Belvedere Promotes Property Transfer Tax to Help Fund Seawall Project – Marin Independent Journal


Belvedere is leaning toward passing a property transfer tax to help fund a $ 28 million dike and infrastructure protection project.

The tax would be included in a proposal to vote in 2022. It would be a parallel funding source with several pending grant applications.

“We are cautiously assuming that no grants would be received and therefore we need to raise $ 28 million,” City Manager Craig Middleton said at the November 29 meeting.

The city council is currently studying two options for taxing the public contribution.

The first is an ad valorem property tax and general bond, which is funded by an annual land tax of 3.3 cents per $ 100 of assessed value to pay off debt until it is paid off. The option would require a two-thirds majority vote.

The property transfer tax includes a rental income obligation. The tax would be a one-time tax of 1% based on the sale price of a real estate transfer and added to the general city fund. A rental income bond would be issued by the Belvedere Public Finance Authority to the city as a method of debt repayment.

City officials have signaled their support for the second option because it only requires a majority vote. The property transfer tax is also seen as more flexible, as it could be used for other city services or projects if needed.

The property transfer tax would force Belvedere to convert to a charter town. The decision would be included on the same ballot proposal as the transfer tax.

The city hired Meyers Nave, an Oakland-based law firm, to help with the city’s charter conversion, Middleton said in an email.

He said city council would vote on the tax option at its December 13 meeting.

Council members inquired about the legal constraints of a property transfer tax and whether it could be levied only on a buyer or a seller, or both, in a sale.

“There are very few laws in case law or laws relating to property transfer rights established by chartered cities. So there is no clear answer to this question, ”said Sky Woodruff, an attorney for Meyers Nave.

Woodruff noted that the details could be viewed as a “municipal matter” whereby the city could designate who is responsible.

Middleton added that a conversion to a charter town would give the town more control over its municipal affairs in general. He said there were about 120 charter cities in California, including San Rafael, Palo Alto, Monterey and San Francisco.

Board member Nancy Kemnitzer also asked if there are any loopholes for people who circumvent the tax, such as with the sale of a limited liability company with real estate assets in Belvedere.

City officials have said real estate transfer tax could be levied on specific real estate assets as part of a larger sale.

“The beauty of what was going on here is that there are cities that have done this and made mistakes along the way,” said Deputy Mayor Sally Wilkinson. “I think it will hopefully be relatively easy to come up with a good policy.”

Middleton said in an email that the two main grants the city was seeking were from CalOES and the Federal Emergency Management Agency. Both cost just under $ 16 million.

“We have been fairly careful in describing various aspects to donors in a way that we hope donors or grantors will appreciate,” Middleton said.

City officials said they expected to know the outcome of the grants around May or early June.

City officials have said they are pursuing the parallel tax proposal because the deadline to put it on the ballot is August.

City officials also described the tax as “leverage” for grant applications.

“The more leverage we can provide, the better,” Middleton said. “Most licensors want to know that the city itself has money in the game.”

The tax can be stopped, if the city chooses, once the cost of the project is covered. Officials also put money aside in a contingency fund, though the amount is considered negligible compared to the total of $ 28 million. Belvedere has an annual operating and capital budget of approximately $ 9 million, plus an operating reserve of $ 3.5 million.

The project aims to strengthen levees, levees and utility lines against the threat of natural disaster, primarily along San Rafael Avenue and Beach Road, roads connecting the one square mile island to the Tiburon peninsula.

City officials said a powerful earthquake could displace the roads, which are built on the sediments of the bay, making them impassable. Natural disasters could also cause widespread flooding as well as flooding and destruction of underground utilities.

The project cost estimate contains a 30% provision.

Construction is expected to begin after finalization of construction plans in the summer of 2023.


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