Four years ago, Atherton's parcel tax renewal measure passed overwhelmingly, with 77.4 percent of voters supporting the annual levy on their properties. This year, renewal of the tax in the Nov. 5 election is proving to be a harder sell.
The City Council unanimously approved the ballot measure, and all four council members signed the ballot argument in favor of renewing the tax, which expires at the end of June 2014. Measure X needs approval of two-thirds of the voters to pass; it would renew the tax at its current rates for four years.
Although they missed the deadline to file a ballot argument against the measure, six residents, including former mayor Kathy McKeithen, whose 12-year tenure on the council ended last December, have come out in opposition to Measure X.
Because Atherton has no commercial tax base, it relies heavily on the $1.8 million it raises annually through the tax, which has been in place since 1980, according to the town. Revenue from the tax of $750 annually for the typical homeowner is shared by police services, which receives 60 percent, and public works projects.
Two issues appear to be driving opposition to the tax: the council's avoidance of a public discussion on the possibility of outsourcing police services, and the question of whether Atherton really needs revenue from the levy, given the town's turned-around financial health and increasingly robust property tax revenue.
According to the ballot argument in favor of the tax, although the town's financial situation has improved over the last two years, the parcel tax "remains a critical funding source for many pressing capital improvement projects while also helping to maintain our current police services and the critical 9-1-1 capabilities."
The town seeks grants whenever possible for projects, "acts prudently with your money and has received clean audits," the argument states. "The Town scrutinizes budget expenditures to reduce costs where appropriate including the elimination of our long-term liabilities."
In fact, last month the council voted to spend $2 million of Atherton's larger-than-expected $4.9 million surplus on the town's unfunded liability, which is the result of employee retirement obligations that have accumulated over the years.
The town is also planning roadway safety and drainage projects that would rely largely on parcel tax revenue, most notably a project to stabilize and improve the Marsh Road Channel. With experts predicting that it's only a matter of time that the roadway will fail into the channel unless something is done, the town is studying options projected to cost between $2.11 million and $2.86 million.
Sandy Crittenden, one of the six residents who signed the opposition argument that didn't make it to the city clerk's office in time to appear in the voters' information pamphlet, points to the boom in property sales in town and construction of new homes, which is happening in a time of ever-rising property values that ensure higher property tax revenue. Atherton's tax revenue growth over the last two years has topped all other municipalities in the county, with increases of 9 percent in each of the two years.
"I believe that the property tax revenue is going to continue to increase, and they'll be able to take care of all the expenses of the town," Mr. Crittenden said.
The council and the police union last week signed a new three-year contract that, according to City Manager George Rodericks will save the town a significant amount of money. But in their statement, the opponents criticized the council for "refusing to consider or discuss outsourcing (police services) to save tax money. Whether one is for or against police outsourcing, there is no excuse for Atherton overpaying for police services."
Resident Jon Buckheit, who also signed the opponents' statement, told the Almanac in an August interview that he doesn't necessarily support outsourcing police services, but he believes the question should be publicly discussed and options considered. And the parcel tax? "I would happily pay the parcel tax as long as there wasn't the notion that the town is paying too much for police services just because residents can afford it," he said.
As with the current parcel tax, the council would have to set the tax rate every year, up to the maximum allowed by the voter-approved measure. Several council members have talked publicly about the possibility of suspending the tax or lowering the rate at times when it appears the town has sufficient funds to provide services and perform needed public works projects in the following fiscal year.
Is the provision allowing the council to lower or suspend the tax a sufficient safeguard against over-taxation? "That's asking the wolf to guard the herd," Mr. Crittenden said. "I have never seen consistently politically elected people be conservative with taxpayer dollars."
Mr. Buckheit has a similar response: "I sat in on the finance committee meeting in which the members concluded the parcel tax is not necessary at this time, at least insofar as the 40 percent for capital improvements, but Atherton should still ask voters to authorize it, since the council could decide not to charge residents for it in any given year," he wrote in an email last week. "I'm against this. Has anyone ever heard of a government being appropriated money it didn't spend?"
Whether two-thirds of Atherton's voters disagree with that lack of confidence in town officials' spending decisions remains to be seen. The partial list of endorsers on the Committee for Yes on Atherton Measure X literature includes a wealth of current and former town leaders and influential residents.