Letter from Council Member John Fricke

(Unedited text of email sent by John Fricke to Emeryville residents Saturday, July 25).

Dear Emeryville neighbors,

Residents United for a Liveable Emeryville, a resident organization, is sponsoring a community meeting to discuss the future development of the land adjacent to the Bay Street shopping mall:

Tuesday, July 28th, 6 p.m. Emeryville Senior Center 4321 Salem Street

The city council majority intends to negotiate an agreement with the developer of the Bay Street shopping mall to expand the mall to the north. This agreement will likely include giving the developer tens of millions of dollars in subsidies. I oppose these subsidies because the money should instead be used to pay for concrete benefits to the residents, benefits such as constructing a permanent rec. center, providing a pedestrian/bicycle bridge across Interstate 80, and improving access to public transit. The community meeting on Wednesday will be an opportunity to discuss how to make the project meet the needs of Emeryville residents.

CITY BUDGET. At its last two meetings, the city council has been determining how to close current and projected budget deficits through budget reductions and new sources of tax revenue. My questions about the fairness of a tax to support park landscaping and street lighting have not been addressed.

REDUCING CITY EXPENDITURES. Several months ago, the city council decided to reduce the costs of running the city. The combined budget reductions will save about $1.2 million, and include such things as reducing the frequency of street sweeping and not filling vacant city staff positions. Despite these cuts, there will still be a budget shortfall. The city council decided to make up the shortfall by drawing money from a fund set aside in past budgets for economic downturns. (Many cities and the State of California did not set aside money in past budgets, and are now being forced to make severe cuts to balance their budgets.) The city council chose not to lay off employees so that basic city services such as police, fire, maintaining city parks, maintaining sewers, etc., will not be impacted.

If the economy does not recover in the next year or two, the money that the city council has set aside may become depleted before the economy recovers. In addition, new demands on the city budget will arise in the coming years. For example, maintaining new amenities such as the public park at 61st/Doyle, a future park and pedestrian bridge to the Bay Street shopping mall will increase the city’s budget. To meet these demands, the city council has discussed various tax measures, including increasing the gambling tax, and creating a tax to pay for landscaping and lighting.

GAMBLING TAX. Emeryville currently imposes a tax on card clubs. (For quite some time, Emeryville has had only one card club, the Oaks.) Last Tuesday, the city council voted to put a tax measure on the November ballot. If approved by the voters in November, the tax rate on card clubs will be increased from nine percent to ten percent. I intend to vote for this tax measure.

LANDSCAPE AND LIGHTING ASSESSMENT DISTRICT. At two recent city council meetings, I have repeatedly raised concerns about the inequitable tax rates for this proposed annual property tax assessment. This tax measure would not be decided by registered voters in Emeryville, but by those who own property in Emeryville. (The ballots are mailed to the property owners.) If it passes, the assessment tax would appear on the annual property tax bill, and would be calculated by multiplying the square footage of the property by the tax rate. (Compare this to the property tax which is calculated by multiplying the assessed value by the tax rate.) Those of you who own a condo or house would pay an additional amount on the property tax bill. Those of you who rent an apartment in Emeryville may see your rent go up to pay for the additional tax.

As currently proposed, there would be different tax rates for the following categories (amount in parentheses is the annual tax based on 1,000 square feet): Industrial ($27.50); commercial/retail ($68.75); office building ($82.50); and residential ($127.96). These differing rates are supposed to reflect the degree to which the people associated with these different categories use the landscaping and lighting in the city.

In comparing the residential rate to the other rates, I noticed that the residential rate is fifty percent more than the rate for office buildings, and double the rate for commercial/retail. (The rate for industrial is low but seems about right since an industrial property probably doesn’t use the city’s landscaping and lighting as much as a retail or office property.)

As a property owner, I am willing to pay to maintain the landscaping in our parks and the lighting on our streets. But making residential property owners (or a tenant through a rent increase) pay a higher rate strikes me as unfair, especially when you compare what a different consultant came up with about a year ago. This other consultant was asked to determine what one-time fees to charge developers of residential projects, office building projects and retail projects. (After developers objected to this development fee, the city council majority quietly dropped it.) The fees would have been used to pay for creating new parks. His conclusion: charge basically the same rate for residential developments as office building or commercial/retail developments. Considering that far more people work and shop in Emeryville than those who live in Emeryville, this one-to-one ratio seems fair.

Since there is more square footage in an office building, an office-building property owner will pay much more for this assessment tax than a residential property owner. But that doesn’t mean that the higher rate for residential is necessarily fair.

Furthermore, the vote is not the same as an election where each voter gets one vote. When voting on an assessment district, property owners who would pay more money get more votes. For example, a person with a 1,000-square-foot condo would get 127.96 votes, but a property owner of a 100,000-square-foot office building would get 8,250 votes. This means that a small number of property owners who own the large office buildings in town could have effective control over the outcome of the vote.

The tax burden should be more fairly distributed between the business-oriented uses and the residential uses. The city council can change these rates, but once the ballots are mailed out, the rates will be set.

Best,
John