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ERAF Surplus

From: domainremoved <Max>
Date: Fri, 2 Mar 2018 22:19:16 -0800

Dear City Council Members,

As a taxpayer in the Menlo Park City School District, I am writing to express my support for Councilmember Mueller’s suggestion that the city give $1 million of its ERAF surplus to MPCSD as mitigation for the cost of the increased school enrollment expected from the Stanford housing development.
The development is expected to generate approximately 39 new students beginning in the 2019-20 school year. As a community funded district, MPCSD does not receive any more funding when more students enroll. Our tax base, while generous, must cover any and all enrollment growth. Stanford’s non-profit status means it is not required to pay property taxes on these residential units, thus the only source of funds for these residential units to the school district--property taxes--will not be generated even though the district will see an increase of approximately 39 students.

The cost of educating the anticipated students will be $663,000 annually. If a tax-paying developer built a similar project to Stanford’s, the property taxes generated would cover about 60% of that cost. Wishing to hold Stanford to the same 60% benchmark, MPCSD would need to receive $400,000 annually from the development. Stanford and the City negotiated a one-time gift of $1.5 million to the MPAEF to help offset the ongoing costs to the district which will be deposited into the MPAEF endowment, the roll-off earnings of which, at a 7% rate of return, will generate approximately $105,000 annually. The annual property tax income to MPCSD on the office and retail space of the project is estimated to be about $225,000, meaning the district can anticipate annual revenues from the project to be about $330,000, or slightly less than 50% of the cost of educating the students it generates. With a $1 million gift from the City, put into endowment along with Stanford’s gift of $1.5 million, the school district woul
d be on track to annually generate 60% of the cost of educating the Stanford development’s students, bringing it on par with what typical housing developments generate.

We appreciate the work and support on the district’s behalf that the City Council has already proven willing to offer. We feel that if the City has a way to further mitigate the gap in funding between what residential units built by a tax-paying developer would generate for the school district, and the one-time donation that Stanford made as a gesture towards filling that gap, the City should not let this opportunity pass.

Please consider giving MPCSD a $1 million gift so that when the new students arrive, as they surely will, the district will be equipped with the resources to educate them without diluting services and programming for all students. We all appreciate the value that an excellent school district adds to our vibrant community, and with your foresight and help, we can maintain the quality that we all expect.

Maxine and David Bonnette

Sent from my iPhone
Received on Fri Mar 02 2018 - 22:21:57 PST

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