Albany staff begin multi-year review of taxes, fees and bonds to shore up city services

Albany City Council members heard a detailed kickoff presentation July 8 on a multi-year program of potential revenue measures and related actions intended to close structural budget gaps and fund aging infrastructure, parks and facilities.

The discussion centered on a range of options staff said could be pursued over the next three to five years: modernizing the business license tax, studying a sewer enterprise rate update, examining new or reauthorized parcel taxes for street-tree management and street lighting, exploring storm‑drain funding approaches in light of Prop 218 complexities, and investigating bonding for large building projects such as the Veterans Memorial Hall.

Finance Director Rena Schwartz told the council the presentation was intended as a “kickoff” and warned the process will be lengthy. “They are a process. This is a journey,” she said, describing the different legal and implementation rules that apply to each revenue tool and the consultants the city will engage to prepare analyses and ordinance language.

Why it matters: Albany’s operating budget is balanced for FY25–26 but staff said a structural gap persists and long‑deferred capital and maintenance needs — from pavement and sewers to parks and building systems — will require new or reauthorized revenue. Council members pressed staff on timing and structure, including whether some existing parcel or special taxes should be reauthorized with updated language to capture possessory interest properties (for‑profit developments on public or university land) and whether measures should be placed on the June 2026 primary or the November 2026 general election.

Key points from staff and council

- Staff recommended continued work on multiple fronts: begin business license modernization with consultant HDL; continue parcel- and parcel‑billing analyses and a sewer rate study (expected to return in roughly one year to be timed for the 2026–27 tax roll); investigate consultant options for street-tree and street-light funding; and study bonding options for major facilities.

- Schwartz summarized timing constraints for property or parcel taxes that must be submitted to the county tax roll: a June 2026 special tax would require final council adoption by the March 2, 2026 regular meeting to meet the county’s March 6 submission deadline, a schedule staff described as “extremely tight.” Sewer fee updates, by contrast, require public hearing and council action and do not go to voters but must meet the county’s August deadline for placement on the tax roll.

- On storm drain funding, staff said legal and litigation history makes the path unclear. “Prop 218 … was silent on storm drain,” Schwartz said, and the city’s regional NPDES permit and increasing regional requirements were driving higher compliance costs. Staff recommended the most conservative path may be to take a stormwater measure to a vote, but acknowledged that is a heavy lift.

- Council members raised specific options and priorities: a tiered property‑transfer tax modeled on Berkeley; expansion of possessory‑interest language to capture private operators of large student-housing buildings; bundling street-tree and lighting funding under a single parcel tax; and leaving active‑transportation projects (bike lanes, sidewalks) separate because they may be more controversial.

Council direction and next steps

While no formal vote was required, council members broadly supported staff continuing analyses and consultant work with several requested priorities. Multiple council members identified business-license modernization as a near-term priority; staff said HDL will be engaged immediately and that work could lead to an ordinance and a potential 2026–27 implementation. Several council members asked staff to return with refined options for combining or reauthorizing existing parcel taxes (for parks, open space, street trees, street lights and emergency medical service/ALS funding) and with more precise cost estimates before committing to an election timeline.

Finance Director Schwartz summarized the tangible next steps staff will take: start HDL work on business license modernization, continue billing and parcel analysis for sewer rates, develop cost estimates and ballot language options for street-tree and lighting measures, and return to council with recommended sequencing and a timetable for potential ballot placement. Staff also noted an upcoming ARPA update scheduled for September–October and stressed that ARPA funds are finite (through December 2026).