The city of Mountain View and local school districts came to a short-term agreement on Tuesday over how much money local schools will receive this year from the Shoreline Community’s tax revenue.
The decision ensures that the school districts get a cut of the property tax money generated in North Bayshore this year – about $5.7 million annually for the Mountain View Whisman School District and $3.6 million for the Mountain View Los Altos Union High School District – while also buying more time for the parties to negotiate a long-term agreement.
“We needed to have a short-term agreement. We all came to the conclusion that that would be in our best interest,” Mountain View Whisman Superintendent Ayindé Rudolph told the Voice after the May 30 meeting.
Schools typically receive a large portion of city property tax revenue, but the Shoreline Community, a special tax district encompassing properties north of Highway 101, is an exception – something that’s caused tension between the city and local school districts over the years.
Established in the 1969, the Shoreline Community is an unusual tax district located in Mountain View’s North Bayshore area. It’s a separate legal entity from the city, and the vast majority of the tax revenue from the area is managed by the city in order to fund improvements in the Shoreline area.
When the tax district was first created, it was a largely undeveloped area of the city. Fifty years later, land value has skyrocketed in the area and is now home to tech behemoths like Google – making the tax revenue coming out of the area much higher.
In 2006, the city's Shoreline Community entered into an agreement with the two school districts. Dubbed the Education Enhancement Reserve Joint Powers Agreement (JPA), the city agreed to provide annual payments to the school districts from the Shoreline Community. In 2013, the three entities entered into a new JPA that continued the arrangement for another 10 years – which means it’s set to expire this year and needs to be renegotiated.
The city and school districts started meeting in 2019 to come up with a successor agreement. But exactly how much the school districts should receive from the Shoreline Community has been a point of contention: The districts have argued that they should receive their full tax rate allocation from the region, while city officials have said that this would be tantamount to defunding the district and would be detrimental to the city’s general fund.
Meanwhile, with Google’s plans to build thousands of new homes in the North Bayshore area, school district officials say they’re going to need more funding to accommodate a large increase in students.
By November last year, with negotiations still underway, it became clear that more time was needed. The JPA Board suggested that the three parties enter into a short-term agreement so that payments to the school districts continue to receive annual payments while negotiations over a longer tax-sharing agreement continue.
That short term agreement was unanimously approved by the JPA Board – made up of City Manager Kimbra McCarthy, Mountain View Whisman Superintendent Rudolph and Mountain View Los Altos Superintendent Nellie Meyer – on May 30.
Per the agreement, the school districts will each receive a minimum payment for the next fiscal year from the Shoreline Community – about $5.7 million for MVWSD, and about $3.6 million for MVLA, which is slightly more than what the districts received last fiscal year. The districts will additionally receive adjusted payment based on the percent change in property tax revenues over the next year, and an additional one-time payment equal to 10% of the adjustment payment.
“For illustrative purposes, if property tax revenues in the Shoreline Community were to increase by 10%, the (total) payment would be approximately $6.3 million to MVWSD and $4 million to MVLAUHSD, resulting in a total of $10.3 million,” the proposed agreement states.
The newly negotiated agreement also added some language to provide assurance that future plans for the Shoreline area will “address the increased demand for infrastructure, school district facilities, affordable housing and services generated by new development.”
Rudolph said in an interview that he was pleased with the outcome of Tuesday’s meeting.
“It’s good to have the first step done,” Rudolph said of signing the short term agreement. “Obviously there’s still some other work to be done, but we’ve immediately applied the amount that we’re receiving towards our kids. So that’s been a good help to address issues around class size, as well as mental health and special education services.”