Insight/Analysis: Proposed Storm Drain Tax Has Unusual Elements, Gotchas


[Note: any updates to information are available on our Storm Drain Central Page here.]

Overview

» The special, off-cycle ballot is costing the town $175,000, according to town staff and consultants.

» The process is unusual and there are two steps: (1) a protest period requiring a proactive, written response and (2) the actual ballot sent and counted by the town. See this article.

» There is no sunset on the tax; the tax is forever.

Financial Considerations

» There is no financial plan: The town doesn't know how or what it will do financially if the measure passes (e.g. spend money as it comes in, float a bond, etc.).

» The amount sought under the new tax ($800,000/year) won’t be sufficient and won't be the last:

  • The number was determined by the town's assessment of what would pass vs. what is actually needed, and

  • The town will come back for the rest later

Fairness and Equity

» Schools and churches get taxed. Preschools, private schools, public schools and every church.

  • The Moraga School District and Campolindo will be subject to $37,000 per year in taxes

  • Even if additional MEF donations were received to cover this unusual and unexpected tax levy, they can't be used to pay the taxes.

  • See this article for more.

» Developer impact fees of at least $350,000-$400,000 (and possibly as much as $1,000,000) are not being directed toward storm drains; residents will pick up the difference for an additional 5%-6% (minimum) hit to the wallet

  • By agreement with the town, all of the Palos Colorados developer payments ($1.25MM this year, at least) go directly into the general fund for unrestricted spending.

  • Absent this redirection of funds, Palos Colorados should have and would have been contributing $350,000-$400,000 or more, in a single payment, to the storm drain fund. The amount may be as high as $1,000,000 depending on the lot size, hardscape, and acreage that streets, sidewalks and other development encompasses.

  • Because the Palos Colorados development is not paying storm drain impact fees, the rest of the property owners make up the difference, which we estimate to be an additional 5%-6% per property owner and potentially 2x-2.5x that amount

Procedural items

» The town itself counts the ballots; the objective, County election department isn’t involved

» Any appeals to to assessment amounts are limited to the public works director, with the final decision by the town manager.

  • The town attorney recommended that appeals be limited so as not to potentially waste town council time.

» There will be no voter information pamphlet, pro/con arguments or impartial analysis on this ballot​.

  • The only information you'll have is what the town chooses to put on its website or on the ballot, or what you proactively search out yourself.

» Your name and signature will be on the ballot. It isn't anonymous like normal voting.

Other Considerations

If you're concerned about the declaration of fiscal emergency or town spending, these facts are worth considering:

» The tax relieves pressure on the general fund by eliminating the need for thoughtful spending and saving, thus allowing more uncontrolled spending.

  • The money the town already has been spending on storm drains now will be covered entirely by the new tax money in a new account, freeing up the general fund money for other uses. It allows “loosening the belt” at the very time the Town has declared and demonstrated it ought to be tightening it.

  • More on how the town accounts for - and spends - it's money will be in a forthcoming article

  • Federal reimbursements for the sinkhole and Canyon bridge (which the Town likes to pretend don’t exist, but represent almost 89% of the costs of those projects) go directly into the general fund for unrestricted spending, too.

  • ​Along with the imminent Palos Colorados contribution, there is almost $7,000,000 inbound and headed to unrestricted funds, yet we're told we desperately need to raise taxes.

  • These facts beg the question "why do we have a declared fiscal emergency, and why do we need to collect even more taxes right now?”

More info on the special ballot process and a summary of all related articles are here.