Real estate tax off table in Atherton Real estate tax off table in Atherton (January 26, 2005)

** Atherton aims for another parcel tax, but details are still scarce.

By Andrea Gemmet

Almanac Staff Writer

All real estate agents dealing in high-end Atherton properties, rejoice: a plan to tax commissions on Atherton property sales is officially off the table -- at least for now.

Faced with a fiscal crisis when a renewal of the town's parcel tax didn't pass in November, Atherton officials looked to the lucrative real estate and home construction industries for alternatives to replace the approximately $2 million a year currently raised by the parcel tax.

Faced with legal challenges that could tie up any proceeds from a real estate tax for years, the town last month unceremoniously dumped plans to put such a measure on the March ballot, and, last week, made clear that it would try once again to hit up residents for an annual parcel tax.

Putting a parcel tax measure on the June 7 ballot is a last-ditch effort to get voter-approval before the current parcel-tax measure expires on June 30. But whether it will be a renewal of the current, four-year tax that costs most homeowners $750 a year remains to be seen.

After dickering over the tenure of the tax, the amount and other details at the January 19 meeting, the City Council directed city staff and its finance committee to come up with a plan and language for a ballot measure, and bring it back to the council in time for a special meeting on Monday, February 7.

Mayor Bill Conwell urged his colleagues on the City Council to stick with the familiar and ask voters for another four-year term at the current assessment levels.

"Whatever we come up with, we have to get it passed at the polls. If we can't have all of our druthers, so be it," said Mr. Conwell, adding: "You can make the best dog food in the world, but it's no good if dogs won't eat it."

Councilman Alan Carlson suggested a 12-year tax measure with some sort of indexing mechanism to raise the assessments in keeping with the rate of inflation. Council members Jim Janz and Kathy McKeithen indicated support for a five-year term that would mirror the five-year scope of the town's long-range financial plan.

Councilman Charles Marsala, who has said he is interested in a 20-year parcel tax, was absent.

Ms. McKeithen and Mr. Janz also expressed interest in providing an exemption from the parcel tax for seniors.

The parcel tax raises about $1.8 million a year, funding everything from road repairs to city services such as the police and public works departments.

As Mr. Carlson never tires of pointing out, the town has trimmed $1.3 million from its budget since February 2004.

"We're at the point where there is not much more we can squeeze out of this budget," he said.

After the parcel tax's defeat in November, several council members said they blamed themselves for not making enough of an effort to campaign for the renewal measure. That doesn't seem likely to be the case this time. Mr. Conwell suggested everything from phone trees and advertisements to volunteers ringing doorbells.

"We need to send this to the marketing department," he said.

Mr. Janz raised the possibility of revisiting the tax on real estate and construction in the form of a business license fee at some point in the future.

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