CITY OF SAN MATEO
City Council Special Meeting
August 18, 2025
5:30 PM
City Hall Council Chamber
Entrance is on O’Farrell Street
COUNCIL MEMBERS
Robert Newsom Jr.
Adam Loraine
Nicole Fernandez
Danielle Cwirko-Godycki
Lisa Diaz Nash
AGENDA
THIS MEETING CAN BE ATTENDED IN PERSON OR REMOTE BY JOINING ZOOM – SEE CODES BELOW.
PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND REMOTELY .
SEE END OF AGENDA FOR OPTIONS AND INSTRUCTIONS ON HOW TO PARTICIPATE IN THE MEETING.
To join via Zoom – click here:
August 18, 2025
To join via telephone: (408) 638-0968
Webinar ID: 813 6959 4347 Passcode: 967383
CALL TO ORDER
Roll Call
AB 2449 Requests and Consideration for Meeting Participation by Teleconference due to Just Cause or Emergency Circumstances
CLOSED SESSION
The public will have an opportunity to comment before the consideration of this item. Following the meeting a report of action from Closed Session will be provided if required.
1. Conference with Legal Counsel — Anticipated Litigation Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: (one case) Existing facts and circumstances: discuss IRS compliance statement for plan corrections
STUDY SESSION
The public will have an opportunity to comment during the consideration of this item.
2. Revenue Enhancement Options — Informational
Consider General Fund revenue enhancement options, many of which will require a ballot measure, and provide staff with direction on which option(s) to move forward for additional review.
CEQA: This study session is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b) (5).)
ADJOURNMENT
----------------------------------------------------------------------------------------------------------------------------- AGENDAS:
Agendas and material are posted on the City’s website on the Friday preceding each Council Meeting and can be viewed on the City's website at
www.cityofsanmateo.org
. Any supplemental material distributed to the Council after the posting of the agenda will be made part of the official record.
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WATCHING A MEETING ON TV:
City Council meetings are broadcast live on Comcast/channel 27, Wave/channel 26, or AT&T/channel 99.
For transmission problems during the broadcast, please call (650) 522-7099. For all other broadcast comments, call (650) 522-7040, Monday-Friday, 8 a.m. - 5 p.m.
WATCHING A MEETING ON A COMPUTER:
There are three ways to stream.
1) Public Meeting Portal
www.cityofsanmateo.org/publicmeetings
2) City YouTube channel and stream it on YouTube:
http://youtube.com/CityofSanMateo
3) Watch TV live stream:
https://www.cityofsanmateo.org/193/Channel-San-Mateo-Live-Stream
PUBLIC COMMENTS/REQUEST TO SPEAK
Prior to the Meeting
Send comments to:
[email protected]
until 4 p.m. the day of the meeting.
During the meeting
By Zoom:
Click the link at the top of the agenda and you’ll be added to the meeting. All attendees are muted by default. When the item of interest is open for consideration, select the “Raise Your Hand” icon and you will be called on at the appropriate time.
By telephone:
Call (408) 638-0968 and enter the conference ID found at the top of the meeting agenda. When the item of interest is open for consideration, select *9 to raise your hand. When called upon, press *6 to unmute, state your name and provide your comments.
In Person:
At the meeting complete a “Request to Speak” form.
ACCESSIBILITY:
In compliance with the Americans with Disabilities Act and to ensure meaningful access for all participants, including those with limited English proficiency, individuals requiring special accommodations or language assistance to participate in this meeting may contact the City Clerk’s Office at (650) 522-7040 or [email protected] . Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting
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CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 2 Section Name: STUDY SESSION Account Number: 10-2021 File ID: 25-10253 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Finance Department
MEETING DATE: August 18, 2025
SUBJECT:
Revenue Enhancement Options — Informational
RECOMMENDATION:
Consider General Fund revenue enhancement options, many of which will require a ballot measure, and provide staff with direction on which option(s) to move forward for additional review.
BACKGROUND:
At the June 16 meeting to adopt the FY 25-26 Citywide budget, the City Council adopted a General Fund budget that anticipated a budget deficit of $11.9 million. This was a decrease from the originally proposed budget deficit of $15.2 million, and less than the currently estimated deficit of $13.9 million. City staff has revised its estimated budget deficit since the adoption of the budget because the State’s adopted budget only included about 70 percent of the total Vehicle License Fee (VLF) backfill owed to the City in FY 25-26. Due to this estimated budget deficit and the anticipated budget deficits projected over the next 10 years as part of the General Fund 10-year forecast, the City has implemented a Fiscal Sustainability Plan. As part of this plan, staff continues to review opportunities to reduce general fund expenditures, improve cost recovery and cost allocation, pursue grant opportunities, and strategize on Citywide economic development. Another key component of this plan is to review revenue enhancement options to both bring in new funding to offset the expected structural operating deficit of $5 -$7 million per year and find funding for significant unfunded capital improvement projects.
Transactions and Use Tax
The City can add a transactions and use tax, also known as a district or local add-on sales tax, on top of the regular sales tax. A transactions and use tax applies to merchandise that is delivered within a jurisdiction and does not apply to grocery items or prescriptions medicines. San Mateo voters approved Measure S, a transactions and use tax, in November 2015, which extended Measure L, a 1/4 cent transactions and use tax. Since the passage of Measure RR in November 2020 to support Caltrain operations, the sales tax rate in the City of San Mateo has been 9.625 percent. The State of California imposes a limit of two (2) percent above the statewide base sales tax rate, thus the City has 1/4 cent of capacity left before reaching the limit. If another entity places a sales tax measure on the ballot before the City uses its cap, the City may no longer have the option to add a 1/4 cent sales tax for local funding. While it may be possible for a local 1/4 cent sales tax to proceed along with the regional transportation tax measure under the current wording of proposed Senate Bill 63, that will depend on the final bill language if and when it passes the legislature and is signed into law. In any event, City staff will continue to review the legal ramifications of the City proposing a sales tax measure at the same time as another entity in the County.
Historically speaking, sales tax measures have a high likelihood of passing. Of the 512 transactions and use tax ballot tax measures from California cities and counties between 2002-2024, that were structured as general taxes and were new or increased the sales tax rate, 402 passed and 110 failed, a pass rate of over 79 percent. If San Mateo voters were to
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CITY OF SAN MATEO
pass a revenue ballot measure for an additional 1/4 cent transactions and use tax, the impact would be equivalent to Measure S. Measure S generated approximately $6.7 million in FY 24-25 and is projected to generate $6.8 million in 2025-26.
Parcel Tax
Pursuant to Article XI §5 of the California Constitution, a special non-ad valorem (non-value based) tax can be levied on parcels of property generally based on either a flat-rate per parcel or a variable rate depending on the size, use and/or number of units on a parcel. A parcel tax cannot be based on the value of real property. Parcel taxes are typically used for special purposes or new facilities and can be levied on all those who receive that service or have access to that facility. Parcel taxes are considered special taxes and require a 2/3 voter approval. Given the 2/3 voter threshold, parcel taxes are not as common as other locally imposed taxes.
Since 2008, 20 non-school parcel taxes appeared on the ballot in Santa Clara and San Mateo counties. 80 percent of the measures passed, 16 out of 20, but this does not necessarily indicate success for San Mateo based on the small data set. In San Mateo County, most of the City’s that passed a parcel tax were smaller cities with a very specific purpose such as libraries or Police and Fire. Given the need to fund ongoing operating revenues and unfunded capital needs in San Mateo, City staff asked Urban Futures Inc. (UFI), our Municipal Advisor, to evaluate raising either $7 or $14 million in parcel taxes. They developed three different types of parcel taxes to reach each funding target and determined that a single-family residence would pay between $159 and $484 per parcel based on the scenario. The analysis for these scenarios is summarized in Attachment A. In general, this level of parcel tax is more than other local jurisdictions the size of San Mateo that have passed.
Utility Users Tax
Also pursuant to Article XI §5 of the California Constitution, a Utility Users Tax (UUT) may be imposed by a city on the consumption of utility services, including (but not limited to) electricity, gas, water, sewer, telephone (including cell phone and long distance), sanitation, and cable television. The tax would be levied by the City, collected by each utility as a part of its regular billing processes, and remitted to the City. As an approximation of the potential revenue impact of a UUT, Finance Department staff analyzed utility consumption metrics from the utility providers and applied a UUT rate of 5 percent for natural gas and electricity, and 4 percent for telecommunication and cable television services, which is the rate in place in the city of Redwood City. Based on this previous analysis on utility consumption by the San Mateo community between April 2020 through March 2021, passage of a UUT ballot measure would generate approximately $5.9 million in UUT revenues per year. If the City exempted public agencies and PG&E customers enrolled in the California Alternate Rates for Energy (CARE), the additional UUT would be approximately $5.4 million.
UUT is often disfavored because it burdens essential services needed by every household. In addition, UUT does not fare well at the ballot box in California. Of the 87 UUT ballot measures that were structured as a general tax for a new UUT from 2002 – 2024, 28 passed, and 59 failed, a 32 percent pass rate.
Benefit Assessment
A benefit assessment is another revenue generating option that levies a special assessment or charge on real property to fund either a specific public improvement or an expanded/new public service benefiting those properties assessed. This type of revenue enhancement is not designed to fund existing operating costs. Benefit assessments are often associated with an assessment district in which a fixed area receives the benefit of the assessment such as a lighting or landscaping assessment district or a property and business improvement district. A special assessment is approved through the Proposition 218 process and is subject to a ballot vote of those impacted by the assessment. An Engineer’s Report is typically needed to determine the amount of the assessment and the subject properties.
Since a special assessment is typically for new or expanded services or a new public improvement, it may not be the most suitable tool for addressing the City’s current operating deficit. At this time, staff has not developed a recommended type of assessment or estimated value to be raised through the assessment. However, it remains a viable revenue enhancement option to keep in mind within the City’s broader list of strategies and could be appropriate for later financing needs, especially since the Proposition 218 process provides more flexibility and does not need to be approved
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CITY OF SAN MATEO
by the voters at a general election.
General Obligation Bond
Another specific type of revenue enhancement that the City could pursue is a General Obligation (GO) bond. A GO bond requires 2/3 voter approval and once approved authorizes the City to sell bonds based on a levy or tax on real and personal property within the City limits. A GO bond is backed by the City’s General Fund and the credit of the City. For a GO bond, the voters approve a maximum bond issuance amount and the use of the bond proceeds, but not a specific tax rate or annual payment. Revenues from a GO bond can only be used for approved infrastructure improvements and not for operating expenses. Thus, this revenue source is appropriate for addressing the City’s unfunded capital improvement needs.
The City’s municipal advisor, UFI, analyzed three scenarios for potential GO bond issuances. In each scenario they developed what the tax rate per $100,000 of assessed value would be for a parcel, based on an estimated total amount of bond proceeds being approved. Table 1 outlines the estimated tax rates and bond proceeds.
Table 1
As shown, property owners would pay approximately $30 per $100,000 of assessed valuation on their property per year if the City got approval to bond $325 million, close to the amount currently estimated in unfunded infrastructure needs.
Revenue Measure Ad Hoc Committee
City staff reviewed these options with the Revenue Measure Ad Hoc Committee at a meeting on August 6. The committee posed questions on some of the revenue enhancement options and ultimately agreed with staff’s recommendation. First, to study taking a 1/4 cent transactions and use tax to San Mateo voters in 2026 and second to study interest within the community for a General Obligation Bond.
Next Steps
Based on City Council feedback on the revenue enhancement options, City staff will work with a polling consultant to study interest in the proposed revenue measures. Once the polling is completed, City staff will return to the City Council with a summary of the results, most likely in November.
BUDGET IMPACT:
To best address the anticipated ongoing deficit of $5 - $7 million, to maintain essential services and to provide for capital improvement funding above the current $25 million set aside in the Capital Investment Reserve, this revenue enhancement study session considered the following tax revenues, and the potential additional revenue that could be generated:
Transactions and Use Tax: $6.8 million (operating)
Parcel Tax: $7-14 million (operating and capital)
Utility Users Tax: $5.4 million (operating)
General Obligation Bond: $162 - $325 million in bond proceeds (capital)
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CITY OF SAN MATEO
ENVIRONMENTAL DETERMINATION:
This study session is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Parcel Tax Scenarios
STAFF CONTACT
Abby Veeser, Deputy Director of Finance
[email protected]
(650) 522-7102
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Attachment 1
Parcel Tax Scenario #1
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Parcel Tax Scenario #2
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Revenue Enhancement
Options
City Council Study Session
August 18, 2025
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Agenda
Introduction
Potential Revenue Enhancement Options
• Sales Tax
• Parcel Tax
• Utility Users Tax (UUT)
• Assessment
• General Obligation Bonds
• Citizen Initiative Option
Summary
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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General Fund Challenges
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Unfunded Projects
Unfunded Project Totals:
• Approximately $352 million
Priority Unfunded Projects:
• Central Park (Phases 2 -4): $50 million
• MLK Resiliency Ctr/Pool: $20 million
• Joinville Pool TBD
• Fire Station # 27: $11 million
• Corporation Yard: $26 million
• 2nd and El Camino Garage: $20 million
• Bike Master Plan projects: $13 million
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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GENERAL
OBLIGATION
BONDS
SALES TAX
PARCEL TAX
Summary
UUT
ASSESSMENT
FEE
Fiscal Sustainability Plan
Grant
Opportunities
Expenditure
Control
Cost Recovery &
Cost Allocation
Revenue
Enhancements
Economic
Development
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Question for the City Council
• Which revenue enhancement options would
you recommend the City consider for
additional review?
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Considerations
• Adequacy (financial impact):
o Whether the measure could raise sufficient and sustainable revenue • Consistency (volatility):
o Projected revenues are not expected to significantly fluctuate • Equity (who bears tax burden) & Competitiveness
o Fiscal burden appropriately spread
o Maintain regional competitiveness
• Voter Approval:
o Historical likelihood of passage
• Legal
o Likelihood of legal challenges to ballot measure
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Current
Sales Tax
Rate 9.625%
Measure S
0.25%
Transactions and Use Tax (Sales Tax)
• Definition: An additional sales tax levied on top of the local sales and use tax enacted by individual cities or counties.
• Methodology: Percent tax can be approved by City and added to the combined state and local sales tax rate.
• Voter Approval: Requires majority of voters.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Sales Tax – Current Tax Rate
San Mateo
State SUT & Local TUT Rate
State Sales Tax 6.00% --
Bradley-Burns Local Share
County for Transportation 0.25% --
City General Fund 1.00% --
Local/Regional TUT (2.0% total cap)
SM County Transportation Authority (1989)
Measure A 0.50% December 2033
SM County Transit District (2002) Measure A 0.50% --
San Mateo County (2013) Measure K 0.50% March 2043
City of San Mateo (2015) Measure S 0.25% March 2048
Special Legislation
SM County Transit District Authority (2019)
Measure W 0.50% June 2049
Peninsula Corridor JPA Retail Transactions and
Use Tax (2020) Measure RR 0.13% June 2051
9.625% ExpirationINTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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9.875%
• Belmont
• Brisbane
• Colma
• Daly City
• East Palo Alto
• Half Moon Bay
• Pacifica
• Redwood City
• San Bruno
• S. San Francisco
9.625%
• Burlingame
• San Mateo
9.375%
• Atherton
• Foster City
• Hillsborough
• Menlo Park
• Millbrae
• Portola Valley
• San Carlos
• Woodside
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Current Sales Tax Rate = 9.625%
Special Considerations
• City of San Mateo still has 0.25%
capacity under the state cap.
• Other Sales Tax Measures
Estimated Additional Annual Revenue
@ 0.25% = $7 million
If approved, New Rate = 9.875%
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Remaining
Capacity
• 0.25%
Additional
Revenue
• $7 million
annually
Council
Approval
• 4/5ths
Voter Approval
• > 50%
79% 21%
Pass
Fail
*Based on election results statewide from
2002 to 2024 for new or increased TUT.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Pros Cons
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Parcel Tax
• Definition: Non-ad valorem (non-value based) tax levied on parcels of property.
• Methodology: Either a flat amount on every parcel, or a fixed amount or fixed rate in which amount paid by each parcel varies depending on the size, use, or number of units on the parcel.
• Voter Approval: Parcel taxes considered special taxes requiring 2/3 voter approval (Govt. Code s. 50077).
No Current Parcel Taxes in the City of San Mateo
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Parcel tax measures in Santa Clara &
San Mateo counties
• Since 2008, 20 non -school parcel
taxes on ballot with 80% approved
(16 of 20).
• All for special purposes:
libraries, roads, police/fire,
water , and open space.
• Since 2018, 40 school parcel taxes on
ballot with 73% approved (29 of 40).
*Rates as of April 2025.
**Not renewed in 2017.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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FIXED/FLAT AMOUNT PER PARCEL
Parcel Type # of Parcels 1 Per Parcel Tax Annual Revenues (est.) Single-Family Residential (SFR) 2 25,162 484$ 12,183,724$ Multi-Family (2 units or more) 3 2,340 484 1,133,054 Commerical/Industrial/Other 1,411 484 683,222 TOTAL 14,000,000
FIXED/FLAT AMOUNT PER PARCEL - TIERED BY LAND USE & AVG. PARCEL SIZE Parcel Type Avg. Parcel Size # of Parcels 1 Per Parcel Tax 4 Annual Revenues (est.) Single-Family Residential (SFR) 2 4,875 25,162 366$ 9,198,347$ Multi-Family (2 units or more) 3 11,346 2,340 851 1,990,869 Commerical/Industrial/Other 26,570 1,411 1,992 2,811,383 TOTAL 14,000,598
FIXED RATE PER SQUARE FOOT (SF) OF PARCEL SIZE (@ $0.075 PER SF) Parcel Type Avg. Parcel Size Total Acerage 1 Avg. Parcel Tax Annual Revenues (est.) Condominium 992 165 74$ 537,970$ SFR1 - up to 5,000 sf 4,246 542 318 1,770,076 SFR2 - 5,000 to 10,000 sf 6,403 1,594 480 5,205,312 SFR3 - 10,000 to 20,000 sf 12,548 379 941 1,238,279 SFR4 - over 20,000 sf 27,813 137 2,086 446,316 Multi-Family (up to 4 units or under 1/2 acre) 3 7,480 379 561 1,239,488 Multi-Family (5 units or more) 77,071 230 5,779 751,297 Commerical/Industrial/Other (1/2 acre or less) 7,568 195 568 637,888 Commerical/Industrial/Other (over 1/2 acre) 100,989 665 7,573 2,173,374 TOTAL 14,000,000
(1) Excludes parcels owned by public entities/utilities, parcels with no acreage & less than $1,000 value, parcels designated underwater/marsh. (2) Includes residential condominiums.
(3) Includes SFR converted to 2 or more units.
(4) Tiered amounts based on average parcel size in each land use for "rough proportionality" between tax amount and use/demand on service.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Methodology
• Fixed/Flat
• Fixed Tiered
• Per SF Rate
Additional
Revenue
• $7 mil.~$14 mil.
annually
depending on
the model
selected.
Council
Approval
• Majority
Voter
Approval
• 2/3rds
80% 20%
Pass
Fail
*Based on elections results in San Mateo & Santa
Clara counties since 2008 for Parcel Taxes.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Pros Cons
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Utility Users Tax (UUT)
• Definition: A percentage tax on the consumption of utility services such as electricity, gas, water, sewer, refuse, telecommunications, and cable television.
• Methodology: Cities can establish tax rates for residential and commercial users. Tax is collected by utility and transmitted to city. • Voter Approval: Requires majority of voters. Most of the cities with UUTs adopted the taxes prior to 1986 by vote of the city council.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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INTRODUCTION
GENERAL
OBLIGATION
BONDS
$-
$2
$4
$6
$8
$10
$12
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Millions
Daly City East Palo Alto Menlo Park Pacifica Portola Valley Redwod City
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Utility Type UUT % UUT $ Estimate
(in millions)
Electric 5% $3.4
Gas 5% $1.5
Telecommunication 4% $0.2
Cable TV 4% $0.8
TOTAL $5.9
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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32% 68%
Pass
Fail
*Based on election results statewide
since 2002 for new or increased UUT.
Methodology
• All utilities
• Could include
streaming
services
Revenue
• $6 million
annually
Council
Approval
• Majority
Voter Approval
• Majority
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Pros Cons
Equity
Voter
Approval
Consistency
Adequacy
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Benefit Assessment
• Definition: A charge levied on real property to fund specific public improvements or expanded/newpublic services benefiting the properties assessed.
• Methodology: Agency develops an assessment amount based on property’s proportionate share of “special benefit” . An Engineer’s Report is needed to determine the assessment and subject properties. • Voter Approval: A special assessment is approved through the Proposition 218 process.
• Ballots mailed to each assessed parcel owner .
• Weighted Voting.
• Protest Ballot.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Examples of Citywide Special Assessments in Surrounding Communities:
• New fire prevention or mitigation services (e.g., brush removal). • New open space acquisition or restoration.
• Construction of new or expanded library.
• Storm water system construction or expansion.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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General Obligation (GO) Bonds
• Definition: Municipal bonds backed by property tax revenue levied until the bonds mature.
• Methodology: The maximum bond issuance amount and use of proceeds are approved by voters, not a tax rate or annual payment. • Voter Approval: State law requires 2/3 approval by electorate for non- school GO Bonds
• Restrictions: Revenues cannot be used for operating expenses; only for approved infrastructure projects.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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General Obligation (GO) Bonds
• Assuming a $30 per $100K of assessed value tax rate and 3.0% assessed value growth rate, the City of San Mateo can generate an estimated $325 million in bond proceeds.
INTRODUCTION
SALES TAX
PARCEL TAX
UUT
SUMMARY
GENERAL
OBLIGATION
BONDS
CITIZEN
INITIATIVE
ASSESSMENT
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Median Assessed Value (AV) for
Single-Family Residence in San Mateo:
$751,478*
Calculation Estimated
FY25 Tax Levy
$15 per $100,000 AV $751,478 / $100,000 x $15 = $112
$20 per $100,000 AV $751,478 / $100,000 x $20 = $150
$30 per $100,000 AV $751,478 / $100,000 x $30 = $225
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*Median Assessed Value based on FY 24-25 Assessed Valuations for San Mateo
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Pass Pass Rate Fail Total
2024 5 63% 3 8
2022 2 50% 2 4
2020 5 71% 2 7
2018 6 67% 3 9
Totals 18 64% 10 28
Non-School GO Bonds in Bay Area
Election Results (2018-2024)
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64% 36%
Pass
Fail
Credit Rating
• Currently
AAA
Capacity
• $160 mil. to
$325 mil. for
infrastructure
Council
Approval
• 4/5ths
Voter Approval
• 2/3rds
*Based on elections results in Bay Area
since 2018 for GO Bonds.
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Pros Cons
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VOTE
Citizen Propose
initiative
Gather
required
signatures
>50% Voter
Approval
Citizen Initiative Option
Transform Supermajority (>2/3) to Majority (>50%) Voter Approval.
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Key Steps in Citizen Initiative Process (see Elections & Government Code):
Initiative Proposed by Citizen
• The initiative is proposed by citizen, not by the City.
Notice & Publication
• Ballot title and summary are requested from and prepared by the City. Proponents must publish in local newspaper .
Petition Signatures
• Proponents have 180 days to obtain the signatures of 10% of all registered city voters. For City of San Mateo, approximately 6,000 signatures are required.
City Clerk Review and Council Action
• If the City Clerk certifies the sufficiency and timeliness of the signatures, City Council is required to submit the measure to the voters and call for the election.
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Consistency
Equity
Voter
Approval
Legal
Sales Tax
+
+ -
+
+
Parcel Tax
+
+
+ -
UUT
+ -
Assessment
+
-
+ -
GO Bond
+ -
-
-
Adequacy
+
+
+ -
+
+ -
+ -
+ -
INTRODUCTION
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+
+
+ -
+
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City Council
Study
Session –
11/3
• Review Polling
Results
Conduct
Ballot
Measure
Polling
Next Steps
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Questions for the City Council
• Which revenue enhancement options would
you recommend the City consider for
additional review?
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INTRODUCTION
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Ad Hoc Committee Recommendations
• Study Sales Tax Increase for 2026
• Study Interest in GO Bond
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Discussion
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