HomeMy WebLinkAboutStaff Report 9107
City of Palo Alto (ID # 9107)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 4/17/2018
City of Palo Alto Page 1
Summary Title: Review of Initial Public Opinion Survey for Infrastructure
Funding Needs
Title: Review of Initial Public Opinion Survey Results Regarding Potential
2018 Ballot Measure to Address the Funding Gap for the 2014 Infrastructure
Plan, Discussion of Next Steps for Addressing the Funding Gap, and Potential
Recommendation to Council Regarding Refinement of Survey Elements and
Objectives for Follow-Up Survey
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that Finance Committee review the results of the initial public opinion
survey and provide direction on next steps in addressing the funding gap for the 2014 Council
Infrastructure Plan projects, including discussion of priorities with respect to competing future
capital investments and a potential refinement of survey elements and objectives for a follow-
up survey.
Background
On March 20, 2018, the Finance Committee approved direction to Fairbank, Maslin, Maullin,
Metz & Associates (FM3 Research) to conduct an initial public opinion survey, from March 23 to
April 2, 2018, to assess public support for a potential November 2018 ballot revenue measure
to help address the funding gap for the 2014 Infrastructure Plan projects, currently estimated at
$76 million including a $20 million contingency placeholder. The survey also gathered
information regarding the level of public support for funding other “community asset” projects,
such as the second phase of the new Junior Museum and Zoo, a New Animal Shelter, and
implementation of elements of the Parks Master Plan which were estimated to cost $55 -65
million.
In addition, the staff report provided discussion and tables outlining the current cost estimates
for both the Infrastructure Plan projects and other community asset projects as well as
potential funding options for these projects. (CMR #9039 Initial Public Opinion Survey for
Infrastructure Funding Needs)
City of Palo Alto Page 2
On February 6, 2018, the Finance Committee discussed the next steps for addressing the
existing funding gap1 for the Council Infrastructure Plan projects. The Council Infrastructure
Plan includes the following nine projects:
Public Safety Building
Highway 101 Pedestrian/Bicycle Bridge
Bicycle/Pedestrian Plan Implementation
Charleston/Arastradero Corridor
Byxbee Park
California Avenue Parking Garage
Downtown Parking Garage
Fire Station 3 Replacement
Fire Station 4 Replacement
Discussion
Survey Results
FM3 Research conducted a survey from March 23 to April 2, 2018 by phone and through email
and received approximately 1,200 responses from likely November 2018 voters. (For more
information, a summary of survey results from FM3 Research is provided in Attachment A.)
These survey results were juxtaposed to recent similar survey results completed in 2013 and
2016. Overall the survey results indicated that the City’s current direction is not as highly
supported as it was in a similar survey in 2016. In addition, the confide nce in the City’s
management of infrastructure and finances has declined since 2016; however, it is important to
note that this trend is not unique to Palo Alto. These sentiments have been expressed in recent
polls done for other surrounding communities and jurisdictions in the Bay Area. Even though
confidence has declined overall, the City’s maintenance of its infrastructure still has approval
from two-thirds of the survey sample.
Additional funding to support infrastructure polled with a little less than 50% support, which is
similar to results from a poll question posed in 2013 asking about the need for additional
funding to maintain and improve infrastructure. When asked about specific infrastructure
projects that have been identified as upcoming needs , projects that pertained to public safety,
streets maintenance, and bike/pedestrian safety all rated over 60% in terms of importance. A
majority of the projects that fall into the community asset project category previously discussed
by the Committee rated less than 40% in terms of importance.
Specific types of funding mechanisms were evaluated that could potentially be used to fund the
City’s infrastructure repairs and improvements. The four funding options polled were increases
to the transient occupancy tax (TOT), documentary transfer tax, and sales tax, or establishing a
1 Information on the 2014 Council Infrastructure Plan funding gap is provided in the February 6, 2018 Finance
Committee report (CMR #8927) at https://www.cityofpaloalto.org/civicax/filebank/documents/63293
City of Palo Alto Page 3
parcel tax. Increases to both the TOT and the documentary transfer tax polled with over 50%
support, while increases to sales tax or establishing a parcel tax both polled with under 4 0%
support. The survey also assessed how much in additional taxes households would be willing to
pay annually to support infrastructure needs. A $100 increase per year was the upper limit that
still received a majority of positive support.
Updated Potential Funding Options
Staff continues to work to identify multiple types of funding sources, ranging from current ly
available funding, anticipated new funding, and funding from potential revenue generating
ballot measures. Below is an updated version of a table previously presented addressing
available and anticipated funding, and a new table estimating potential revenues generated by
ballot measure initiatives.
Table 1: Project Funding Options
Additional Parking In-Lieu Funds (Downtown Garage) $2.8 million
FY 2019 estimated SB1 funding (Charleston/Arastradero Project) $1.2 million
Other Sources (Charleston/Arastradero Project) $1.7 million
Infrastructure Reserve (currently “scheduled annual” General Fund transfer
for CIP investment between FY 2019 – FY 2023
$25- $30 million
Available Funding Sources (w/o ballot measure) $31- $36 million
New Estimated Transient Occupancy Tax estimated debt issuance
(anticipated opening FY 2020, Marriott hotels)*
$35 million
Additional hotel development Transient Occupancy Tax receipts (in
entitlement process)*
$10- $12 million
Transportation Tax measures (SB1, Measure B, through FY 2023) $12 million
Sale of City of Palo Alto real estate assets (Middlefield lots) $4 - $5 million
Anticipated Funding Sources (with less certainty) $61- $64 million
The table below articulates both the potential annual revenue generated as well as potential
debt issuance that can be leveraged against the four tax increases that were polled in the initial
survey. Except for a parcel tax, which requires 2/3 voter approval, each of these measures
could be structured as a general tax measure requiring a simple majority for approval. Should a
“special tax” measure be pursued, dedicating these funds to certain purposes, this would
require a 2/3 voter approval.
City of Palo Alto Page 4
Table 2: Potential Ballot Measure Initiatives
Tax Measure
Annual
Revenue
Total Debt
Leverage
1% Increase in TOT
(from 14% currently, to 15%)*
$1.7 million $16.7 million
$1.10 per $1,000 increase in Documentary Transfer Tax
(from $3.30 per $1,000 currently, to $4.40 per $1,000)*
$2 million $19.6 million
1/4 cent increase in Sales Tax
(additional 0.25% to rate of 9.25%)*
$5-$6 million $49-$59 million
Parcel Tax
($100/parcel)
$2.1 million $29.4 million
* All economically sensitive revenues are modeled at 70% of estimated receipts leveraged for
debt service.
As mentioned above, increases to the TOT and Documentary Transfer Tax polled favorably;
however, an increase to the sales tax or establishing a parcel tax both polled below 50 %
approval. Below is additional background information for TOT and Documentary Transfer Tax
rates compared to other cities. In addition, Attachment B has a full list of these comparables.
Transient Occupancy Tax
Palo Alto has a TOT (hotel tax) rate of 14 percent of the room rate. This rate increased from 12
percent to 14 percent in 2014 as approved by the voters and is consistent with other
destination cities such as San Francisco, Oakland, Santa Monica and Beverly Hills. The highest
rate in the state is currently 15 percent in Anaheim and the median rate in the state is 10
percent, according to Californiacityfinance.com. Some cities have other taxes included in
addition to the hotel tax, such as tourism tax and/or convention center tax. For every 1 percent
increase in the tax rate, we estimate collecting $1.7 million in additional revenues annually.
Documentary Transfer Tax California’s Documentary Transfer Tax Act allows counties and cities
to collect tax on transactions that transfer real estate. In addition to the county rate, cities may
impose additional documentary transfer taxes. The amount that the city may impose depends
on whether the city is a charter city or a general law city (Palo Alto is a charter city). In Palo
Alto, property owners pay a total of $4.40 ($1.10 county rate plus $3.30 city rate) on each
$1,000 of property value transferred. In comparison to other Santa Clara County cities, Palo
Alto’s rate is consistent with San Jose and Mountain View, but higher than Sunnyvale and Santa
Clara which are at $0.55 per $1,000 even though they are charter cities.
City of Palo Alto Page 5
Projected Uncertainties and Risk
As discussed at the Finance Committee meeting on March 20 and in the associated staff report
(CMR 9039), it may be possible that sufficient funding sources will be available over the
Proposed 2019-2023 Capital Improvement Program (CIP) to address the Council Infrastructure
Plan funding gap and $20 million contingency. However, there are risks and uncertainties
associated with this strategy:
Currently Measure B and SB1 are both facing challenges through litigation and a
referendum. The outcome of these proceedings remains uncertain.
Additional TOT revenues are contingent on the development and construction of new
hotels and timely opening of permitted facilities.
The funding model assumes continued economic growth through the projected five -
year period; no recession or contraction in the economy is presumed or modeled.
The model would exhaust all funding options and delay the City’s ability to invest in any
projects outside of the 2014 Council Infrastructure Plan projects , including the
community asset projects previously identified.
Many of the 2014 Council Infrastructure Plan projects remain in the design phase.
Project cost estimates are still in flux, and there is a potential that a $20 million
contingency will be insufficient to address further increases.
As a result, this approach could reduce the flexibility of the City t o respond to unforeseen,
urgent capital needs over the next five years. In addition, execution of the five-year CIP
assumes current projects remain within budgeted levels and that there are no new capital
requests beyond those projects.
Looking forward, the City is facing numerous pressures. These include the 2014 Council
approved Infrastructure Plan, FY 2019 General Fund operating budget forecasted gap of $2.6
million, growing obligations to fund employee pension benefits, current labor negotiations for
some of the City’s largest employee units, and needed additional capital investment such as
rail/grade separation. Palo Alto serves a diverse community with a broad range of unique
services adding to the complexity of managing resources and expectations in both the near and
longer term. A containment strategy is necessary to maintain a manageable financial position
and to address these future financial challenges as well as any unforeseen changes such as
program needs or the inevitable economic downturn. The City is faced with prioritizing the
growing needs of the City with the long-term stability of these needs.
City of Palo Alto Page 6
Ballot Measure – Timeline
Should the Committee provide direction to conduct a refined survey and potentially pursue a
November 2018 ballot measure, Table 3 outlines the schedule necessary to accomplish that.
The schedule allows for Finance Committee to bring a potential recommendation for a
November 2018 ballot measure to Council before the Council summer break, so that the
remaining steps can occur in time to meet the relevant election deadlines. This is a very
constrained schedule that will require late packet reports and assumes that decisions needed
from Finance Committee and Council will be made at the indicated meetings.
Table 3: Estimated schedule for consideration and preparation of ballot measure
Activity
Estimated
Schedule
Finance Committee approval of initial survey objectives - COMPLETE March 20
FM3 conducts initial survey and compiles results - COMPLETE March 23 – April 2
Finance Committee review of survey results and recommendation on
refinement survey objectives (late packet distribution)
April 17
Council approval of refinement survey objectives (late packet distribution) April 30
FM3 conducts refinement survey and compiles results May 7 – May 14
Finance Committee review of survey results and recommendation on
placing measure on ballot (late packet distribution)
May 30
Council takes policy action to place measure on the ballot (late packet
distribution)
June 11
Council adopts resolution of necessity June 11
Council adopts resolution calling election June 11
Deadline to submit election measure to County August 10
Election Day November 6
Timeline
Following completion of the refinement of the initial public opinion survey, staff would to
Council to review the survey results on April 30.
Resource Impact
The recommended actions in this report do not have a resource impact as costs associated with
polling will be funded from FY 2018 budgets. However, the result of this process will assist in
informing the both the FY 2019 budget development and proposed funding for various
infrastructure investments.
Attachments:
Attachment A: Initial Survey Results
Attachment B: Tax Rate Comparisons
220-5016
Key Findings of a Survey of Palo Alto Voters
Conducted March 23-April 2, 2018
Palo Alto Voter Views on
Infrastructure Funding
Attachment A
1
Methodology
•1,191 interviews with likely November 2018 voters in
Palo Alto
•Conducted March 23 to April 2, 2018, online and via
landline and cell phones
•Margin of sampling error of ±4.0% at the 95%
confidence interval
•Due to rounding, some percentages do not add up to
100%
•Selected comparisons to 2016, 2014, 2013 and 2008
surveys
2
Key Findings
•Voters are now divided on the City’s direction compared with 2016 – a trend
common in recent months for Bay Area cities facing increasing challenges like
housing costs and traffic congestion.
•Majorities approve of the City’s management of infrastructure, and more
approve than disapprove of its handling of budget and tax dollars.
•In principle, voters support a measure to fund improvements to City
infrastructure – and a solid majority is willing to pay up to $100 per household
per year for such projects.
•Ensuring a modern emergency response system, and repairing streets and
roads, are the highest-priority projects.
•Among mechanisms tested in concept, a TOT or real estate transfer tax have
the most initial appeal.
•Note that this poll was not designed to gauge the ultimate feasibility of a fully-
developed ballot measure concept; should the City choose to move forward,
future research will need to test draft ballot language and pro and con
arguments.
3
Issue Context
4
Q1.
Right
Direction
61%
Wrong
Track
25%
DK/NA
14%
Right
Direction
43%
Wrong
Track
37%
DK/NA
20%
2018 2016
Would you say that things in the Palo Alto are generally headed in the right
direction, or do you feel that things are pretty seriously off on the wrong track?
Voters are now split on the city’s direction,
reflecting a regional trend.
5
10%
18%
15%
16%
50%
56%
53%
56%
27%
19%
23%
22%
10%
5%
6%
2018
2016
2013
2008
Excellent Good Only Fair Exc./
Good
Fair/
Poor
60% 37%
74% 24%
68% 29%
72% 26%
Three in five say the City does an “excellent”
or “good” job providing services.
Q2.
How would you rate the overall job being done by Palo Alto city government in
providing services to the City’s residents? Would you say the City is doing an …?
6
21%
10%
9%
43%
37%
38%
5%
23%
16%
17%
16%
21%
13%
14%
16%
Maintaining the City's
infrastructure
Managing the City's
budget and finances
Efficiently utilizing
local tax dollars
Strng. App.Smwt. App.DK/NA Smwt. Disapp.Strng. Disapp.
Q3.
Total
Approve
Total
Disapprove
64% 31%
47% 30%
47% 36%
Nearly two-thirds approve of maintenance
of City infrastructure; they are more divided
on budget and tax management.
I am going to read you a list of specific aspects of the City of Palo Alto’s work in managing city government.
Please tell me whether you generally approve or disapprove of the job the City is doing in that area.
7
Q3. I am going to read you a list of specific aspects of the City of Palo Alto’s work in managing city government. Please tell me whether you generally approve or disapprove of
the job the City is doing in that area.
Appraisals of the City’s work managing
infrastructure and its budget have declined – as
they have in many cities - but remain net positive.
City Palo Alto City Government 2013 2016 2018
Maintaining the City's infrastructure 75% 75% 64%
Managing the City's budget and finances 62% 64% 47%
Efficiently utilizing local tax dollars 63% 67% 47%
(Total Approve)
8
11%
35%
19%
25%
11%
Q5. Split Sample
10%
36%
22%
23%
9%
Great/
Some Need
46%
Little/No
Real Need
45%
Great need
Some need
Little need
No real need
Don’t know
Great/
Some Need
45%
Little/No
Real Need
43%
Just under half see at least “some need”
for funding for infrastructure.
More specifically, how would you rate the City of Palo Alto’s need for additional
funding to maintain and improve infrastructure: is there a great need for
additional funding, some need, a little need or no real need for additional funding?
2018 2013
9
10%
31%
25%
25%
8%
Q6. Split Sample
11%
43%
19%
22%
5%
Great/
Some Need
54%
Little/No
Real Need
41%
Great need
Some need
Little need
No real need
Don’t know
Great/
Some Need
42%
Little/No
Real Need
50%
About two in five see at least “some need” for
more specific infrastructure improvements.
More specifically, how would you rate the City of Palo Alto’s need for additional
funding to maintain and improve public parks, streets, sidewalks and vital
facilities like police and fire stations: is there a great need for additional
funding, some need, a little need or no real need for additional funding?
2018 2013
10
Voter Priorities for
Infrastructure Funding
11
“Now I would like to ask you a
few questions about potential
local funding measures. The
City has identified between
$75 million and $150 million
in needed improvements to
City’s streets, sidewalks,
parks, public facilities and
other basic infrastructure.”
11 Q7.
12
35%
22%
24%
26%
25%
15%
23%
22%
16%
40%
44%
39%
35%
36%
43%
31%
31%
35%
18%
29%
30%
27%
29%
37%
27%
32%
33%
6%
5%
7%
12%
10%
5%
19%
14%
16%
^Ensuring a modern and stable 911
emergency communications network
Maintaining City streets and roads
Fixing potholes and paving city streets
^Providing safe routes for bicyclists and
pedestrians
Maintaining City parks and recreation
facilities
^Improving safety at Caltrain crossings
^Improving city streets to make busy
intersections safer
Providing adequate parking
Ext. Impt.Very Impt.Smwt. Impt.Not Too Impt./DK/NA
Q7. I’m going to read you some of the objectives of the infrastructure projects identified through this process. Please tell me how important each objective is to you as a
resident of Palo Alto: extremely important, very important, somewhat important, or not important. ^Not Part of Split Sample
Ext./Very
Impt.
75%
66%
63%
61%
61%
58%
54%
53%
51%
Ensuring a modern emergency communications
network is important to three-quarters.
^Ensuring vital City facilities like police
stations and the emergency command
center are earthquake safe
13
17%
20%
14%
15%
10%
9%
32%
25%
29%
29%
29%
21%
14%
8%
8%
35%
31%
34%
32%
41%
38%
46%
32%
29%
16%
24%
22%
24%
21%
32%
37%
59%
61%
^Making sidewalks, City buildings and parks
accessible for people with disabilities
Funding transportation incentives that
improve traffic by reducing solo driver trips
Providing downtown parking
^Providing a safe crossing over Highway 101
for pedestrians and cyclists
Improving parks, playgrounds and playfields
for youth and adult recreation
^Providing a modern animal shelter
^Upgrading the Palo Alto
Junior Museum and Zoo
^Upgrading Byxbee Park
Restoring the historic Roth building
Ext. Impt.Very Impt.Smwt. Impt.Not Too Impt./DK/NA
Q7. I’m going to read you some of the objectives of the infrastructure projects identified through this process. Please tell me how important each objective is to you as a
resident of Palo Alto: extremely important, very important, somewhat important, or not important. ^Not Part of Split Sample
Ext./Very
Impt.
49%
44%
44%
43%
39%
30%
17%
10%
10%
Fewer are concerned with upgrading the
museum, zoo, Byxbee Park, or Roth building.
14
Support for
an Infrastructure
Funding Measure
15
19%
39%
17%
18%
6%
Strongly support
Somewhat support
Somewhat oppose
Strongly oppose
Don't know
Many of these projects and improvements are beyond the scope of the City’s
existing budget and may require additional funding through a local voter-
approved bond or tax measure. Based on what you’ve heard, do you think
you would support or oppose a bond or tax measure to fund some group of
these projects to maintain and improve Palo Alto’s infrastructure?
Total
Support
59%
Total
Oppose
35%
Q8.
In principle, nearly three in five support a bond
or tax measure for infrastructure upgrades.
16
Younger voters are slightly more
supportive than those over age 50.
Q8. Many of these projects and improvements are beyond the scope of the City’s existing budget and may require additional fun ding through a local voter-approved bond or tax
measure. Based on what you’ve heard, do you think you would support or oppose a bond or tax measure to fund some group of th ese projects to maintain and improve Palo
Alto’s infrastructure?
64%
56%
62%
59%
30%
39%
33%
33%
Men Ages 18-49
Men Ages 50+
Women Ages 18-49
Women Ages 50+
Total Support Total Oppose % of
Sample
15%
33%
15%
36%
By Gender by Age
17
While nearly seven in ten Democrats support
the idea, independents are split.
Q8. Many of these projects and improvements are beyond the scope of the City’s existing budget and may require additional fun ding through a local voter-approved bond or tax
measure. Based on what you’ve heard, do you think you would support or oppose a bond or tax measure to fund some group of th ese projects to maintain and improve Palo
Alto’s infrastructure?
68%
49%
38%
61%
64%
51%
25%
43%
57%
35%
29%
44%
Democrats
Independents
Republicans
Asians/Pacific Islanders
White Voters
Voters of Color
Total Support Total Oppose
% of
Sample
58%
27%
15%
14%
62%
30%
By Party & Ethnicity
18
Renters are stronger backers than owners,
though majorities of both support it.
Q8. Many of these projects and improvements are beyond the scope of the City’s existing budget and may require additional fun ding through a local voter-approved bond or tax
measure. Based on what you’ve heard, do you think you would support or oppose a bond or tax measure to fund some group of th ese projects to maintain and improve Palo
Alto’s infrastructure?
63%
64%
56%
64%
56%
66%
29%
32%
38%
30%
38%
28%
<$100,000
$100,000-$150,000
$150,000-$250,000
$250,000+
Homeowners
Renters
Total Support Total Oppose
% of
Sample
18%
12%
19%
28%
72%
23%
By Income & Residence
19
51%
36%
23%
19%
20%
24%
18%
18%
5%
5%
5%
8%
11%
16%
14%
16%
24%
37%
43%
$50 per year
$100 per year
$200 per year
$250 per year
Very Will.Smwt. Will.DK/NA Smwt. Unwill.Very Unwill.
Q9.
Total
Willing
Total
Unwilling
71% 25%
61% 35%
41% 53%
38% 57%
Three in five voters are willing to pay up to
$100 annually for these improvements.
Regardless of how the measure was structured, would your household be willing to pay
______ in additional taxes if it were dedicated to the types of Palo Alto infrastructure repairs
and improvements we have been discussing?
20
Examining Potential
Funding Mechanisms
21
27%
25%
13%
8%
34%
27%
27%
20%
5%
7%
5%
17%
16%
17%
23%
17%
25%
38%
47%
Increasing the transient
occupancy tax, charged to
hotel and motel guests
Increasing the real estate
transfer tax rate, paid when a
property is bought or sold
Establishing a flat tax on every
parcel of property in Palo Alto
Increasing the sales tax
Strng. Supp.Smwt. Supp.DK/NA Smwt. Opp.Strng. Opp.
Q10. I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure r epairs and improvements we have been discussing.
Please tell me if you would support or oppose that particular way of raising new revenue for these purposes. Would you suppo rt or oppose_____?
Total
Supp.
Total
Opp.
61% 34%
53% 40%
40% 55%
27% 70%
Three in five back a higher TOT, and
a majority favors an RETT.
22
Q11.
Voters then heard a pro/con exchange on a
potential sales tax increase in isolation.
Let me ask you about the idea of increasing the sales tax.
Supporters say increasing the sales tax ensures that people who make
purchases in the city, including visitors, pay a small share of the cost of
maintaining city infrastructure without raising taxes on homeowners
once again.
Opponents say sales taxes increase the price of nearly everything we
buy, which hurts the poor more than it does the rich. Our sales tax
rates is already 9 percent.
Having heard this, would you support or oppose increasing the sales tax
as a way of raising money to repair and upgrade City infrastructure?
23
9%
17%
21%
51%
2%
Q10a. I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure repairs and improvements we have been discussing.
Please tell me if you would support or oppose that particular way of raising new revenue for these purposes. Would you suppo rt or oppose increasing the sales tax?
Q11. Having heard this, would you support or oppose increasing the sales tax as a way of raising money to repair and upgrade City infrastructure?
8%
20%
23%
47%
2%
Total
Support
27%
Total
Oppose
70%
Strongly support
Somewhat support
Somewhat oppose
Strongly oppose
Don’t know/NA
Total
Support
26%
Total
Oppose
72%
This did not shift opinions – more than seven
in ten still oppose a sales tax increase.
After Pro/Con Initial Opinion
24
Q12.
They also heard an exchange of messaging on
a transient occupancy tax increase.
Let me ask you about the idea of increasing the transient occupancy tax,
charged to hotel and motel guests.
Supporters say increasing the transient occupancy tax ensures that visitors
to our city pay their fair share for our infrastructure while keeping costs
lower for residents.
Opponents say higher transient occupancy taxes will cause tourists to stay
in cities outside Palo Alto, driving business out of the City, and especially
hurt parents and students who visit campus.
Having heard this, would you support or oppose increasing the transient
occupancy tax charged to hotel and motel guests as a way of raising money
to repair and upgrade City infrastructure?
25
25%
33%
19%
19%
4%
Q10b. I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure repairs and improvements we have been discussing.
Please tell me if you would support or oppose that particular way of raising new revenue for these purposes. Would you suppo rt or oppose Increasing the transient occupancy
tax, charged to hotel and motel guests?
Q12. Having heard this, would you support or oppose increasing the transient occupancy tax charged to hotel and motel guests as a way of raising money to repair and upgrade
City infrastructure?
27%
34%
17%
17%
5%
Total
Support
61%
Total
Oppose
34%
Strongly support
Somewhat support
Somewhat oppose
Strongly oppose
Don’t know/NA
Total
Support
58%
Total
Oppose
38%
A solid majority continued to support a TOT
increase after messaging.
After Pro/Con Initial Opinion
26
Q13.
Supporter and opponent rationales for a real
estate transfer tax were also read.
Let me ask you about the idea of raising the real estate transfer tax
rate, paid when a property is bought or sold.
Supporters say the it makes sense for people who buy a home in
Palo Alto to contribute to the City’s infrastructure with a one-time
investment when they buy the house.
Opponents say the cost of housing is already outrageous, and we
shouldn’t make it even more costly to buy a home in our community.
Having heard this, would you support or oppose raising the real
estate transfer tax rate as a way of raising money to repair and
upgrade City infrastructure?
27
21%
26%
17%
32%
4%
Q10c. I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure repairs and improvements we have been discussing.
Please tell me if you would support or oppose that particular way of raising new revenue for these purposes. Would you suppo rt or oppose increasing the real estate transfer
tax rate, paid when a property is bought or sold?
Q13. Having heard this, would you support or oppose raising the real estate transfer tax rate as a way of raising money to re pair and upgrade City infrastructure?
25%
27%
16%
25%
7%
Total
Support
53%
Total
Oppose
40%
Strongly support
Somewhat support
Somewhat oppose
Strongly oppose
Don’t know/NA
Total
Support
47%
Total
Oppose
49%
After messaging on the RETT as a funding
mechanism, voters were evenly divided.
After Pro/Con Initial Opinion
28
Q14.
Voters heard reasons to vote “yes”
and “no” on a flat parcel tax.
Let me ask you about the idea of establishing a flat parcel tax on
each piece of property.
Supporters say that it is the simplest way to ensure that property
owners all pay a fair share in improving the City’s infrastructure.
Opponents say that this method is unfair because owners of smaller
homes will be forced to pay the exact same price as owners of larger
and more valuable properties.
Having heard this, would you support or oppose establishing a flat
parcel tax as a way of raising money to repair and upgrade City
infrastructure?
29
12%
22%
22%
41%
4%
Q10d. I am going to read you a list of several methods that might be used to raise money to fund the types of infrastructure repairs and improvements we have been discussing.
Please tell me if you would support or oppose that particular way of raising new revenue for these purposes. Would you suppo rt or oppose Establishing a flat tax on every
parcel of property in Palo Alto?
Q14. Having heard this, would you support or oppose establishing a flat parcel tax as a way of raising money to repair and up grade City infrastructure?
13%
27%
17%
38%
5%
Total
Support
40%
Total
Oppose
55%
Strongly support
Somewhat support
Somewhat oppose
Strongly oppose
Don’t know/NA
Total
Support
34%
Total
Oppose
62%
This increased opposition
to more than three in five.
After Pro/Con Initial Opinion
30
Conclusions
31
Conclusions
•This limited test of mechanisms alone indicates that a transient occupancy tax
or real-estate transfer tax present potential avenues for voter-approved
revenue.
–Both a TOT and RETT (without the rate of increase) begin with majority
support, and retain it after a very brief exchange of messaging.
–Voters in general support up to $100 per year in new taxes for
infrastructure improvements and repairs.
•Maintaining the emergency communications network, repairing streets and
roads, and pedestrian and cyclist safety are top priorities.
•Voters are increasingly pessimistic about the direction of the City, and offer
middling approval ratings on the City’s work managing tax revenues and the
budget.
•At the same time, fewer than a majority see a need for new funding for the City
generally or for infrastructure specifically.
•Further research should test a 75-word ballot label, which includes the rate of
increase and projects funded, as well as a fuller suite of messaging, to
determine viability in a November election.
For more information, contact:
1999 Harrison St., Suite 2020
Oakland, CA 94612
Phone (510) 451-9521
Fax (510) 451-0384
Dave@FM3research.com
Miranda@FM3research.com
Revised
Apil 15, 2017
Count 483
Mean 9.80%
Standard Deviation 1.85%
Median 10.00%
Minimum 3.50%
Maximum 15.00%
City County Rate
Anaheim Orange 15.0%
Garden Grove Orange 14.5%
Beverly Hills Los Angeles 14.0%
Culver City Los Angeles 14.0%
Healdsburg Sonoma 14.0%
Inglewood Los Angeles 14.0%
Los Angeles Los Angeles 14.0%
Oakland Alameda 14.0%
Palo Alto Santa Clara 14.0%
San Francisco San Francisco 14.0%
San Leandro Alameda 14.0%
Santa Monica Los Angeles 14.0%
Palm Springs Riverside 13.5%
Blythe Riverside 13.0%
Del Mar San Diego 13.0%
Indio Riverside 13.0%
Mammoth Lakes Mono 13.0%
Burlingame San Mateo 12.0%
Campbell Santa Clara 12.0%
Cupertino Santa Clara 12.0%
East Palo Alto San Mateo 12.0%
Los Gatos Santa Clara 12.0%
Menlo Park San Mateo 12.0%
Pacifica San Mateo 12.0%
Redwood City San Mateo 12.0%
San Bruno San Mateo 12.0%
San Mateo San Mateo 12.0%
Sunnyvale Santa Clara 10.5%
Mountain View Santa Clara 10.0%
Transient Occupancy Tax Rates
California Cities and Counties
SOURCE: CaliforniaCityFinance.com
SOURCE: CaliforniaCityFinance.com
California City Documentary and Property Transfer Tax Rates
CONTRA COSTA COUNTY $ 1.10 $ 1.10
RICHMOND Chartered $ 7.00 $ 1.10 $ 8.10
SAN MATEO COUNTY $ 1.10 $ 1.10
SAN MATEO Chartered 0.5% of value $ 1.10 $ 6.10
SANTA CLARA COUNTY $ 1.10 $ 1.10
CUPERTINO General Law $ 0.55 $ 0.55 $1.10
GILROY Chartered $ 0.55 $ 0.55 $ 1.10
LOS ALTOS General Law $ 0.55 $ 0.55 $1.10
LOS ALTOS HILLS General Law $ 0.55 $ 0.55 $1.10
MOUNTAIN VIEW Chartered $ 3.30 $ 1.10 $ 4.40
PALO ALTO Chartered $ 3.30 $ 1.10 $ 4.40
SAN JOSE Chartered $ 3.30 $ 1.10 $ 4.40
SANTA CLARA Chartered $ 0.55 $ 0.55 $ 1.10
SUNNYVALE Chartered $ 0.55 $ 0.55 $ 1.10
Governance
General Law or
Chartered
Per $1000 Property
Value City Rate
Per $1000 Property
County Rate
Per $1000 Property
Value Total
ALAMEDA COUNTY ALAMEDA $ 1.10 $ 1.10OUNTY
ALAMEDA Chartered $ 12.00 $ 1.10 $ 13.10
ALBANY Chartered $ 11.50 $ 1.10 $ 12.60
BERKELEY Chartered $ 15.00 $ 1.10 $ 16.10
EMERYVILLE Chartered $ 12.00 $ 1.10 $ 13.10
HAYWARD Chartered $ 4.50 $ 1.10 $ 5.60
OAKLAND Chartered $ 15.00 $ 1.10 $ 16.10
PIEDMONT Chartered $ 13.00 $ 1.10 $ 14.10
SAN LEANDRO Chartered $ 6.00 $ 1.10 $ 7.10