In one of its most challenging discussions in recent memory, the City Council on Tuesday will talk about the possibility of relinquishing to local schools a larger share of property taxes from North Bayshore companies, including Google.
A group of parents have organized a formidable campaign, called "Share Shoreline," to retrieve the funds, which they say are unfairly withheld in a 40-year-old tax district known as the Shoreline Community. City officials say they are sympathetic to the parent's concerns and are carefully considering a solution. Nevertheless, the City Council chambers is expected to be packed on Tuesday at 5 p.m. with school parents recruited by the campaign's Facebook page, the shareshoreline.org website and pitches to local Parent Teacher Associations and school site councils.
The Mountain View Whisman School Board will also be discussing the issue on Thursday evening at 8 p.m. at Theuerkauf elementary school.
Shoreline in a nut shell
Special state legislation passed in 1969 allows the Shoreline Community, which is controlled by the City Council, to collect nearly all of the taxes on properties north of Highway 101 in Mountain View, taxes which would otherwise be shared with local schools and the county. The Shoreline Community then pays for the ongoing maintenance and city improvements to Shoreline Park and the surrounding business district, as well as the usual city services of firefighting and police in the neighborhood.
Last fiscal year the Shoreline Community brought in $29.1 million in property taxes and had $18.7 million in ongoing expenses. The arrangement has created the 500-acre Shoreline Park and a successful business district that's home to Google.
"Shoreline is in a sense the crown jewel of Silicon Valley. It is one of the most valuable assets in Mountain View. It's not fair that our schools don't benefit from that asset," said Jim Pollart, a Mountain View Whisman parent who is leading the Share Shoreline effort.
Despite the success of the special tax district, even some City Council members, including Mountain View Whisman parent Margaret Abe-Koga, find the arguments from school parents hard to counter. The Mountain View Whisman School District alone would see an additional $5.9 million in tax revenue if the tax district were to be eliminated. Mountain View Los Altos high school district would see an additional $3.6 million.
City officials were open to the idea of sharing the funds on Tuesday.
"We're not coming from the perspective that we will keep it all for ourselves," said Assistant City Manager Melissa Stevenson Dile, referring to the Shoreline fund.
"It's not a question of whether Shoreline funds will be shared with local schools, but when and how much," said finance director Patty Kong.
Shoreline's revenues are predicted to decline to $26.8 million this year and continue to decline over the next few years. Further detail about its current and forecasted revenues and expenses was expected to be available in a city staff report released on the evening of Feb. 3.
Pollart's group has been quietly approaching city officials about the issue over much of the last year. Pollart spends his workday negotiating real estate development projects with city councils and acquiring land for O'Brien Homes, and he and others in his group have extensive experience fundraising for the school district.
"All our fundraising efforts, however, only generate about $800,000 per year … not nearly enough to cover the $2.4 million in cuts in this past year alone" to the district's $32 million operating budget, Pollart writes in a letter the City Council.
Last year, district superintendent Craig Goldman said his district would have an additional $1,000 per student annually if the Shoreline Community was dismantled, which would buy the city's elementary and middle schools smaller class sizes, more competitive salaries for teachers and more funds for programs that serve the district's poorer students.
Pollart said he and his group were shocked to read about the Shoreline Community in an article detailing the issue in the Voice in March 2010. The group has been researching the topic ever since, filing requests for documents with the city attorney.
"We've tried to be very respectful and responsible," Pollart said. "We don't want to go off half-cocked. We wanted to do our homework so that when we come forward we're credible."
Spurred by historical events
The Shoreline Community was never designed to have such an impact on local schools. Before the passage of Proposition 13 in 1979, schools "would have been able to raise the property tax rate," said finance director Patty Kong. The issue remained dormant until 2009, when the Mountain View Whisman district became classified as a "basic aid" district. As a basic aid district, it doesn't get per-pupil state funding and instead would benefit from increases in local property tax revenue. School officials then took an interest in Shoreline.
Pollart and his group say the Shoreline Community needs some serious study by "an independent third-party consultant ... to determine what level of revenues Shoreline would require to finance on-going operations, long-term maintenance and debt service."
Such a study may vindicate the group's position, which is "that Shoreline should be wound down over a short period of time" and completely eliminated once all debts are paid.
Kong and Dile also said that could be a bad move because the Shoreline Community could face numerous potentially expensive projects in the future, including flood protection if the bay level rises, as well as mitigation for traffic congestion from anticipated Google developments.
The city's landfill under Shoreline Park is also a major cost concern for city officials. The clay cap covering the landfill requires constant maintenance in order to prevent methane gas from escaping and causing fires, and maintenance to prevent the ground above from settling unevenly.
Last year, the Shoreline Community's $18.7 million in expenses included $3.7 million in "direct operation costs," $6.9 million in debt payments; $5.2 million in "reimbursements" for ongoing police, fire and administrative services; and nearly $2 million in compensatory payments to the county, which also forgoes taxes to the Shoreline Community.
Kong said that Shoreline Community revenues are predicted to decline over the next few years as businesses there are seeking to have their property values reassessed because of the recession. A significant decline in property taxes could make what Pollart proposes more difficult.
Despite those assertions from city officials, Pollart believes the situation needs to be independently studied, much the way the city requires a developer to pay for an environmental impact report.
"We have a high level of trust in Mr. Duggan and his staff," Pollart said. "Having said that, the fact remains the city is in a position to benefit significantly from the continuation of the current" agreement with schools. The city's "joint powers agreement" gives each district $450,000 from the Shoreline Community for technology-related programs.
City officials say that underneath the controversy over the Shoreline Community is a story of successful collaboration. The city provides after-school programs, field maintenance, sports facilities at Graham and Crittenden middle schools, crossing guards and two police school resource officers, while the school districts allow public access to playgrounds, fields and gymnasiums at several schools that the city would otherwise be obligated to provide. The cost of those services has yet to be quantified by the city or school district.
The city's many successes aside, Pollart's bottom line is this: "I would like to see the city come up with a way to maintain Shoreline without continuing to take money from our schools."