School Board Girds for Refunds

Alameda's Board of Education is setting aside $5.8 million to cover refunds the district may have to pay on its Measure H parcel tax.

The board voted 5-0 on Tuesday to repurpose an existing reserve fund it created in 2008 as state funding lurched over a cliff to cover the potential refunds. If needed, the money could cover close to 80 percent of what the district would have to pay out.

"Right now it seems to me that 80 percent seems like a prudent number. And right now we have it to set aside, so it's not as painful," Trustee Mike McMahon said.

A state appeals court panel has twice ruled that state law didn't give the district the authority to charge different tax rates on different types of property, as it did under Measure H. The district could be on the hook for as much as $7.4 million it collected from commercial property owners between 2008 and 2011, though it is asking the state Supreme Court to review the case.

An official with the Alameda County Office of Education wrote to the district in January saying the district's budget would have to show Alameda Unified has the funds to cover any refunds they may be required to pay. The official district business and advisory services executive director Jeffrey B. Potter, said he expected the district to use its existing reserves for repayment purposes.

The district is not facing a legal challenge over its current parcel tax, Measure A, though the West Contra Costa Unified School District is being sued over a similarly structured tax. One of the same plaintiffs in the Measure H case, Ed Hirshberg, sued to try to invalidate the tax after votes approved it, though he lost that case and chose not to appeal.

Under the Measure H tax, the district charged about 30,000 residential property owners — including homeowners and owners of apartment buildings — $120 per parcel, while nearly 800 commercial and industrial parcels were assessed 15 cents per square foot with a cap of $9,500 (a handful of others with 2,000 square feet or less paid the $120 flat rate). All told, the district collected $13.6 million, including about $7.5 million on commercial property.

The board voted 4-1 to ask the California Supreme Court to review the case, and the court has a minimum of 60 days to decide whether to grant the request. If they chose not to hear the case, the Court of Appeal's decision will stand. The appeals court has asked the trial court judge who handled that case to determine whether refunds are due.

Even if he prevails, the lead plaintiff in the case — George Borikas — won't be entitled to a refund on taxes he paid on his properties. The district charged him the same $120 per parcel rate that homeowners paid, an amount the appeals court said the district was entitled to charge. But some commercial property owners could be in line for tens of thousands of dollars in refunds, tax data show.

Read more about this issue, including a list of the property owners in line for refunds at http://webh.it/alamedasun.

 

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