Town of Portola Valley
Fiscal Year 2026-27 Budget Study Session Revenues
March 25, 2026
Overview
• Types of revenue
• Authority to collect
• Timing of revenue
Revenues
• Taxes
• Benefit Assessments
• Fees, Charges & Rates
• Other Local Revenues
• State Subventions
• Grants and Aid
General
Fund
Revenues
Taxes – 76% of General Fund Revenue
PROPERTY SALES & USE UTILITY USERS BUSINESS
LICENSE
Property Tax
•Limits assessment to 1% of assessed value
•Caps annual increase the lesser of CPI or Prop 13 AV growth factor of 2% Proposition 13 –
(1978)
•Requires a minimum percentage of the state budget to be spent on K-12 education •Shifts specified amounts of property tax revenues from the town to educational revenue augmentation funds (ERAF) to support schools.
Proposition 98 –
(1988)
•Allows homeowners to transfer existing assessed values between spouses, parents/children, or purchase of a new home.
Propositions
58/60/90
Property Tax
- Definitions
Assessed Value – base
value that increases 2%
per year
Supplemental –
increase to assessed
value due to change in
ownership
Unitary – assessed
value of property
owned by utilities
TEA – Tax Equity
Allocation raises
minimum property tax
revenue to low tax
cities to 7%
VLF – Vehicle License
Fee in lieu of property
tax dedicated for nonbasic aid school districts
adjusted annually by AV
growth
ERAF – Education
Revenue Augmentation
Fund is property tax
revenue shifted to
support school funding.
Real Property Transfer
Tax – Tax imposed on
the transfer of
ownership of real
property. Current rate
$1.10/$1,000 that is
shared between County
and Town.
HOPTR – State
reimbursement of
Homeowners Property
Tax Relief exemption of
$7,000 of the full value
of a dwelling.
Property Tax
– Tax Levies
• Average AV growth 5.1%
• Tax levy is 7.01% of Net
AV
• California Constitution
• Article XIII and XIIIA
• RTC Sections 95 and
97 22-23 23-24 24-25 25-26
Estimated Levy
Secured 2,948,987 3,102,840 3,240,297 3,425,629
Unsecured 110,277 122,076 132,512 136,823
Homeowners Property Tax Relief 8,616 8,427 8,246 8,311
Total 3,067,880 3,233,343 3,381,055 3,570,763
Assessed Value 43,826,861 46,122,933 48,233,580 50,944,565 Percentage of Levy to AV 7.00% 7.01% 7.01% 7.01%
PT Revenue Growth - $ 263,354 165,462 147,712 189,708
PT Revenue Growth - % 8.58% 5.12% 4.37% 5.31%
AV Growth - $ 2,529,216 2,296,071 2,110,647 2,710,985
AV Growth - % 5.77% 4.98% 4.38% 5.32%
Property Tax Timeline
Jan 1
Growth factor
applied
Jan. –
June
Assessor applies any
changes to the tax
rolls
Jul 1
Assessor delivers
tax rolls to auditor.
Auditor applies tax
rates and
assessments
Aug 31
Treasurer-Tax
Collector receives
the tax rolls
Sep
Treasurer-Tax
Collector mails tax
bills
Dec 10
First payment is due
from taxpayers
Nov
Auditor apportions
revenue
Apr 10
Second payment is
due from taxpayers
August
Auditor apportions
revenue
Sales & Use
Tax
• PV Rate – 9.375%
• 1.00% received from State
rate, approximately $0.11 for
every tax dollar remitted
• Public Safety and COPS
grants funded through State
rate
• Measure A and W funded
through district-add on rates
• 104 registered sales permits
• General Fund
Rate Jurisdiction Purpose Authority
3.6875% State State General Fund RTC § 6051, 6201
0.25% State State General Fund RTC § 6051.3, 6201.3
0.50% State Local Public Safety Fund § 35, Article XIII
0.50% State Local Health and Social Services RTC § 6051.2, 6201.2
1.0625% State Local Revenue Fund 2011 RTC § 6051.15, 6201.15
0.25% County Transportation Funds RTC § 7202, 7203
1.00% Local Town General Fund RTC § 7202, 7203
7.2500% Statewide Base Sales & Use Tax
Rate Jurisdiction Purpose Authority
0.1250% CalTrain CalTrain PCJPB TUT
0.50% County Transactions & Use Tax (TUT) SMC TUT
0.50% County Transportation SMCTA
0.50% County Transportation Measure W
0.50% County Transportation Measure A
2.1250% District Add-on Sales & Use Tax
9.3750% Total Sales & Use Tax Rate - PV
State Rate
District Add-on
Sales & Use
Tax - Rates
• Any rate greater than
9.375% means there is an
additional Transaction &
Use Tax (TUT) rate
established
Jurisdiction Rate
San Mateo County 9.375%
Atherton 9.375%
Belmont 9.875%
Brisbane 9.875%
Burlingame 9.625%
Colma 9.375%
Daly City 9.875%
East Palo Alto 9.875%
Foster City 9.375%
Half Moon Bay 9.375%
Hillsborough 9.375%
Menlo Park 9.375%
Millbrae 9.375%
Pacifica 9.875%
Portola Valley 9.375%
Redwood City 9.875%
San Bruno 9.875%
San Carlos 9.375%
San Mateo 9.625%
South San Francisco 9.875%
Woodside 9.375%
Utility
Users Tax • 26 telephone providers • 9 energy providers • 1 water provider • 7.50% in effect since 07/1/2023
Rate Jurisdiction Purpose Authority
5.50% Town Town General Fund MC 3.32.040
2.00% Town Town Open Space MC 3.32.040
7.50%
5.50% Town Town General Fund MC 3.32.040 - 3.32.050
2.00% Town Town Open Space MC 3.32.040 - 3.32.050
7.50%
5.50% Town Town General Fund MC 3.32.070
2.00% Town Town Open Space MC 3.32.070
7.50% Total UUT Water
UUT Rate
UUT - Telephone
UUT - Energy
UUT - Water
Total UUT Telephone
Total UUT Energy
Business
License Tax
Franchise
Fees
• A form of rent that gives
franchisee access to town
roads and right of way
• General Fund
• Cable – DIVCA – 5%
• Garbage – CIWMA - Neg
• Electric/Gas/Water – 2%
• Broughton Act – poles/wires
• Franchise Act – gross
receipts
Rate Jurisdiction Purpose Authority
2.00% Town Town General Fund Ord No. 1965-35
2.00%
1.00% Town Town General Fund Ord No. 1965-35
1.00%
Franchise Fee - Garbage
7.70% Town Town General Fund Ord No. 1965-35
7.70%
5.00% Town Town General Fund Ord No. 1965-35
5.00%
Franchise Fee
Franchise Fee - Energy
Total Franchise Fee Energy
Franchise Fee - Water
Total Franchise Fee Water
Franchise Fee - Cable
Total Franchise Fee Cable
Total Franchise Fee Garbage
User Fees – 15% of General Fund
Revenues
Planning &
Building
Licenses &
Permits
Public
Works
Engineering
Fees
Community
Hall Rentals
Field
Rentals
User Fees
• Is it a Fee or is it a Tax?
• User Fees must comply with Prop 218 and 26
• Proposition 218 (1996)
• Defined a “general tax” and “special tax” and steps to implement them • New taxes, increases, or property-related assessment subject to vote of the electorate or property owners
• The amount of the fee may not produce revenues that exceed the reasonable cost of providing the service
• Proposition 26 (2010)
• Defined “tax” as any levy, charge, or exaction of any kind imposed by a local government • Establishes 7 exceptions for a fee to be increased and not to be considered a “tax” • General Fund
Fines &
Forfeitures
As a result of a violation
of the law Traffic fines
Civil fines
Collected by the County
who also establishes fee
schedule
County distributes
when fines are collected
minus a small
administrative fee
General Fund
State Subventions
Gas Tax (Highway Users Tax)
Road Maintenance and Reimbursement
Account (RMRA) – SB1
State Public Safety Sales Tax
COPS Grant
Federal and State Grants and Aid
Use of Money and Property
Interest allocated to all funds via average cash balance Amount Bank Rate Authority
$ 19,726,076 Schwab 4.31% Investment Policy
$ 1,756,357 LAIF 3.87% Investment Policy
$ 1,152,224 Tech CU 3.93% Investment Policy
$ 22,634,657 Total
Use of Money & Property
Transfers &
Contributions
Transfers are interfund usually for
capital projects or gas tax
maintenance of effort provisions
Contributions, or donations, will
be used for general purposes or
project specific expenses
Donation & Gift Acceptance Policy
Fiscal
Forecast
• GF Reserve will be below
20% policy level by the
end of FY 2027-28
• GF Reserve will be in a
deficit position by the end
of FY 2030-31
• Sheriff Contract increase
of $408K for FY 2026-27
• $197K increase in contract
• $211K expired credit
Fiscal Forecast – Without New Revenue
Reduction in Services
Town Staff
Sheriff Patrols
Fire Mitigation - WFPD
Cap on Consultant Hours
New Revenue
Adopt a Town Charter and
increase Real Property Transfer
Tax
Impose a Parcel Tax
Modify UUT reallocating 2% from
Open Space to General Fund
Discussion & Direction