San Bruno property transfer tax scrapped

But support was needed from four of the five members of the council, and Salazar and Rico Medina indicated several concerns, mostly to do with strain the tax could place on the business community.

“This does affect the business community, that means it affects people,” said Rico Medina.

The council’s three other members, however, who have been strong advocates of the tax, voiced frustration regarding the outcome.

“San Bruno is underfunded with huge needs,” said Councilmember Marty Medina. “Not allowing our residents to vote on it is really disappointing, it’s almost amazing.”

The city is facing major infrastructure needs, at least $310 million of which there are currently no plans for how to address. The city in recent years has also seen an increased 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.

Ahead of the council’s vote, City Manager Jovan Grogan highlighted issues from potholes, ailing streetlights, a leaking fire station, crumbling storm drains to understaffing. The city’s budget was reduced by $8.2 million amid the pandemic, he said, requiring many staff positions to be cut or laid off, some of which the city has been unable to bring back.

Still, Salazar pointed to the city of San Mateo, which has a population more than double San Bruno’s and is the only other city in the county with a property transfer tax, with a rate of 0.5%.

“Why would we want to have the highest number out of all of the cities in the county?” he asked.

There are 21 cities in the Bay Area with commercial transfer taxes, with rates as high as 1.3%. Some also have progressive rates like Berkeley’s, which slides up to 2.5% for transactions over $2.5 million, according to a city report.

Salazar also stated that by approving the item for the ballot, he would effectively be supporting the measure. Both he and Rico Medina said the council should focus instead on a larger initiative to increase city revenue.

Rebutting the notion, Councilmember Tom Hamilton suggested Salazar and Rico Medina could have written an argument in opposition to appear in the ballot information. He also said the concerns should have been raised earlier in the process.

“Waiting until the last minute immediately before the vote to bring up new concerns, when there is no opportunity to potentially address them, is massively disappointing,” he said. Salazar responded that his concerns were nothing new.

A sticking point for Salazar in prior meetings, also raised by Rico Median as a concern, was that the tax would have required the city to move away from its 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. Other than the tax measure, the charter proposed would have entirely retained the state’s “general laws” by which the city currently abides.

For her part, Vice Mayor Linda Mason requested Rico Medina elaborate on his call for a more holistic plan to increase revenue. “Your comment was that we need a plan and process, and my question is what exactly are you talking about,” she said.

The City Council in 2019 began a “fiscal sustainability project,” with recognition that the city’s revenue was inadequate. The council last year identified a handful of possible measures, among them a $124 million bond, and increasing taxes on Artichoke Joe’s, the city’s casino.

As a result, the city entered into an agreement to collect an additional $900,000 annually from the casino, but following poor polling results, the council opted to abandon placing the bond on the ballot. The poll results found the transfer tax would likely pass with a narrow margin.

“We created a process on how to prioritize this, we agreed to that process, we agreed that this would be an initiative, we agreed that the council would work together, we all directed staff to work on this,” said Mason.

Grogan said the amount of staff time spent on the measure was “in the hundreds” of hours.

Close to two dozen public speakers also weighed in during the council’s meeting, with comments split between those for and opposed. Several in support pointed to infrastructure issues or lack of police.

Nearly all those who spoke in opposition described themselves as business owners or real estate agents. The San Mateo County Association of Realtors issued a “call for action” against the measure earlier this week, and several Realtors who spoke echoed similar talking points, among them that the tax would likely be extended to single-family homes or that the cost would be passed down to renters.

Hamilton, Marty Medina and Mason all made a point to say they had not received money from the Realtor association during their campaigns.

corey@smdailyjournal.com

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