San Bruno council still split on a property transfer tax

It’s a proposal that comes as the city is facing major infrastructure needs, at least $310 million of which there are currently no plans for how to address. The city is also seeing an increasing amount of high-dollar property sales, like the recent $328 million sale of The Shops at Tanforan, or $215 million sale of the Bayhill campus to YouTube.

“The financial challenges that face San Bruno remain significant,” said City Manager Jovan Grogan, who pointed to per capita revenue well below many neighboring cities.

But while the rest of the council has indicated support, a sticking point for Medina and Salazar has been that the new tax will require the city to move away from its current general law status — in which the city’s “municipal affairs“ are governed by state law — to instead become a charter city.

Charter cities get to set their own rules (within the state Constitution) regarding some tax measures, certain land use, aspects of local elections and contracting — items within the loosely defined municipal affairs umbrella.

Additionally, “cities that have reserved their power to regulate municipal affairs can act very quickly and nimbly to regulate those affairs,” said Interim City Attorney Trisha Ortiz, who also noted any new tax, including extending the transfer tax to other property types, would require a new ballot measure, even with a charter.

Other than the tax measure, the charter proposed by the city would entirely retain the state’s “general laws” currently being abided by.

Still, Salazar said he fears the move could be a “slippery slope,” allotting the council increased authority that could be abused. He is also indicated concerns the tax would have a negative financial impact on small-time landowners. He did not elaborate on his reservations during the council’s discussion this week, but requested more information be made available to residents via the city’s website.

Councilmember Marty Medina countered the points, noting that “what other future councils do is up to them.”

“What we’re trying to do right now is to raise revenue for our city that impacts the least amount of residents, and I think we all agree that our city doesn’t have the revenues to provide the level of service that we all want,” he said.

He pointed to a report from the police department that indicated inadequate staffing.

“If we are able to pass this … we will be able to increase the police department,” he said.

Rico Medina, meanwhile, said he had heard concerns related to the inclusion of multi-family residential buildings in the measure. Last month, he indicated concern that a charter could afford the council the ability to establish salaries for its members above an existing ceiling.

If adopted, San Bruno would join Redwood City and San Mateo as the other two charter cities in the county. Redwood City doesn’t have a property transfer tax while San Mateo levies a 0.5% rate on commercial and residential sales — and voters there will be asked to approve an increased rate for sales above $10 million this year.

Other nearby charter cities include Palo Alto, Mountain View, Petaluma, San Francisco and San Jose.

“Being a charter city is not a bizarre and out-there thing that would make us unique in California,” said Councilmember Tom Hamilton. “There are many dozens of charter cities all across the state.”

A poll commissioned by the city of 446 “likely voters” found the measure would pass with a slim margin, with 55.4% of respondents saying they would either definitely or probably vote yes. Another measure to raise funds, a $124 million bond the council had hoped to request voter approval for this year, was abandoned by the council after the poll found it would likely fail.

The City Council plans to hold a meeting Aug. 3 for a vote, ahead of an Aug. 12 deadline for submitting ballot measures for the Nov. 8 election.

corey@smdailyjournal.com

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