Voter Guide: Portola Valley utility tax renewal measure stirs up Town Center opponents Voter Guide: Portola Valley utility tax renewal measure stirs up Town Center opponents (October 26, 2005)

By David Boyce

Almanac Staff Writer

Measures H and I on the November ballot would renew two utility-users taxes in Portola Valley. The taxes would be based on a percentage of residential utility bills, with 5.5 percent of the revenues used to help finance the town's operating expenses and 2 percent used to purchase open space.

Residents first approved the tax in 1985 and have chosen to renew it in 1993, 1997 and 2001.

In this year's election, opponents charge that the revenues for the 5.5 percent tax are being spent for purposes other than town operations -- such as building a new Town Center complex -- and that Measure H should be rejected and rewritten to add spending restrictions.

These revenues do go into the general fund, which is tapped for expenses such as road maintenance, litter removal and public safety. Town policy also allows spending from the general fund for capital expenses, said Town Administrator Angela Howard.

On September 28, the council unanimously enacted a new policy restricting the spending of revenues from the 5.5 percent tax to operating expenses.

Estimated revenues for this tax in 2005-06 are $611,500, or 17 percent of the general fund, about the same as in the two previous budgets, said Stacie Nerdahl, the town's administrative services officer. The average tax per household would be $29.26 per month, proponents said in the ballot argument.

"I can't even imagine how to balance the budget without those funds," said Ms. Howard during the annual budget review by the Town Council.

Contingent upon the passage of Measure H is Measure I, the 2 percent utility tax that sets money aside to purchase open space. The estimate for the current budget year is to set aside $223,000 for this fund.

Two-thirds of voters must approve a new tax measure, but because these measures would renew existing taxes, they can pass with a simple majority.
Pro and con

In the ballot argument favoring Measure H, supporters claim that with Portola Valley's "strong volunteer tradition" and small but efficient town staff, renewal is necessary to assure "continued financial strength."

Property tax revenues are a major revenue stream but Portola Valley receives 4 percent of the revenues compared with 5.7 percent for Woodside, 10 percent for Atherton and 12 percent for Menlo Park, said San Mateo County Deputy Tax Assessor Terry Flinn. State law prohibits changes to these percentages.

"We run a very tight ship," said Mayor Davis in an interview, noting the savings accrued through the work of volunteers on the town's 14 advisory committees.

Signing the ballot argument for Measure H were Mayor Ed Davis, former mayors Kirke Comstock and Sue Crane, Planning Commissioner Chair Chip McIntosh, and Finance Committee Chair Michele T. Takai.

Only Measure H received an opposing ballot argument. Signing it were Portola Valley residents Charles Engles, William Henderson, Ted Lamb and Ed Wells, and non-resident and tax opponent Jack Hickey.

The opponents focused on the role the utility tax revenues would have in paying for the $20 million Town Center complex, which is still in the planning stages. Noting the town's reserve -- currently at about $3.5 million -- and the tax's initial goal of solving "a short-term emergency cash-flow problem" 20 years ago, they accuse town leaders of being "less than candid" about its renewal.

"These folks are relying on the utility tax to launch the Town Center that they -- not necessarily we -- want," the ballot argument said. "And after this extravagant and pretentious project is begun, we will no doubt need to approve another bond to rescue the city from unfunded costs."

Similar sentiments were expressed in a September 12 letter and fundraising appeal from the Taxpayers Committee Against Measure H, Utility Taxes. The letter was mailed to about 300 residents, said resident Sheri Elmore, one of the letter's signatories.

Plans show spending of about $600,000 on the Town Center project in the current budget year. Council members have said that the town will not build what it cannot pay for and that they will either scale the project back or consider a bond measure if the necessary $16 million cannot be raised in donations.

Asked for a comment on the opposition's arguments, Ms. Howard replied: "Clearly, we have more operating expenses than the utility users tax revenues provide for." Town Center project bills are paid from the general fund, but as money comes in from fundraising for the project, it will be transferred to the general fund as needed, she said.

The utility tax revenues are one of 10 general-fund revenue streams used for operating expenses, said Councilman Steve Toben. "I reject the opponents' misleading attempt to connect this (measure) to the Town Center project," he said. "It's a false characterization."

E-mail a friend a link to this story.