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A San Mateo County Superior Court Judge issued a tentative ruling Monday that Menlo Park failed to make the necessary findings to continue collecting Utility Users Tax (UUT) from residents. The ruling opens the door for residents to seek refunds on taxes paid going back to 2020.
The tentative decision, issued on April 3, favored plaintiffs claiming that they were owed a refund on their UUT because the city did not make findings in 2016, 2018 or 2020 that the tax continued to be necessary for the city’s financial health.
Menlo Park’s UUT was approved by voters in 2006 and imposes a maximum 3.5% tax on gas, electrical and water usage and a maximum 2.5% tax on cable, telephone and wireless services. Since 2007, the UUT has been set at 1% with an annual cap of $12,000 that residents can pay for electric, gas and water utilities.
The class action lawsuit was brought by Menlo Park residents David Fogel, Kirill Pertsev and Kaitlin Darke, alleging that the City Council has failed to properly reauthorize the tax collection since 2014. The residents sought a refund for their UUT paid after Dec. 31, 2016.
The decision laid out the “ordinary and plain meaning” of several key words in Menlo Park’s statute that introduced this tax, finding that it was completely necessary for Menlo Park to present findings that the UUT was still necessary to the city’s finances.
“There was not even a staff report discussing the UUT for years after 2016, let alone a staff report sent to the City Council or any line item of the Council’s agenda from which the Court could make an implied finding,” the decision said.
The court’s tentative decision concludes that the UUT expired Dec. 31, 2016, as the Menlo Park City Council did not make the required findings and that a class of taxpayers is entitled to refunds on the UUT assessed since October 28, 2020.
A final decision will be issued by May 3.
Change of plans: Research campus to leave Menlo Park, make way for more housingJune 12, 2026 6:46 pm
Dear City of Menlo Park. Please feel free to keep whatever refund is due me. I understand taxes is how we run our community and am happy to pay my share.
Michael:
I don’t have a problem paying taxes either. But I want them honestly collected. The city blew it and then compounded their problem by deciding to just keep illegally collecting the tax. I’ll take my refund. And if they want to continue collecting the tax, they need to put it on the ballot again since it expired and cannot legally be collected. The voters will likely approve it again. Until then, they need to stop collecting the tax.
It’s generally prudent for local governments to obey the law. Even the most generous, trusting residents might not be too happy if our city began flouting all the rules.
First the city screwed up in letting the tax expire and then they proposed raising the tax from the 1% to I believe the mas 2.5% (does anyone have the details on this?). Then when caught not following the law to renew the tax they chose to spend our money on lawyers to fight what seems to be an obvious failure. I will take my refund, thanks
If your government can not operate with the already disgustingly high amount of local taxation, then they are either incompetent or just frivolous with YOUR cash. There is no other explanation.
If “no one, not even the president of the USA is above the law” – then neither is the city of Menlo Park. Please let us know which office to visit to pick up our money.
Regards.
Something is really wrong that the City did not keep track of this for multiple years. That is where a lot of focus should be – figure it out, hold those involved accountable, and design a better way for the future.
What else is falling through the cracks?
City operations have become increasingly opaque. I’ve heard rumors that many operations have been outsourced, and city management seems to be trying to stay under the radar. With a bunch of ideologues running the council, I guess we shouldn’t be surprised if there are other irregularities.
I’m glad that this particular oversight was identified, but residents should not be responsible for uncovering irregularities.
“City operations have become increasingly opaque.” Interesting – I think the city has recently stepped up their game considerably when it comes to communicating with residents.
Re: the UUT debacle, my guess is that the every-other-year renewal requirement got lost in the shuffle during a period of key staff transition in 2015. https://www.mercurynews.com/2015/08/12/menlo-park-assistant-city-manager-starla-jerome-robinson-steps-down/)
2015 was an off-year in the cycle of renewing the UUT (council merely took the annual vote to keep it at 1% and wasn’t required to reauthorize it). If the new finance/administration team in 2016 decided to copy-paste the budgetary process from the previous year without going back to the original law, they would have missed the reauthorization requirement.
And since the renewal was usually a consent calendar item during the budget meeting and didn’t typically generate much (if any) discussion, even council members who had previously voted to renew the tax wouldn’t have necessarily noticed its omission.
It’s an understandable mistake – albeit one with painful/expensive consequences. But the principals on staff who would have been directly connected to/responsible for this mistake are long gone. Given how conscientious our current city manager is, I’m guessing the discovery of this oversight led to renewed scrutiny of our internal processes and documentation.
Pistorino says in his letter addressed to City Clerk Judi Herren that he began investigating the UUT after a majority of the council told City Manager Starla Jerome-Robinson and her team to begin looking at collecting the utility tax at the maximum voter-approved rates in order to help fund ways to get people to take out their gas-burning appliances, such as furnaces and water heaters, and replace them with electric ones.“. Not what the UUT is for not what the voters approved! Shame on the ideological thinking council. Use the UUT for electrification and leave none for police and operations as it was intended! Brilliant no one notices when we break the law and do whatever we want!
It may have been a mistake, but then council doubled and tripled down on it. First they ignored the fact the tax could no longer be collected and chose to go on collecting it illegally then increased the already illegal tax. Then tripled down when they chose to fight it in court, making the taxpayers pay for their mistake and hubris. I want my refund and I want council to come out of pocket to pay the legal bills they racked up fighting to preserve what at that point was an illegal tax. I know that will never happen, but that is how angry I am with the council for the way they have handled/mishandled this entire situation.
“I want my refund and I want council to come out of pocket to pay the legal bills they racked up fighting to preserve what at that point was an illegal tax. I know that will never happen…”
Best conceptual argument ever for why we should never have government healthcare. Government actors never actually are accountable for their bad acts.
Thoughtful:
these particular actors can be held accountable in two ways. Either by being recalled or not being reelected. A recall is unlikely as there are too many virtue signalers living in this city that think the three folks that are pretending to save the world are doing a good job “saving the world”. They can all pat each other on the back for their “good job” pretending to do something, all the while doing nothing or worse, creating all kinds of unintended consequences. They’re likely to get reelected for the same reason.
Well folks – Looks like in order to get our overpayment of Utility Users Tax (UUT) each one of us would need to do a lot of work to provide to the City of MP what they require to have payments calculated and paid back to us. Might not be worth the effort to track down, complete pages of forms the City of MP requires and then photocopy all the past bills and mail them to the City. Argh! Who has the time to do that for probably a pittance of money.
Menlo Cyclist:
All of the utility bills can be downloaded in pdf form, then easily sent to the city. I don’t care how little I get, it’s about the principle. If the city hadn’t tried to keep collecting a tax they could no longer legally collect and then fought the lawsuit, I probably wouldn’t bother. But they did and so I will.