To gauge public opinion on potential sales tax and real property transfer tax increases to address city needs, San Mateo will conduct a survey of potential options for City Council review.
“I’m not prepared to make any decisions until I see what the polling says. These are very precarious times. I recognize we have tremendous needs as a city, not only just to keep going but to do some of our long-term projects that are long overdue,” Deputy Mayor Diane Papan said.
The council is exploring a sales tax or real property transfer tax measure to address revenue losses due to the pandemic such as with the transient occupancy tax that comes from hotels. It also wants to work on capital improvement projects and public priorities like improving parks, sustainability, infrastructure, affordable housing and traffic congestion but lacks the financing. Capital improvement projects include Marina Library improvements, implementing a green fleet by 2030, infrastructure funding, recreation facilities, and bicycle and pedestrian projects. According to a midyear budget update, the city’s 2021-22 general fund will end in the black, with $155.2 million in revenue and $146.6 million in expenditures. However, the city needs to use reserves over the next four years. The city expects to have enough revenue to maintain core services at existing levels and restore reserves by 2032. The city’s unfunded pension liability is also around $264 million.
Potential options include a quarter-cent sales tax increase that would generate around $6.5 million to $7 million per year. The current sales tax rate is 9.625% in San Mateo. The city can also change its flat real property transfer tax rate to a tiered structure. The shift could generate around $5.6 million to $6.8 million per year. An RPTT is a tax paid upon transfer or sale of a property and is split between a buyer and seller during residential sales. San Mateo currently has an RPTT rate of 0.5% for residential and commercial buildings. Most sold properties in San Mateo fall under a lower tier and would not be affected by changing RPTT rates. The current San Mateo median sale price for a single-family home is $1.84 million and $880,000 for a condominium. The survey will ask about two scenarios of changing rates for properties sold above $2.5 million and $3 million. The taxes require voter approval and would go on the November 2022 or November 2024 ballot. Contractor True North Research will conduct a split survey for two RPTT scenarios and the sales tax measure.
Councilmember Joe Goethals urged the public to be aware that city funding measures and revenue are more fraught than the improved short-term outlook.
“It doesn’t change the fact we have a Bayfront with rising oceans or significant lagoon issues, grade separations that need to be built and infrastructure problems that cost hundreds of millions of dollars and a significant pension liability,” Goethals said.
Councilmember Eric Rodriguez did not support raising taxes, or the survey, as the city currently has a better financial outlook than expected, and people are dealing with pandemic recovery.
The council gave direction for staff to conduct the survey at its March 21 regular meeting.
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In other business, the city will name the 400 E. Fifth Ave. parking garage the Kiku Public Downtown Garage. The garage is under construction as part of the 225-unit affordable housing Kiku Crossing development from developer Mid Pen Housing at 480 E. Fourth Ave. and 400 E. Fifth Ave. Other names under consideration were South-East Garage, Railroad Avenue Garage, and Fifth and Railroad Garage. Its current name is Fifth Avenue Garage. The council decided on the name to highlight the history of Japanese Americans in San Mateo, the downtown location and its intended use for the public. Kiku is Japanese and refers to the chrysanthemum flower. The name also celebrates the past Japanese American floral industries that flourished during the 1900s in San Mateo. Councilmember Amourence Lee and several others thought having Kiku in the name would generate interest in Japanese American history in San Mateo. Project art on the side of the parking structure from a Japanese artist will include Japanese patterns and textiles.
“It inspires conversations and questions of what does Kiku mean. I’ve already got a number of those questions,” Lee said.
The council also approved the final design and construction documents and administration with RRM Design Group for the Central Park Playground and Memorial Grove improvement project. The city is redesigning the playground to an adventure village design. It will be a series of elevated towers and boardwalks for kids to be closer to trees and nature. The towers would stand alone and include a series of ramps and platforms to travel between towers. Some playground features are a wizarding tower, hobbit house, elf tower and stone wall with a slide. Other options include an enchanted forest and a fairy garden. A new restroom would replace the existing one in a different location with better visibility. The cost for the design and construction documents is $570,239, with around $50,000 in contingency funding for $620,239. The cost of the entire project is not yet determined but park in-lieu fees are available to use.
The council voted to eliminate all late fines from San Mateo public libraries because the relatively small amount doesn’t justify the time involved and would ease the burden on lower-income people. San Mateo has not charged late fees during the pandemic, with the slight loss of revenue already factored into the budget. The city will still charge fees for unreturned library materials.
The council has adopted an ordinance to update its Outdoor Restaurant and Merchandise Display Encroachment Permit program to add outdoor dining in the pedestrian mall area. The move gives more permit flexibility for outdoor dining on the sidewalk.
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(2) comments
Based on this article, it appears this survey may be filled with loaded questions. For instance, the article says the survey asks about two scenarios of changing rates, both up. But what if I don’t want rates to change or I want existing rates to decrease? With these loaded questions, there’s no alternative but “up.” And of course we’ll then get the obligatory, “but we have a survey and so we’re increasing rates” - because there were no alternatives. Will we get the same loaded questions for the sales tax increase - a choice between a quarter-cent and a half-cent? Maybe we need a survey on the wording of the survey. Or a write-in choice of “Other.”
Seems like two out of the three are needs highlighted (Fleet and Bike Lane) are not really needed. Government at the Federal, State, and now apparently the Local level need to end creating unfunded mandates.
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