|
Getting your Trinity Audio player ready...
|
The town of Portola Valley is inching closer to becoming a charter town. The Town Council is set to meet on July 22 to discuss putting a ballot measure for the November general election.
Pursuing a town charter was first proposed in 2024, as Portola Valley began to face a structural deficit. Adopting a charter will allow the town to adopt a property transfer tax that will provide Portola Valley with a new stream of revenue from properties sold.
Other ideas for boosting the town’s revenues included raising a parcel tax, leasing town-owned land and enacting a 2% user utility tax. Portola Valley’s lack of financial stability has impacted its services, such as causing town staff vacancies, limited town office hours and the slow processing of permits.
The town’s general fund is expected to face an ongoing deficit of about $700,000 per year which is forecast to deplete Portola Valley’s reserve funds by 2030 without new revenue. Portola Valley is also short of funds for capital improvements projects, road resurfacing, equipment replacement and more.
In community surveys and discussions, residents said they prioritized the town’s fiscal stability and autonomy, according to the staff report. Town autonomy, according to the feedback, meant that Portola Valley would be able to have control over its own zoning and planning decisions rather than succumb to the county.
What is a charter town?
Becoming a charter town would allow Portola Valley to have even more control over its own affairs by relinquishing its status as a general law town. When towns form a charter, it has authority over municipal affairs, overriding a state law on the same topic. The town however will still be subject to matters not regulated by town government, overseen by the U.S. and California constitutions, as well as any law the state deems is of “statewide concern.”
Currently, Portola Valley’s status as a general law town means its local government is bound by state law. Other San Mateo County charter cities include Redwood City and San Mateo, according to the Civil Grand Jurors’ Association.
If voters approve a ballot measure to form a town charter, the existing governance structure and municipal codes will not change, according to a town presentation in May. Voters will also have the ability to amend the charter in the future.
For Portola Valley, the main drive to become a charter town is to gain the authority to adopt a real property transfer tax beyond what is authorized in state law. Currently, the ceiling for the tax is $0.27 per $500 of the sales price for real property transfers.
The town has already held two public hearings on the town charter in May and June, fulfilling the hearing requirements of the state’s formal charter process.
What is a real property transfer tax?
The real property transfer tax is imposed when property is sold or transferred. Funds from the tax would be set at a rate that will allow Portola Valley to maintain or increase its current level of services and town facilities.
All revenue from the tax will go to the town and serve as a dedicated source of funding.
The draft ordinance that will be reviewed in the upcoming Town Council meeting would replace the existing $0.27 per $500 tax with a new one, however no specific amount has been determined.
Pursuing a ballot measure
The staff report estimated that placing the measure on the November election ballot would cost about $6,000 to $7,200 in addition to expenses for legal support and community outreach efforts.
The ballot measure to become a charter town would need approval from a majority of local voters. If it wins, the real property transfer tax would be effective 10 days after the Town Council declares the election results.
If the charter town ballot measure does not pass, the town will be required to maintain its 20% reserve levels and have to cut expenses on wildfire mitigation work, staffing, use of consultants and facility improvements, according to Assistant Town Manager Tony McMarlane.
The ballot measure will be discussed during the July 22 Town Council meeting ahead of the county’s Aug. 7 filing deadline for the November election.
