HomeMy WebLinkAboutStaff Report 4.A 10/06/2014DATE
TO:
100
October 6, 2014
Honorable Mayor and Members of the City Council
John C. Brown, City Manager
Agenda Item #4.A
SUBJECT: Resolution Establishing City Council Priorities for Use of Proceeds from Measure
Q, A One -Percent General Transactions and Use Tax Applicable in the City of
Petaluma which Will Be Submitted to the Qualified Electors of the City at the
General Municipal Election on Tuesday, November 4, 2014
"CE8113 R1
It is recommended the City Council receive comments from all interested parties, including
proponents and opponents of Measure Q, and following discussion and deliberation by the City
Council, adopt the attached resolution establishing the City Council's priorities for the use of
proceeds from Measure Q, a One -Percent General Transactions and Use Tax Applicable in the
City of Petaluma which Will Be Submitted to the Qualified Electors of the City at the General
Municipal Election on Tuesday, November 4, 2014.
BACKGROUND
On July 21, 2014, the City Council voted 5-2 to place a sales tax measure before the voters on the
November 2014 ballot. This measure, designated Measure Q by the County C1erlJRegistrar of
Voters, is identified in the ballot question that will be presented to City voters as the Better
Roads, Safer Petaluma Measure, and would increase local transactions and use tax by one percent.
Measure Q is a general sales tax; it requires approval by a simple majority of Petaluma voters to
pass.
Polling and outreach activities were conducted between November 2013 and July 2014, and
indicated sufficient support to pass the proposed sales tax increase as a general tax. Some
members of the community, and some members of the City Council, raised the issue of assurance
that the City Council will spend tax proceeds on uses supported by the voters when the Council
acted to offer the measure to the voters in July 2014. Tax measures with prescribed, voter -
approved uses are considered special taxes, which requires approval by a 2/3 majority of those
voting to pass. Polling results indicate support for a Petaluma transactions and use tax measure
that requires only a simple majority to pass. It's highly questionable, however. if a special tax
measure would receive sufficient support to pass.
DISCUSSION
City Councils can exercise discretion to direct revenue from a general tax to wherever they believe
the need is and benefit to the public is greatest. This City Council has recognized that significant
mmiet need, and benefit to the public, exists in funding certain infrastructure, equipment, and
system improvements. These are areas in which the City Council has not been able to invest,
during the recession, even as needs in these categories continue to mount. The Council has shown
strong interest in providing as much assurance as it can to the public, consistent with the
requirements for a general tax, that the Council would spend local transactions and use tax
proceeds consistent with Petaluma's priorities. One way the City Council can indicate its
intentions is to establish priorities for how it would use increased tax revenues. Another way to do
this is to implement accountability measures that allow specific oversight and accounting of
Measure Q revenue and expense, and additionally, to structure project funding in ways that
support and compliment these priorities if a measure should pass.
Priorities for the Use of New Tax Revenues
Polling results, combined with opinions gathered during City outreach efforts, indicate strongest
community interest in street and sidewalk maintenance and relief from traffic congestion. It is
recommended that the Council select this category of improvements as a priority. Outreach and
polling also indicate Petalurnans want the Council to complete the Rainier crosstown
connector/interchange project. It is recommended that the Council identify this project as a
priority as well.
Polling results varied from earliest to latest, but the public also supported replacing emergency
vehicles and completing flood protection and storm water projects. The Council is also aware, as
a result of workshops held on both subjects, of the importance of investing in these two areas to
preserve and enhance the health and safety of the community.
Polling and surveying also revealed Petalumans are concerned about crime and worry about
further degradation of police services. Several Police positions were lost during the economic
downturn. This impacts staffing schedules, employee health and morale, and the ability to
continue to provide core services. In particular, police personnel are working a large amount of
overtime, sometimes mandated. This practice is meeting a current need, but is not sustainable.
Relief in the form of additional staffing can improve this situation. In addition, concern exists
with the loss of School Resource officers and those assigned to drug and gang activity.
Increasingly, need exists to direct resources to property crime investigations and prevention.
Existing staffing levels cannot support these specialty assignments as officers are needed for patrol
and response. Accordingly, it is recommended that restoring police positions be a Council
priority.
Fire and Police facility improvements did not poll as strongly as other choices, but significant
need exists for both. Prior to 2011. Redevelopment funds could have been used, and were used. to
initiate some of the projects. Those monies are gone now, taken by the State of California. A
stable, permanent local finding source is needed now to complete these projects. As the Council
is aware, Fire Station One is challenged with seismic safety issues that should be addressed prior
to a major earthquake. The Carnegie Library Museum faces a similar threat.
Recommended, then, for the Council's consideration as its top priorities for the use of Measure Q
revenues, are:
• Street and Sidewalk Maintenance, Repair and Reconstruction
• Constructing the Rainier Crosstown Connector/hiterchange Project
• Flood Protection and Storm Drainage
• Vehicle Replacement
• Restoring Police Officer Positions
• Fire & Police Station Upgrades/Replacement & Museum Seismic Upgrade
• Street Lighting
In July, 2014, when this subject was first raised before the City Council, cost estimates in the area
of these recommended priorities were provided for illustrative purposes only. Most of these
numbers are based on information presented in the various workshops held in 2013 and 2014;
some were generated subsequently. It is not suggested that in adopting any or all of the
recommended priorities that the cost estimates identified serve as a spending guarantee or a
spending plan. These estimates are provided to give the public an idea of the magnitude of need
that prompted the City Council to place Measure Q on the ballot.
Prioritv Cost Ranee
Street and Sidewalk Maintenance, Repair and Reconstruction $86- $210 million
Rainier Crosstown Connector/Interchange Project $88 million
Flood Protection and Storm Drainage $39 million
Vehicle Replacement $53 million
Restore Police Officer Positions $45 - $51 million **
Fire/Police Station Upgrades/Replacement & Museum Seismic Retrofit $25 million
TOTAL $336 - $466 million
* S1.3 million ann:iall), for 301,ears
** SI..i - S1.7 mnillioannaallt,for 30 i,ears
Accountabilitv and Pro iect Funding Provisions that Sunnort Priorities
The Council included "accountability" provisions in Measure Q. Among those is a provision that
would require separately tracking revenues and expenses associated with Measure Q. As well,
there are provisions that require annual reporting of revenue and expense, and that require a citizen
oversight committee.
Another step the Council can take, which will be recommended during annual goal setting in 2015
(should Measure M pass), would be to develop financing plans using Measure Q revenue to
support borrowing. Borrowing against this revenue source, as has been done with Measure M.
will provide two sets of results: an infusion of cash to complete the widest range of projects at
earlier delivery dates; and as importantly, an obligation of these revenues to these purposes.
These actions are intended to further provide the assurance that some members of the public and
City Council have indicated they would like to see, consistent with Measure Q's status as a
general tax, and with the City C'ouncil's legal authority to provide policy direction regarding its
priorities for Measure Q proceeds.
FINANCIAL IMPACT
There is no cost associated with the recommended action. As noted in previous reports, the cost of
placing Measure Q before the voters is estimated to range between $18,400 to $46,100, depending
on the number of voters participating in the November 2014 election. This would be in addition to
a cost estimate of $53,800 to $70,700 for the Mayor's race and three City Council seats. Funding
for a tax measure is not budgeted for 2014/15; the elections expense for the measure will need to
be transferred from General Fund reserves, which will be presented as part of the City's mid -year
budget adjustments.
ATTACHMENTS
Resolution
ATTACHMENT 1
Resolution N.C.S. 2014 —
RESOLUTION ESTABLISHING CITY COUNCIL PRIORITIES FOR USE OF
PROCEEDS FROM MEASURE Q, A ONE -PERCENT TRANSACTIONS AND USE
TAX APPLICABLE IN THE CITY OF PETALUMA WHICH WILL BE
SUBMITTED TO THE QUALIFIED ELECTORS OF THE CITY AT THE
GENERAL MUNICIPAL ELECTION ON TUESDAY, NOVEMBER 4, 2014
WHEREAS, pursuant to its stated goals, the City Council engaged in a series of
workshops in 2013 and 2014; and
WHEREAS, those workshops included focus on the City's pressing and unmet
infrastructure, facilities, and equipment needs, and on long-term funding opportunities to
meet those needs; and
WHEREAS, the City Council determined that a sales tax measure is the only new
revenue source sufficient to meet its long-term needs, and conducted polling and surveying
to determine the community's priorities for the use of new revenues and their willingness
to pass a sales tax increase; and
WHEREAS, Petalumans indicated the greatest concern is the deteriorating
condition of the City's streets and roadways, replacement of emergency vehicles,
preservation of public safety staffing, and relief from traffic congestion; and
WHEREAS, Petalurnans and the City Council are also concerned about deferred
investment and unmet capital needs in the areas of storm water and flood protection, and in
the safety and reliability of public safety and other public buildings; and
WHEREAS, the cost to address these various deficiencies is estimated to range
between $336 million and $466 million: and
WHEREAS, revenues associated with Measure Q are conservatively estimated at
$10 million per year, and at that rate of finding would require between 33 and 47 years to
address these needs, others that arise in the meanwhile notwithstanding; and
WHEREAS, it is the desire of the City Council to demonstrate its commitment to
finding projects, programs and activities in these areas by establishing its priorities for the
use of the proceeds of Measure Q.
NOW THEREFORE, BE IT RESOLVED that the City Council of the City of
Petaluma establishes the following priorities for the proceeds of Measure Q, a one -percent
general transactions and use tax applicable in the City of Petaluma which will be submitted
to the qualified electors of the City at the general municipal election on Tuesday,
November 4, 2014:
• Street and Sidewalk Maintenance, Repair and Reconstruction
• Constructing the Rainier Crosstown Connector/Interchange Project
• Flood Protection and Storm Drainage
• Vehicle Replacement
• Restoring Police Officer Positions
• Fire/Police Station Upgrades/Replacement & Museum Seismic Retrofit
• Street Lighting