San Fernando Lowers City Property Tax Rate by a Penny

The City of San Fernando has lowered its property tax rate for the fifth year in a row, according to Finance Director Nick Kimball.    

At the city council’s Aug. 20 meeting, Kimball presented a report on the city’s obligation to its employees’ and retirees’ pensions plan, which is partly funded by property taxes. According to Kimball’s report, the city has decreased the tax rate from 28 cents per $1,000 of assessed value in 2013 to the current 23 cents per $1,000 of assessed value.  

Kimball attributes this decrease to two factors: tax money that was previously going to California’s Redevelopment Agency, which was dissolved in 2013 to balance the state budget after the Great Recession, has since been redirected into the city’s pension tax fund. That additional money is enabling the City to pre-pay its yearly obligation to the California Public Employees Retirement System (CalPERS), which manages city employees’ pension plan.  

Pre-paying the CalPERS cost at the beginning of the fiscal year has saved the City approximately $200,000 in interest costs, according to the report, which has only been possible because funds have been available. If the City continues this practice, they can have more leverage in keeping the pension tax low. 

“You should be impressed because you have lowered taxes five years in a row. That’s something not many cities can claim to have done,” commented City Manager Alexander Meyerhoff after the presentation. Councilmember Joel Fajardo humorously responded that he would wait five to 10 years to see how those numbers are, and then let Meyerhoff know how he feels.  

Fajardo and Councilmember Jaime Soto expressed skepticism about the report’s accuracy, prompting the council to direct Kimball to search for a third-party agency to provide its own independent report.  

Soto was concerned about Kimball not citing his sources for the report’s numbers and graphs and requested an “unbiased, arbitrary assessment.” 

Fajardo said “I think that just relying on just one staff report can be a bit of a disadvantage to us if we want to discover the truth.”

Kimball agreed to put out a request for proposal and would provide the council with a list of agencies that respond.  

Nonetheless, the council approved setting the 2018-2019 property tax rate by following the model just discussed of pre-paying the city’s obligation to CalPERS. They agreed to set the rate to .227 percent, a 2.2 percent reduction from the previous year. That should allow it to fund the city’s obligation of $4.3 million to CalPERS for that fiscal year, according to Kimball’s projections.  

The council also agreed to provide recommendations to the Los Angeles County Metropolitan Authority on how it would like the city’s Metro light-rail station to look, and what features council members want the station to have.  

The council quickly brainstormed some ideas at the meeting to send the letter to Metro by Friday, Aug. 24.  Members suggested features like bicycle parking, artwork that reflects the city’s history and culture, shade, restrooms, and maintenance for the restrooms. The council is also encouraging renewable energy to be used for the station.

The light-rail station projected for Maclay Avenue and Truman Street is one of 14 that Metro is planning for its $1.3 billion transit project that will connect the Sylmar Metrolink Station to Metro’s Van Nuys Orange Line Station. The at-grade train would use the current railway along Truman Street and head south on Van Nuys Boulevard. Construction is expected to begin 2021.