San Rafael finance subcommittee outlines options to close multi-year shortfall, eyes June library renewal

SAN RAFAEL — At a meeting of the San Rafael finance subcommittee, staff and committee members reviewed options to address projected multi-year budget shortfalls and sketched a compressed timeline for potential ballot measures in 2026.

Staff presented a preliminary back-of-envelope estimate for the package of needs at “around 7 and a half, $8,000,000,” and emphasized that some items still lack detailed estimates, Speaker 4 said. The group discussed both capital-related impact-fee changes and separate “service level” costs that typically are not covered by developer impact fees.

The meeting flagged an immediate deadline: the city’s library parcel tax, which “currently generates 1 point $2,000,000 a year in support of library operations” was described by staff as set to expire in June; staff said that absent council action the revenue would not carry forward into 2026–27. Speaker 1 framed the renewal as time-sensitive and said the subcommittee is eyeing a June 2026 special-tax placement on the ballot.

Staff outlined potential revenue tools under consideration. Speaker 1 said the city is studying a property transfer tax (San Rafael’s current rate is 0.2%), noting that transfer-tax receipts in cities with such measures range and that the city’s current rate and per-capita yield are on the low end; staff estimated a 0.2% transfer tax produces about $1.5 million a year in similar-city comparisons. The transfer tax was described as a likely candidate for the November 2026 ballot if the committee recommends a general-purpose measure.

On the subject of cuts and internal savings, Speaker 1 said each 1% of expenditure reduction would equal about $1,200,000 and stressed the goal of minimizing impacts to direct community services and avoiding staffing reductions. The subcommittee also reviewed fee-recovery work: recreation and library departments are doing fee studies, and planning and building-code enforcement fees are under review.

Speakers discussed a stormwater fee as another funding option and noted legal constraints. Speaker 1 said some cities have used a Proposition 218 property-owner majority-protest process rather than a citywide ballot to impose a stormwater parcel fee, but warned that approach “may have some legal risks.”

The group agreed on an accelerated engagement schedule: staff will begin polling immediately, with preliminary polling results targeted for January to guide the subcommittee’s final recommendation. Speaker 6 summarized prior polling as mid-to-low 60s in a special-election context and said two-thirds thresholds remain challenging for parcel taxes; staff said they will run split polling on different measure designs to test support levels.

Speaker 4 praised staff for “linking together all the disparate” elements so the council can see the full scope of needs, and the subcommittee agreed to reconvene with additional analysis before forwarding recommendations to the full council. Staff noted a legal window for council action: the earliest election-call action could be at the second council meeting in February for a June election, making the subcommittee’s January work and polling timeline critical.

Next steps: staff will close an RFP for polling services, produce refined cost ranges where missing, run split polls on measure designs, and bring results back to the finance subcommittee in January. The committee discussed trying a standing cadence of Tuesdays at 10 a.m. for 2026 subcommittee meetings and indicated the proposed schedule will be presented to the full council for approval at its December meeting. The meeting adjourned with staff asked to finalize minutes and follow up on scheduling and polling.