold on.
>> Yeah, should be fun.
>> Yeah.
Here we go.
Okay. Darcy Smith, town manager. Yes.
So, excitement summer concert series
start this week on Thursday with Dennis
Johnson and we'll have two more nights
and then many of you know we also have
the PB Palooa on August 29th. The lineup
has been announced and town members were
sent a lovely postcard with details.
More excitingly, we had the town
emergency preparedness and safety day
which was well attended. Here's some
photos.
and count Vice Mayor Huy and I attended
as well as council member Flynn and we
successfully made ham radio contact. I
talked to someone as far away as
Nebraska or maybe it was South Dakota.
Yeah. So, thank you to all who helped
the fire department, Epic, WPB ready,
WPBERT, and the town emergency
preparedness committee.
Next, some of you hopefully received the
Portolla Valley Post, which is our
quarterly printed newsletter, which was
delivered to residents this week. And as
part of this year's budget process and
last year's evaluation of potential
fiscal stabil stability measures, we've
engaged our residents to identify the
town's services, needs, and priorities.
And that information is included in the
post. And this is an extension of the
scientific survey conducted last
September. We relaunched this Portella
Valley conversation to ensure that we
could hear from all residents on these
important matters and again that
information is on our website.
So last our public works completed some
nice projects around town. They
completed some or sorry the fireart
district completed some valuable tree
removals and then our staff in completed
a sinkhole repair and they replaced you
might have noticed some very old rotten
wheel stops that were crumbling and
people were they were a little bit of a
hazard. So we have these beautiful new
wheel stops and also nice handicapped
parking signs. So, thank you to our
public works team, Justin Scott who work
really, really hard and then the
Woodside Fire Protection District. So,
that's all for my report. I hope to see
all of you on Thursday night at the town
center.
>> Thank you, Darcy. And thank you show for
showing up at the radio. I mean, I know
it's appreciated that you were there.
So, I think they even get a few extra
credit for, you know, a town official
showing up. So, thank you. I was out of
town. All right, with that, we'll move
on to oral communications. Is there
anyone that would like to speak on
issues not on the agenda? So, I see no
one in the schoolhouse
and I don't see any hands online
and I see Mary. Yay.
Hello, Mary.
>> Oh, that doesn't feel good.
» Wish am I saying hello? [laughter]
Well, welcome.
>> And let it be noted that Council Member
Hufty is in the building and seating at
the podium. So, all right. So, yeah, no
worries. So, we we just finished up oral
communications. We're going to move on
to the consent agenda. Yeah. Helen gave
me Helen said, you know, you need to
move this meeting along. So, we're
moving it along. So, all right. So,
consent agenda. Is there any public
comment on the consent agenda? So, I see
none in the schoolhouse. Is there
anybody online that would like to
comment on
consent agenda? I don't see any hands.
All right. So, I'll bring it back to the
council. Are there any consent items
that anybody wants to pull?
>> I'm sorry. Say again. 6D.
>> 6D.
>> Okay. Um, I'd like to pull the regular
meeting minutes unless they've already
been corrected.
» Yep. And I I would pull the special
meeting minutes cons.
>> Okay. So, I think I've heard 6A, 6B, and
6D.
>> Yeah.
>> Okay. Um, do I have a motion to approve
the loan remaining consent agenda item 6
C?
>> So, move.
Thank you. I have a motion to second.
>> I
any
hearing? None. Um six approved. All
right. Why don't we start with 6A?
Ellen, I think that was yours.
>> Yeah, I just needed uh and I did notify
that um Darcy and Veronica. Uh I was
recused on 6A, excuse me, on this on the
item for the special meeting minutes.
So, I just wanted the record to reflect
that I am recused even I was stuck in
traffic for five minutes and then I was
recused as well due to my day job. So,
thank you.
>> And Veronica, do you have what you need
on that?
>> Uh, yes. A was already revised and
reposted.
>> Okay. So, this new revision that's here
is Okay, great. All right. Um, if you
guys don't mind, why don't we just go
through all of them and then we'll just
unless they're substantial, we'll we can
just approve all of them at the same
time.
>> All right. So, why don't we go with 6B?
>> So, mine's just minor typos. I already
let you know that there's three
indications where the vote is listed as
um for uh recusal and then against. And
it just needed to be listed as four,
against, and then either recusal or
absent. So, the three votes were listed
incorrectly.
» So, Veronica, you feel like you have
>> Yes.
>> correction. You know what to make. Okay,
great.
>> Um, all right. Judith 6D.
>> Yeah. I I wanted to understand a little
bit more of the history of this. It
sounds like everybody's in the county
signs up to this, but I there are some
strings attached in the underlying
documents. So, I wanted to understand
the context here. What's the benefit?
And I think it's that we're eligible to
receive grant money. I'm not sure for
what. Uh, if somebody could give me a
highlevel non-detailed
sense of that. Yeah. So, we'll have
Sarah course building director
answer that question. She's done some
great research on this.
Sir, plan bailing director. So, thank
you for that question. Um, so this
agreement, as you know, this is an
amendment to a previous agreement that
the town has entered into with county of
San Monteo. So, this amendment really
why it's coming forward is there's just
a couple updates around HUD's own
policies and one of the policies was
around the renewal requirements or how
this agreement gets renewed. So really
it can only get renewed so often and
then you have to come forward for um I
guess a full renewal of the agreement
itself instead of the auto renewal. So
it's really the auto renewal policy and
there few other bullets they called out
um that are kind of the main things for
this agreement amendment. And then with
us entering into this, there's about 16
other jurisdictions that are less than
50,000 people or have a population of
50,000 or less that have chosen to enter
into this agreement with the county. And
so my understanding is that funding
comes in, I don't have an exact number,
but I was on the phone with the county
today. I thought it was anywhere between
like four and six million that is coming
in that's allocated to different
programs and grants that's distributed
throughout the county. They mentioned
things like meals on wheels and some
other programs to support um housing and things like that. So I have I do
have a list unfortunately that wasn't
distributed to town council but um there
are a variety of things that this goes
towards that um can also be of benefit
to the town and the surrounding
community.
Um, so
watered under the bridge on this to be
clear. Um, there are some costs we might
incur by complying with a cooperation
agreement. Um, we've got to commit to
adopt and enforce certain certain
prohibitions on excessive force, which
I'm sure we do, but
and then you also
uh are restricted from applying for
certain grants independently. That kind
of makes sense. Um, but then affirmative
action uh requirements. And my my my
issue isn't with these line items. It's
with have we looked at and confirmed
that the costs of continuing cooperation
are reasonable in light of the revenue
that you say we're going to get.
I
>> mean, there wasn't a full analysis done
related to cost. It really was just
looking at the amendment language. Mhm.
Um, so I guess my only comment would be
I think when this comes up again in the
future, we ought to just make sure since
we're in cost monitoring slashminimizing
mode uh that we understand what we where
our costs are here and and just confirm
a little bit more formally next time um
where they are. But these amendments
don't seem particularly material to me.
Um, and they seem to be required. So for
me, I'm I'm fine with that with that
explanation. But next time around, I'll
want more structure around the analysis.
>> Okay. Thank you.
>> Could I ask just another quick question?
um if we do get one of these grants
because I was a little bit under the
impression that we probably wouldn't
qualify anything, but um would we then
have to have incur these updates to
ordinances and what have you or is it
just in general we have to
um have all these things set up already?
>> So, I'm not sure if I can answer that.
>> I think we're committing to do these
things regardless of whether or not we
get grants. I don't know if that helps.
That's that's what I'm questioning. And
I don't know that now is the moment to
dive into this, but next time around
I'll want a more wholesome understanding
of that.
>> I'm going to I have affirmative action
in our code. We have
>> maybe beside the point. I agree.
>> Okay.
Thank you.
>> So with that, I'll motion to approve
60D.
>> Okay. So I'd like to do but let me just
ask a quick question before we go there.
Yeah. Um, so Katherine or Darcy, do you
have any more to add? And no is an okay
answer. I just wanted to follow up.
>> I'll just add that we've been under this
agreement for a long time
>> and the is a long-standing agreement and
we haven't to my knowledge incurred
substantive additional costs.
>> Thank you.
>> Okay, great. Okay, so with that, um, if
you wouldn't mind 6 A, B, and D that we
just get them all done.
>> So I would accept a motion for that.
So moved. A
>> second.
>> Thank you. I have motion a second. All
in favor say I. I.
>> I.
>> Any opposed? I hear no opposition. All
right. So that one consent agenda is
approved. So moving on to regular
agenda. Thank you, Sarah.
U moving on to regular agenda 7A. Tony,
I assume you have a staff report for us.
» Yes, I do.
» [clears throat]
» So tonight we are accepting
having council consider acceptance of
the fiscal year 2223
audited financial statements and other
related reports.
So uh the audited results are we did
receive an unmodified or a clean opinion
and that means the the financial
statements re within reasonable
assurance reflect the financial
condition of the town of portola valley
for fiscal year 2223.
Uh just some brief um highlights total
net position decreased by 1.6 million.
uh general fund balance decreased by
1.26 million and then there was a new
finding in the memorandum of internal
control. Uh the chart you see is some of
the um variance are the changes in some
of the balances from 2122 to 2223.
Um our financial statements are in
regard and when you look at the gazsby
adjustments we are minimal. we only have
uh the you know we have to do an
adjustment for compensated absences our
pension liability and our oped
liability. Uh so um those are what's
being reflected in excuse
[clears throat] me in um this table.
This chart this actually was requested
by the finance committee. Um just an
update of all the findings from previous
years and the status um of where we are.
As you can see, as we're getting closer
and closer to uh current fiscal year, uh
we are um making those corrections,
implementing council or the the
auditor's recommendations
and but [clears throat] like I said, the
uh the the 2223 there was a new finding
and it was untimely renewal removal of
uh authorized signers on the bank
accounts um primarily due to um the the
amount of staff turnover between 22 23
and 23 24 that we didn't keep up with.
But at no time was there a situation
where we did not have an authorized
signer on staff. So, we were not
completely um out of compliance, but uh
the auditor just thought it was a
finding and a comment uh that this is
something that we need to stay on top of
with with staff separation, especially
with authorized signers like town
manager or assistant town manager or or
finance director.
>> Tony, could you just clarify how to read
that table because yeses and nos and
reds and green. So in 2021, yes, means
it was a finding. Um, and that's why
it's colored red. It's not good. Um, and
then the end is it's no longer a finding
and it's green. So, which is good. Um,
2526 we will probably get a finding for
uh timelit
because we will be behind. Um, but um
but as I as I stated, we are in the
process of catching up. We're
implementing the changes and
recommendations that the auditors um had
uh suggested in their memorandum of
internal control.
Uh other reports that you were given was
the report on the GAN limit measure A
and measure W. Uh the auditor reported
that we're in compliance. We are
compliant with all the requirements for
the GAN limit, measure A, measure W, Required communications. is
there were no disagreements between
staff and the auditor.
Um the finance committee did review the
financial statements at its last meeting
on June 30th and did recommend that
council accept the audited financial
statements as presented. Um
with that that clears up my report and I
turn it back to council for questions.
>> Thank you Tony.
>> Questions for Tony? Clarifying questions
on the audit.
Rebecca
and no iss okay answer. This is just
questions and then we'll go to public
comment and come back. So, just
checking.
>> Um I I just had some really minor
questions because I had some
used about some of the phrasing of some
of this stuff. Um
just um
so page 53 of the packet.
I don't you probably don't have it right
in front of you.
Um, page 53 of the packet. So it said
the beginning fund balance for the
general fund was restated by 368,000
due to accounting entry errors from the
prior year that resulted in overstating
current liabilities
and general government expenses.
>> Yes. So when I read that,
I read it as if you're overstating your
liabilities and your expenses.
To me, that says that you have more
money. But when I look at the tables,
it's shown that 368,000 is shown as a
negative.
>> So yes, so when you look at the basic
accounting equation, you have assets
equals liabilities plus fund balance.
The issue was that the 22202
or 2122 financial statements, we did a
prior period adjustment and how I booked
it and how the auditor booked it, they
increased the liability, but we were
actually reducing the liability. So even
though the net effect was zero on the
right hand side of the equation, um
liabilities were overstated, fund
balance was understated. So we had to
make that correction in 22 the 23 24 I'm
sorry the 22 23
>> because you had made some kind of
correction the year before.
>> Yes. But if you were looking at
liabilities and fund balance you know
those two together add up to assets that
the we were still in balance. However
liabilities were over fund balance was
under.
>> Okay. But it was still the net effect
was zero. But we had to make the
correction because they are two separate
components in the same equation.
>> Okay. I I think I kind of understand a
little bit. Um
and then there was a bunch of situations
where I consider it to be kind of a
double negative way of these are just
minor minor things but I was confused
and might as well get it clarified. um
statements that said find an example.
Well, it said something like decreased
by minus whatever.
>> So to me that's a double negative. But I
think the way when I look at the numbers
it just meant so decreased by minus 3.1
million when it's fact it's in English
for me it would have been decreased by
3.14 million. You see, but every time
there's that little minus stuck in
there, which I found very
>> This is pretty standard language.
Financial statements.
>> Okay. Well, I haven't experienced it
that way, but maybe government does
everything a little little weird. And
then I noticed that we have a
outstanding liability that we've loaned
something or someone money or a minor
amount. What was
>> the road maintenance districts?
>> Oh. Oh, okay. So they they pay it's
$13,000 each year for 10 years. It was
about 131,000 total.
>> Okay.
>> And that was in 2122, I believe.
>> Um and then I kind of got confused with
the unassigned fund balance. The number
kept changing from one page to the next.
And I kind of think it was due to the
library 20,000
uh payable liability there that kind of
was sometimes included, sometimes wasn't
included when you listed the unassigned
fund balance.
>> Right? So if you're looking at the
there's the statement of net position,
which is all funds plus the Gazsby
adjustments, and then the next section
is the fund financial statement. So the statement in deposition the
unassigned would include anything
related to the gazsby adjustments which
are not in the fund financial statement.
So those numbers are going to be
different.
>> Okay. And then I was found it odd that
um page 65 last year we had a general
government I have notes here that I
don't have complete that was only
$660,000
>> and then the next this year we're
dealing with 6 million and something.
What adjustments related to pension
because we had a significant reduction
in the previous year that was showing up
in the deferred outflows and deferred
inflows. Well, those get recognized in
this year. So, it's a constant back and
forth, but it's related to the Gazsby
adjustments.
>> Okay. Um,
and we didn't have any SBITA liabilities
for that new software as a service
thing.
>> We we did have we do have
um speed of receivable or uh payables
with our subscription based, but it was
immaterial because we didn't exceed the
threshold of $300,000.
>> Okay. And I assume that will be
different for this year when we get to
2020.
>> No, but it has to be 300,000 per
subscription.
>> Oh,
>> so yeah. So that and the the previous
year was loans. It was the same
>> it was the same threshold where each
loan had to be over 300,000 for us to
recognize it. But we have such a small
volume.
>> Oh, okay.
>> We won't be recognizing. And then I just
happened to notice that our audit for
2022, the report was dated August 11th,
2025. And then this audit for 2023, it
said they made a comment, the audit
auditor made comment about the documents
not being provided until miday 2026.
So do you have some sort of explanation
for what happened and why it took so
long? Part of it was the $300,000
>> variance and um it was in May where we
finally came to a resolution.
>> Okay. So, they kind of a little
misstated that.
>> Yeah. I see. Okay. So, we won't
hopefully won't encounter that.
>> Okay. Great. Thank you so much.
>> Thank you.
Rebecca. Judith, do you have
any questions?
Um if you just go back to the chart that
the finance committee
asked for
out of the thing I mean the bottom line
is out of the things that are remaining
to be worked on are those
do you anticipate any significant
impediments
in correcting those in the remaining
audits or going forward from here on.
>> Yeah, the third slide there.
>> Anticipate
um any impediments in resolving these
issues.
>> So, we've got all the processes and the
people that we need to right
>> staff is um
each year staff's getting more and more
knowledgeable.
Um, so they're they're catching it as
they're entering it as as you know as it
is as as it's going in. So
>> what's actually being entered into the
system the first time is clean or done
what hadn't done in the pri the prior
years.
>> Okay. And the one
that is a blank you're
just going to have to wait and see.
Yeah. About that.
>> Yes.
>> Okay.
That's it. Thank you. Thank you,
Mary.
>> Thank you.
>> Hi. So, uh, first, thank you.
This is, um, you know, this town has
been waiting for this for a long time. I
know this is not comments, so quick
couple quick questions.
>> Um,
I didn't have as much time as I normally
do, so just um, bear with me. Total
revenues increased from 66 million to
9.3 million. That was just sales of
houses, right? Differences, but well,
it's all funds, not just general funds.
So, we did have some significant with
measure A, measure W. Um, we also had
investment earnings. We had positive
investment earnings where the previous
year we had losses.
>> Great. Um, and the total expenses, you
know, to go from
6.1 million to 10.9. That was the year.
Remind me that was the year.
>> That was the the Gazsby adjustments that
I alluded to with council before,
>> right? Okay.
Um, just making sure.
Hang on. Let me go. Um
I was just a little bit confused on
segregation of duties. Um found that the
def uh deficiencies had not been
mitigated as of June 23. Therefore they
are deemed to be the current year's
significant deficiencies. Is that s
current year being 23?
>> Yes.
>> Okay.
>> Yeah. Because that it's a finding from
the prior year. So all the all the
memorandum all those findings is for
fiscal year 2223.
>> Right. Se segregation of duties at the
time there was only two members of the
finance staff. So you can't have
segregation of duties with two. So now
we have three and actually four. Um so
we have we have uh alleviated or
mitigated that finding.
>> Great. Thanks. Okay. Um and in terms of
the timely deposit of checks that was a
problem. Um, you know, there were
stories of checks getting lost and is
there now a more clear process for
tracking and deposits and
>> every check that's received is logged,
scanned,
deposited within 7 to 10 days.
>> Excellent. Thanks. Okay. Um.
that might be it. Um,
okay. Uh, let me just double check.
Yep, that's it. Thank you so much.
>> Thank you. All right, let me open it up
for public comment. Um, is there any
public comment on this item? See no one
in the schoolhouse? Is there anyone
online that would like to comment on the
audit? See Rita's hand. Rita, go ahead.
» Hi. Uh, thank you for taking my comment.
And you know um as we applaud the 22 23
audit moving forward uh we still have to
acknowledge that today is uh July 8th
2026 and we have a we have a ways to go
and I just hope that with all the moving
parts that we have that um be before we
put something on the ballot that uh the rest of them are are caught up so
that the town residents can have a
clearer picture of what our finances
are. Thank you for taking my comment.
>> Thank you, Rita.
There any other public comments?
All right, I don't see any other hands
up online. So, I will close this
item public comment and bring it back to
the council for discussion. Any further
discussion?
» Thanks, somebody. I just wanted to thank
you for incredibly hard work that's gone
into this. I know cleaning up accounts
that you had nothing to do with and had
having to try and find uh missing
information, lost checks and all that
stuff. Put in place all sorts of new um
processes was a huge amount of work and
you definitely have my gratitude. Thank
you.
Yeah. Uh I have this similar statement.
Um
you and your whole staff and you know
the auditors working on this have not
had a simple task. So while it looks
nice and tidy and short here, I know
that's not a reflection of the
complexity that you've been dealing
with. Um,
in terms of
not a granular level of detail, but an
overarching
setting of expectation on the future
audits, my general sense had been this
is a super tough one, but once this is
kind of put in line, the others should
be a fraction of some nature of the
future ones. So, if you could just
comment directionally on how to think
about that, that would help me. Y
>> um yeah, this is this one was getting
over the hump.
>> 24 23 24
um
is
pressing 24 25 26 um should um there
should not be any issues in regards to
providing information. Um and u they
should be done relatively uh
I don't want to say short manner but um
it'll be um
quicker than the previous audits.
And I guess the only since this is
discussion, the only request I have is
as you work through with the auditors,
obviously the the public comment
regarding the ballot measure is
something that's on all of our minds,
and I'm not asking tonight for granular
detail, but it this is a request for
updates from over the next several
months on where we are and what what's
realistic and expected. So, you don't
have to answer that now. There's not
something to go after there, but
>> we will have an update at the next
council meeting.
>> Great. Thank you.
» I just wanted to share the enthusiasm
for the work you're doing and I really
appreciate it.
Glad to see that we're getting onto the
slope and and heading down the slope to
get to the finish line. So,
>> thank you. Good luck.
>> Yeah. Um, can you remind me when you
what month and year you started?
>> May 2020.
>> Yeah. So, here you are having to
reconstruct
what other people left and you've put
done a great job. I know it's taken time
but you know good things take time and
you did a really so kudos joining my
colleagues and thank you for what you're
doing it is appreciated.
>> Thank you
>> and ditto I mean thank you Tony I mean
yman's work that you're doing we really
appreciate it and I'm looking forward to
the update at the next meeting.
All right, with that I'm gonna close 7A
and move to 7B,
which is Tony again.
>> Yeah.
>> Oh, I'm sorry. Um, if we need
>> I make a motion to accept the
>> audited financial statements.
>> Thank [clears throat] you very motion in
a second. All in favor say I.
>> I.
>> Any opposed? I hear no opposition. All
right. Now,
thank you. We'll move on to 7B.
>> Okay. Tony Tony gets a little break
first. We're this was really a team
effort, but I want to emphasize a budget
conscious team effort. So you're you're
looking at the team. We have only one
other person who's not here, Lauren
Tarpe, who's assisted us. Um, but I want
to emphasize because I think there was a
public question about, you know, has
this been expensive? Will it be
expensive in the future? And I just want
to emphasize we've we have done a lot of
work on this um to minimize the cost. we
don't have some expensive consultant
working for us it's it's rolling up our
sleeves and doing the work and when I
look to the future would this in incur
more cost for the town I don't see any
um we became a charter town so we here
to talk about sorry the uh review of the
draft ordinance presented potentially to
the voters that decision is not tonight
so this is essentially just a study
session no decisions are made um and we
have been working on this item for a
long time. It's tied into the audits,
but we the council's top priority this
year and last year is working on our
financial responsibility and long-term
viability. So, we've been doing a lot on
that. We've been doing
leading this backlog of audits, as you
heard, financial consultant best
practices. We got the user fee study and
adopted the master fee schedule done and
is being implemented. So, great work on
that. Um, and we're here tonight to talk
about a very key part of this fiscal
responsibility plan, which is the
development of a town charter and real
property transfer tax ordinance, which
would be placed on the November ballot
should the council make that decision at
a future meeting. So, you've all seen
this many times.
It's the infamous black line. We already
know we have a structural deficit
because the council approved this fiscal
year budget with one. um and things are
just looking grim. So that's essentially
what we're trying to solve for. Um as I
mentioned in my town manager report, we
have had the portal valley conversation
starting last year with the scientific
survey and more recently with community
surveys and they've identified
priorities. I don't think this is
anything new to the the community that
we prioritize wildfire prevention,
emergency,
we want to preserve our town autonomy
and we want to focus on infrastructure
and Tony will present a little bit about
that. There's a lot of infrastructure
needs in this town that have been
neglected.
So, back in April, council directed this
team to prepare the charter and you
reviewed that in May and June. So, we've
completed the public hearings on those.
So, thank you very much. Um, I just want
to revisit it because it does tie into
this ordinance that you're reviewing
tonight. And the charter will lay the
groundwork for this revised ordinance by
converting the town from a general law
to a charter town. It's really important
um because without that, the town cannot
enact this ex um
real property transfer tax ordinance.
Really important to note this this
source of revenue goes entirely to the
town. Um and so we've finished the work
on the charter and just important to
note then this is this charter will
allow the town to adopt this real
property transfer tax beyond the state
approved minimum. So right now there is
an existing tax we receive 55 cents per
thousand. Um and we have been collecting
that since we think 1967. Yeah. So our
current ordinance is that old. Um, and
so if you look at the red line of the
ordinance that was attached to your
staff report, it amends our existing
chapter 3.12 to eliminate and our
current existing documentary transfer
tax and we would replace it with a new
real property transfer tax. The amount
is not in the ordinance at this time
because we're not here to talk about the
amount tonight. I just want you to re
looking for you to review the ordinance.
We'll be talking about the rate later.
Um but I want to talk a little about bit
about exemptions because we got a public
comment on um and there's been some
questions that this ordinance approach
that we've presented is simple um and we
don't recommend any changes to the
current exemptions in the ordinance
which are consistent with state law.
They are complicated exemptions and I I
guess I want to pause these are very
different than exemptions that you might
have heard of about related to like Prop
13. So, you know, like when properties
trans transferred from parents to
children or you move out of the county.
These are specific exemptions and
they're nothing new. Again, we've been
applying them since 1967.
Um,
the one that is most commonly used is if
there's a community property division on
a dissolution of a marriage or legal
separation. A lot of these other ones
are very rare and we either never use
them or would very rarely use them. Um
like for example, if the town were to
acquire property, we would not pay the
transfer tax. Same with other
governmental agencies. So I just want to
pause because we have had an interest in
these exemptions and I think they're
easily confused with like you know a
senior exemption for a partial tax
measure or a Prop 13 exemption. These
are very different and they're in state
law and staff's recommendation right now
is to keep these simple, base them on
state law because we can always come
back and amend later. The amendments to
these exemptions are under council
control. So that would not need to go to
the voters. But throughout this whole
process, I've talked about keeping it
simple, keeping it streamlined, you
know, not and that ties in with
minimizing our upfront costs. Um, so I
mentioned that we're not here to talk
about the rate, but I just want you to
be aware that that will be presented at
the next meeting on July 22nd. But I
just want to pause um so that we don't
get distracted by the rate to just
mention important piece which is that
the council in this ordinance there is
language that allows the council to
reduce or repeal the rate without voter
approval. We have that currently from
the for the UUT. I believe it has been
exercised. So, I just want to make sure
you're aware of that because that is
language here that you'll be reviewing
tonight and giving us feedback on. Um,
so we're marching towards the November
ballot. So, tonight's our meeting to
have your preliminary review of this
ordinance and then at the next meeting,
we will give you a resolution to
consider to place this on the ballot
with the election being November 3rd.
And why are we doing this now? We are up
against a filing deadline of August 7th.
Important to note that this ordinance
and the charter would take effect if
approved by the voters. Um there's a
little bit of a distinction I just want
to mention with the effective date. It
would take effect 10 days after the
council certifies the election results.
If in fact it's passed the charter takes
effect when the town files it with the
secretary of state and we should get the
election results on December 3rd.
So, and now we have a presentation by
Tony.
» So, I will be providing some additional
context for your discussion.
Um,
this could be more related to what are
some of our long-term needs in relation
to uh council priorities.
Not looking for any direction or
decision tonight. This is just adding
some additional context um for your
discussion tonight.
So, here's the council priorities. Um
financial responsibility, long-term
diversity. Um these are what the budget
was um developed with uh in mind. Um the
you know we've identified these
priorities these they've been our
priorities uh for the past couple fiscal
years. We've added um community uh for
2627
um and you know but you know we've said
these are our priorities but what are
the strategies that are going to be
implemented with these priorities in
mind. Um so you know when you say
financial responsibility long-term
viability what exactly is that? Um, so
for the town, historically, the town has
not had a long-term uh financial
spending plan. Uh, we haven't
prioritized
uh we haven't identified what's what's
going to be coming down the road. Um,
and also we haven't prepared for a rainy
day. Uh, if there's any type of economic
uncertainty or if there's any type of um
natural uh disaster or emergency. Um and
you know just with that in mind this
winter we're anticipating in El Nino. Um
so u but other policy uh questions that
council will have to uh discuss is you
know the reserve level is currently at
20%. Um it was reduced from 60%. So the
question will be is the reserve at 20%
acceptable is it or do we do we want to
increase reserves? if we want to
increase reserves and we're gonna have
to build in surpluses in the in future
budgets. Um also there's been discussion
at finance committee as well um about
pension funding whether we want to make
additional contributions to lower our
pension liability. Um and you know these
are like I said we're just identifying
these. We're not we don't have a dollar
amount um associated with them but these
are things that will be further you know
developed if council does get that
direction. Um and looking at safety
obviously our sheriff contract that's
going to increase every year. Um but
every three to four years there's going
to be a spike with labor when they go
through labor agree or negotiations.
um wildfire res resilience and um
evacuation planning and implementation
of the evacuation plan. We do have an
evacuation plan, but we do not have the
funds to implement that plan. Uh
wildfire resilience, we do have Woodside
Fire Vegetation Management. Um it has
been 80 days per year. However, last
year we reduced that to 60 days and we
we're keeping it at 60 days this year.
But, you know, we would like to have
some additional funding to increase
those days because, um, having the town
resilient to wildfire is very important.
Um, also, emergency backup power and
cooling centers. Um, our backup our
power issues with the town have been at
the forefront the past few months uh,
with with the theft of copper pipe,
copper wires, but we've also had just
power outages. And when a power outage
does hit the schoolhouse and that the
schoolhouse is down for a significant
amount of time, we lose the
functionality of the equipment that's
here. Um, also we do have a backup
generator, but it's one, so we probably
should uh consider some type of
redundant backup system. Um, operational
efficiency and effectiveness. Um, our IT
infrastructure is aging. Um, and that's
well documented. Um, we have aging
equipment. We are in the process of
selecting a new IT service provider. Um
and um but again significant investment
is going to be needed in our IT
infrastructure. Um and that also
includes our GIS systems. Um also
increasing our customer service uh
training our employees, retaining our
employees um is uh essential for the
town to be operationally efficient and
effective. And we do and when we redo
review some of these CIP projects that
uh we need to consider funding uh we
need to have some grant writing
capability uh which we currently do not
have on staff at the moment.
looking at community uh looking at town
center facilities including Ford Field
uh the town courts uh we do have some
CIP projects impacting those areas that
um quite frankly we might not have the
funding for but we do have some grants
available um we have talked
significantly about storm drain master
plan u the last one was done in 1970 uh
three months after I was born um and
with the storm drain master plan uh is
going to identify some repairs and those
repairs are going to be in the millions
of dollars. Um and because we we we have
a good idea of the external parts of the
storm drain because we can visibly see
those. But the internal part of this of
the storm drain system, the the the
corrugated metal or the corrugated
steel, the PVC, we don't know the
condition. We don't know if there any
significant corrosion. Um but I mean the the master plan needs to be done. Uh
and also we talked about you know
modernization for greater resilience for
power outages extreme heat and
everything. Uh and then on the
sustainability side developing a climate
action plan implementing that plan. Um
those are going to cost funds as well.
So looking at the capital improvement
program again with the evacuation plan.
One of those was widening of Alpine
Road. Um that is going to be north of a
million right there. Uh we have streets
and roads maintenance effort. Um we are
required
um to uh the general fund needs to
contribute at least $350,000 per year
into our streets and roads and that's
where we have our street resurfacing
program, our pavement management
program. Um we have not been uh
maintaining that effort in the last two
fiscal years and we are subject of
possibly having our SP1 funding uh
withheld and that's about $125,000.
Um and that's for transportation
um and for other road improvement
projects. Um again the Ford field
bathroom and concession stand um those
costs are going to exceed what the grant
amount is that we have. Um and then also
uh the town courts and just the other
items that we've identified um that um
you know we that council will need to
consider uh moving forward should the uh
if we do receive if the revenue measure
does pass. But if it does if it does
pass then these are uh conversations
that we're going to need to have not
just with the council but with the
community as well. um just what um what
services are they going to expect from
the town.
So these are some of the strategic
investment priorities and we'll keep
this chart up as we uh go through your
discussion. Um and that concludes my
report and give it back to council.
» Okay. So there's kind of two parts to
this. there's sort of our needs um and
sort of potential revenue from RPTT and
then there's the actual ordinance
itself. Given it's going to be very
clumsy to switch back and forth between
the two presentations, why don't I
suggest that we start with Tony's
because it's up we ask any questions.
I'll open it to public comment um and
then we can come back and discuss this
and move to the ordinance sort of do the
same thing. I think that'll just keep it
the most streamlined. So with that on
Tony's presentation, are there
clarifying questions?
» Yeah.
Go ahead, please.
>> Um, so thanks for that. Um,
>> my my understanding of
the intent behind this um is to remind
us of what's at stake if we don't
enhance the revenues and get to a place
where we're more fiscally viable. So is
it correct that these are
really examples taken both from the
public input but also our prior our
prior discussions on we can't do that we
can't do that it would be great to do
that we need to do that um but it's not
like a a throughz listing of everything
is my interpretation
>> but it's items that need to be
considered uh moving forward and the
alternative being Without the revenue
measure, I'm going to be the finance
director or the assistant town manager
bringing a budget. That's going to be
draconian.
>> Yeah. Yeah. And and these are things at
stake,
>> right?
>> If we don't somehow get to a better
financial position,
>> right? Specifically with the the
evacuation plan, we're we have no
funding for that. Mhm. Mhm.
And that's not to say that we won't also
seek grants for some of these things.
These are we have degrees of freedom is
my interpretation if we have more
revenue to spend or to seek grants or do
have a different playbook.
>> Right. And with grants there's there's
still the matching component that will
be coming out of the jungle.
>> Yeah. Yeah. And if I could just so the
other thing I think I heard from Judith
is was the the sort of a couple of
slides before this that that you showed
those are just some examples like that
wasn't an exhaustive list right that was
just part a partial list
>> including but not limited to
>> yeah fine perfect okay yeah that's what
I understood
>> but I just want to because it's an
important discussion and you know
there's going to be a lot of work going
forward is my sense to refine these to pick and choose but that's not
today's task. today is to say
>> this is just giving you context.
>> Okay,
>> because that you know you're going to be
discussing the ordinance. The next
>> conversation is the rate and it's based
on what what do we need?
>> Okay. All right. Those are my questions
for Tony. Thank you.
>> Thank you Rebecca. Do you have
questions?
>> I guess just from a legal question legal
standpoint when this list of things for
example
um falls into sort of the general expenses, right? General
operating expenses.
>> The general fund
>> general fund expenses, right? Okay. Um I
think that's it. That's pretty seem very
clear. All the the extreme needs.
Thanks,
>> Mary. Question.
>> My question is u a higher level. As you
move into uh this next phase, are you
feeling like you've gotten to the bottom
of the barrel of the problems or do you
feel like there's another layer that I
mean is there another infrastructure
issue that we're looking at or is there
do you do you see do you have a sense
that you've actually accomplished you've
dug all the way in?
Yeah, I I believe storm drain is the
highest priority. Our infrastructure, I
mean, we do we do have funding for our
streets. Um those are our two largest
infrastructure u and trails. Um in
regards to volume, the miles of roads
and the miles of storm drains and um
that you know, we have two people in
public works that kind of keep an eye on
these things for us. Um but the only
other areas would be just our facilities
itself. Uh the buildings that we're in
are over 20 years old except I mean it's
older than that. But
you know we've been deferring
maintenance on our facilities as well.
uh that if we start looking more and
more into it that yeah we might have to
look at but for me the biggest concern
is the storming
>> and that's the most recent two the HVAC
etc we're all old
>> right
>> okay the one the one thing that has
never um shown up on this is the idea of
undergrounding the uh
wires
as a capital improvement
>> that yeah that's that that would be the
absolute uh looking down the barrel of
the gun.
>> Yeah, we're nowhere near
>> having that.
>> Thank you. That's that is my
>> And I I think again these are examples,
but I think the reason is undergrounding
is prohibitively expensive. It's like $2
million a mile.
>> Like five five million a mile
>> is now okay. I keep you know I remember
the days it used to be a million dollars
a mile. So if you probably have better
data than I do, but the point is you you
can imagine that that you know
everything else we've talked about here
would be dwarfed if we decided to
underground [clears throat]
>> I just wanted to know whether he had a
sense that he was coming getting to the
bottom of the
cleanup
>> can't can't get more bottom and storm
drink [laughter]
>> oh yeah there's the septic there's the
septic
there's sewer and septic Ellen
>> so um question
obviously
Um,
obviously if if this if we were to vote
and put this on, if we were not to if we
were to vote against it, we would still
have, for instance, the ongoing cost
plus our pension liability.
>> Correct.
>> And could you talk speak to the pension
liability issue that we're facing in
town? um our our liability is about 2
million and that's the difference
between our our net li our total
liability and our market value of
assets. Uh the market value of assets
fluctuates from year to year. Investment
returns, contribution rates and all that
other uh stuff. When it's good
investment return year, it shrinks but
it also expands and when they don't meet
uh the goal um it's not going to go
away. Um, you know, it's it's we're
contractually obligated. Um, but um,
you know, regardless of if it passes or
not, we're still going to have to pay
it.
>> And that is that 2 million
>> that's also including
>> the U as well.
>> And that's annually.
No, what is that? So, so what what PERS
does is they take the the pension
liability and advertise it over a
rolling 20-y year
um cycle. And so we actually pay an
additional
I think it's going to be 190,000 this
year on top of what we payroll
deductions
um in the budget.
So, for instance, if we were to go
bankrupt and the county were to take us
over, they would need to find $2 million
somehow to long-term from our assets.
That is a legal conversation. There's
been court cases. Uh there's no example
of that happening, so I can't really
answer that question, but it would be a
legal kurfuffle.
>> Hypothetical. I wanted to uh unwrap
that.
>> Okay.
>> Leave that as a term legally.
>> Okay. So, but we have an some Yes.
obligation, contractual obligation.
Correct. Okay. Great. Um,
thank you. That's my questions. Thank
you.
>> Thank you, Helen. Um, Tony, this last
slide that you put up, um, could you
speak to this a little bit? So, is this
your recommendation or staff's
recommendation on various ranges? And
>> yes,
>> are you asking council to sort of weigh
in and and sort of discuss some of these
different because I mean obviously the
sheriff's contract is, you know, we know
what that is. It's 1.4 million and it's
roughly an additional 200 to $250,000 a
year.
>> Correct.
>> Just we know that until we get to a
next, like you say, the next contract
with the deputies. Um, but like the CIP
fund, are you looking for us to weigh in
on sort of do we go leaner or richer?
And the same thing with ongoing
expenses, do we go leaner or richer? Is
that part of this discussion?
>> Um, yes, but I mean it's more of a
range.
>> Okay.
>> But the, you know, with with the sheriff
services, I mean the 1.4 is basically to
recover the cost increases over the last
three to four fiscal years. uh CIP fund,
you know, I my recommendation would be
750,000
uh per year. Um but you know, again,
that's council has to give that
direction. Um and that's, you know, 750,
but minus 350 for roads, so that leaves
400 for the CIP projects. Um but yeah,
there could be some years where we
invest more. Could be years where we
actually just do the 350. uh other
ongoing expenses. I mean that's going to
fluctuate. Um the you know because
there's personnel costs built into that
increases with our medical um but you
know there could be one time cost
increases got to do another element
update or um there's some other
significant unfunded mandate that we
have to take care of. Um, but this was
just to kind of give you a range of
between 2.3 and 3 million of the revenue
needs that we're going to need uh just
for ongoing operations and capital
improvements.
>> Okay. So, so the the goal of tonight is
just to give us roughly an idea what the
range is so that under next meeting Yes.
>> when we're setting the rate, we can
think about whether the rate gets us
>> right
>> a a annual revenue that we need. Is that
okay, Got it. Okay. Great. Perfect.
Thank you. Um, yeah, I think that's all
my questions. So, let me open it up to
public comment. So, I don't see
>> Mayor I think it's fine to do public
comment now. I just I did just want to
flag that um you would probably want to
do it a second time if Oh, you are going
to do
>> Yeah. My plan is to do public comment on
Tony.
>> Public comment twice. Okay.
>> And then we'll do discussion on Tony's
part and then we're going to go back to
the ordinance and we'll do questions on
the ordinance and public comment and
then discussion.
>> Okay. Okay, we sort of broke it into
two, but because the slide,
>> this is Yes, it's one agenda item. So,
normally we would just do one public
comment, but uh discretion of the
council to do multiple public comments.
>> Yeah, I think it's just that that'll let
people comment on parts that they care
about. Um because otherwise people going
to potentially, you know, the council's
going to want to bring up the other deck
and then we'll spend minutes doing that.
So, okay. So, with that, let me open a
public comment on Tony's slides. So, I
don't see any hands in the schoolhouse
um online. I see Rita. Rita, go ahead.
>> Hi, thank you for taking my comment. Um,
I I just I have one simple one. Uh, what
if this stuff doesn't pass in November?
Uh, what becomes of us and uh there was
a recent article in uh about Brisbane
and their housing element and some other
things and we were mentioned in it. Um,
you know, how how does all of this
affect us if if this doesn't pass? Thank
you.
Okay. Um Tony, do you want to just
provide a a quick answer to I I know
you've sort of said it already, but you
want to just remind
the public to get this. So
>> So the you know it would be we're we're
then bound by the policy of maintaining
the 20% reserve. So and that would be
done on the expense side.
>> Okay.
>> And um we really can't do anything with
the sheriff's contract.
um we can reduce the use of consultants,
we can further reduce uh wildfire
um mitigation. Uh but it would come at
the on the back so staff um to balance
the budget,
>> right? So I think like all the long-term
needs you just showed us, we'd do none
of those.
>> We wouldn't put any money into our
capital fund
>> and we would cut staff. I think that's
>> and we would lose our SB1 funding and
we'd lose
>> Yeah.
then we would be going back into
where we were four or five years ago,
>> right? Okay, great. Thank you. Okay, any
other public comment on Tony's.
>> All right, going once, going twice. All
right, I don't see any hands. So Tony,
thank you very much. Um, that's really
helpful and I think it's going to help
inform our discussions at our next
meeting. So with that, Darcy, can we go
back to your slide deck?
>> I thought I'm sorry.
>> I thought we were gonna
>> We're just I'm sorry. I I apologize. I I
get confused by separating this as well.
So now can I'll bring it back to the
council for discussion on Tony's part
and then we'll go to the next part. My
apologies.
>> The finance committee will be discussing
this on Tuesday as well. Great.
>> Thank you. Okay. Yeah. And thank you
Judith. Okay. Go ahead.
>> Um All right. If you want me to go
first. Um,
so the the question on leaner or richer,
um, I mean I to do this all properly
probably takes five to 10 Tony's over
three years. Not no offense intended.
Um, and so I think for myself, I find
those ranges and those parameters very
helpful to think about. So, I I do think
they're really helpful context, but I do
think that I'm personally not prepared
to say, "Well, that one ought to be 750
or eight." Like, I think the range that
you suggested for me, I'm not going to
second guess because I don't I don't
find that a useful um endeavor and I
think it's a little bit outside of
what's practical tonight and that's just
speaking for me. Um the other thing is
there are two aspects of the question.
what if it doesn't pass? One is um you
know severe reductions, right? Um but we
haven't said you know a backup plan for
additional revenue enhancements going
forward. So, tell me if I'm wrong, but
to me,
among other things, and I defer to staff
and and council on this, you could be
looking at a special election and a
different approach for revenue
enhancement in March at some cost. Like,
tell me if that's wrong. But but I do
think the public has to understand
while we're trying here our best to do
what's right in one shot.
It would be some more likely some
combination of severe cutbacks and
trying again with something else.
>> Right. We'd have to declare a fiscal
emergency immediately.
>> Yeah.
>> To be on the March
>> ballot.
and but yeah, there would be some
significant cost because, you know,
we'll probably be the only one having a
special election in March or fewer uh
towns would have items on the ballot.
So, there'll be a higher cost for that
election.
>> Yeah.
>> Um but yeah, and it would be what other
revenue uh options um would we consider?
>> Yeah. And I'm not saying I advocate for
that. I just think people have to
understand there's tools out there and
you know they're not our preferred route
but there are tools out there to
consider in real time as we go forward
because there's no guarantee
>> right
>> okay
>> and Jude if I could just add to that I
mean the finance committee also
discussed some of this and there are
other options like a lease back
>> where we basically you know the the
county you know takes our buildings and
we lease them back from them. I mean,
none of them seem like great options,
but right, you know,
>> I think those options though take effect
as your reserve gets lower and lower. I
mean, so I mean that obviously we still
have a reserve and we can still use it
for a while, but at some point we need
to keep enough for an absolute emergency
and we need to keep the lights on. So, you're absolutely right. I mean,
there's some combination, but they all
seem pretty drastic. So,
>> and for what it's worth, I've been in a
lot of the finance committee meetings
and we did discuss at a couple years ago
at a council meeting whether or not to
declare a fiscal emergency. So, we as a
council have had these concepts floated
in the past. We would have to take that
out, dust it off again, and figure out
what if anything
um as a game plan. Okay. Thank you.
That's it.
>> Thank you, Judith. Becca, do you have
any comments?
» So, I would say that the range that
you've provided, that staff has provided
is pretty realistic. Um, I mean, we
really need to face reality here. We've
been delaying our maintenance for
several years. Um costs have been going
up everywhere. Whether it's um
insurance, health insurance, the
sheriff's contract, we know that's
getting to be crazy. Um
staff costs. Um we haven't been paying
staff enough to keep up with the market.
Um we we just know that to have a stable
and resilient community, we have to pass
some type of revenue measure. So, I I I
feel like the numbers that that have
been provided, the the lists of
potential things that we've delayed not
doing, that we really need to be doing
to secure the town, to make the town
safe, so that we don't have a blowout in
our storm drain, so we don't have so
that we have better evacuation
uh routes, so that we have better
clearance of our brush. These are all
critical for the working of the town. Um
and that includes also supporting our
staff. Um having a full staff that uh
can handle all the responsibilities that
we have enough bandwidth to deal with
anything that happens whether it's an
emergency, whether it's uh the new new
laws that come down every year. Um so I think the range is realistic. I I
might
[laughter] I mean the finance committee
will play around with the numbers as
well and try to kind of give us some
recommendations I guess in terms of
where they fall out but you know I would
probably put us in the middle of that
range or maybe a little bit bit on the
slightly lower side and go out with that
and then you know depending on how the
market is, how the sales go um we'll be
able to kind of um gauge how well we're
doing and how well um the money that's
coming in through this through a
potential transfer tax covers our needs.
Um and it at least will give us a
several years of of being able to be
more stable and solve some of the
problems, some of the unmet needs. Um so
that would be my where I'm at with this.
>> Great. Thank you.
>> Can I go next?
>> All right. Thank you.
>> Sure. Um,
so, uh, first of all, I just wanted, you
know, we've had some comments about the
question on parcel taxes. So, I'm
backtracking a little bit because I want
this publicly on the record. We did have
the conversation on, you know, about
whether to move forward with the
transfer tax or parcel tax. So, I'm just
reminding the public that we did um,
vote 5 to zero to move forward with the
transfer tax um because, you know, we
all decided that that made the most
sense. um because of the ongoing lots of
ongoing cost of living and this would
increase proportionally over time
continuing
um in terms of uh where we should come
in on the amount is kind of what I'm
hearing. There's been a statewide
conversation because of the Howard
Jarvis um ballot measure about the
amount um and whether you know whether
or not and what we pulled at at 1% is
exactly
allowed. We could go higher, we can go
less, but 1% is what we pulled at. And
that was, you know, we can go up to 1.1
or 1.5 is what is what just happened to
get Howard Jarvis to pull it off the
ballot. Um, [clears throat] so, you
know, at 1% what we pulled at is exactly
we are in the complete uh sweet spot for
that. Um, I know like state of Hawaii
does 7 and a half%. It's insane for
people who live out, but state of
California with Howard Jarvis pressuring
like this is we are in the sweet spot of
what we can do. Um, so I just wanted to
state that. Um, and then the exemptions.
Um, what no one asked about is the
comments and I'm sorry to bring this
back up. That's later. Okay. Okay. Um,
so those are my comments. Thank you.
>> Thank you, Mary.
Well, um just in a general sense, I'm I
feel that the value of our our community
is it is in its stability. Um and uh
without financial stability, uh the
value of our properties, the value of
our town is greatly diminished. And uh
this is something we have to do. Um, and
this we've put a lot of thought and and
care into making sure it was done in a
way that was as painless and as
effective as possible. Um, and of course
I'm fully supportive.
I also think u that
I believe we pulled at 10% but at any
rate the uh
>> No, it's $10 per thousand which is one%.
Thank you. That helps me. um the uh
that we we need to we need to actually
make sure that we get our reserve back
up to what we considered safe before in
less risky times. We're now in more
risky times, more climate instability.
We have more need for reserve, not less.
And uh and I think the value of our
community is diminished by not moving.
>> Thank you, Mary.
So, I just wanted to say thank you. I
thought the the list was helpful. Um, I
think it's worth noting that this isn't
a sort of shopping list of all possible
things we could spend money on. This is
already clearly a paired down list. So,
the range you're proposing doesn't fund
all the needs that you listed. And the
things you listed were only some of the
examples. So, you know, our long-term
needs are probably much greater than
this. But I think we as a town have
always been fiscally responsible um and been a low tax. So and so I think
we're balancing the serious needs, storm
drains, wildfire, evacuation,
those things feel like things that need
to get funded and we need to find a way
to fund it. So but I just wanted to be
clear that there are a lot of things
we'd like to do that aren't on this list
and aren't going to get done.
And the other thing I would add is we
also have the option as this once we
figure you know if we figure out sort of
roughly the revenue and roughly the rate
based on the ordinance we'll get to in
this next section. We also have the
ability to adjust those if we were
collecting too much money. So that's the
other thing I feel comfortable with that
range. Um so with that um I'm going to
close this section but thank you. I
think this was very helpful and I look
forward to the finance committee next
Tuesday.
Okay. Now, now that I've split one
agenda item into two parts, can we go
back to the first part of the agenda
item? Um, are there any questions for
Darcy and Katherine?
» Yep.
>> Okay. Start with you, Judith.
>> Sure. Um, and some of these are
reflected in a public comment as well,
and I think it's helpful to get people
oriented to ask them anyway since they
over overlapped in part with mine. And
the first area,
and I don't really have a great sense of
them. Obviously, the concern is the
exemptions swallow the upside. So, I
want to make sure I understood. Um, the
first one, exemption instrument to
secure debt. That would be we're not
taxing a mortgage. Is that essentially
it? But, but somebody, even if someone's
buying a house with a mortgage, the
purchaser and the seller still have to
come up with the money. We're just not
going after the banks providing the
mortgage.
>> That is correct. Or if someone just
refinances, um, they would not be, you
know, they would be exempt from paying
taxes. This is again this is an existing
um exemption. Um since 1967 the town of
Portulla Valley has had this exemption
um and all of the ones actually almost
all of them there a couple of that were
amended in 1987. Uh but these have been
on the books and so the proposal is to
keep those in place with no changes.
>> Yeah. And apologies if I'm raising old
and cold, but I do want to understand
because there's a proposal for
considering other
while we're looking at it that I
understand. The other one um that I had
a question
about was um the continuing partnership.
Again, this has to do with um the way a
property is held, but does this take out
of the applicability of the tax anything
held in a partnership? Like it's pretty
tough to read and I want to make sure
that we're not creating loopholes where
people can hold things in a certain way.
It's unlikely, but I just want to ask
that question. Yeah. Yeah. This I you're
right. This exemption is quite dense.
Again, this is based on um state law and
um is also one of those that's been in
place for a long time. The idea behind
this one is that when partnership
interests um change hands, the property
held by the partnership is not taxed. Um
but when the partnership terminates, the
property it owns is taxed, but no more
than one time.
>> Okay. Okay. And the public comment had
said, you know, maybe there's an
exemption for people who incur these,
you know, a buy and a sell within a
certain period of time. And I'm sure
this is old, you know, trotten path that
one of the downsides of creating that
type of exemption could be that we're
kind of encouraging flipping and and
also we don't know if this is even an
issue in town. So, let me know if
there's any background here or framework
to apply as as I consider my view on
that.
>> I I'll just note yes, I did um notice
that comment as well. And you know, the
count big picture, the council does have
discretion to add additional exemptions
either now um before it goes to the
voters or if passed um the council
retains that discretion to add
additional exemptions. Um, you know,
Darcy and I have looked at a lot of
other um, ordinances. Um, probably a
dozen different, you know, or ordinances
by charter towns and cities and and some
of them do add additional exemptions.
Um, again, we're not um recommending
that at this time, but the the council
retains that discretion. Yeah, I mean
I'm all in
keeping simple is good, but also um
making sure we're like streamlining.
But my question is if we did want to
create another exemption, does that is
that a vote or is that an ordinance that
the council has the right to change? Uh
so so the council would have the right
to change that. So if if it goes to the
vote, let's say you added that exemption
in this um you know in this and decided
to change your mind later, the council
could make that make that change.
>> Okay.
>> And can I add on or
>> so
>> I understand we could add an exemption
to basically protect people if they sold
within a certain period or something.
But presumably you can't make an
exemption that would actually increase
the tax. Is that correct? Without a
vote.
I mean, I just I mean, just think
probably somewhere in this legal
framework, something that would prevent
us from like if we deleted all of these
exemptions,
>> then that would have an increased tax
consequence and presumably we couldn't
do that. Is that correct?
>> That would require some legal research,
I would say. Um,
>> I'm not thinking we would do that. I
think we're I would be happy with this,
but I was just trying to understand.
Yeah. that I'm guessing that we are
talking about decreasing tax burden, not
increasing tax.
>> Correct. Yes. Yeah. Thank you. And thank
you, Judith. Go ahead.
>> Yeah. No, that that's fine. That's a
good good flip side of what I was trying
to get at. And the um the costs of
operating in the city like this isn't
quite this. It's a different but I think
Darcy in your presentation you kind of
were covering if I understood correctly
that the costs of operating under this
framework there's no anticipated
significant addition once we get through
something
operationally.
>> That's correct. Okay. Thank you.
>> Uh let me just click through.
» No, those are my questions. Thank you.
>> Thank you.
Becca, you want to go next?
>> Um, I guess I asked this privately to
the town manager, but um,
in terms of ballot language, we would
just
in the actual ballot language. So, we're
not going to or would this exhibit A
actually show up somewhere in the
booklet or or or how how does that
actually work? Um yeah, the um that will
be decided at the next meeting. Um but
the council would have discretion to
print the entire text of the ordinance
in the ballot pamphlet. Um and I I I
will just double check. I I there may be
an extra additional cost for that. So
we'll actually might want to run that
run down um the costs for printing the
entire um ordinance for for for next
time. Yeah,
» I don't have other questions. Thank you.
Mary. Questions?
>> Well, uh I I
suppose I I maybe we've done this, but I
suppose I'd like to ask what we think
what the council thinks about Bill
Urban's suggestions for exemptions
and whether you can say anything about
that or not.
>> So whether the the council will discuss
it when we get to council discuss that
did you mean to ask what the council
thinks?
>> Staff
>> or ask the staff.
>> Oh, yes. He said,
>> "Okay."
>> Is that wrong?
>> No, but you said you're asked what
council thought. No, you meant what
staff.
>> Got it. Oh, our attorney.
>> We have an attorney who is a counsel.
Sorry.
>> Yeah, it's a it's a confusing use of the
word then. No problem. I understand.
[laughter]
>> So, uh I I would want to research that a
little bit more um in in terms of the
whether that would have any impact. I
guess work with Tony actually to see
what kind of impact it might have on
revenue uh projections. U adding that
additional exemption. Uh and I'd want to
look at I guess other other samples.
Like I mentioned, we've looked at
probably a dozen other um RPT ordinances
and I haven't seen this one. Um so I
would just want to, you know, make sure
it could be implemented. Um yeah, and
we're feasible. I don't have a policy
leaning one way or the other about
whether it's a good or a bad idea, but
those are those are my thoughts. There
was also a comment that was in that same
um and forgive me if you're not asking
about this, but about the operative
versus effective date.
>> Yeah, I was going to ask about that one.
The 30 days versus 30 days.
>> Yeah, I'll go ahead and answer that one,
too. So, uh, staff's, you know,
recommendation has has for quite a while
been to, you know, if passed, get this
on the books and going as soon as
possible for two reasons. One is the
town needs the money. The other reason
is that the Howard Jarvis measure going
to be on the same ballot and um it was
basically a race to see which one would
go into effect first because there was a
grandfathering prison provision in the
Howard Jarvis measure. Um now that um
that is no longer the case there's still
the the first reason is you know I think
from staff's and I really Darcy and Tony
speak to this more more readily um the
sooner the better in terms of revenue
generation is generally the staff's
perspective but I will say you know in
looking at the dozen or so ordinances um
there are some that actually do choose a
date certain um uh even potentially a
few months later to have like July
uh to have the tax go into effect. So
that would be a council decision.
>> And if I could follow up because that my
question was I mean given that the the
election is early November and it gets
certified a month later and then we
enact it 10 days after that. There
actually is 30 days plus 10 days from
the time it goes on the ballot. So, I I
appreciated the public comment in the we
don't want somebody to have entered into
a transaction and then gone, "Oh, I had
no idea this was going to happen." But
at this point, I mean, it's going to be
over 30 days where they're know it's
they know it's on the ballot. They may
not know the result because we won't
know the result, but I would say from a transaction, if I were in one of those
transactions, I would be assuming that I needed to think about that. So is that
a reasonable way to think about that
part of the the sort of public comment
which it was sort of a fairness the way
everybody was
>> yeah I I would say so I mean you know if
the council put puts this on the ballot
in two weeks then there would be you
know notice that this is a possibility
and then as you say um you know
basically the election results you can
you know are ascertainable within within
about a week of the election
>> right even though it's not official.
>> Even though it's not official.
>> Perfect. Thank you.
>> Okay Mary other Thank you. I didn't mean
to
>> No, it's fine. I I uh it's a lot to take
in and and I appreciate the discussion.
>> No questions.
>> Okay, Ellen.
>> Um I do have some questions. So um
uh does staff have an opinion on the
three years versus the five years
exemption idea?
>> So I'll just say I don't recommend we
add any exemptions. Our mission this
whole process has been keep it simple,
keep it streamlined.
We've presented you with our
recommendation and the other factor is
that we we've been working on modeling
you know the fiscal anal impact and the
minute you start adding in exemptions
you're muddling with that. My advice is
just what we said earlier, which is that
we recommend we exemptions that are in
our current ordinance. Don't make any
changes. We can certainly entertain any
changes in the future, but I think we're
just getting a little ahead of ourselves
right now.
>> Okay.
>> Just caution you not to.
>> Right. And in terms of the partnership
exemption, obviously under IRS it looks
like, but my understanding is like
Disney has used it to avoid. Right.
>> Well, and again, we can look at that's
another thing we could look at if we
need to. I would also emphasize that,
you know, this tax is in effect in over
500 counties and right now, and their
ordinances largely mirror what we have
right now. the minute we start getting
unique, you start confusing realators
who work across the entire state and I
just wouldn't recommend that. Um, but
yeah, we if we do have issues and it's
important to note that we can amend this
ordinance
quickly if we need to. I mean, you need
introduction adoption, but that could be
done a month in a month if we need to.
>> Okay. Um
what about Proposition 19 and the you
know transfers from
>> Yeah. Again so as I said earlier
Proposition 13 tax implications those
are completely separate from this. So
that has
>> I said proposition 19 not 13.
>> Well but 13 and 19 are very similar
where they relate to your property taxes
and this is completely separate than
that. But um so for instance under a
qualified real estate transfer
um uh when people will transfer property
to to significant others for instance
how like I what I'm confused about is
like how does the transfer tax work on
those situations?
>> Well there's still a transfer of title
right and a and it's the same. Yeah.
>> Got it.
>> Yeah. I'm sorry, I didn't mean to
confuse Prop 13 all but this is very
different than property taxes
>> and Prop 19 deals with the assessed
value
>> the assessed value
>> that they can transfer best value
>> from property
>> right and except for
>> the transfer taxes still get
>> there and there are exemptions within
Prop 19 for like if the per if a child's
living on the property etc so that's
where I'm
>> still related to the assessed value
of Basically, whatever the assessed
value was when property transferred,
they can transfer to the new propert.
>> Got it. Okay. And then that would still
trigger it property.
>> Well, the transfer tax would still be
assessed at value.
>> Got it. Okay.
>> Of the trans Yeah.
>> The transfer.
>> Remember, it's a property or it's a real
property transfer tax. So, if there's a
transfer and there's a real property and
there's a sale, a dollar amount,
>> then there's a tax.
>> Got it. Okay.
>> And but so even if there's not a sale,
but there's a transfer,
>> right?
>> But again, yeah, unless there's an
exemption. Yeah. But you could transfer
it for $5 to your son,
>> right? Got it. Okay. Just curious how
that would work. Okay. Thank you.
>> Yeah.
>> Thank you. All right. And I think my
colleague have asked the questions I was
going to ask. So let me open it up to
public comment. So let's start with Dave
Cardinal.
Go ahead Dave.
>> Yeah, sure. Thanks. Um I think this is a total no-brainer honestly and I just
want to put my support in. I don't think
um like messing with the UT is I don't
like Tidly Winks or something. that's
not
a reliable source of revenue because we
don't even know what our utilities look
like in the age of the internet. Um, and
I don't see another way we can do
anything. So, I I just want to lend my
full support to
uh the idea of an RPP RPT and the
charter city and I would support
whatever rate we need and can afford or can get past. So, thanks. That's my thought.
>> Thank you, Dave. Betsy,
welcome, Betsy.
>> Yeah, sorry, I was waiting to be waiting
to be unmuted. Thank you. Um,
>> I too I mean the town absolutely needs
to raise um money uh in order to to to
survive. And so um I'm in favor
generally. I have a specific um point um
and question about the council
amendments. That would be 3.12.130
regarding B, which I prefer to A. Um and
I prefer it because the council would
seemingly be more likely to reduce a tax
rate that was collecting more money than
needed. were they less cautious around
creating a future potential
insufficiency were they to take that
action and so I'm in favor of incenting
a council to reduce rates um where
whenever possible as I read A then I
guess my question is isn't that
redundant isn't it one over the other
and the other question regards C which I
straight out didn't track I couldn't
follow what it was trying to get at. Um,
so perhaps that's um because I'm late in
the night or perhaps it could be stated
more clearly or you could explain it
now. Thank you very much.
>> Thank you, Betsy.
Um, Katherine, do you want to quickly
respond to those? I mean, that seem
pretty those seem pretty
straightforward.
>> I I'd be happy to. Um, so, uh, this
refers to the, uh, section of the
ordinance that expressly allows for
council amendments so long as the
amendments do not increase tax rates.
And there was a question about, um, uh,
subsection B, well, subsection A, I
would just say, um, allows the council
to repeal or reduce the tax. Subsection
B allow says that the council may reduce
tax rate and later restore the tax rate
to a rate that does not exceed the tax
rate approved by the voters. And um
there is a question about well isn't
that redundant with a and I I certainly
see that point and um maybe there would
be a way to make this a little bit
tighter but the idea is that the council
could increase the tax rate if it is
simply to restore it. So if it the
council takes an action to reduce it in
year one and then in year five uh
decides oh wait we've actually need the
money now and so we need to increase the
tax rate. It's basically this is just
saying that the council can increase the
tax rate after a previous reduction of
the tax rate.
>> Right? But a the way I read a is it's
not quite the same in the sense the
council could decide because you know
the public has asked for it that it be
permanently and irrevocably reduced
>> uh completely repealed.
>> Well repealed or reduced but we could
reduce it.
>> Yes.
>> And reduce it in a way that it could not
be raised back up. Is that possible or
is it just a we can either revoke it or
we have this sort of up and down?
>> Uh so given the right to repeal it, I
believe the council could actually just
repeal the tax. Yeah.
>> Altogether.
And [clears throat] then not
would not be able to restore it at a
later date,
>> right? Could we reduce it? I mean, let's just say we picked the $10 per
thousand. Could we reduce it to five and
say we're doing we're going to five
permanently and the only way to raise it
back up would be to have another
election. Like if that's what we were
being
>> you could Yeah, I I see what you're
saying. But no, you you couldn't do
that. Um
>> No, it's either repeal or it's the we
can reduce with the potential. Okay,
thank you.
>> Otherwise, you'd be tie in the hands of
a future council for what this council
to say future coun that. So
>> fair enough.
>> Um and then there's a question about
subsection C which would allow for
clarifications.
Uh and that's really just to give the
council some leeway and flexibility to
clarify language that may not be crystal
clear. um with with over o you know um
overarching restriction though is that
the council cannot increase the tax
rate.
>> Okay. Thank you. All right. Is there any
other public comments?
Wait just a minute. All right. So I
don't see any hands online. So I will
bring it back to the council for
discussion. Who would like to start?
Judith. [laughter]
This is your night to start first. Thank
you.
>> Go in. Go in first. Um, I like the idea
of keeping this simple, being in the
range of what other jurisdictions
are as long as they're
reasonably applicable to us. And I don't
view it what I've read here is something
that requires tailoring to us. Um, I
think it's important for us to have
flexibility. So the council amendment
section to me
uh you have to read them in the
alternative or
being applied sequentially or whatever
other than the repeal. Um so I I find
and I read these for a living. So you
know I I found it pretty clear. So, I'm
not sure I would find the need to
clarify it unless somebody were looking
at like could say in this particular
instance something bad could happen.
Like I I think these are all uh tools we
might want. And I just my interpretation
of C is that, you know, if there's a
certain type of
ownership structure that isn't clearly
within the ordinance as it exists today,
we could go, oh yeah, something new
happened, so let's extend these
principles and here's how that would be
treated. like it's kind of like we don't
know what it's about, but as long as
it's not increasing the tax, we could do
that without a a new vote with the
public, which is a big hurdle and a big
expense for us. So, to me, all all that
makes sense and I like the targeted
edits that you've made. Uh so for me
I I'm in uh this has been very helpful
to have the preview of it this week. Um
so that we can all go away think about
any other questions for the next time
around. But uh thank you for preparing
this and providing the examples and
going and doing the research on the 12
jurisdictions. So that's it.
>> Thank you. You'd like to go next? Mary,
you ready?
Oh,
>> I'd say I have to say as real estate
documents go, this is very clear and
it's very understandable [clears throat]
and simple. Uh, and uh, and I'm I'm
fully in support.
>> Okay. Thank you, Rebecca.
>> Um, I agree that keeping it simple right
now makes the most sense. Um, I'd like
the amendment where um you're able to
reduce the tax. If we find that somehow
we we're huge numbers of sales of very
expensive homes happened and we we're
raising much more than we we kind of
need to operate safely, though probably
initially we'll we'll need to put some
of that money into reserves and into the
storm drains. Um, but it gives us a lot
of flexibility for future. And I also
appreciate the addition of being able to
kind of tailor the ordinance, whether
it's for exemptions or whether it's for
the implementation if we do discover
that, you know, there's some sort of
issue with how how it's working out. Um
sort of unintended consequences that we
haven't predicted. So I I think it's well done and I appreciate the all
the effort that's gone into crafting it.
Thanks.
>> Thank you, Ellen. Yeah, just echoing
what my uh colleagues have said. Um I
appreciate this. It's a strong flexible
document that gives you know that gives
on-ramps and offramps later which I
appreciate. So um I support this draft.
Thank you.
>> Thank you. And I would echo the same
thing. Um, keeping it simple I think is that was the direction we gave you
and I think you've done an excellent job
of of following our direction. I like it
because I think if there are unintended
consequences, we have the ability to
either adjust the tax or we could also
adjust UT. I mean there there are
multiple ways that we can adjust this if
the town ends up raising more money than
we need, which at the moment is is sort
of hard to imagine, but I I can believe
it. you know, I mean, we could get there
and and I appreciate that people are
sensitive to that and I'm sensitive to
it as well. So, I like the fact that
we've got some knobs that we can turn to
adjust that so we're not overcolcted
because that's definitely something
that's important to me that we don't end
up creating a mechanism that just
collects taxes [snorts] that we don't
know what to do with. Like that's that's
not good public policy. So, so I think
that's great. I would also say the same
thing about the exemptions. I like that
it's simple. I would not make any
additional exemptions and I think we can operate and you know after six
months or a year if we find that wait a
minute I mean this really does seem
ownorous then we can bring it back to
the council and pretty quickly we can
add the exemptions as appropriate but I
think I'd rather see those exemptions as
something that's needed rather than try
to second guessess and and add more
complexities to document. So I I very
much appreciate that. Um and I I think
this is definitely the you know the
right direction for us to be going. So
thank you. Thank you for all the work um
both in finance department, legal
department in the administration. Um
this this has been great. All right. So
with that I'm going to close this agenda
item
and try to find my
agenda.
All right. So, moving on to
agenda item number eight, which is
subcommittee liaison and regional agency
reports. Um, there's one ASC liaison in
the packet. Thank you, Mary. Um, are
there any other oral um reports?
>> I I just wanted to say that I have
signed up for the League of California
Cities annual conference in September.
>> Okay. and they actually have um
uh you know they have the general
assembly so that you can actually
present a motion that you would like to
have covered. So if there's anything
that the town council would like to have
presented, we do have to get I think
several other municipalities to join in
with us. But if there's some pressing
need that you feel that the the League
of California Cities should be
addressing, then please think about it.
I think the deadline is coming is coming
up in the next month maybe.
>> So just give it some thought if there's
some burning issue that we need to do to
encourage Sacramento to kind of be a
little more reasonable, if you will.
Anyway,
>> okay. Thank you. All right. Any any
other oral reports? Helen,
>> so I have a um I wanted to talk about
ebikes for a second. Obviously, I poked
a bear this week. um kind of on purpose,
but to try to let people know what's
going on with the ebike situation. Um I
did want to do one correction because
I'd been telling people that uh we will
have some laws probably in January, but
um the education and the manufacturing
situation, um those will not go into
effect if they pass, which I'm assuming
they will pass until 28 and 29. Um so um
letting you know the manufacturing you
know you need to let manufacturers
uh
put you know figure out how to put
headlamps on and and to put on um
speedometers and the other things that
are in the bill so that they're um and
the second one uh for um the education
to create curriculum and get that into
schools you know kind of idea that's
going to take some time. So, I wanted to
correct that for the record. Um the
other
uh so that's ebikes. Um I still think
you know we're we are still all going to
need to work on ebikes with the parents.
So I'm that I don't see this changing to
be honest. But um the other one I wanted
to report about is I'm not sure that you
guys and I'm on the I'm the leazison to
the utility committee. Um, so this is a
utility committee that hasn't been
meeting um for uh I wanted everyone to
know that AT&T
uh went to the FCC because the CPU had
said that they cannot end their
landlines.
Um but the FCC 3 days ago came out and
said that AT&T can no you know can end
landlines.
Um, so that will, uh, so there's still a
lawsuit and other things, but I wanted
to make sure that you all were aware of
that. Um,
uh, and then lastly, I had a question
about the ASC 501 wayside. Um, uh,
motion for continuence. Um, this 501
wayside continuence, isn't it under the
housing accountability act? They only
get five bites of the apple.
>> Just curious.
>> I I'm not actually super familiar with
this application, so I would
» under the Housing Accountability Act,
you usually only get five bites of the
apple of a public meeting,
>> right? Um, yeah, I probably don't want
to get too into I'm not sure this is
agendaized, but the there there is and
this came up with the Stanford project
actually. Um, under SP 330, there is a
five hearing rule. Um, and so, you know,
that that is something to be mindful of
in terms of housing development
projects. This doesn't apply to other
types of approvals, but for housing
development projects specific, there is
a five hearing,
>> right? Well, I was gonna say, can can
you guys work with our attorney on this
because this isn't agendaized, but but
why don't you have this conversation
with our attorney?
>> Well, yeah. Yeah. So, the two of you can meet with the
>> Well, it is on.
>> Okay. Well, this was on the leazison
memo and I wanted to check in about the
five bites of the apple. Okay. So, so
those are my questions. Thank you.
>> Thank you.
» Okay. So, now I'd like to open it up for
public comment. Rita, your hands up.
» Yeah,
>> welcome. Um, I just wanted to comment uh
on the just on the ebikes. You know,
maybe this isn't the right time, but I I
really hope that our town along with the
parents and the school system can uh can
really do some education because uh
everyone wants to talk about the kids,
but these kids are not purchasing these
bikes themselves and they're not paying
for the electric bill. So, I I really
hope that um with our committees or with
the council that we can do something. So
thanks for bringing it up Helen.
>> Thank you Rita. Is there any other
public comment on the reports?
All right seeing none I will bring it
back. Is there any further discussion
from the council? Okay. So with that we
move to number nine. I would accept a
motion for adjournment.
So moved
>> and a second. Gosh.
>> All right. All in favor? I I. Excellent.
Thank you everyone.