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The town of Portola Valley evaluated its revenue enhancement options again during its Town Council meeting on Aug. 27 in preparation for a community survey that the town hopes to release in September.
Town Manager Darcy Smith explained that the survey will help officials understand the community’s priorities and needs, satisfaction with town services and to evaluate the feasibility of a revenue ballot measure.
The town is currently evaluating four potential revenue enhancement methods: parcel tax, real estate transfer tax that includes the establishment of a charter city, a new user-utility tax, and modifying an existing user-utility tax. Each would bring the town an estimated $100,000 to $2 million.
The parcel tax would require a two-thirds vote and a real estate transfer tax would require a super majority to pass. Both of these options would bring in the most for the town with an estimated annual revenue between $1 million to $2 million.
The town staff looked to the council to decide what would be included in the survey, which entailed choosing one of the potential measures to gauge voter’s opinions. Despite council members’ interest in exploring multiple options, Smith clarified that choosing one and keeping the survey simple would be easier for voters to understand.
“It’s critical to have this information to design the ballot language because that does craft it…It’s meant to inform you around the critical policy decision which will come to you in the future especially around what the community would like this money to be spent on,” Smith said.
Portola Valley resident Nona Chiariello asked the council if the public would be receiving any additional information about the potential ballot initiatives ahead of the survey. Smith responded that the town purposefully does not provide information so as not to affect the outcome.
As for how the survey will be shared, the town will only be contacting residents for whom it has contact information. Although there are about 3,600 registered voters in Portola Valley, the town only has emails and phone numbers for about 2,000 voters.
“It really comes down to who answers the phone or responds to the email because it’s a lengthy survey,” Smith said.
Local resident Rita Comes asked whether the survey will also have a question about the town’s overdue financial audits and whether residents think that the town should address those before spending money on a ballot measure.
“It’s really hard to talk about us giving more money to the town when we don’t have a strong history of managing that money and spending a lot of money to correct those problems,” said Comes.
Council’s choice
The potential ballot measure would be placed on the November 2026 ballot and as council members eye the real estate transfer tax as their top option, there are also worries about how a state measure being placed by the Howard Jarvis Taxpayer Association to “save Proposition 13” will impact their town.
The Save Proposition 13 ballot initiative would strengthen the protections for a long-standing state provision that sets a limit to how much homeowners and businesses can be taxed. The initiative also exclusively states that it will “prohibit the charter city loophole from being used in the future and also invalidates general transfer taxes that exceed the state limit.”
Helen Wolter said although she is in favor of pursuing a real estate transfer tax, she is concerned about the Save Proposition 13 measure which would overturn the town’s initiative.
In terms of rates, Vice Mayor Craig Taylor expressed he thinks that a rate that would bring $1 million of annual revenue would not be enough. He thinks $1.5 million in revenue is what the town should be aiming for in order to increase its town services, staffing and to fund for emergencies.
Council member Mary Hufty emphasized the town’s critical need for stronger finances and encouraged the council to pursue a $2 million real estate transfer tax and to survey the voters with language including this particular revenue value. An estimated annual revenue of $2 million in transfer tax would place a rate of “$10 per $1,000 for every $1,000 of the property’s sale price,” according to the staff report.
In spite of the Jarvis risk, Council member Rebecca Flynn said she would support the transfer tax and agreed with Taylor and Hufty that $1 million would not be enough for the town to build a reserve. She supported aiming for $2 million in revenue but said the survey would be a strong indicator of whether voters would be willing to pay that tax rate.
Mayor Judith Hasko acknowledged that a parcel tax would be the best way to avoid any risk with the Jarvis initiative but expressed her support for the transfer tax and charter city.
“I don’t know how much traction Howard Jarvis will get but I do think we’ve got to be ready to pivot as information comes in indicating that’s going to prevail,” Hasko added.
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