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Santa Clara City Council: Business Tax Increase Set For November Ballot

The Santa Clara City Council approved a Business Tax to be placed on the November Ballot. Some say it's unfair to businesses.

After a week of deliberation, the Santa Clara City Council decided to alter the original proposal for a ballot measure that would increase taxes on businesses.

Last week, the Council deferred the item after hearing strident commentary from the Central Valley Chamber of Commerce that the proposed tax was draconian. The originally proposed tax was slated to generate $9.5 million for the City to chip away at its looming $20 million deficit that City employees attribute to the pandemic.

Two new proposals saw discussion Tuesday night. One was a headcount flat tax that would require businesses to pay $45 per employee, and the other would require $45 per employee for up to 500 employees with businesses with more than 500 employees paying $60 per employee.

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Councilmembers Kevin Park, Karen Hardy and Raj Chahal said they tried to weigh the need to inject the City’s coffers with cash with the desire to avoid burdening small businesses. Hardy said the flat tax made the most sense.

“I want to think in the long-term and the long-run,” she said. “I want to send the message that we like our businesses. We want our business here.”

Still, small business owners as well as the Chamber still opposed the hike, saying it places an undue burden despite the subsidy the City proposed.

Christian Pelleccchia, with the Santa Clara Chamber of Commerce, said the City is only considering increasing the business license tax, which has not been updated since 1992 because the pandemic struck.

The proposed hike, if passed by voters in November, would go into effect July 2023 and is estimated to generate $6 million for the City.

Mayor Lisa Gillmor agreed that the thresholds were unreasonable, calling them “onerous.”

“These numbers are just not reasonable,” she said. “They are going to be burdensome.”

Still, the Council majority disagreed. Chahal said the update is “not exorbitant.”

“We have dwelled on this thing in a very reasonable fashion. It is the right time to make this move,” he said.

The Council voted 5-2 to put the measure on the ballot, with Gillmor and Councilmember Kathy Watanabe voting “no.”

 

Housing Project Gets Zoning Change

Special consideration will make way for a 40 townhome, 20 flat residential housing complex. The zoning designation for the 2.14-acre site, located at 3141 to 3155 El Camino Real, will shift from commercial development to planned development.

The Council approved the change unanimously, with Hardy abstaining because of a conflict of interest.

 

Council Extends Contract for Legal Services

Monthly spending reports to the Council were a contingency of an approval for the renewal of the contract for continued legal services for Interim City Attorney duties. The Council extended the contract with the Lozano Smith law group, upping the total contract amount to $900,000.

James Sanchez, who has been Acting City Attorney since the Council fired Brian Doyle earlier this year, told the Council he anticipates the contract to extend the group’s services through the end of the year. In addition to boilerplate city attorney duties, embedded in that cost is handling a tide of public records requests and other “special projects.”

The City has gotten more than 60 records requests from “one person,” a clear reference to Doyle who is suing the City for his firing.

The Council approved the contract extension in a 5-2 vote with Gillmor and Watanabe voting “no.”

 

Public Petitions Prove Divisive

The Council also considered two contentious public petitions.

The first, submitted by Councilmember Anthony Becker, was a continued item to discuss the removal of a recently appointed planning commissioner. Becker was “very concerned” that the commissioner in question, Ron Patrick, had changed his address on the form submitted for consideration to the Council.

Although the registrar of voters has since confirmed that Patrick’s voting address is in Santa Clara, and not Mountain View as previously listed, the Layfette address he lists is a business that he owns, not a residence. Becker said the issue is one of transparency and openness, adding that he feels lied to.

Patrick addressed the Council, saying he is deeply invested in Santa Clara and maintains his marital home in Mountain View but spends little time there because it is “depressing” to do so. Several people ceded time to Patrick and vouched for his commitment to Santa Clara.

Gillmor cast suspicion on those who supported the motion despite the Council’s appointment.

“What is the real reason?” she said. “There is more than meets the eye.”

Still, the Council opted to agendize the item for a future meeting in a 5-2 vote, with Gillmor and Watanabe voting “no.”

The Council defeated a second petition that was a virtual mirror image of a one previously submitted by Brian Doyle, Santa Clara’s former city attorney that the Council fired earlier this year. The petition called for Councilmember Park to explain discrepancies in financial records that have been the subject of the Fair Political Practices Commission.

While the petitioner, Craig Larsen, applauded Park’s correction of his financial filings, he said Park owes the public an explanation as to why the discrepancy occurred and took so long to remedy.

“It should not take petitions from the public for public officials to do the right thing,” he said.

The motion failed 3-3, with Councilmembers Hardy, Becker and Chahal voting “no” and Park recusing himself.

 

Silicon Valley Power

The Council also gave the go-ahead for Silicon Valley Power to take the first steps in the eminent domain process for two more parcels to allow the transmission of power lines.

The parcels in question — 1040 Di Giulio Ave. and 2265 Lafayette St. — have been in negotiations for seven and six months respectively, said Manuel Pineda, Director of Silicon Valley Power. Pineda said SVP will continue to negotiate before beginning the eminent domain process property, which typically takes two years.

Both items passed unanimously.

 

Consent Calendar Spending

  • A $461,934 purchase order with L.N. Curtis for personal protective equipment for the fire department.
  • $419, 614 to Bear Electrical Solutions, Inc. to install a high-intensity activated crosswalk beacon on Scott Boulevard at Harrison Street.
  • A three-year $247,000 contract with Environmental Systems Research Institute, Inc. for geographic information system software and support services.
  • A five-year $394,200 agreement with Orchard Commercial for maintenance of the Santa Clara Convention Center Complex district.
  • A $40,000 amendment to a contract with Brightview Landscape Services for tree care in the Santa Clara Convention Center Complex district. Contract extended through August, total: $1.01 million.
  • A $3 million one-year extension to a contract with Hotline Construction, Inc. for electric utility overhead services. Contract total: $5 million
  • A one-year $4 million extension with Daleo, Inc. for electric utility substructure and aerial fiber optic cable. Contract total: $10 million
  • $2.5 million for the fire department’s salaries and appropriations (paid for out of the City’s general fund land sale reserve.)
  • A three-year $138,273 purchase order with Lutron for a technology support plan for Levi’s Stadium.
  • A $1,280 purchase order with Pacific Coast Flags for City of Santa Clara flags at Levi’s Stadium.
  • Four purchase orders with EyeP Solutions, Inc.: $15,500 to upgrade the security system at Levi’s Stadium, $32,896 for KiwiVision software licenses to assist with video investigation, $41,662 for camera kits, related security software license subscriptions, and remote deployment services and $2,746 for camera software license subscriptions.

The next regularly scheduled meeting is Tuesday, Aug. 16 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.

Members of the public can participate in the City Council meetings on Zoom at https://santaclaraca.zoom.us/j/99706759306; Meeting ID: 997-0675-9306 or call 1(669) 900-6833, via the City’s eComment (available during the meeting) or by email to PublicComment@santaclaraca.gov

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