More ways to get taxes from us
Original post made by Diana Diamond, Palo Alto Online blogger, on Apr 16, 2008
And so it is in Palo Alto.
It's amazing how our city councils and city managers over the years have found so many creative ways to get money from us for the city's general fund, now a mere $139 million a year.
For example, those library fines we pay for overdue books? They don't go to the library the library turns all of them over to the general fund. I asked a Los Altos librarian what that library does with overdue fines.
"We use the money to buy more books," she replied. Not in Palo Alto.
And the $30 parking fines we pay when we park more than two hours on downtown streets? They also go to the general fund. In fact, Palo Alto City Manager Frank Benest told the council recently that he is thinking of hiring another parking-enforcement officer who would "bring in $167,000 a year in net recovery."
I learned that the water division of our Utilities Department "transfers" money to the general fund each year, and the fixed amount it transfers goes up by 3 percent each year, every year. This year it amounted to $2.8 million; next year it will be 3 percent higher $2.88 million.
"The transfer is fixed, and not related to profit, sales or any other metric," Dexter Dawes, a member of the city's Utilities Advisory Commission, explained. Dawes called this transfer the city's "dividend." I would say it's another hidden tax.
Need I point out that all this transfer money comes from us, in the bills we pay each month for water? Our water rates now are higher than any of our neighboring communities.
The city, as you know, is also charging rent to its own Utilities Department for the land it uses. For example, Stanford charges the city $1 a year for the 950 Hansen Ave. site; the city charges Utilities $153,669 a year in rent for the same parcel. Yet the way I look at it, the city's pays $1 to Stanford and charges153,000 percent more rent. And of course all these utility rental costs ($5.4 million a year) are paid by us in our monthly utility bills.
Benest and the council are now trying to find ways to come up with $5.2 million/year for the next 30 years or so to pay for a new $81 million public safety building (plus interest). Benest has found on paper all but $1 million of the payment, but he's having trouble.
"The difficult part is carving out the $1 million. ... This is very difficult, ... very difficult for an organization. ... We are going to be struggling," he told the council.
The $1 million represents .7 percent of the general fund.
Instead of going to the voters to approve a bond for the 50,000-square-foot public-safety building (current space is approximately 19,000 square feet), the council will issue "certificates of participation" to investors. It's almost the same as a bond, except voter approval is not required. The council knew that a survey found not enough voters wanted the new building. The 57 percent majority approval fell significantly short of the two-thirds support required by law, but that was when it was estimated at $61 million.
But now we the residents and the businesses will have to pay for it, or some of it. Among Benest's proposals to the council are:
* A business-license tax.
* A 50-50 cost sharing between property owners and the city for non-emergency sidewalk repairs, including curb cuts at corners.
* A "public-safety development impact fee" for new construction.
* Cost recovery for code enforcement property owners with violations would pay a portion of the cost of the enforcement program.
* An increase in park field usage fees from $5 a season to an hourly charge.
* A registry fee for landlords.
* A "basement fee" for new and remodeled homes.
* Eliminating leaf-blower- complaints.
* An increase in fees for emergency responses by paramedics.
Also under consideration is a monthly charge on telephone bills for 911 emergency calls, depending on whether the courts rule that such a fee is legal.
No council decision has been made yet on what fees will be adopted.
Some doubt is beginning to creep into council members' minds, which is good.
Pat Burt called for more efficient use of space and wondered if the police building really needed to have a 2,125-square-foot multipurpose room that would be used for training and sporadic community meetings. And Yahweh Yeh asked if the staff is looking at any cost savings, including revamping some of the design plans.
I think a police building that is two-and-a-half times bigger than the present facility is a big expansion, especially when no staff expansion is planned so far. Cutbacks could lead to more community acceptance, since apparently people agree the current building is crowded.
I also think it's time for the entire council to study the total budget in detail. The traditional practice is for the council's finance committee to hear from each department what is to be added and subtracted, but the bulk of the budget is not discussed. In fact Benest was asking the council if it even needed a separate study session for the upcoming year's budget, since he would be presenting a "status quo budget."
A thorough top-to-bottom analysis of the budget by the council has not occurred for decades. Maybe it's time for one.