DATE:
| 7/12/2022 | TO:
| HONORABLE MAYOR AND CITY COUNCIL | FROM:
| KRISTOPHER J. KOKOTAYLO, CITY ATTORNEY | SUBJECT:
| CONSIDER FOR ADOPTION A RESOLUTION CALLING AN ELECTION TO BE HELD ON NOVEMBER 8, 2022, FOR VOTER CONSIDERATION OF THE EXTENSION OF AN EXISTING, VOTER-APPROVED LOCAL ONE-HALF CENT TRANSACTIONS AND USE (SALES) TAX FOR AN ADDITIONAL NINE YEARS WITH NO INCREASE IN TAX RATE FOR THE CONTINUED MAINTENANCE OF CITY SERVICES; ESTABLISHING POLICIES AND PROCEDURES IN CONNECTION WITH SUCH AN ELECTION; REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY OF ALAMEDA TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION WITH THE GENERAL ELECTION TO BE HELD ON NOVEMBER 8, 2022, REQUESTING CERTAIN SERVICES OF THE REGISTRAR OF VOTERS OF ALAMEDA COUNTY WITH RESPECT TO THE CONSOLIDATED GENERAL MUNICIPAL ELECTION; AND PROVIDING FOR SUBMITTAL OF BALLOT ARGUMENTS AND REBUTTALS AND AUTHORIZING THE FILING OF AN IMPARTIAL ANALYSIS |
Pursuant to prior City Council direction, staff recommends that the City Council adopt a resolution calling an election and submitting to the voters at the November 8, 2022 election the consideration of a nine-year extension of the existing voter-approved local one-half cent transactions and use (sales) tax with no increase in tax rate.
STRATEGIC PLAN ALIGNMENT
Placement of a tax measure on the November 2022 ballot is consistent with Strategic Plan Goal A: Strategy 1 and New Strategy 1: 1) Establish a comprehensive fiscal stability and sustainability plan to address the General Fund’s long-term structural deficit; 2) Study and prepare for placement of a revenue measure for the November 2022 election that addresses the expiration of the half-cent sales tax; or prepare for $6 million in service cuts.
BACKGROUND
In 2010, the City Council adopted a resolution proposing for voter consideration at the November 2010 election a one-half cent (.5%) transactions and use (sales) tax increase for four years (“Measure AA”). The voters of Union City approved Measure AA at the November 2, 2010 election with 60.12% voter approval.
Measure AA went into effect on April 1, 2011 with an expiration date of April 1, 2015. The City Council adopted a resolution proposing for voter consideration at the November 2014 election a ten year renewal of Measure AA (“Measure JJ”). The voters of Union City approved Measure JJ at the November 4, 2014 election with 73.74% voter approval. Absent an extension, the half-cent sales tax will expire on April 1, 2025. The half-cent sales tax is referred to as Measure AA throughout the remainder of this report.
DISCUSSION
Staff presented several reports over the past year regarding the fiscal impact of Measure AA, the effect of extending Measure AA on the City’s general fund and, conversely, the effect of permitting Measure AA to expire. A general timeline of past Council consideration during 2022 of a potential renewal of Measure AA is as follows:
January 25, 2022: The City Council adopted a resolution authorizing Mayor Dutra-Vernaci to appoint two Councilmembers to an Ad Hoc Subcommittee to evaluate and provide recommendations on the placement of potential tax measures on the ballot. Councilmember Duncan and Councilmember Singh were appointed to the subcommittee.
February 22, 2022: The Ad Hoc Subcommittee returned to the City Council with a recommendation to proceed with a community survey regarding a potential extension of Measure AA. The Ad Hoc Subcommittee subsequently worked with staff and the City’s consultants to prepare a survey evaluating voter attitudes toward the potential extension.
April 26, 2022: The City Council received a report from Godbe Research and TBWBH Props and Measures regarding the community survey of Union City voter attitudes related to a potential extension of Measure AA and the planned public information program. Given the lack of consensus from the City Council necessary for placement of an extension of a ballot measure to extend Measure AA, staff was directed to return at the subsequent City Council meeting to consider ceasing further efforts related to the potential ballot measure.
May 10, 2022: The City Council received a further report from staff regarding the potential ballot measure to extend Measure AA. The City Council discussed the potential ballot measure and indicated support for a potential extension of Measure AA for an additional nine (9) years.
Pursuant to City Council discussion, the City Attorney has prepared a Proposed Resolution calling an election and submitting an ordinance for a nine-year extension of Measure AA to the voters at the November 8, 2022 general election. The ordinance amends and restates the existing code section to reflect other procedural updates including the fact that the California Department of Tax and Fee Administration now responsible for administration of local transactions and use taxes. A two-thirds vote of the City Council (or four out of five City Council Members) is required to place the nine-year Measure AA extension before the voters on the November ballot. (Government Code section 53724.) Should the Council elect to adopt the Proposed Resolution, the following election timeline would apply:
1. July 12, 2022: Council adopts the Proposed Resolution calling an election and placing the proposed extension of Measure AA on the ballot.
2. July 26, 2022: Direct arguments for or against the Measure AA extension due no later than 5:00 p.m. (Elections Code sections 9282, 9286.)
3. August 5, 2022: Rebuttal arguments due no later than 5:00 p.m. (Elections Code section 9285.)
4. November 8, 2022: General election.
If the City Council elects to adopt the Proposed Resolution, the City Council may designate up to two Council members to draft and submit the ballot argument in favor of the measure and to draft the rebuttal argument to any argument against the measure. The Proposed Resolution also authorizes the City Council to sign the argument and rebuttal.
FISCAL IMPACT
Measure AA currently generates over $6 million annually to the City’s general fund. This amount is expected to grow in the future. If the City Council consolidates this initiative with the General Municipal election on November 8, 2022, this action will have minimal fiscal impact to the City.
RECOMMENDATION
Staff recommends that the City Council:
1. Submit the nine-year Measure AA no tax rate increase extension to the voters at the next General Municipal election on November 8, 2022.
2. Designate the person(s) responsible for preparing and submitting the ballot argument and rebuttal in favor of the proposed ballot measure.
Prepared by:
Shandyn Pierce, Attorney
Submitted by:
Kristopher J. Kokotaylo, City Attorney |