San Rafael Essential Services Protection Measure
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AMENDING CHAPTER 3.22 OF THE SAN RAFAEL MUNICIPAL CODE TO INCREASE THE RATE OF THE REAL PROPERTY TAX AND ADD AN OVERSIGHT PROVISION
SECTION 1. TITLE
This Ordinance shall be known and may be cited as the “San Rafael Real Property Transfer Tax Ordinance.”
SECTION 2. FINDINGS
The City Council of the City of San Rafael hereby makes the following findings in connection with the adoption of this Ordinance:
WHEREAS, The City of San Rafael provides essential municipal services to residents, businesses, and visitors, including fire suppression and emergency response, law enforcement, street maintenance and repair, stormwater infrastructure, parks and open space, library services, and community programs.
WHEREAS, The City faces structural deficits in its General Fund projected to reach approximately $2.0 million to $3.0 million by fiscal year (FY) 2028-29, due to lacking sufficient and reliable funding to support investments in maintenance and replacement of capital infrastructure, increased service-level demands, particularly in the area of public safety, continue to place additional pressures on existing resources cost pressures driven by post-pandemic inflation, increased fuel, energy and utility costs, buoyed by ongoing uncertainty in the general economy.
WHEREAS, By seeking an increase in the real estate property transfer tax rate from 0.2% to 1.0%, the resulting increase in General Fund revenues would significantly aid in addressing priority unfunded needs, help make-up for the comparatively low allocation percentage of local property taxes retained by the City (currently 12.2%), and further the City’s goal of fiscal sustainability by contributing to a broader diversification of the City’s general fund revenue sources, predominantly reliant on property tax and sales tax revenues.
WHEREAS, A real property transfer tax is a one-time levy on the transfer of ownership of residential and commercial real estate pursuant to a purchase or sale. Payment of the one-time Real Estate Property Transfer Tax is the joint responsibility of the parties to a real estate transaction—the buyer(s) and seller(s).
WHEREAS, after careful evaluation of the City’s financials, evaluation of viable potential revenue enhancement measures, and community surveys assessing the public’s views and priorities, the City Councils finds that increasing the rate of the existing Real Property Transfer Tax from .2% to 1% and submitting a measure to the voters, with a recommendation for approval, is the most prudent, reasonable, and fiscally responsible action in order for the City to maintain current service levels and quality.
WHEREAS, this Ordinance shall become effective ten days after the vote is declared by the City Council pursuant to Elections Code Section 9217;
WHEREAS, if adopted, the City’s Voter-Approved Tax Oversight Committee, established by City Council Resolution No. 15118, will provide the resident oversight to review the collection and expenditure of tax revenues generated under the authority of this Chapter.
NOW, THEREFORE, THE PEOPLE OF THE CITY OF SAN RAFAEL DO ORDAIN AS FOLLOWS:
SECTION 3. AMENDMENT OF MUNICIPAL CODE
Section 3.22.020 of Chapter 3.22 of the San Rafael Municipal Code is amended to read, with additions shown in underline and deletions shown in strikethrough, as follows:
3.22.020 Imposition of tax.
A tax is imposed on each transfer, by deed, instrument or writing, by which any lands, tenements or other real property located in the city are sold, granted, assigned, transferred or otherwise conveyed to, or vested in, a purchaser or purchasers thereof, or any other person or persons at or by the direction of said purchaser or purchasers, when the value of the consideration exceeds one hundred dollars, said tax to be at the rate of two ten dollars for each one thousand dollars or fractional part of one thousand dollars of the value of the consideration.
Section 3.22.235 is added to Chapter 3.22 of the San Rafael Municipal Code, with the additions shown in underline as follows:
3.22.235 Oversight Committee
The City’s Voter Approved Tax Oversight Committee, as established by City Resolution No. 15118, and as may be amended, shall submit a report on at least an annual basis to the City Council evaluating whether the proceeds from this tax are being properly expended for the purposes set forth in this Chapter. Proceeds from this tax shall be subject to the City’s generally applicable independent annual audit procedures and requirements.
SECTION 5. SEVERABILITY
If any provision of this Ordinance, or application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.
SECTION 6. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA).
The approval of this ordinance is exempt from the California Environmental Quality Act (Public Resources Code §§ 21000 et seq., “CEQA,” and 14 Cal. Code Reg. §§ 15000 et seq., “CEQA Guidelines”). This tax submitted to the voters is a general tax that can be used for any legitimate governmental purpose. It is not a commitment to any particular action nor does it authorize any private activity, but merely taxes such activity as otherwise occurs. As such, under CEQA Guidelines section 15378(b)(4), the tax is not a project within the meaning of CEQA because it creates a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. If revenue from the tax is used for a purpose that would have either such effect, the City will undertake the required CEQA review for that project. Therefore, CEQA analysis is not required at this time.
SECTION 7. EFFECTIVE AND OPERATIVE DATES
This ordinance shall be effective ten days after the date on which the City Council has declared that the voters of the City of San Rafael have approved the ordinance by a vote of no less than a majority of the votes cast by the electors voting on the tax measure set forth in this ordinance at the General Municipal Election to be held on Tuesday, November 3, 2026.
SECTION 8. CERTIFICATION AND PUBLICATION
Upon approval by the voters, the City Clerk shall certify to the passage and adoption of this ordinance and shall cause it to be published, in full or in summary form, according to law.