Council Looks at Condos, Budget, Cops on Telegraph

By Judith Scherr
Friday May 19, 2006

The question of condominium conversion, one of some 50 items on the City Council agenda Tuesday night, was significant, not so much for the council vote, but for what modifications the ordinance might face in the future. 


Condo conversion 

The council decision—approved unanimously—simply continues an ordinance that had lapsed. The vote, however, included a mandate to revisit the issue in September, a question of particular note since members of the Berkeley Property Owners Association are beginning to petition for a ballot measure which could increase the number of permitted conversions.  

The approved ordinance caps the number of permitted conversions at 100 units per year. A fee for the conversion is 12.5 percent of the sale price for owners who have occupied a unit in the building for less than seven years. Owners who have lived in the building seven years or more pay a fee of 5 percent of the cost of the converted unit. Fees are put into the Housing Trust Fund, intended to replace lost rental units.  

Councilmember Gordon Wozniak touted conversion. “We’re trying to help long-term renters achieve home ownership,” he said. 

Counilmember Max Anderson, formerly a member of the Rent Stabilization Board, argued for higher fees, but voted with the majority. 

“I believe a 15 percent rate is more appropriate,” he said. 

Housing Director Steve Barton told the council that 55 units have been selected for conversion this year. 

“We have 120 units waiting for the next round,” he said.  

While Councilmember Kriss Worthington argued that condo affordability to the middle class was “rhetoric,” with condos selling for as much as $400,000 in Berkeley, Councilmember Laurie Capitelli said he had done the math and that, with tax deductions for interest paid, a condominium owner might end up paying less per month than a renter. 


Budget in balance 

While the City Council won’t vote to approve the $293 million 2006-2007 budget until June 27, councilmembers heard good news from City Manager Phil Kamlarz, who outlined a balanced budget. In December, Kamlarz had presented a preliminary budget that was $1.6 million in the red. 

But the manager predicted a less rosy future.  

“There’s a major uncertainty in the transfer tax and property tax,” Kamlarz said in a press briefing Tuesday morning. 

Sales tax is flat and there are concerns that auto dealerships could leave the city, leaving a hole in the city budget. While property taxes and transfer taxes are up, experts such as the UCLA Anderson School predict real estate sales will slow. And the city may be able to collect less in utility taxes, due to pending state and federal legislation and new technology, such as the increasing use of the Internet for phone service. 

Still, this year’s income, especially due to transfer taxes, about 1.3 million more than had been expected will allow for some one-time expenditures, such as keeping some parks and planning staff positions funded, giving nonprofits a 3 percent increase, funding disaster preparedness efforts and paying for infrastructure needs such as roads and the storm drain system. The transfer taxes comprise about 10 percent of the city’s $130 million general fund budget. 

Council critic Barbara Gilbert, reached by phone on Thursday, said she is “glad the city has a balanced budget, but it’s not doing great for sustainable Berkeley.” 

Gilbert pointed to council reserves of only 6 or 7 percent, while other cities in Alameda County have reserves at 13 percent, which she said is prudent. (Similarly, in his budget message to the council, Kamlarz said the council may wish to consider a higher reserve policy.) 

Furthermore, Gilbert argues that homeowners pay all the taxes for services. 

“UC is not paying; renters are not paying,” she said. And, instead of raising taxes, which must go before the voters, the council is hiking fees. There is a recommended 8 percent increase in refuse fees, she said. All the fees go up automatically, she added. 

At the May 23 meeting, the council will look at the budget again, focusing on infrastructure needs. 


Union support 

In other business, by unanimous vote, the council lifted the boycott on Berkeley Honda, with Councilmember Linda Maio making it known that she would take her Honda there this week. The council lifted the boycott when the employer reversed his position and allowed the return of the union shop. 

The council also voted unanimously to support unionization efforts of ABC Security employees who work on contract at the city’s corporation yard. Claiming they are forced to work unpaid overtime, they have filed complaints with the National Labor Relations Board, according to Service Employees International Union organizer Miya Saida-Chen. 


Cops on Bikes and other budget referrals 

The council voted to consider in the budget process the restoration of funds for bike cops and community mental health workers on Telegraph Avenue. The item was of special interest, because of the recent announcement that Cody’s on Telegraph would close in July. 

“Telegraph is at a pivotal moment,” Al Geyer, founder of Annapurna, told the council during public comment period. “I urge you to pass the proposal.”  

This, however, is just a small part of the solution. In a note to the council Geyer called for a number of improvements, including better lighting, ending the concentration of homeless people and those with mental problems in the Telegraph Avenue area and parking after 6 p.m. in the yellow zones. 

“If Berkeley wants a vibrant Telegraph Avenue … it should include authentic small businesses such as quirky used book shops, boutiques, food and used CD stores” which he said “have been defining elements of the alternative culture in Berkeley.” 

The council also voted to add to the proposed budget partial funding for the warm pool and support for an auto theft reduction plan.