TO:
FROM:
Mayor and City Council
Philippe Eskandar, City Manager
BY: Hillary Guirola-Leon , Finance Director
Mark Siegfried, Accounting Manager/Controller
DATE: March 28, 2025
SUBJECT: APPROVAL OF RESOLUTION TO REESTABLISH FISCAL
YEAR 2025-26 PUBLIC SAFETY SPECIAL TAX LEVIES
STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Fiscally Responsible and Transparent City Government
Efficient, Responsive, and Effective City Services
BACKGROUND
San Marino voters approved the adoption of a special tax in November 1980 on parcels of real property within the City. The special tax is to be used for the purposes of obtaining, providing, operating, and maintaining paramedic services, police equipment or apparatus therefor; paying the salaries and benefits to paramedic, police protection, and firefighting protection and prevention personnel; and for other necessary paramedic expenses, police protection expenses, and fire protection and prevention expenses of the City of San Marino. The parcel tax has been approved by the voters in twelve (12) subsequent elections; it was most-recently approved by 76.55% of voters in November 2024 as Ordinance No. O-24-1412 for Fiscal Years (FY) beginning July 1, 2025, and ending June 30, 2029.
Exhibit 1 to Ordinance No. O-24-1412 established the maximum special tax to be levied for each property zone for Fiscal Years 2026, 2027, 2028, and 2029. As shown in Exhibit A, the annual maximum amounts specified in the Ordinance increase by five percent (5%) each year over the previous year’s maximum amount. The City Council must set the actual tax amount for each zone each year. From time to time, the City Council has acted to increase the Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
levy to amounts that were less than the maximums established in the Ordinance. For the ten-year period of FY 2010-11 through FY 2019-20, the parcel tax was increased seven (7) times. Six (6) of these seven (7) times, the annual increase was five percent (5%) while in FY 2018-19, the tax was increased by two percent (2%). For FY 2019-20, FY 2020-21, FY 2021-22, FY 2022-23, and FY 2024-25 there was no increase. For FY 2023-24, there was an increase of three percent (3%).
DISCUSSION
As mentioned above, the City Council has only increased the Public Safety Parcel Tax once in the past five (5) fiscal years. Over that same period, all inflationary costs such as materials and supplies have risen dramatically. The Consumer Price Index change for December 2024 was 3.4% and this factor drives future operational increases. A five percent (5%) increase in the Public Safety Parcel Tax will help absorb the increases seen over the years and the increase expected in the next FY.
Below is a table of how much the Public Safety Parcel Tax is a percentage of the operating expenses incurred by the Police and Fire Departments over the years and next fiscal year’s estimates.
Public Safety Tax History
Growth in
Collections Over
Public
Safety Tax
Prior Year as % of
Year Measurement Amount $ %
Public
Safety Fund
Expenses
Fiscal Year
2015-16 Audited
2,938,883 29%
Fiscal Year
2016-17 Audited
3,093,737
154,854 5.27% 26%
Fiscal Year
2017-18 Audited
3,220,338
126,601 4.09% 29%
Fiscal Year
2018-19 Audited
3,357,200
136,862 4.25% 29%
Fiscal Year
2019-20 Audited
3,431,755
74,555 2.22% 27%
Fiscal Year
2020-21 Audited
3,426,827
(4,928)
-
0.14% 26%
Fiscal Year
2021-22 Audited
3,421,901
(4,926)
-
0.14% 25%
Fiscal Year
2022-23 Audited
3,439,456
17,555 0.51% 23%
Fiscal Year
2023-24 Audited
3,528,294
88,838 2.58% 19%
Fiscal Year
2024-25 Estimated
3,528,294
- 0.00% 21%
Fiscal Year
2025-26 Estimated
3,704,976
176,682 5.01% 21%
At this time, staff is recommending an increase in the Public Safety Parcel Tax rates of five percent (5%) compared to prior year. On average this is an increase of approximately $4 a month for residential zones.
The recommended increase is needed to help fund operational increases experienced in the Public Safety Fund. Over the last five fiscal years (from FY 2021 to FY 2025), Public Safety Fund expenditures have increased by $3.8M (or 29%) while the Public Safety Parcel Tax has only increased by three percent (3%).
Public Safety
Parcel Tax
Revenue
Public Safety Fund
Expenditures
Fiscal Year 2020-21
3,426,827
13,240,280
Fiscal Year 2024-25
3,528,294
17,097,354
$ Increase
101,467
3,857,074
% Increase 3% 29%
A five percent (5%) revenue increase was included as part of the 5-year forecast presented to the City Council on February 28, 2025. A five percent (5%) increase would generate approximately $176,000 in revenue and this amount would help fund existing services.
The revenue estimate for the Public Safety Parcel Tax that will be included in the FY 2025-26 Proposed Operating and Capital Budget will be based on the parcel tax amounts approved today. If the City Council decides on an increase, the tax will offset the amount that the General Fund subsidizes for paramedic expenses, police protection expenses, and fire protection and prevention expenses in the City.
Exhibit B shows the current FY 2024-25 rate, recommended rate FY 2025-26, and Maximum rate for FY 2025-26 as set by Ordinance No. O-24-1412.
FISCAL IMPACT & PROCUREMENT REVIEW
Staff is recommending an increase of five percent (5%) to the parcel tax next year. The anticipated total collection will be approximately $3,704,976 and will be included with the FY 2025-26 Proposed Operating and Capital Budget.
If Council were to choose to increase the public safety parcel tax rate at a different rate than staff’s recommendation, each percentage increase would generate approximately $35,283 of revenue compared to FY 2024-25.
This report requires no procurement review.
LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.
RECOMMENDATION
Staff recommends that the City Council approve a public safety parcel tax levy of $3,704,976. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to approve Resolution No. R-25-08 establishing the Public Safety Special Tax Levies for Fiscal Year 2025-26.”
ATTACHMENTS
1. Resolution No. R-25-08 Reestablishing the Public Safety Special Tax Levies for Fiscal Year 2025-26
2. Exhibit A Maximum Special Tax Levies
3. Exhibit B 2024-25 and FY 2025-26 Rates and Estimated FY 2025-26 Total . Levy
4. Ordinance No. O-24-1412 and Exhibit 1