Title
CONSIDERATION OF AN INFRASTRUCTURE FUNDING MEASURE FOR THE NOVEMBER 2016 BALLOT AND DIRECTION TO STAFF TO PREPARE BALLOT LANGUAGE AND ALL OTHER NECESSARY DOCUMENTATION FOR REVIEW AND APPROVAL BY THE CITY COUNCIL
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RECOMMENDED ACTION
Recommended Action
Approve the development of a funding measure to be placed on the November 2016 ballot and direct staff to prepare the ballot language, and all other necessary documentation for review and approval by the City Council.
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SUMMARY
The City of Chula Vista is progressing on developing and implementing its Asset Management Program (AMP) to operate and maintain the City’s natural and built environment. This item presents revenue options and asks the City Council tp provide direction to staff to bring back a formal ballot measure for City Council review, approval, and placement on the November 2016 ballot.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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Environmental Determination
The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act and has determined that discussion on Infrastructure Financing is not a “Project” as defined under Section 15378(b)(5) of the State CEQA Guidelines because this item involves only an administrative activity of the government; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
BOARD/COMMISSION RECOMMENDATION
Not applicable
DISCUSSION
Background
Several years ago, the City initiated efforts to develop a comprehensive Asset Management Program (AMP) to more effectively and transparently operate and maintain the City owned assets. Staff has provided annual updates to the City Council on this program. Over this time, City staff has made a variety of outreach efforts to include the community in identifying the most critical needs and priorities. The Asset Management Program Advisory Committee (AMPAC) was convened as a working group composed of Chula Vista residents, business owners, and other stakeholders willing and interested in engaging with City staff regarding preserving, maintaining and upgrading public infrastructure. The AMPAC has been meeting since March 2014 and has been engaged in learning the City’s infrastructure systems, touring sites, observing repairs and maintenance activities, and reviewing information on the City’s finances.
For more general outreach and solicitation of priorities the City has: attended a number of community group meetings to present information, conducted a telephone public opinion survey, and sent out an informational mailer/survey. The telephone survey showed that seven in ten respondents say they would back a sales tax measure to provide new revenue that would enable the City to repair neighborhood streets, sidewalks and potholes; upgrade aging/obsolete public safety vehicles, equipment and technology; repair storm drains; and address deficiencies in parks and sports facilities. The data from the survey that was mailed out to approximately 54,000 households was similar. See data below received from over 3,000 respondents:
The significant public feedback is helpful information for Council and staff to make sound, strategic decisions in a variety of areas, including planning, priority-setting, and budgeting.
Recommendation and Options
At the April 7 Infrastructure Workshop, City staff presented the current state of infrastructure assets as well as a recommendation for a potential revenue mechanisms for sustaining the AMP. City staff recommended a half-cent general use sales tax for ten years. As a general use tax, the approval requirement is a simple majority (50%+1) of voters. An oversight committee was also recommended to ensure funds are allocated to address pressing needs identified through the AMP process. City Council asked staff to return with a list of the critical and medium need infrastructure items and a list of items that address public safety that could be funded with a sales tax measure.
Revenue generated from a half cent sales tax for ten years can address a large portion of the highest priority needs such as:
• Streets
• Traffic Signal Systems
• Sports Fields and Courts
• Park Infrastructure
• Other Public Infrastructure
• Fire Safety Equipment
• Fire Stations
• Fire Response Vehicles
• Police Facilities
• Police Response Vehicles
• Public Safety Communication Systems (Dispatch and Regional Communication System)
While a general use tax would not approve a specific list of projects, Attachments 1 & 2 provides a list of the types of critical and medium need items that could be addressed with such a measure.
Methods of restricting (or guiding) the use of new tax revenues to the funding of infrastructure
In California a two-thirds “supermajority” vote of the electorate is required to pass a new tax for a specified use. This type of tax is known as a “special tax”. A “simple majority” vote of the electorate (50% plus 1) is required to approve a new or increased “general tax”, where the use of tax revenues is not legally restricted. While staff recommends a general use sales tax to address general asset management needs, the City Council has asked staff to report on methods to direct the use of a new revenue source specifically for infrastructure.
2/3 vote-In order to legally bind the future allocation of any new revenue, a two-thirds supermajority vote is required to pass a new tax for a dedicated use.
Advisory vote-An advisory vote is a type of ballot measure in which citizens vote on a non-binding question. While the outcome of the ballot question will not result in a new law, it would symbolically make the general opinion of the voting population known in regard to a particular issue. In this scenario, an advisory vote would provide formal guidance to an Oversight Committee and future City Councils on a direction for future spending. Logistically, it would be placed as a companion piece to the revenue measure. For example, “If the proposed $.005 sales tax increase is approved, should the Chula Vista City Council be advised to spend new tax revenues only on infrastructure?”
Oversight Committee-A Citizen Oversight Committee is also an effective way to guide the expenditure of the funds. Duties typically include review of an Independent Auditor’s report on sales tax revenues and expenditures on an annual basis and provision of an annual report to City Council on the sales tax revenue and expenditures. While the Oversight Committee would not have budget authority, it would be a public body governed by the Brown Act, which includes public meetings, posted agendas, reports and minutes.
Most cities reference the citizens’ oversight committee in the ballot question, but many do not include many details about the members, formation or responsibility of the committee within the full text. Some do include a few key guidelines, leaving the rest to be set by the City Council. City staff recommends the ballot language include the establishment of a Citizen Oversight Committee representing a broad range of expertise and interests to guide and oversee any new sales tax revenue and expenditures. The City Council would approve the details of a Citizen Oversight Committee by Ordinance prior to the operative date of any new revenue. Examples of the composition of other cities’ citizen oversight committees are included in Attachment 3.
Fiscal Transparency-Although a Citizen Oversight Committee does not prescribe a specific expenditure plan, the clear accounting of additional revenue and related expenditures is key to transparency. Revenue from a sales tax measure would be identified in a separate line item in the budget, and all corresponding expenditures would be distinguishable.
Bond after General Use Tax-If a General Use Tax were approved by the electorate, the City Council could subsequently approve the issuance of debt secured by a pledge of new general tax revenues to fund the construction or repair of infrastructure.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently, the 500-foot rule found in California Code of Regulations section 18704.2(a)(1), is not applicable to this decision. Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. Implementation of the Asset Management Program, including a funding mechanism, will advance all of these goals by realizing efficient, transparent operations with safe and reliable stewardship of the natural and built environments to ensure a sustainable quality of life expect by the community.
CURRENT YEAR FISCAL IMPACT
The cost to perform current work on the AMP and the Financing Study were included in the 2015/2016 fiscal year budget and there is no additional fiscal impact.
ONGOING FISCAL IMPACT
The ongoing fiscal impact would be additional revenue to fund critical capital needs. If the ballot measure were approved, items would be brought forward each year to a citizen oversight committee and the City Council for consideration and approval during the budget process.
ATTACHMENTS
Attachment 1 & 2 - Infrastructure Funding Scenario Summary Table & Detail Table
Attachment 3 - Examples of Citizen Oversight Committees
Staff Contact: Amanda Mills, Performance & Organizational Development Manager