1 David Yakobson
From: Brian Sweeney <[email protected]>
Sent: Tuesday, October 28, 2025 12:01 PM
To: councilmtgitems
Subject: Item 4A: Please Remove from Consent and Pause New Mills Act Contracts
EXTERNAL
Dear Mayor Negrete and Honorable City Council Members:
I am writing to request that you remove Item 4A from the Consent Calendar and place a moratorium on new Mills Act contracts until staff is able to develop a more equitable program.
Staff's analysis of one property (226 Palisades Avenue) is particularly flawed, which I'll discuss in further depth below, but the bottom line is that we don't need to be handing out tax breaks that defund our cities and schools when the public benefits are specious at best, and when -- based on how much they paid for the home -- the property owners can afford to pay to maintain their own homes in the absence of subsidy. Indeed, it's difficult to come up with a less equitable or fair way to spend public money.
For those reasons, many jurisdictions already limit the total number of Mills Act contracts or put a dollar limit on the pre-contract assessed value. Los Angeles, for example, already limits new Mills Act contracts to single family homes assessed at <$1.5 million. See here: https://planning.lacity.gov/node/133401. We should do the same so that we're not just sending tax breaks to the already-wealthiest members of our community.
As to 226 Palisades Avenue, staff's analysis also has the following problems:
1) Staff's financial analysis completely ignores the 2024 sale of the property for $7.9 million, thus getting the "current" Prop 13 tax value wrong, and dramatically understating how much tax revenue will be lost for the City, the School District, and the County.
Staff's report says the current Prop 13 property tax is $45,537.87. That's wrong; it's based on the pre-sale assessment. With the property being sold for $7.9 million, the current property tax for that year (1.02%) was ~$80,580 (plus some bond assessments).
The City lists the estimated Mills Act property tax at $9k. If that's correct, that means the property owner would be paying $71k less in taxes every year, not $36k as the staff report says. That means $11,000 less (not $6k as the staff report says) to the City and $14,000 less to schools.
Even putting aside whether that's a good idea -- it's not -- staff needs to at least get the numbers right for Council evaluation, especially if this is on the Consent Calendar. 2) Staff only considers the loss in tax revenue to the City, but I know that many if not most members of our community care about our schools -- which here would be $14k less per year, which anyone involved in school budgeting knows is real money -- and further, we all still live to in the community and greater community.
Item 4-A
October 28, 2025
Item 4-A
October 28, 2025
2 The focus on "only" the City revenue component -- 14% -- is inexcusably myopic. Just as with schools, we all benefit from a well-funded County, both directly and indirectly. That's one reason why other jurisdictions simply do not allow Mills Act contracts on properties that have assessments this high -- the loss in taxes is too great to justify. Here, with this just one property, we'd be losing out on $71k/year and counting.
In the future, staff analysis should consider not just lost revenue to the City but to other public entities as well.
3) I am extremely skeptical that applicants who can afford a $7.9 million home purchase can't afford to do their own maintenance or even restoration. As a matter of public policy, it makes zero sense to subsidize "improvements" that were going to happen anyway.
And here, the case is even worse -- as the plan in the staff report has us subsidizing improvements that already happened and were already paid for in 2024. There's ~98k of recently-completed work that we would be subsidizing. Quite honestly, that's not just bad public policy -- it's offensive. 4) The public benefits are specious at best. This property is located on a very low-foot-traffic (or vehicle-traffic) street and mostly well-shaded. I doubt many folks every year notice this property, let alone, if polled, would say they believe taxpayer money should subsidize its maintenance.
It's a beautiful home, don't get me wrong -- but I think the privilege of living in it and being able to afford it should be enough; these applicants do not need public money to do so, and any benefits are certainly not large enough to outweigh the loss in revenue.
In short, please reevaluate our Mills Act program and bring it more in line with other jurisdictions -- like Los Angeles -- that recognize these programs should not be misused to subsidize the already-wealthiest members of our community and thus defund our City, schools, and county.
Thank you,
Brian Sweeney
Item 4-A
October 28, 2025
Item 4-A
October 28, 2025