Memo From City Manager To Mayor & Council: Forget Nov. '06 Tax Increase Ballot Measure, Aim For April '08

Date: July 31, 2006
To: Mayor Foster and Members of the City Council
From: Gerald R. Miller, City Manager
Subject: Update on Community Outreach for a Potential November 2006 Revenue Generating Ballot Measure

During the past year, City staff has researched public support for a potential ballot initiative to restore core City services impacted by the City's Financial Strategic Plan (Plan). This report provides background on the project, an update on recent community feedback efforts, and recommendations for City Council consideration.

BACKGROUND

The City's Financial Strategic Plan, endorsed by the City Council in 2003, proposed a number of solutions for both reducing expenditures and increasing revenues, including consideration of possible tax measures, to balance the structural deficit in the City's General Fund (once projected at $102 million). Over the past three years, the structural deficit in the General Fund has been reduced by $92 million through the optimization of key operations, the elimination of over 400 vacant positions, service reductions, higher investment returns on City assets and fee increases for selected services. Consequently, only $10 million in structural deficit remains and will be eliminated in fiscal year 2007.

As part of the Budget Oversight Committee (BOC) discussions conducted during April and May of 2005 to develop future Plan solutions, the Committee researched opportunities for new revenues that would provide resources needed to maintain core community services impacted by the implementation of the Plan. This research included a survey of similar communities that had passed revenue-generating ballot measures for public safety, infrastructure, library services and youth programs. On June 21, 2005 the City Council approved a BOC recommendation directing the City Manager to research public support for a ballot measure in the City of Long Beach...

To fulfill this direction, the Lew Edwards Group (LEG) and Fairbanks, Maslin, Maullin, & Associates (FMMA) were selected through a competitive bidding process to provide strategic advice and scientific public opinion polling. In the Fall 2005, FMMA conducted the two public opinion telephone surveys to assess voter opinions on potential ballot measures that would generate funding for core City services. Findings from this research showed that voters agreed that the City needs more funding for essential local services, including libraries and public safety needs...

City staff presented these findings to the City Council at a study session on December 20,2005 and at a City Council meeting on January 10, 2006...As a result of these presentations, the City Council directed staff to obtain additional feedback from the community to determine the level of support for placing a public safety ballot initiative on the November 7, 2006 ballot. Extensive community outreach efforts began in April 2006. An update on the progress of these activities was given to the City Council on May 23, 2006...At this point City staff recommended continuing with outreach efforts, exploring both a possible dedicated % cent sales tax increase and a $100 parcel tax for single family homes with proportional adjustments for multi-family and commercial properties...

It is important to note that there are different requirements associated with dedicated tax and general tax measures. A dedicated tax measure can take place at anytime, but requires two-thirds voter approval. A general tax measure can only be placed on a ballot during a regularly scheduled municipal election, but would only require a 51 percent majority to pass (per Proposition 218). The next opportunity to approve a general tax is April 2008.

Pursuant to City Council direction to obtain additional community input regarding a potential tax measure on the November 7, 2006 ballot, the City Manager directed representatives from the Police, Fire and Library Services departments to engage nearly 40 community groups in a dialogue regarding public safety needs and funding challenges. At these meetings, staff distributed materials regarding service needs...and a survey questionnaire to solicit feedback about community priorities and funding options. Outreach efforts included meetings with:

Business and Industrial Groups City Commissions
Neighborhood Associations Community Action Groups
Homeowners Associations Local Non-profit Boards
Neighborhood Watch Groups Councilmember Town Hall Meetings
City Advisory Bodies Focus Group of Community Leaders

During this effort, staff received over 800 comments and questions through the open-ended dialogue, a written survey questionnaire, telephone hotline, and email correspondence...Feedback from the community reflects strong support for enhancing police patrol services, library services (particularly in the hours after-school), and fire emergency and disaster response services. At the same time, opinions regarding how to fund service enhancements were mixed. Some in the community expressed support for a sales tax; some expressed support for a parcel tax; however, many expressed resistance to any tax proposal at all. Based on the feedback gathered through community meetings, it is clear that a dedicated ballot initiative on the November 7, 2006 ballot would have difficulty obtaining the two-thirds of votes needed for approval.

Therefore, it is recommended that the City Council:

• Not move forward with placing a dedicated tax measure on the November 2006 ballot;

• Continue efforts to identify funding alternatives wherever possible to enhance police patrol, fire response, and library services;

• Remain open to exploring the feasibility of a ballot initiative in April 2008 to support and expand priority quality of life services.

I hope the information obtained through these community outreach efforts provides the City Council with adequate feedqack regarding placing a tax measure on the November 7, 2006 ballot...