Portola Valley: Windfall goes into town's reserves Portola Valley: Windfall goes into town's reserves (February 01, 2006)

By David Boyce

Almanac Staff Writer

The town of Portola Valley has decided what to do with a $915,000 property tax windfall from the county: keep it in reserve, and don't restrict it to a particular expense, such as open space acquisition.

A unanimous decision of the Town Council to take this step came at its January 25 meeting, where many speakers recommended that the town save the money.

The town could not legally refund the windfall to taxpayers, said town attorney Sandy Sloan.

Some speakers called on the council to compensate taxpayers by suspending another tax: the town's 7.5 percent tax on utility bills.

"All you're doing is taking hundreds of thousands of dollars and squirreling it away," complained resident Ted Lamb, who opposed the renewal of the utility tax in November. "You're ripping off the people of Portola Valley."

The town plans to hold community meetings in late February or early March to discuss the possibility of reducing the utility tax rate.

A decision is unlikely until the council meeting scheduled for April 12, said Mayor Steve Toben.

By that time, he said, the council is likely to better understand several factors, including whether it will continue to receive annual payments from the county of about $400,000, and what legal claim the town may have to payments for past years.

The windfall is for the past two years and is based on a 1988 state law meant to insure that towns get a fair share of property tax revenues. Some residents think the town should sue the county for payments due over the previous 15 years the law has been in effect.

One resident calculated that the county owes Portola Valley $6.8 million.

Commenting on the fervor of anti-tax speakers at the meeting, resident Marilyn Walter said that in her two-person household she pays $16 a month in utility taxes. "That's what we're fighting about," she said.

In fact, utility taxes vary widely by household, Town Administrator Angela Howard told the Almanac. Occupants of a small home with drought-tolerate native plants may pay $16 a month, she said, but it doesn't compare to what's paid by those who occupy a 7,000-square-foot mansion in Blue Oaks "with a pool, a media center and a bowling alley."

Councilman Ted Driscoll gave his opinion of the night's discussion: "It's a sad situation that when we're presented with a cake we have a food fight."

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