Mayor's viewpoint on pool, Nov. 1999
Mayor’s Viewpoint (November 1999)
Mayor Gina Brusatori
Financing the El Cerrito Swim Center - Decisions and Choices
On November 15, the City Council will discuss how to finance the pool
with a tax measure on the March 2000 ballot. The ballot measure requires
2/3 voter approval to pass. Thus, the tax measure must be widely acceptable
and not generate organized opposition.
The council has received estimates that rebuilding and renovating our
streets will cost over $10 million. Other projects, including renovating
our public safety building and pursuing other long-deferred capital improvements
for 30-40 year facilities, boost the total price tag up to $30 million.
On the March 2000 ballot, I favor a parcel tax for up to 20 years and
up to $5.3 million in net proceeds for specified capital improvement projects
at the swim center and the Canyon Trail, Huber, Poinsett and Harding clubhouse
I also want the ballot measure to include a low-income exemption, fundraising
by the pool users, the obligation by the council to use of cost savings
to fund a maintenance and reconstruction fund for the swim center, the
distribution of several swim tickets per year (for at least an initial
period) to encourage community support and the obligation of the council
to use real estate property transfer tax proceeds to fund a maintenance
and reconstruction fund for civic capital improvements, including the
As background for my proposal, I present below the various aspects of
a tax measure with the pros and cons of each, based upon what I have read
and heard to date.
Net Amount of Proceeds: $5.3 million
Pros: The $5.3 million net proceeds from a tax measure includes
$4.9 million for the rebuild of the two existing pools, new locker rooms,
new pump room and a small meeting room in the community center adjacent
to the pools. The swim center is 37 years old and does not meet current
health and safety codes.
The tax would also fund approximately $400,000 for several park projects.
These would include rebuilding the Canyon Trail Clubhouse that has been
closed for 2 years due to structural problems, and replacing restrooms
at the Poinsett, Huber and Harding park clubhouses with ones that are
accessible to the disabled.
By combining the swim center with some clubhouses, residents will enjoy
newer facilities in various neighborhoods. This should help garner additional
support for the tax measure. The additional $400,000 will cost about $5/year
on a 20 year parcel tax.
Cons: The swim center costs much more than expected. The swim
center consultant was asked, "how much would it cost to replace the swim
center and bring it up to code?" We did not ask, "if we cap the cost at
$2.5 million for example, then what type of swim center can we have, including
bringing the facility up to code?" We also did not seek a second opinion.
If capping the cost at a lower figure were possible, it would make the
tax measure more affordable and more likely to pass.
Term: 20 years
Pros: A 20 year term will lower the annual tax payment and spread
the cost of the swim center and other facilities over existing and future
property owners. A lower annual cost makes the tax more affordable and
increases the possibility that voters are able to pay for and therefore
presumably approve future taxes to finance our streets, public safety
building and other community projects.
Both current property owners and people who purchase homes or other property
within the next 20 years will contribute toward the cost of the facilities.
Since the swim center and other facilities are expected to last more than
20 years, existing and future property owners would pay as they benefit
Cons: A 20-year term will significantly increase the total cost
of financing because more interest will have to be paid over time. The
accumulated cost of financing would effectively more than double. While
the total cost of financing is less visible, it is still a factor.
Type: Parcel Tax
Pros: Assessed values have little to do with actual values. Under
Prop. 13, property is either based upon a starting point in the mid-70’s
with a maximum 2% annual increase or its purchase price if it changed
ownership. Like any tax system, there are inequities. One home can be
assessed at $300,000 while the neighboring home is assessed at $100,000.
Newer residents whose homes are assessed at $300,000 pay more than $3,000
per year in property taxes. Their neighbors, who have owned their homes
prior to 1978, pay about 80% less or $400-600 per year in taxes.
A parcel tax would cost every homeowner about $55 per year. An ad valorem
would cost about $40 per year for owners of homes assessed at $100,000
and $125 per year for owners of homes assessed at $300,000.
Yet all homeowners would benefit from the new swim center as it makes
El Cerrito a better community. Long-time residents may use the pool less
than may newer residents with young families. However, they likely supported
the initial ballot measure to build the swim center in 1962 and consider
the swim center fundamental to their "quality of life" in El Cerrito these
past 37 years. We should not worsen the inequities with an ad valorem
Cons: The parcel tax is based on a 5.50% interest rate vs. a 5.25%
rate for an ad valorem tax, reflecting the latter’s perceived lower risk
to bondholders. Under an ad valorem tax, the city is committing to exercise
its taxing authority to the bondholders, no matter what.
Setting the Tax Rate: For parcel taxes, the tax on residential
units would be about $55 per year. Tax rates for multi-family units and
commercial parcels would likely be set on an acreage basis at one rate
while vacant parcels and open space parcels such as the golf course and
cemetery would be based on an acreage basis at a lower rate. For an ad
valorem tax, the amount of the tax would be based on the value of each
owner’s property, such as about $.40 per $1,000 or $40 per $100,000 of
Low Income Exemption or Reduced Tax Payments: Under a parcel tax,
the city could provide a partial exemption for lower income residents,
with eligibility based upon whether the homeowners are eligible for lifeline
utility rates. Linking the eligibility to existing programs reduces administrative
Fund Raising: I favor a tax measure that requires that the city,
together with the swimming pool users, to raise at least $500,000 or about
10% of the cost of the swim center through grants, contributions and fundraising.
The monies could be used to finance amenities, reduce the size of the
bond issue, or if the bonds have already been issued, prepay the debt.
This would save interest costs and demonstrate good faith to the voters
who will be asked to support tax measures to finance other capital improvements
in the future.
Additional Inducement to Vote "Yes": Voters could be given several
swim tickets each year to be used for lap swim, water aerobics and public
swim. This would encourage usage and help offset the cost of the parcel
tax or increased fees charged at the new facility. The swim ticket distribution
could be limited to the first few years or continue through the life of
the debt financing.
Sharing the Cost of the New Swim Center with Non-Residents: Only
about 10% of El Cerrito households use the swim center. These include
children of all ages who may use the pool because they are enrolled in
the city-operated child care centers, Portola Middle School or El Cerrito
High School. Moreover, they comprise about 50% of the pool patrons overall.
The other 50% represent childcare participants and middle-school and high-school
students or adults who live in neighboring communities and attend El Cerrito
In conjunction with the tax measure, we need to review our policies regarding
fees charged non-residents and direct or in-kind exchanges with the West
Contra Costa School District for the use of our swim center as part of
their athletic programs and swim meets.
Use of Real Estate Property Transfer Tax Proceeds:
I favor a tax measure that would obligate the Council, effective January
1, 2000, to establish an additional designated and restricted maintenance
and reconstruction fund for capital improvement projects, including the
swim center. The fund would be financed with proceeds from the city’s
real estate property transfer taxes.
The real estate property transfer tax of $7.00 per $1,000 imposed in
1991 is relatively painless, and does not exceed the rates charged by
neighboring communities. The tax helps to recoup some of the property
taxes forgone under Prop. 13.
The amount of the real estate property transfer tax collected each year
varies widely because it depends upon the number of home sales and prices
of homes sold. In El Cerrito, recent tax proceeds have ranged from less
than $400,000 two years ago to $1.2 million in the current fiscal year.
It therefore makes more sense to designate proceeds for maintenance and
capital expenditures than for operating expenses. The current high level
of tax proceeds could be used to reduce the size of the tax measure for
the swim center, thereby reducing the cost to the El Cerrito taxpayers.
Linking the real estate property transfer tax to infrastructure spending
greatly increases the chances that the tax can be preserved. El Cerrito
voters have pent-up demand to fund capital improvements that they consider
need renovating or replacing due to years of deferred maintenance and
sheer age. Given the widespread support for infrastructure spending, voters
will be more willing to ensure this tax continues if it funds capital
Conclusion: I believe the tax structure outlined above will be
adopted by my fellow council members because it will have the best chance
of being approved by 2/3 of El Cerrito voters in the March 2000 election.
It is time to join together and address a near term need to finance our
swim center and parks, and lay the groundwork to finance our many other
capital improvement needs including our streets and public safety building
in the future.
I invite anyone interested in sharing their views about funding the swim
center and other capital improvements and in working on a March 2000 tax
measure to attend the council meeting on November 15th.
Run dates: 1999-11-01 - 1999-11-30