HMB leaders threaten to dissolve city if sales tax fails

Posted by on Tue, August 31, 2010

The County Times has a good summary of the Half Moon Bay city council’s threatened dissolution if its proposed 1% sales tax increase is rejected by voters. The full article is well worth reading.

"The council has done everything in its power to keep the city whole," [city county member John] Muller said. "If it doesn’t pass, we could seriously not be in business much longer." [...]

City Manager Michael Dolder admits disincorporation is one of the options on the table now. The City Council already cut $900,000 from the current budget—including half its employees—and imposed furloughs on those who remain. Some of the cuts were needed to pay for the Beachwood lawsuit settlement, a $15 million burden the city will shoulder in bond payments for the next 20 years.

Despite those efforts, the city will finish the current fiscal year with a deficit north of $500,000. And tourist dollars, the city’s economic mainstay, aren’t likely to flow in anytime soon.[...]

Although the law lays out a clear procedure for disincorporation, including public meetings and a final majority vote by residents, it’s unclear how it could work from a practical standpoint, said Martha Poyatos, executive director of the San Mateo County Local Agency Formation Commission.

"We’re in uncharted territory," she said.

One thing is certain: disincorporation is not a bailout. The county would lay claim to revenues, including Half Moon Bay’s property taxes, sales taxes and hotel taxes, but not its liabilities. Today’s Half Moon Bay residents would be required to assume the debt burden of Beachwood bond payments, which would likely be added as a lien on their properties, according to Assistant County Controller Bob Adler.

Disincorporation: how would it work?

  • A City Council, school district, special district or group of residents can initiate disincorporation with the Local Agency Formation Commission, or LAFCo, by presenting a petition signed by 25 percent of voters.
  • LAFCo would then hold public hearings and choose whether to affirm the proposal with conditions or deny it.
  • A special election would be held, in which a majority of voters have to approve the terms of disincorporation.
  • The county Board of Supervisors would work with LAFCo and the city on disposition of the city’s assets.
  • Note: Disincorporation proceedings can be subject to legal challenges.


Comment 1
Fri, September 10, 2010 1:45pm
Ken Johnson
All my comments

Isn’t this like the kid who pleaded for mercy because he was an orphan – he had just been convicted of killing his parents!


Comment 2
Sat, September 11, 2010 8:24am
Hester Schell
All my comments

Man-o-man-o-man am I ever thrilled I sold my HMB condo this summer!  I feel bad for anyone with property within the City limits on the market.  I hope agents and buyers are doing their homework.  I would be very unhappy to be closing on a home, new the area, not know about this, and then really get slapped for moving here….  wow.  What a freakin’ mess. 

With the serious potential of liens against property within City limits to cover really bad lawyering…  (how on earth could the City have lost this suit!!!!!  AND on appeal) ...  is shocking, or evidence of a court corruption at its best. 

Since residents would have to vote on disincorporation, and that would put the burden of debt on home and property owners, you can bet we’ll be voting against disincorporation.  So, I guess we better vote for the sales tax increase.  11% here?  So, let’s shoot ourselves in the other foot.  Main Street retailers are really going to love that: highest sales tax in California… right here at home.  Oh joy!

Thank God the sun is out today.  And we have such a great bike trail to get out and enjoy it. 

Still the greatest place on earth.  I’m really happy I don’t own property anymore.

Comment 3
Sun, September 12, 2010 12:11pm
Tammy Lee
All my comments

Wow.  I hope the residents of HMB just vote yes.  A 1% tax is an extra $1 for every $100.

I don’t live in HMB but shop there frequently.  It wouldn’t dissuade me from shopping there.  Maybe it would if I was buying a big ticket item like a car or something

But having the city disincorporate could have a huge impact on coastal real estate prices.

Comment 4
Sun, September 12, 2010 2:12pm
Barry Parr
All my comments

I don’t live in HMB, but I shop there whenever I can. The only exception is that, as has been discussed here numerous times, Linda Mar Safeway is a lot closer and better-stocked than the one in HMB.

I can’t imagine the proposed sales tax would change my behavior.