Title
Recommendation to Provide Direction to Staff to Explore the Feasibility of Placing a Revenue Measure on a Future Ballot for Potential Infrastructure Funding or Other Possible Revenue Measures, including the City Manager Entering into Agreements with: (1) Clifford Moss for an Initial Feasibility Assessment in an Amount Not-To-Exceed $30,000; and (2) Fairbank, Maslin, Maullin, Metz & Associates (FM3) for Survey Development, Implementation, and Associated Analysis in an Amount Not-to-Exceed $40,750.
These actions are not subject to further environmental review under the California Environmental Quality Act (CEQA), Section 15378 (b)(4), CEQA Guidelines. (City Manager 10021030)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
Staff is seeking City Council direction on whether the City of Alameda (City) should explore the feasibility of a future revenue measure to address significant deferred maintenance of existing Citywide infrastructure and new infrastructure needs. The workplan in the draft Strategic Plan also includes a project to explore the feasibility of a potential vacancy tax measure, which is underway. If the City Council directs staff to conduct a feasibility study of potential revenue measures, staff recommends engaging a consultant team that has experience assisting the City on previous successful ballot measures, which includes Clifford Moss and Fairbank, Maslin, Maullin, Metz & Associates (FM3). Clifford Moss supported the City on its successful Utility User Tax (UUT) measure in 2016 and FM3 assisted the City most recently in 2022 with the successful Transient Occupancy Tax (TOT) measure, in 2019 and 2020 when the City last considered the potential for an infrastructure bond; and in 2018 with the successful Sales Tax measure. This consultant team would conduct initial polling before the end of the year and staff would bring the results and analysis on the feasibility of an infrastructure bond and vacancy tax to City Council in early 2024 for further consideration.
The authorization of these actions this evening is not an endorsement of an infrastructure bond or vacancy tax; it is only an effort to assess the community interest in a revenue measure to support the significant infrastructure needs of the City or in a vacancy tax measure.
BACKGROUND
City staff previously identified over $200 million in deferred maintenance in Citywide infrastructure and over $500 million in new infrastructure needs. While these amounts will need to be reviewed and updated, they did not address sea-level rise or the impact of climate change, provide new facilities and improvements, such as a fire station and branch library at Alameda Point, or implement the many traffic safety and disaster preparedness priorities identified in the City Council’s Strategic Plan and other City plans.
In 2018, after researching several revenue measure options, including a $95 million infrastructure bond, the City Council placed a successful Sales Tax measure on the November 2018 ballot. Staff planned to return to the Council in March 2020 to address a variety of identified infrastructure funding needs, but did not present the item given changing priorities due to the onset of the COVID-19 pandemic.
In 2022, 59.29% of Alameda voters passed Measure F, an increase to TOT. An additional $800,000 in annual revenues from this measure support ongoing general services and financial commitments, but do not address the significant infrastructure capital project needs that have grown since 2018.
The workplan in the draft Strategic Plan also includes a project to explore the feasibility of a potential vacancy tax measure, which is underway.
DISCUSSION
Previous polling of Alameda residents shows strong community support for maintaining 911 fire and police response times, repairing potholes and deteriorating streets, addressing climate change impacts and preventing flooding, repairing and upgrading City infrastructure, and better preparing for natural disasters.
Should the City decide to pursue an infrastructure bond, it could create locally controlled funding that will be used to address infrastructure needs that help maintain our quality of life and longer-term problems like sea-level rise caused by climate change.
In May 2023, S&P Global Ratings raised the City’s long-term credit rating to 'AAA', reflecting S&P’s view that the City will continue its record of strong-to-very-strong financial performance. This increase in rating will allow the City to secure the lowest possible interest rates on its sale of long-term obligations, such as general obligation bonds, saving the City money as it repays the debt over time.
Any funds generated from an infrastructure bond or vacancy tax would be subject to tough fiscal accountability requirements, including full public review of all spending and independent financial audits, to ensure that the money is spent consistent with voter authorization.
Considering the ongoing need to address aging and future infrastructure needs, staff is recommending that the City Council revisit the need for a future revenue measure to address infrastructure funding and authorize the City Manager to enter into agreements with the consultant team to conduct an infrastructure funding feasibility study over the next several months. More information on the consultant team and their proposed scopes of services is provided below:
Clifford Moss Scope of Services
Clifford Moss would conduct a feasibility assessment and provide general strategy support to the City in assessing the electoral feasibility of a future ballot measure for infrastructure funding. The services provided by Clifford Moss are offered at a monthly base consulting fee of $7,500, which equals a four-month not-to-exceed amount of $30,000 (noted as Phase 1 in the Scope of Services in Exhibit 1). Following the feasibility assessment, should the City Council decide to continue pursuing a potential ballot measure in the future, staff would consider an amendment to the agreement with Clifford Moss for ballot measure development and public information support at the same monthly consulting rate of $7,500.
FM3 Scope of Services
FM3 would provide community survey development, implementation, and analysis for the City’s infrastructure funding feasibility study. This feasibility survey would be conducted in the fall of 2023 and focus on generating funds for Alameda’s infrastructure needs. The length of the survey would be determined as the options are developed. FM3 would offer telephone interviews in English, Spanish, and Chinese, and online interviews in English. The services provided in this first phase by FM3 (noted in the Scope of Services as Phase 1) would be provided at a not-to-exceed amount of $40,750. Should the City decide to continue exploring the possibility of placing a measure on a future ballot, staff would amend the agreement with FM3 for an additional not-to-exceed amount of $40,750 to conduct a Phase 2 tracking survey. The recommended scope and budget, is attached as Exhibit 2.
Consistent with the draft Strategic Plan, staff has already commenced the preparation of a technical feasibility study to assist in the exploration of a vacancy tax measure, including identifying the number of vacant parcels in the City, and the FM3 survey can also include questions related to a vacancy tax measure.
Next Steps
If the City Council approves staff’s recommendation to explore the feasibility for a potential revenue measure and authorizes the City Manager to enter into contracts with Clifford Moss and FM3 consistent with the attached scopes of work, an initial feasibility survey would be conducted before the winter holidays. Staff would return to the Council in the first quarter of 2024 to share the survey results and seek additional direction based on the findings related to an infrastructure bond or vacancy tax measure.
Should the City Council decide to move forward with placing a measure on the November 2024 presidential election ballot, staff would engage the consultant team to prepare a more targeted tracking survey and conduct ballot measure development and public information, including community outreach. The results of this outreach would be presented to the City Council in July 2024 along with proposed ballot language for the measure to be submitted to the Alameda County Registrar of Voters in early August. Ballot arguments would be due in mid- to late-August.
ALTERNATIVES
• Provide direction to staff on exploring potential revenue measure and authorizing the City Manager to enter into contracts with Clifford Moss and FM3 consistent with the attached scopes of work.
• Provide direction to staff on exploring potential revenue measure, but do not authorize the City Manager to enter into contracts with Clifford Moss and FM3.
FINANCIAL IMPACT
Funding for consultants and polling to explore a potential revenue measure is included in the City Manager’s budget. The City will also have approximately $35,000 in election related costs.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
City Council’s direction to staff to explore infrastructure funding or other possible revenue measure and to authorize agreements related thereto is not subject to further environmental review in that such action is not a project under CEQA. CEQA Guidelines, Section 15378 (b) (4) [creation of governmental funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment is not a project].
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with a feasibility study on possible revenue measures.
RECOMMENDATION
Provide direction to staff to explore the feasibility of placing a revenue measure on a future ballot for potential infrastructure funding or other possible revenue measure, including the City Manager entering into agreements with: (1) Clifford Moss in an amount not-to-exceed $30,000 for an initial feasibility assessment; and (2) FM3 in an amount not-to-exceed $40,750 for survey development, implementation, and associated analysis.
Respectfully submitted,
Sarah Henry, Communications and Legislative Affairs Officer
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Clifford Moss Scope of Services
2. FM3 Scope of Services