TO: HONORABLE MAYOR AND FROM: Rick Bruneau
CITY COUNCIL Jill Bourne
SUBJECT: APPROVAL TO INCREASE THE DATE: May 15, 2023
LIBRARY PARCEL TAX RATES
FOR FISCAL YEAR 2023-2024
Approved Date
5/23/23
RECOMMENDATION
Adopt a resolution increasing the Library Parcel Tax rates for Fiscal Year 2023-2024 by 3% over the Fiscal Year 2022-2023 rates, and approving the placement of the Library Parcel Tax on the Fiscal Year 2023-2024 Santa Clara County Property Tax Roll.
SUMMARY AND OUTCOME
The increase in Library Parcel Tax rates will continue to provide funding to maintain and enhance Citywide library services and facilities through the acquisition of materials, development and delivery of education and digital literacy programs, and to repair, equip, and staff libraries.
BACKGROUND
In August 2004, the City Council adopted Resolution No. 72268 placing a Library Parcel Tax, as provided in the San José Library and Reading Protection Ordinance, on the November 2004 General Municipal Election ballot. The Library Parcel Tax was approved by the required two-thirds vote of the electorate. The Library Parcel Tax took effect on July 1, 2005, with an expiration date of June 30, 2015.
In August 2005, the City Council adopted Resolution No. 72844 approving the placement of the Library Parcel Tax on the fiscal year 2005-2006 Santa Clara County Property Tax Roll. Library Parcel Tax rates for fiscal year 2005-2006 were set at the same rates that had been charged through the Library Benefit Assessment District: $25 per single-family or condominium/townhome parcel, and varying rates for other residential, industrial, and vacant parcels.
COUNCIL AGENDA: 6/6/23
FILE: 23-819
ITEM: 2.12
HONORABLE MAYOR AND CITY COUNCIL
May 15, 2023
Subject: Approval to Increase the Library Parcel Tax Rates for Fiscal Year 2023-2024
In March 2014, the City Council adopted Resolution No. 76935 placing a 25-year extension of the existing Library Parcel Tax on the June 2014 Special Municipal Election ballot. The Library Parcel Tax was approved by the required two-thirds vote of the electorate. The passage of the measure extends the Library Parcel Tax for the period beginning July 1, 2015 through June 30, 2040.
Per the San José Library and Reading Protection Ordinance (Chapter 4.79 of the San José Municipal Code), commencing with fiscal year 2006-2007 and, by resolution of the City Council, the City Council may increase the Library Parcel Tax rates, if the City Council finds that the cost of living in the City of San José as shown on the Consumer Price Index (CPI) has increased over the preceding base period, but in no event shall the increase exceed 3.00%. The base period for calculating the CPI adjustment is the February to February reporting period. The specific CPI required to be used for the calculation is the All Urban Consumers for the San Francisco-Oakland-San José area with all items included as published by the United States Department of Labor, Bureau of Labor Statistics. The Bureau of Labor Statistics discontinued the San Francisco-Oakland-San José index in 2018. Starting in fiscal year 2019-2020, the Finance Department has used the Bureau of Labor Statistics’ San Francisco- Oakland-Hayward CPI index to calculate the Library Parcel Tax cost of living adjustment, as the geographical area covered by this index is comparable to San José.
The table below shows the last 10 years of annually approved percentage increases for the Library Parcel Tax per Chapter 4.79 of the San José Municipal Code.
Annual Increases in Library Parcel
Tax Rate
Fiscal Year
Percentage
Increase
2014-2015 2.45%
2015-2016 2.53%
2016-2017 3.00%
2017-2018 3.00%
2018-2019 3.00%
2019-2020 3.00%
2020-2021 2.91%
2021-2022 1.57%
2022-2023 3.00%
2023-2024 3.00%
ANALYSIS
Following the methodology used since fiscal year 2006-2007 for the CPI adjustment to the Library Parcel Tax rate, staff recommends an increase of 3.00% for fiscal year 2023-2024. Specifically, as outlined in the table below, the CPI for All Urban Consumers for the San Francisco-Oakland-Hayward area, as published by the United States Department of Labor Bureau of Labor Statistics, increased by
HONORABLE MAYOR AND CITY COUNCIL
May 15, 2023
Subject: Approval to Increase the Library Parcel Tax Rates for Fiscal Year 2023-2024
5.30% during the period from February 2022 to February 2023. However, per Chapter 4.79 of the San José Municipal Code, the annual increases are capped at 3.00%.
CPI February 2023 337.173
Less: CPI February 2022 320.195
Index Point Change 16.978
Divided by previous period CPI 320.195
Percent Change 5.30%
Percentage Change over 3% Cap 2.30%
Proposed 2023-24 Library
Parcel Tax Rate Increase
3.00%
The proposed 3.00% increase in the Library Parcel Tax rate will increase the Library Parcel Tax for a single-family or condominium/townhome parcel from $37.98 for fiscal year 2022-2023 to $39.11 for fiscal year 2023-2024 or an increase of $1.13 per parcel. The complete Library Parcel Tax schedule is attached to this memorandum (see the Exhibit - Library Parcel Tax Rates (FY 2022 - 2023 Actual and FY2023 – 2024 Proposed Library Tax Rates). The exhibit shows the current tax schedule and the proposed tax schedule to be placed on the County of Santa Clara Property Tax Roll for fiscal year 2023-2024 for all types of parcels. Assuming the same land use classifications and number of parcels as in fiscal year 2022-2023, the approximate tax collection for all land use classifications in fiscal year 2023-2024 will be approximately $10.7 million or an increase of approximately $300,000 over fiscal year 2022-2023 collections of approximately $10.4 million.
The collection of the Library Parcel Tax for fiscal year 2023-2024 represents the ninth year of the extended 25-year term of the Library Parcel Tax scheduled to end on June 30, 2040. Currently, the Library Parcel Tax provides approximately 17% of the San José Public Library System’s 2022-2023 Operating Budget and 7% of 2022-2023 Capital Budget.
EVALUATION AND FOLLOW-UP
The Library Parcel Tax is adjusted each year based on the CPI. No follow-up is required.
BUDGET REFERENCE
The fiscal year 2023-2024 Proposed Operating Budget includes the estimated increase of 3.00% in revenue for Library Parcel Tax. Additional details can be found in the Library Parcel Tax Source and Use of Funds on page 903 in the 2023-2024 Proposed Operating Budget.
HONORABLE MAYOR AND CITY COUNCIL
May 15, 2023
Subject: Approval to Increase the Library Parcel Tax Rates for Fiscal Year 2023-2024
COORDINATION
This item has been coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the June 6, 2023 City Council meeting.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Statutorily Exempt, File No. PP17-005 CEQA Guidelines Section 15273, adjustment to fees, rates and fares without changes to or expansion of services.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/ /s/
RICK BRUNEAU JILL BOURNE
Director of Finance City Librarian
For finance-related questions, please contact Rick Bruneau, Director of Finance, at [email protected]. For library-related questions, please contact Jill Bourne, City Librarian, at [email protected].
ATTACHMENT
EXHIBIT – Library Parcel Tax Rates (FY 2022 - 2023 Actual and FY2023 – 2024 Proposed Library Tax Rates)
EXHIBIT
LIBRARY PARCEL TAX RATES
(FY 2022-2023 Actual and FY 2023-2024 Proposed Library Tax Rates)
Land Use
Classification
FY 2022-2023
Parcel Tax Rate
Proposed FY 2023-2024
Parcel Tax Rate
(3.00% Increase)
Single Family Parcels $37.98/Parcel $39.11/Parcel
Condominium/Townhome Parcels
$37.98/Parcel $39.11/Parcel
Other Residential Parcels
(Fraternity, Sorority, Boarding,
Rooming House, Farm Labor
Camp)
Up to 20 Units $14.21/Unit $14.63/Unit
21 to 50 Units
$280.05+ $9.48/Unit
Greater than 20 Units
$288.45+ $9.76/Unit
Greater than 20 Units
51 to 100 Units
$569.34 + $4.74/Unit
Greater than 50 Units
$586.42 + $4.88/Unit
Greater than 50 Units
Over 100 Units
$806.27 + $1.91/Unit
Greater than 100 Units
$830.45 + $1.96/Unit
Greater than 100 Units
Multi-Family Residential Parcels
Up to 20 Units $19.10/Unit $19.67/Unit
21 to 50 Units
$381.47 + $12.68/Unit
Greater than 20 Units
$392.91 + $13.06/Unit
Greater than 20 Units
51 to 100 Units
$762.83 + $6.34/Unit
Greater than 50 Units
$785.71+ $6.53/Unit
Greater than 50 Units
Over 100 Units
$1,080.24 + $2.53/Unit
Greater than 100 Units
$1,112.64 + $2.60/Unit
Greater than 100 Units
EXHIBIT
LIBRARY PARCEL TAX RATES (Continued)
(FY 2022-2023 Actual and FY 2023-2024 Proposed Library Tax Rates)
Land Use
Classification
FY 2022-2023
Parcel Tax Rate
Proposed FY 2023-2024
Parcel Tax Rate
(3.00% Increase)
Commercial Parcels
Less than or equal to 0.5 acre $113.89/Acre $117.30/Acre Greater than 0.5 acre to 1.0 acre
$56.93 + $75.96/Acre
Greater than 0.50 Acre
$58.63 + $78.23/Acre
Greater than 0.50 Acre
Greater than 1.0 acre to 5.0 acres
$94.90 + $56.93/Acre
Greater than 1.00 Acre
$97.74 + $58.63/Acre
Greater than 1.00 Acre
Greater than 5.0 acres to 10 acres
$322.68 + $37.98/Acre
Greater than 5.00 Acres
$332.36 + $39.11/Acre
Greater than 5.00 Acres
Greater than 10 acres
$512.54 + $9.48/Acre
Greater than 10 Acres
$527.91 + $9.76/Acre
Greater than 10 Acres
Minimum Special Tax per Parcel
$18.96/Acre
$19.52/Acre
Professional Parcels
Less than or equal to 0.5 acre $170.84/Acre $175.96/Acre Greater than 0.5 acre to 1.0 acre
$85.43 + $113.89/Acre
Greater than 0.50 Acre
$87.99 + $117.30/Acre
Greater than 0.50 Acre
Greater than 1.0 acre to 5.0 acres
$142.36 + $85.43/Acre
Greater than 1.00 Acre
$146.63 + $87.99/Acre
Greater than 1.00 Acre
Greater than 5.0 acres to 10 acres
$484.05 + $56.93/Acre
Greater than 5.00 Acres
$498.57 + $58.63/Acre
Greater than 5.00 Acres
Greater than 10 acres
$768.82+ $14.21/Acre
Greater than 10 Acres
$791.88+ $14.63/Acre
Greater than 10 Acres
Minimum Special Tax per Parcel
$28.51/Acre
$29.36/Acre
EXHIBIT
LIBRARY PARCEL TAX RATES (Concluded)
(FY 2022-2023 Actual and FY 2023-2024 Proposed Library Tax Rates)
Land Use
Classification
FY 2022-2023
Parcel Tax Rate
Proposed FY 2023-2024
Parcel Tax Rate
(3.00% Increase)
Industrial Parcels
Less than or equal to 0.5 acre $56.93/Acre $58.63/Acre Greater than 0.5 acre to 1.0 acre
$28.51 + $37.98/Acre
Greater than 0.50 Acre
$29.36 + $39.11/Acre
Greater than 0.50 Acre
Greater than 1.0 acre to 5.0 acres
$47.46 + $28.51/Acre
Greater than 1.00 Acre
$48.88 + $29.36/Acre
Greater than 1.00 Acre
Greater than 5.0 acres to 10 acres
$161.38 + $18.96/Acre
Greater than 5.00 Acres
$166.22 + $19.52/Acre
Greater than 5.00 Acres
Greater than 10 acres
$256.25 + $4.74/Acre
Greater than 10 Acres
$263.93 + $4.88/Acre
Greater than 10 Acres
Minimum Special Tax per Parcel
$9.48/Acre
$9.76/Acre
Vacant Parcels
Less than or equal to 0.5 acre $14.20/Acre $14.62/Acre Greater than 0.5 acre to 1.0 acre
$7.10 + $9.48/Acre
Greater than 0.50 Acre
$7.31 + $9.76/Acre
Greater than 0.50 Acre
Greater than 1.0 acre to 5.0 acres
$11.84 + $7.10/Acre
Greater than 1.00 Acre
$12.19 + $7.31/Acre
Greater than 1.00 Acre
Greater than 5.0 acres to 10 acres
$40.28 + $4.74/Acre
Greater than 5.00 Acres
$41.48 + $4.88/Acre
Greater than 5.00 Acres
Greater than 10 acres
$63.95 + $1.17/Acre
Greater than 10 Acres
$65.86 + $1.20/Acre
Greater than 10 Acres
Minimum Special Tax per Parcel
$9.48/Acre
$9.76/Acre