HomeMy WebLinkAboutStaff Report 4055
City of Palo Alto (ID # 4055)
Infrastructure Committee Staff Report
Report Type: Meeting Date: 9/3/2013
City of Palo Alto Page 1
Summary Title: Infrastructure Finance Measure
Title: Continue Discussion from August 6, 2013 Infrastructure Committee
Meeting on Baseline Survey Results and Recommendations to the City
Council on Next Steps in Considering an Infrastructure Finance Measure
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends that the Infrastructure Committee continue its discussion on the public
opinion survey results and make recommendations to the City Council on: 1) areas of further
study for opinion research, 2) uses of current or potential new revenue sources to fund
infrastructure projects, or 3) other next steps.
Background
On June 6, 2013, the City’s Infrastructure Committee reviewed the preliminary findings of a
baseline survey assessing the community’s opinions about a potential finance measure to fund
infrastructure needs. Attachment A provides the staff report for the meeting and the meeting
minutes. The staff report presented the preliminary findings of the baseline survey.
Supplemental information was also provided on the status of infrastructure project costs,
currently available revenue sources, grant applications, potential revenue sources, and debt
financing alternatives intended to support the Committee’s discussion and recommendations
to the City Council about next steps. No formal action was taken at the June 6 Infrastructure
Committee meeting.
On August 6, 2013 the Committee continued its discussions and assessment of a potential
finance measure to fund infrastructure needs. Staff provided a series of worksheets designed
to assist Committee members in advanced reflection and preparation work on potential
recommendations that the Committee may make to the full Council about: 1) areas of further
study for opinion research, 2) uses of current or potential new revenue sources to fund
infrastructure projects, or 3) other next steps. The staff report also provided some key policy
questions and considerations that the Committee may want to consider in their deliberations.
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Attachment B provides the staff report and meeting minutes. Duplicate attachments from the
June 6 and August 6 meetings have been removed.
At the conclusion of the August 6th meeting, the Committee requested staff return to the next
Committee meeting with additional information on:
1. Schedule and flowchart for the annual process to develop the CIP plan.
2. Integration of the 5-year Capital Improvement Program (CIP) plan and the City’s overall
infrastructure needs the Committee is evaluating, including project updates on Parks Catch-
up, Building Catch-up, Surface Catch-up, Sidewalks, Civic Center and Parking Garages.
3. Updated information on finance measures and other revenue sources including a business
license tax, Mello-Roos districts, Transient Occupancy Tax, and the Los Altos Treatment
Plant revenue potential.
Discussion
1. Schedule for Annual CIP Plan
At the August 6, 2013 Infrastructure Committee meeting, the Committee requested staff return
with a schedule and flowchart for the annual process to develop the CIP plan. Attachment C
presents a draft schedule and flowchart for the CIP plan development process overlaid with key
dates in considering an infrastructure revenue measure. Staff is currently evaluating the CIP
plan process with a goal of making the process more efficient and more responsive to the
recommendations of the Infrastructure Blue Ribbon Commission (IBRC).
Since the completion of the IBRC’s work in December 2011, the City has used the detailed
infrastructure spreadsheet developed by staff and the IBRC to guide the development of the CIP
plan. The spreadsheet specifies the “keep-up” projects for each fiscal year, and identifies
projects that have been deferred and are not scheduled in the 5-year CIP plan as “catch-up”.
Separate worksheets are provided for Buildings, Surface, and Parks categories. The City uses
the infrastructure spreadsheet to identify the keep-up projects to include in the CIP plan, and it
is updated each year following adoption of the new 5-year CIP plan. The most recent update
occurred recently following adoption of the FY 2014 Capital budget and 5-year plan, and the
project cost changes that resulted are described in this report.
Staff is currently evaluating proposals received in response to the City’s RFP for consultant
support to implement an Infrastructure Management System (IMS). The anticipated scope for
the consultant work will include 1) an assessment of current applications used by the city to
manage its infrastructure, 2) identification of best practices for tracking relevant data about the
City’s infrastructure, 3) examination of issues associated with replacement and/or integration
with existing systems used by the City to manage its infrastructure, and 4) recommendations
for a specific application that will best meet the City’s requirements for monitoring and
reporting the condition of the city’s infrastructure and forecasting maintenance, repair and
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replacement needs that can be incorporated into future budget and capital planning processes.
A consultant agreement is expected to be awarded this fall.
2. Relationship of 5-year Capital Improvement Plan to Infrastructure Projects
At the August 6 Infrastructure Committee meeting, the Committee also directed staff to
provide information on the integration of the 5-year Capital Improvement Program (CIP) plan
and the City’s overall infrastructure needs that the Committee is evaluating. All of the
information relating to the 5-year CIP plan presented in this report is with respect to the
General Fund CIP only, and does not include Enterprise Funds or Internal Service Funds.
Summary of FY 2014 Capital Budget and 5-year CIP Plan
Attachment D presents a tabular summary of the FY 2014 Capital budget and 5-year plan,
including the following for each CIP:
Project funding for each of the five years
CIP type – recurring or nonrecurring
IBRC category – Catch-up, Keep-up, or New
City infrastructure category – Streets and Sidewalks, Parks and Open Space
This information is useful in reviewing the types of projects that are funded in the CIP plan and
how the funding is apportioned in the plan. Attachment E presents additional information to
further illustrate the CIP plan funding. These include the 5-year CIP plan according to City
infrastructure categories such as Parks and Open Space, and Streets and Sidewalks; the 5-year
CIP plan in terms of the IBRC categories of catch-up, keep-up, and new for each of the 5 years;
and the funding sources for the CIP that include general fund transfers, gas taxes, and various
grants and reimbursements.
Changes to Project Costs Resulting from FY 2014 Capital Budget and 5-year Plan
Based on the Infrastructure Committee’s direction, staff has reviewed the infrastructure project
costs and updated the net cost figures for projects that have received new funding in the FY
2014 Capital budget and 5-year plan. In some instances, staff is recommending changes for
other reasons. For example, the Ventura Community Center project cost of $3 million
developed for polling is already captured by an existing CIP and the Buildings Catch-up project,
and staff therefore recommends that Ventura Community Center be removed from the project
list to avoid double-counting these costs. Table 1 provides a high-level summary of the
recommended changes to project costs.
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Table 1: Summary of Changes to Project Costs
Project Previous Cost Estimate* Updated Cost Estimate*
Streets 8 0
Parks Catch-up 9.8 8.9
Bike/Pedestrian Plan 23.5 16.25
Ventura Community Center 3 0
Surface Catch-up 8.8 3.4
Buildings Catch-up 4.5 4.2
Civic Center 16 to be determined
*Net cost with committed funding ($ millions)
With these changes, staff believes that there are no further redundancies or double-counting
between the CIP and the infrastructure project list. Attachment F provides an updated
Infrastructure Project Summary Sheet, in the format reviewed previously by the Infrastructure
Committee that reflects the changes recommended by staff. The changes are described in the
section below for each project. Information on sidewalks and parking garages is also included,
although changes to costs for these projects are not proposed.
Streets
The $8 million project cost for streets is an estimate of the incremental funding, in addition to
the current $5.1 million per year in CIP funding, that would be required to attain the City’s
Pavement Condition Index (PCI) goals by the end of 2016. The annual funding level for the
Street Maintenance Program CIP was increased from $1.8 million to $3.8 million in FY 2011.
The FY 2014 Capital budget and 5-year plan increases the annual funding to $5.1 million. The
original PCI improvement goal established in FY 2011 was to achieve a citywide average PCI of
85, representing very good or excellent conditions, by 2021. With the annual funding level of
$5.1 million included in the FY 2014 Capital budget and 5-year plan, the citywide PCI goal is now
anticipated to be reached by the end of 2019. The $8 million project cost estimate for Streets
was developed primarily for polling purposes. Achieving the citywide PCI goal by 2016 would
require extensive and disruptive work throughout the City in a short timeframe and is likely
infeasible given the need to coordinate street maintenance work with utilities projects. Current
staffing would also be inadequate to oversee such an effort. For these reasons, the Committee
may want to consider removing the $8 million in additional streets funding from the project list.
Sidewalks
The $6 million project cost for sidewalks was a figure selected to represent a substantial
investment in sidewalk repairs in addition to the current funding provided in the CIP, but was
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not based on a formal assessment of sidewalk needs. In recent years, the Sidewalk Repairs CIP
has been funded at $650,000 annually. IBRC identified a $3.7 million catch-up amount for
sidewalks that was based on the additional funding needed to complete the original cycle of 23
sidewalk districts within the planned 30-year timeframe ending in 2016. The FY 2014 Capital
budget and 5-year plan increased funding for sidewalks by $1 million annually, as well as
funding a one-time project to repair damaged sidewalks on school routes. Providing an
additional $6 million in sidewalks funding would allow the completion of a very significant
amount of sidewalk improvements. The FY 2013 sidewalk repairs contract is currently in
progress, and is expected to result in the replacement of 62,300 square feet of sidewalk at a
cost of about $700,000. Assuming the same price per square foot (the actual bid price for a
very large contract would likely be lower), $6 million would fund the replacement of 530,000
square feet of sidewalk, representing about 7 percent of the City’s total sidewalk surfaces.
Members of the Infrastructure Committee have expressed interest in the cost of implementing
a more rigorous ongoing sidewalk repair program that would have a much greater impact on
the condition of sidewalks throughout the City than the current program. Staff intends to
create a new CIP for FY 2015 to study in detail potential improvements to the sidewalks
program and their costs. A thorough review is timely given the upcoming completion of the 30-
year sidewalk district cycle.
Parks Catch-Up
IBRC evaluated the maintenance needs of City parks and open space facilities. The Parks Catch-
up estimate includes all deferred maintenance that is not scheduled in the FY 2014 Capital
budget and 5-year plan. These needs include turf, irrigation and playground replacement,
pathway, tennis and basketball court resurfacing, and replacement of miscellaneous amenities
such as benches, drinking fountains, lighting, signage, and trash receptacles. The Parks Catch-
up project cost is reduced from $9.8 million to $8.9 million. This decrease is primarily due to
the inclusion of the Baylands Interpretive Center Improvement and Boardwalk Repair project,
and other previously unscheduled projects and maintenance, in the new 5-year CIP plan. The
new Parks Catch-Up figure represents a reduction of $5.5 million from the $14.4 million that
was identified by IBRC.
Bike/Pedestrian Plan
The Palo Alto Bicycle and Pedestrian Transportation Plan 2012 expands the City’s existing
bicycle infrastructure and proposes to implement a network of new on-street and off-street
facilities for all user levels. Key components of the plan include 52 miles of new or enhanced
multi-use paths, bicycle lanes, and bicycle boulevards, and new barrier crossings at a number of
locations. Barrier crossings account for about three-fourths of the total estimated cost for
implementing the plan.
The FY 2014 Capital budget and 5-year plan includes funding of $1.2 million per year for the
Bicycle & Pedestrian Transportation Plan Implementation CIP, $250,000 for the El Camino Real
& Churchill Avenue Intersection Improvements CIP, and $2.5 million for the Matadero Creek
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Trail CIP. The El Camino Real & Churchill Avenue Intersection and Matadero Creek Trail are
components of the Bike/Pedestrian Plan. The overall project cost for the Bike/Pedestrian Plan
is $25 million. The project funding provided in the FY 2014 capital budget and 5-year plan
results in an updated unfunded amount of $16.3 million for the Bike/Pedestrian Plan.
It is important to note that the $1.2 million per year for the Bicycle & Pedestrian Transportation
Plan Implementation CIP was proposed by staff to come from the Stanford University Medical
Center Development Agreement funds. During the budget process, Council directed that the FY
2014 funding come from the Infrastructure Reserve, with the remaining four years that are
adopted in concept being funded by the Stanford University Medical Center Development
Agreement funds pending policy decisions by Council on the use of the funds. The impact of
this additional $4.8 million in the 5-year plan coming from either the Infrastructure Reserve or
Development Agreement funds is not yet captured in the descriptions of available revenue
sources being considered by the Infrastructure Committee.
Ventura Community Center
Ventura Community Center was placed on the project list for polling by City Council. The
Ventura Community Center is a City owned and maintained facility at 3990 Ventura Court. The
City leases this building to a non-profit childcare program, Palo Alto Community Child Care, Inc.
The City purchased the Ventura Community Center Site from Palo Alto Unified School District
(PAUSD) in 1980 under the terms of the Ventura Purchase Agreement. The Agreement allows
PAUSD the right to repurchase the property for educational purposes, and specifies the
methodology for determining the repurchase price, which includes the value of capital
improvements, if PAUSD decides to exercise this right.
The estimated project cost of $3 million developed for polling includes $690,000 in funding for
the Ventura Buildings Improvement CIP (scheduled for FY 2015 and FY 2016) and additional
needs for Ventura that are included in the Buildings Catch-Up project. Staff recommends
removing Ventura Community Center from the project list for the purposes of assigning funding
sources to projects, so that these costs are not double-counted.
Surface Catch-Up
IBRC evaluated the maintenance needs of City streets and sidewalks as well as other surface
facilities such as parking lots and off-road trails. The Surface Catch-up project estimate includes
all deferred maintenance that is not currently scheduled in the FY 2014 Capital budget and 5-
year plan. The surface needs include resurfacing of parking lots, off-road trail repairs, traffic
signal upgrades, intersection improvements and traffic calming improvements. The estimate
does not include annual street maintenance.
The Surface Catch-up project cost is reduced from $8.8 million to $3.4 million. The reduction is
primarily due to the following factors:
Funding of the $3.7 million sidewalks catch-up amount in the FY 2014 Capital budget
and 5-year plan
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Removal of $1.0 million in Downtown and California Avenue assessment district parking
lot maintenance costs from the Surface Catch-up project list. These maintenance
projects are being funded through assessment district monies.
Funding of previously unscheduled maintenance for parking lots through the City Facility
Parking Lot Maintenance CIP. Funding for this CIP was doubled from $100,000 to
$200,000 per year in the FY 2014 capital budget and 5-year plan to begin addressing the
parking lot maintenance backlog.
The new Surface Catch-Up figure represents a reduction of $6.4 million from the $9.8 million
that was identified by IBRC.
Buildings Catch-Up
IBRC evaluated the maintenance needs of all City buildings. The Buildings Catch-up estimate
includes all deferred maintenance that is not currently scheduled in the FY 2014 Capital budget
and 5-year Plan, with the exception of deferred maintenance for Cubberley Community Center.
Deferred maintenance requirements include roofing, HVAC, electrical and plumbing
replacements, and accessibility improvements. Interior and exterior improvements such as
painting and carpet replacement are also included.
The Buildings Catch-up project cost is reduced from $4.5 million to $4.2 million. The reduction
is due primarily to roofing replacements at the Municipal Service Center that are included in the
5-year plan.
Civic Center
In 2003, the City hired Ferrari Moe Architectural/Engineers to assess the Civic Center
waterproofing system. Ferrari Moe submitted an Evaluation of Waterproofing Membrane
report in 2004. The study concluded that it is prudent to undertake the replacement of the
Civic Center waterproofing membrane that protects the Civic Center structural system to avoid
costly associated structural repairs. In October 2004, a cost estimate totaling $11.7 million
identified a repair plan to replace the waterproofing system in four phases that would allow the
Civic Center to remain accessible to the public. That estimate has since been inflated to $16
million by staff to account for escalation of construction costs.
Although the waterproofing membrane has not been replaced, the City took several immediate
steps to minimize the impacts of any water leakage, including installation of metal gutters to
capture water leaking from expansion joints at parking garage level A, crack sealing of the
surface cracks on the Civic Center Plaza, and capping of leaking abandoned conduit pipes at
garage level A.
In response to the Infrastructure Committee’s discussion on August 6, 2013, staff reviewed the
Ferrari Moe Report and determined that some of the report’s recommended actions warrant
further review, and that the report did not determine the necessary timeframe for completing
repairs to prevent structural damage to the Civic Center plaza deck. Staff recommends that a
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new CIP be created for FY 2015 to conduct a feasibility study that will provide non-destructive
testing to reassess the condition of the structural system, conduct a cost benefit analysis, and
make updated recommendations for short, medium and long term improvement plans.
Immediate plans may include repair of concrete delamination in the garage, crack sealing of the
plaza, replacing expansion joints at the garage levels, and repair of miscellaneous leaks and
drainage at the planters. Long term repairs will likely include replacement of the entire
waterproofing membrane and drainage system, associated replacement of landscaping,
decorative plaza decking and structural repairs, if necessary.
Staff recommends that the $16 million Civic Center project cost be removed from the
infrastructure project list or denoted “to be determined”, pending an updated study of the
waterproofing system replacement needs. While an eventual project will likely be very costly, it
may be determined that short term actions can allow the full replacement to be scheduled for a
future year as part of the City’s building keep-up needs.
Parking Garages
The downtown parking garage estimate of $21 million is based on the in lieu parking fee of
$60,750 per space multiplied by 350 spaces. The California Avenue parking garage estimate of
$12 million is based on the in lieu parking fee of $60,750 per space multiplied by 200 spaces.
The in lieu parking fee is derived by calculating the cost per space for building the last two
downtown parking garages, and then inflating that cost to current dollars. The 350 and 200
space figures are arbitrary and represent the number of spaces that might be built at some of
the potential sites, but the exact number of spaces would be highly site specific. The Planning
and Community Environment Department is currently studying the comparative advantages of
building parking structures over certain downtown surface parking lots. The results of that
study are likely to significantly change the estimate of $21 million. The results of that study and
any combined land use opportunities would impact the cost of the projects.
3. Updated Information on Finance Measures and other Revenue Sources
At the August meeting, the Committee requested updated information on finance measures
and other revenue sources including a transient occupancy tax, business license tax, Mello-Roos
districts, and revenue that could be generated from the Los Altos Treatment Plant site. In
addition, based on the polling results, staff was asked to eliminate the utility users and parcel
tax from further consideration, and to proceed to the full Council with recommendations on a
digital readerboard. Attachment G provides an updated revenue sources sheet in the format
reviewed previously by the Infrastructure Committee that reflects the changes discussed below.
Transient Occupancy Tax
The Committee requested that staff return with additional information on the revenue that the
City would realize from a three percent increase in its Transient Occupancy Tax (TOT) versus a
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two percent increase, and to calculate the effect of the percentage change on “new hotel”
revenue. The City’s current TOT rate is 12 percent.
Staff previously reported that an increase in the TOT rate from 12 to 14 percent on base
revenue would yield an additional $1.8 million annually. A three percent rate increase to 15%
would raise another $0.9 million to total $2.7 million. New hotels coming on line in the next
few years are anticipated to yield $2.4 million at the 12 percent rate. The effect of a two
percent increase yields another $0.4 million while a three percent hike would result in $0.6
million. Thus, the combination of a two percent rate increase and new hotel revenues would
provide $4.6 million in additional revenue while a three percent increase would yield $5.7
million. Table 2 below illustrates these results:
Table 2. TOT Increases
2% TOT Increase 3% TOT Increase
Increase 2% 14% Increase 3% 15%
Current base $1.8M Current Base $2.7M
New Hotels $2.8M New Hotel $3.0M
$4.6M $5.7M
Table three below displays the TOT rate for a range of other California cities in comparison to
Palo Alto.
Table 3. TOT for Other California Cities
City TOT Rate City TOT Rate
San Francisco 14% Mountain View 10%
Oakland 14% Sunnyvale 9.5%
Menlo Park 12% Santa Clara 9.5%
East Palo Alto 12% Redwood City 12%
Palo Alto 12% Santa Barbara 12%
San Jose 10% Anaheim 15%
As discussed in previous reports, to issue Certificates of Participation (COPs) to debt finance
projects, the City must identify existing, increased, or new revenue streams. Based on several
assumptions, staff estimates that for each $1.0 million in resources, $14.0 million in project
funds can be generated. Hence, a 2 percent increase in the TOT combined with new hotel
revenues results in $4.6 million in new revenue that, in turn, translate into $64.4 million in
project funds; a 3 percent increase results in $5.7 million that generates $79.8 million in project
funds.
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There is a caveat to consider in using economically sensitive tax revenues to leverage COP debt.
Sources such as a TOT are susceptible to volatile swings or steep drops during a recession. The
credit for a COP is typically a physical asset, but the City also is pledging its general revenues to
pay bondholders. Should a specific revenue source such as TOT not perform as expected, the
City likely would be forced to forego an asset or identify other resources (e.g. cost reductions)
to meet its debt obligations.
Another consideration is the current status of the bond market for local jurisdiction COPs.
Because of recent local government bankruptcies as well as local pension and medical liabilities,
the bond market has become leery of COP debt. Both Standard and Poor’s and Moody’s are
considering lowering their ratings on COPs by two “notches” or grades. The argument for this
action is that pledged assets may not easily be used or converted to repay bondholders and
that there are extreme pressures on General Fund resources to deliver services and cover
liabilities. The effect of these concerns may result in higher interest rates and lower project
funds than projected even with the City’s stellar Triple A credit rating.
Business License Tax
As is well known, the City does not have a Business License Tax (BLT). BLT proposals have been
made on several occasions in the City’s history and have generated considerable debate and
concern. From staff’s original proposal in March 2009 through the proposed ballot measure in
November 2009, this tax went through numerous iterations and changes with substantial input
from the business community and Council. Ultimately, it was rejected by voters for a variety of
reasons, chief among which was the complexity of its application. A BLT can be complicated
given legal exemptions, the variety of business enterprises, equity issues, and various types of
formulas for allocating the tax. The final proposal sent to the voters was expected to raise
around $3.0 million net of administrative expenses.
The question posed at the last Infrastructure Committee meeting was whether a higher tax
could be levied on commercial businesses and businesses with a large number of employees
compared to smaller business. The answer to this question is yes. Moreover, it is possible to
allocate a relatively higher tax on businesses that are not contributing to General Fund
resources via sales tax generation through retail sales or transient occupancy taxes via hotels –
two major sources of revenue to support City services.
Based on data collected in FY 2006-07, small businesses that are defined as having 49
employees or less, constituted 97.5 percent of businesses identified. There were only 168
businesses with 50 or more employees. Small businesses accounted for 28,000 or 37.4 percent
of the estimated 75,000 employees working in the City while the larger businesses accounted
for the remaining 47,000 employees. Assuming that the small businesses would have a low or
low flat tax, the general thrust of this data indicates that large businesses (those with
employees greater than 50) would bear a significantly high cost/proportion of a $3.0 million
goal. Similarly, and based on prior analysis, if the City were to tax businesses based on a gross
receipts methodology, it would be the large businesses that that would incur the highest
burden of a BLT.
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Should Council wish to pursue a BLT considerable lead time would be needed to collect and
analyze data, develop proposals, and work with the business community.
Mello-Roos District for Building Parking Garages
During the last Committee meeting, staff was asked to return with additional information on
using a Mello-Roos (MRD) or Communities Facilities District (CFD) (These terms/acronyms are
interchangeable) to fund new parking garages in the University and California Avenue business
districts. Currently, the City has $1.2 million in parking in-lieu fees for a downtown garage.
Unlike the Assessment District formed under Proposition 218 that was used to fund the High
Street (Lot R) and Bryant Street (Lots S/L) garages, an MRD has less stringent requirements.
Typically used in new developments to build schools, streets and other infrastructure, local
jurisdictions have been using MRDs to fund a variety of projects in built out jurisdictions. In San
Francisco, for example, a number of CFDs have been or are planning to be used. These have
included:
1. The Rincon Point/South Beach area has a CFD used for street improvements,
underground infrastructure, and other capital investments
2. The Mission Bay area south of market has two CFDs that were used for a full array of
capital improvements related to the rebuilding of the area.
3. The Port of San Francisco is planning to use a series of CFDs along the waterfront for
development projects, including garages
Some key considerations on formation of a MRD are as follows:
1. The City has broad discretion in drawing the boundaries of a MRD. The boundaries
could be citywide or they could be drawn to capture certain portions of the City
2. If there are fewer than 12 registered voters within the district then election involves a
landowner vote; if there are 12 or more registered voters in district, then election
involves a registered voter election. Approval requirement is two-thirds (2/3) of voters
3. Unlike Proposition 218 which requires a special benefit per property, a CFD requires a
“reasonable” basis for its special tax. State code defines “reasonable” as “based on a
benefit received by parcels of real property, the cost of making facilities or authorized
services available to each parcel, or some other reasonable basis as determined by the
legislative body."
4. The special tax is levied pursuant to a rate and method of apportionment (called the
"RMA" or "tax formula"), which can assign tax rates on a variety of criteria or one or
more of the following factors:
Land use: the RMA could assign different tax rates to single family residential,
multifamily residential, commercial, retail, etc.
Intensity of land use: the RMA could assign different tax rates based on square
footage.
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Proximity to a facility: the RMA could establish tax zones whereby those properties
closest to the facility would pay more.
Expected burden on a garage: the RMA could assign a tax rate based on the number
of car trips expected at different properties or even sales transactions.
Based on the above information, the Infrastructure Committee can further discuss the use of a
MRD to finance the building of new garages in the City.
Los Altos Treatment Plant Revenue (LATP)
Potential rental revenue from the LATP site has been revised downward from $3.0 million to a
range of $1.3 to $2.0 million. The former estimate was predicated on the City building a site for
use and on a change in zoning from public facility to commercial use. At this time, staff believes
that a tenant might prefer to build on this site. Annual rent could range from $1.3 million with
public facility zoning to $2.0 million with commercial zoning.
Other Revenue
Staff has identified $1 million additional surplus from higher than anticipated revenues. Based
on the results of tax revenue performance (e.g. sales and documentary transfer taxes) in the
past several years, staff believes that an additional and ongoing $1.0 million can be devoted to
infrastructure work.
Since the last Committee meeting, staff has also identified an additional option for a source of
revenue to fund infrastructure needs. There are two City owned properties located on
Middlefield Road that were used as well sites and can now be sold for residential housing. Each
property is valued at around $1.1 million so the City could elect to sell the properties and use
the $2.2 million to fund infrastructure needs.
Attachments:
-: Att A - June 6, 2013 Staff Report & Meeting Mintues (PDF)
-: Att B - August 6, 2013 Staff Report & Meeting Minutes (PDF)
-: Att C - Annual CIP Process (PDF)
-: Att D - Tabular Listing of CIP (PDF)
-: Att E - CIP Plan, Graphs and Source of Funds (PDF)
-: Att F - Revised Project Summary Sheet (XLSX)
-: Att G - Revised Revenue Sources (PDF)
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City of Palo Alto (ID # 3875)
Committee for Potential Infrastructure Finance Measure
Staff Report
Report Type: Meeting Date: 6/6/2013
City of Palo Alto Page 1
Summary Title: Infrastructure Finance Measure
Title: Review Baseline Survey Results and Make Recommendations to the
City Council on Next Steps in Considering an Infrastructure Finance Measure
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends that the Infrastructure Committee review the preliminary public opinion
survey results and make recommendations to the City Council on next steps in considering a
potential infrastructure revenue measure.
Background
On September 18, 2012, the Council adopted a high level plan and timeline for consideration of
an infrastructure revenue measure in the November 2014 election to fund infrastructure needs.
Since last September, the City retained assistance of outside experts in two areas: 1) public
opinion research and 2) public communications and educational outreach. In December 2012,
the City hired the public opinion research firm, Fairbank, Maslin, Mauling, Metz and Associates
(FM3) to assist the City with its opinion research. In February 2013, the City retained the
communications firm, TBWB Strategies (TBWB) to help evaluate the feasibility of a finance
measure and develop communications, messaging, and community engagement strategies.
FM3 recommended a series of research efforts to assess public attitudes towards funding the
City’s infrastructure needs, including: 1) initial baseline survey in the spring of 2013, 2) series of
follow-up focus groups in the summer of 2013 if the initial baseline survey points to voter
support for revenue increases to support infrastructure investments, 3) a potential tracking
survey in the Fall of 2013, and; 4) a final feasibility survey in the Spring of 2014. The culmination
of the research will be a series of recommendations to the City Council about whether and how
to proceed with an infrastructure finance measure or measures.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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In the first of a series of research efforts to access public attitudes, a baseline public opinion
survey was conducted in late April and early May 2013 of approximately 600 residents in Palo
Alto. The objectives of the survey were to:
1. Track public attitudes (compared to prior years’ surveys) on core measures like feelings
about the City’s quality of life; the City Council’s management of civic affairs and finances;
the condition of the local economy; and the need for additional revenue to fund various
local services;
2. Gauge overall perceptions of the condition of the City’s infrastructure, and the specific
areas that may be in greatest need of approval;
3. Test public support for the following 14 potential infrastructure improvement projects as
directed by Council, given basic information about their substance and cost.
Public Safety Building Parks Catch-up
Bicycle/Pedestrian Plan Animal Services Center
Bike Bridge Playing Fields (golf course)
Fire Stations Ventura Community Center
Accelerate Street Resurfacing Downtown Parking Garage
Charleston/Arastradero Improvements California Avenue Parking Garage
Sidewalks (surface catch-up) History Museum
4. Evaluate public support for several potential ballot measure packages that might combine
several of the improvement projects in cohesive packages;
5. Evaluate types of funding mechanisms and levels of tax threshold the community is willing
to support;
6. Determine the demographic profile of the respondents to provide the necessary categories
for cross-tabulation of the data, and to ensure that the respondents are representative of
the pool of likely November 2014 voters in Palo Alto.
Discussion
This staff report presents the preliminary findings of the baseline survey. Supplemental
information is provided on the status of infrastructure project costs, currently available funding
sources, grant applications, potential revenue sources, and debt financing alternatives to
support the Committee’s discussion and recommendations to the City Council about next steps.
In addition, the staff report provides information on two areas that drew public support as
measured in the survey, potential ballot measure packages that combine multiple projects, and
a potential general tax measure used to fund infrastructure projects.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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The following provides some key policy questions and considerations that the Committee may
want to consider in reviewing the survey findings and supplemental material and making its
recommendations to the Council.
1. Removing projects that do not have strong support?
2. Focusing continued efforts around specific projects such as public safety and transportation
(including bike and pedestrian) improvements?
3. Proceeding with further study on a bundled measure that combines multiple projects?
4. Proceeding with further study on funding for a public safety building individually or bundled
with other projects?
5. Proceeding with further study on specific finance mechanisms that received more than
simple majority support including a General Obligation Bond, Transient Occupancy Tax,
business license tax, or real estate transfer tax and considering multiple measures?
6. Evaluating further the issuance of Certificates of Participation to fund infrastructure needs?
7. Designating current funding to infrastructure projects (that did not have strong support)
that could be allocated at the Council’s discretion such as the Stanford Mitigation Funds?
Preliminary Survey Findings and Conclusions
FM3 conducted the initial baseline public opinion survey from April 28 – May 5, 2013. A
telephone survey was conducted of 603 randomly-selected Palo Alto voters likely to cast a
ballot in the November 2014 election. The margin of sampling error is +/-4.0 percent at the 95
percent confidence level; margins of error for population subgroups will be higher. For
example, the split sampled questions (sampling 300) have margins of error of +/- 5.7%.
Selected findings were compared to the results of prior City voter surveys in 2007 and 2008.
FM3’s preliminary conclusions of the baseline survey are:
1. Voters express striking confidence in City government and its financial management.
2. The central challenge is that voters do not attach much urgency to infrastructure issues;
they believe the City is handling them well and not much additional funding is required.
3. At the same time, 66% of voters are supportive of a ballot measure to finance infrastructure
improvements – though most only tentatively.
4. A ballot measure to fully fund a public safety building is unlikely to receive two-thirds
support; however, the public share of a public-private partnership could likely win approval
as part of a broader package.
5. Chances for a measure’s success will likely be maximized by:
Focusing ballot measures around public safety and transportation (including bike and
pedestrian) improvements, subject areas which consistently draw the most support.
Placing projects together in packages, which pair projects that draw enthusiastic public
reaction with others that are more lukewarm.
Using general obligation bonds as the financing mechanism to the extent possible at the
two-thirds level; several other taxes could be feasible with a simple majority vote.
Keeping costs close to the level of voters’ expressed willingness to pay, which seems to
peak at $125 per year (for two-thirds support) and $200 per year (for majority support).
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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A full report of the survey findings and conclusions is included in Attachment A. Attachment B
provides the survey questionnaire and the topline results.
Status of Infrastructure Project Costs
Attachment C provides an updated list of infrastructure projects and cost estimates, committed
funding, potential funding, and the net cost that requires funding for each project. Committed
funding includes awarded grants and project funding already appropriated through the capital
budget, while potential funding consists of outstanding grant applications and the Jay Paul
proposal for construction of a public safety building. The list of projects differs from past
project cost summaries provided to the Infrastructure Committee and Council as follows:
The Cubberley Replace/Expand and Municipal Services Center projects are not included
since they are dependent on future studies and Council decisions
The following projects will be funded from a variety of sources such as rates, user fees,
lease revenues, expense reductions, and partner contributions and are not included. These
include: Energy/Compost Facility, Golf Course, Airport, Post Office and Regional Water
Quality Control Plant Master Plan
The Los Altos Treatment Plant project is not included because it is proposed to be funded in
the FY 2014 capital budget
The cost estimates for the Streets and the Sidewalks projects have been increased to allow
for accelerated work intended to significantly improve sidewalks and to achieve a citywide
average Pavement Condition Index of 85 in 2016 (five years earlier than the initial goal of
2021).
The History Museum at the Roth Building, Downtown and California Avenue parking garage
projects have been added to the project list for public opinion feasibility polling and are
included with the initial cost estimates that have been used in the polling.
The current estimate of total project costs is $231.5 million. The net cost after committed
funding is $219.3 million and the final net cost if outstanding grant applications are successful
and if the Jay Paul proposal moves forward, is $171 million. If projects are excluded that were
added to the list for polling purposes (History Museum at the Roth Building, Downtown and
California Avenue parking garages, Ventura) the total project cost is $192.5 million. The net cost
after committed funding is $180.3 million and the final net cost if outstanding grant
applications are successful and if the Jay Paul proposal moves forward, is $132 million.
Attachment C also provides the public opinion survey results for each specific project tested in
the survey, presented as the percentage of the survey respondents that strongly support or
somewhat support the projects. More than 2/3 of the survey respondents supported Fire
Stations, Streets, Sidewalks, and Parks Catch-up Projects, while the Bike/Pedestrian Plan, Bike
Bridge, Ventura Community Center, Public Safety Building, and Charleston/Arastradero Projects
have support levels at or above a majority. The remaining projects received less than majority
support.
Bundling Infrastructure Projects
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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The survey also tested the level of public support for five different potential bond or tax
measures that represent combinations of individual projects, with the wording of each
potential measure structured as it might appear in an actual ballot measure – minus a funding
mechanism and dollar figure. The survey results for these potential measures are useful for
understanding the public response to a combination of projects that surround a given theme.
Four measures were found to have support levels greater than two-thirds:
1. Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure (74%)
2. Palo Alto Vital Facilities and Services Protection Measure (72%)
3. Palo Alto Children and Families First Measure (71%)
4. Fire, Paramedic, Police, Seismic Safety and Emergency Response Measure (68%)
Attachment D presents the language tested for each measure and identifies the projects and
project costs that might coincide with the language of each measure. The language of the Palo
Alto Vital Facilities and Services Protection Measure, which received 72% support in the survey,
was structured as a general tax measure that could be passed by simple majority vote and
therefore does not specify projects and project costs that it may fund.
The City may express its intent to use a general tax to fund a specific list of projects, though it
would not be obliged by law to do so. To accomplish this, the City could put a general tax
before the voters together with a Council-approved expenditure plan – which could either be
approved legislatively or referred to the ballot for an advisory public vote accompanying the tax
measure. It is a common practice for cities to adopt an expenditure plan associated with
general tax measures when outlays are known.
As described above, the survey found that the community has a high level of trust in the City
government. Sixty-eight percent of residents surveyed stated that the City does an excellent or
good job in providing services, 75 percent approved of the City’s work in maintaining city
infrastructure, and 63 percent approved of the City’s efficiency in utilizing local tax dollars. The
combination of the voters’ positive response to the language of a potential general
infrastructure measure and overall approval for the City’s management of infrastructure and
local tax revenues suggests that a general tax measure requiring only majority support may be a
viable means of funding a portion of the City’s infrastructure needs. If the City decides to
proceed with a general tax, a determination on the type of tax will need to be made, e.g. hotel
stays (TOT), sales, real estate transfers, business licenses (BLT), utility use (UUT).
As noted above, the survey findings indicated a ballot measure to fully fund a public safety
building is unlikely to receive two-thirds support; however, according to FM3, the public share
of a public-private partnership could likely win approval as part of a broader package.
Currently, Jay Paul Company is proposing a Planned Community (PC) zone change at 395 Page
Mill and 3045 Park Blvd. that, if approved, would allow construction of office buildings at 395
Page Mill Road, and a three-story approximately 44,500 square foot public safety building (as
the primary proposed public benefit), along with associated parking. The applicant has
estimated the value of the construction of the public safety building (including land) and
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associated parking at $49.3 million. (There are additional costs—approximately $8 million-- to
provide turn- key occupation of the completed building).
Attachment E provides an update on the Public Safety Building associated with Jay Paul
Company’s proposed development at 395 Page Mill Road. If Council proceeds with planning for
a potential measure that combines multiple infrastructure projects, it is anticipated that Council
will have the information needed to inform Council’s final decisions about placing an
infrastructure finance measure on the ballot in the spring of 2014. The design review schedule
assumes Council will consider Jay Paul Company’s development proposal and the feasibility of
the EIR in March 2014. The City will be conducting its final feasibility poll in the spring of 2014
to inform Council’s final decisions about an infrastructure measure or measures. If the
development proceeds it is anticipated that the City will need up to $8 million to complete the
build out. If the development does not proceed and an alternate new location is needed for
the public safety building, the City will not be prepared to proceed with a finance measure that
addresses funding for a public safety building until 2016 to allow time for the acquisition of the
property, and the plan/design/EIR review process.
Grants, Currently Available Funding Sources, Other Potential Revenue Sources, and Financing
Alternatives
The following section provides an update on grants, currently available funding sources that
Council could earmark for infrastructure, other potential/projected revenue sources, and
revenue that could be generated from various finance mechanisms.
Status of Grant Applications
The City has applied for grant funding for the Bike Bridge and Charleston/Arastradero Corridor
projects. The status of these grant requests is provided in Table 1. The Vehicle Emissions
Reduction Based at Schools Grant request of $1 million to support the Charleston/Arastradero
Corridor Project has been approved by the VTA Board of Directors. The VTA Technical Advisory
Committee (TAC) recommended that the $4 million OBAG grant request for the Bike Bridge
Project be approved, but did not recommend approval of the $5.5 million request for the
Charleston/Arastradero Corridor Project. The TAC’s recommendations are scheduled to be
considered by the VTA Board of Directors on June 4, 2013. Staff continues to monitor
opportunities to leverage grant funding toward the cost of infrastructure projects.
Table 1: Status of Infrastructure Project Grant Requests
Bike Bridge Project
Grant Request
Request
Amount
Expected
Timeline for
Award
Other
Project
Funding
Total Project
Cost
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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One Bay Area Grant
for Bike Bridge
$4 million1 June 2013 $5.35
million
$10 million
Charleston/Arastradero Corridor Project
Grant Request
Request
Amount
Expected
Timeline for
Award
Other
Project
Funding
Total Project
Cost
Environmental
Enhancement and
Mitigation Grant
$0.35 million September 2013
$1.27
million $9.75 million
One Bay Area Grant $5.5 million not
recommended
for award
Vehicle Emissions
Reduction Based at
Schools Grant
$1 million awarded
1 Recommended for approval by VTA Board of Directors
Other Potential Funding Sources
To further evaluate resource needs to fund infrastructure improvements, staff identified
currently available funding sources that could be allocated to infrastructure projects at
Council’s discretion. These funding sources are described below and include the Stanford
Medical Center Development Agreement Funds, the Infrastructure Reserve, Impact Fees and
Parking In-Lieu Fee Funds. Attachment F provides a summary of the funds that are available
under “Currently Available Revenue Sources.” It is estimated that $44-$48 million could be
available from current funding sources should the Council choose to allocate the revenue to
infrastructure.
Stanford Medical Center Development Agreement Funds $34.4M
On May 6, 2013, staff provided Council a review of the status and balances of the six distinct
Stanford University Medical Center Mitigation Funds. The two funds most applicable to the
City’s infrastructure projects are the Infrastructure, Sustainable Neighborhoods and Affordable
Housing Fund and the Sustainability Programs Fund. The former could be allocated to any of
the City’s infrastructure projects. The latter could be allocated to projects addressing climate
change and sustainability such as the Bike/Pedestrian Plan and the Bike Bridge, and potentially
to other projects as well.
It is estimated that upon receipt of the third payment from Stanford University anticipated in
2016-2017; repayment of short-term loans for affordable housing; and no use of funds to
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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provide local matches for successful grant requests through the One Bay Area Grant program,
the following, future balances will be available:
Stanford Infrastructure/Housing $22.1 million
Stanford Sustainability 12.3 million
Total $34.4 million
The above represent one-time funding sources and Council decisions will be necessary for any
drawdowns from these funds. For example, if the City uses Stanford funds for grant matches or
forgives housing loans, fund availability will be reduced. The Finance Committee will be making
a recommendation on using Stanford Funds for the Bike Bridge Project in May 2013.
Infrastructure Reserve (IR) $6-10 Million
The IR is drawn upon annually to fund infrastructure projects in the five-year Capital
Improvement Program. It is replenished when the General Fund has an operating surplus and
monies in the Budget Stabilization Reserve exceed 18.5 percent of budgeted operating
expenses. Based on an expected surplus at the end of FY 2013 and funding for the proposed
Capital Budget for Fiscal Year 2014 through FY 2018, the IR is estimated to have available $6 to
$10 million to fund infrastructure projects. This availability is subject to use of the IR to
purchase the Post Office and for higher than anticipated costs for library and community center
projects. Use of IR monies for the Post Office is temporary in that debt will be issued eventually
to replenish the IR.
Impact Fees
Other sources of funding, which have been and can be used for capital work include Impact and
Parking In-Lieu fees. Impact fee revenue must be used for new projects or expanded facilities
to accommodate new growth. They are dependent upon the number and timing of projects so
it is difficult to estimate available resources. Staff expects to have more information available
on impact fee balances at the Committee’s meeting. The current estimated balances less
expected drawdowns for upcoming projects are as follows:
Parks $1.0 million
Community Centers $1.4 million
Citywide Transportation $TBD
Charleston-Arastradero $TBD
Total $2.4 million
Downtown Parking In-Lieu Fees $1.2M
Downtown Parking In-Lieu fees are targeted for the construction of new or expanded parking
garage spaces. They are one-time resources that would be used to offset the principal required
for construction. Currently, a developer has proposed building a garage on Lot P. The
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Developer’s proposal includes a City contribution from the In-Lieu fund of $1.0 million for
construction. In addition, $0.5 million in in-lieu funds will be used to cover estimated permit
and other fees. Between the $2.1 million available from the Lytton project and a current
balance of $0.6 million, staff estimates that $1.2 million will be available for constructing a
downtown garage.
It is important to note that the City is currently conducting an Impact Fee study to determine
the appropriate level for current fees and the potential for new fees. In June, staff will present
to the Finance Committee a list of potential projects and infrastructure needs that can be
funded via Impact Fees. As with the Stanford Development funds, it will be important to
determine the level of drawdown on fee balances and commitments made in the CIP.
Potential New Revenue Sources
There are also a number of new sources that could provide revenue to fund infrastructure
needs. The use of these potential funding sources for infrastructure projects is at the Council’s
discretion and many of the sources are dependent on future policy and land use decisions. The
potential sources are described below and include new hotel revenue, digital readerboard
revenue, sales tax from an auto dealership at MSC, lease revenue from renting the current
police building (after expenses associated with renovating the facility), and lease of the Los
Altos Treatment Plant site. Attachment F also provides a summary of the potential and
projected revenue increases discussed below. It is estimated that these new potential revenue
sources collectively could yield $117.6 million to fund infrastructure needs.
New Hotel Revenue $2.4M Annually
In the near future, a number of new hotels are expected to open in the City. These include, for
example, the Hilton Garden Inn, the Hilton Homewood Suites, and Casa Olga. The idea of
earmarking revenues from these hotels for infrastructure work has emerged in Council
discussions. This annual income stream could be allocated to debt service for large projects
and/or for pay-as-you-go work. The IBRC, for example, identified $42 million in “catch-up”
needs. The Commission recommended that the City spend $4.2 million per year over a ten year
period to eliminate this backlog. At this time, it appears three new hotels will open sometime
in 2014. Two other hotels have either not filed an application or indicated a construction date.
An estimate of potential annual revenues is provided although opening dates are not known.
Annual revenue from hotels expected to open in 2014 $1.7 million
Annual revenue from hotels expected to open post 2014 $0.7 million
Total expected revenue $2.4 million
Other Potential New Sources of Revenue
Over the past few years, staff has been exploring the potential for placing a digital message
center along highway 101 and re-tooling a portion of the Municipal Services Center for lease to
an auto dealer or other revenue generating user. These options have not been discussed with
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Council. Staff roughly estimates that revenue streams of between $0.7 and $1.0 million could
be generated annually from these two initiatives.
In addition, should the Police Department (PD) be completely relocated to a new public safety
building, the current building could be leased to an office tenant and create an estimated
revenue stream of $1.4 million annually. If the costs for preparing the current PD space for
office occupancy are financed with debt, part of the eventual rental income will be used for
debt service. At this time, staff does not have an estimate for renovation expenses, but it is
reasonable to assume costs of $1-$3 million to provide a space suitable for lessee tenant
improvements to proceed.
A cost of service study is being conducted and a preview of the methodology was presented to
the Finance Committee. A capital component will be included in the proposed fees and, if
approved by Council, could be used to fund future renovation and replacement costs. At this
time, staff does not have an estimate of potential funding that could be available should
updated fees based on the study be approved. The study is expected to be presented to the
Finance Committee this summer.
Finance Measure Results, Revenue Potential and Election Timing and Considerations
The survey also tested a variety of financing mechanisms and levels of funding support for
infrastructure related improvements. When respondents were asked about their willingness to
pay additional taxes to fund infrastructure projects, the level of support peaked at $125 per
year (for two-thirds support) and $200 per year (for majority support).
Support for Household Additional Taxes for Infrastructure
Annual Amount
Polling Support
(strongly and somewhat support)
$100 75%
$150 64%
$200 53%
$250 48%
Attachment F also provides a summary of the funding mechanisms tested, level of support,
potential revenue that could be generated by each type, and voter support needed for
successful passage. The four financing mechanisms that received more than a majority support
include the following. Other proposals such as increasing the sales or utilities users’ tax rate or
creating a parcel tax received low approval ratings.
1. Issuing Bonds 64%
2. Transient Occupancy Tax 62%
3. Business License Tax 51%
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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4. Real Estate Transfer Tax 51%
Based on the survey results it appears Palo Altans are willing to support the idea of issuing debt
to finance infrastructure improvements. It also appears there is willingness to increase a tax
that does not bear directly on Palo Altans themselves and to a lesser extent a tax on businesses
and real estate transactions.
For sizeable projects such as a public safety building, fire station replacements, and parking
garages, it is more than likely that the City will need to issue debt. To support new, annual debt
service payments, the City will need to increase, create, or earmark a revenue source. There
are a variety of options for Council to consider. Increased or new taxes would be subject to
approval by voters. Attachment F summarizes the potential funding available from these
sources. Attachment G identifies potential funding mechanisms and their election
requirements. The four funding mechanisms that received more than a majority support are
discussed further below. Certificates of Participation (COPs), a financing vehicle that does not
require voter approval, are also discussed.
General Obligation Bonds
General Obligation Bonds can be viewed as a new source of revenue to the City since a self-
imposed assessment is approved by voters. These bonds require two-thirds approval by the
voters and were used for Measure N library and community center improvements. Attachment
F also displays the impact of varying levels of General Obligation bonds on the median assessed
value of single family residences. In alignment with the survey results on willingness to pay, it is
estimated that a 30 year general obligation bond at an annual tax of $125 would yield $72
million and a $200 a year assessment would yield $114 million.
Transient Occupancy Tax
A Transient Occupancy Tax, commonly known as the "hotel tax," is charged by the City to
guests at hotels located in Palo Alto. The tax is computed by multiplying the rent charged by the
hotel operator by the tax rate percentage. Hotel tax revenue accounts for 11.5 percent of the
City's total general fund revenue.
Based on current revenue levels, a one percent increase in the City’s transient occupancy tax
can be expected to result in ongoing, annual revenues of $0.9 million which could be available
to the City for any general capital improvements. Palo Alto’s transient occupancy tax rate was
raised from 10% to 12% percent by the voters in the 2007 November General Election. Eighty-
one percent of the electorate voted for the increase. Hotel tax rates vary from city to city.
Across California, tax rates range from a low of 9.5% to a high of 15%. Attachment F provides a
list of the TOT for surrounding communities. This type of tax can be structured either as a
general tax requiring a simple majority vote or a special tax (for a special purpose) requiring 2/3
approval. TOT can also be part general tax and part special tax.
Business License Tax
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The City could consider new taxes to support debt or pay as you go financing. Palo Alto does
not have a Business License Tax (BLT) which most municipalities levy. A Business License is an
annual tax businesses pay each year for doing business in the City of Palo Alto. In the last
analysis performed and taken to the voters in 2009, it was projected that a BLT would raise $3.3
million annually. The BLT, however, can be constructed to generate less or more than this
amount. Like TOT, this type of tax can be structured as a general tax requiring a simple majority
vote, a special tax requiring 2/3rds approval, or both. Staff would recommend beginning work
immediately with the business community if Council proceeds with further study on a potential
business license tax.
Real Estate Transfer Tax
A real estate transfer tax, commonly known as a “document transfer tax,” is a tax imposed on
each recorded document in which real property is sold. The tax is paid at the time of recording
a document transferring real property. Either the buyer or the seller pays the tax upon mutual
agreement. In the City of Palo Alto it is traditional for the buyer and seller to equally share this
tax.
If a house is sold in Palo Alto for $1.5 million the current tax would equal $4,950. By increasing
the tax by $1.10 per thousand dollars or by 33.3 percent, the incremental tax on this
transaction would equal $1,650 for a total tax of $6,600. If the City were to increase its real
estate transfer tax by $1.10, it would yield approximately $1.8 million annually. This tax is
sensitive to the volume and mix (residential and commercial) of property transactions and can
vary significantly from year-to-year. This type of tax can be a general tax requiring a simple
majority vote, a special tax requiring 2/3rd approval, or both.
Leveraging Revenues for Debt Financing: Certificates of Participation
Existing, increased or new revenue sources can be used to fund infrastructure on a pay-as-you-
go basis or by using debt financing. The primary financing vehicle that does not require voter
approval is Certificates of Participation (COPs). The City has used this instrument previously for
Golf Course and Civic Center improvements. Attachment F shows the estimated amount of
principal that could be generated by issuing COPs for infrastructure work. Based on a number
of assumptions (e.g. 4.5% to 5.5% interest rate and 30 amortization period), it is estimated that
for each $1 million of annual debt service through Certificates of Participation, $13-$15 million
of principal can be generated.
Ballot Measure Costs and Voting
The cost of placing a measure on the ballot is dependent on the type of election that is being
held. The Registrar of Voters estimates that the cost to place a measure on the November 2013
ballot would be approximately $350,000. The cost for November 2014, a general municipal
election, is estimated at $175,000. The cost for a special election held at any time other than
the annual November election, is estimated at $500,000. The election year in which a measure
is included on the ballot also influences the use of the revenue and the proportion of the vote
needed for passage of the measure. If the revenue from the measure is to be available for use
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for any purpose, it must be on the ballot for a general municipal election (even years) and
requires a majority vote of the electorate. If the revenue is to be restricted to a specific use
such as infrastructure, the measure may be on any ballot, but requires a two-thirds vote of the
electorate.
Timeline
It is anticipated that the Infrastructure Committee will review the preliminary survey findings
and supplemental information contained in this staff report and make recommendations to the
City Council on the next steps in planning for an infrastructure measure. Based on Council’s
direction and refinement of infrastructure priorities, staff anticipates conducting focus groups
over the summer, developing and implementing a communications plan, and conducting a
tracking survey in the fall of 2013.
Resource Impact
There is no immediate resource impact from this report. Future impacts are dependent upon
Council action and election results.
Attachments:
Attachment A. Preliminary Survey Results (PDF)
Attachment B. Questionnaire_Topline Results (PDF)
Attachment C. Infrastructure Project Costs (PDF)
Attachment D. Potential Bundled Infrastructure Measures (PDF)
Attachment E. Public Safety Building Update (PDF)
Attachment F. Potential New Revenue Sources (PDF)
Attachment G. Funding Mechanisms and Election Requirements (PDF)
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Key Findings From a Citywide Survey Conducted
April 28 – May 5, 2013
Infrastructure Finance Survey
DRAFTAttachment A
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DRAFT
Methodology
Telephone survey of 603 randomly-selected Palo Alto
voters likely to cast a ballot in the November 2014
election
Interviews were conducted via landline and cell
phones
Survey was conducted April 28 – May 5, 2013
The margin of sampling error is +/-4.0 percent at the
95 percent confidence level; margins of error for
population subgroups willbe higher
Some percentages do not sum to 100% due to
rounding
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DRAFT
Palo Alto voters are very pleased with the performance of City
government,bothgenerally and in specificpolicy areas.
Only about half of voters see even “some need” for additional
infrastructurefunding.
At the same time, about two-thirds of voters support hypothetical ballot
measures to provide funding for public safety and transportation
infrastructure.
Just over half of voters support investing in the construction of a new
public safety building; using a public-private partnership to reduce costs
yields only slightly higher support.
In the abstract, two-thirds of voters say they would vote for a ballot
measure tofinance infrastructureimprovements.
More than three in five voters back the use of bond measures or a
transient occupancy tax increase to finance infrastructure improvements;
othermechanisms receiveless support.
Key Findings
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DRAFT
Q3.
Residents have generally favorable
impressions of Palo Alto’s City government.
15%
53%
23%
6%
3%
0%20%40%60%
Excellent
Good
Only fair
Poor job
Don't know
Total
Only Fair/
Poor Job
29%
Total
Excellent/
Good
68%
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…?
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DRAFT
Q3.
Perceptions of the City’s performance
have remained consistently positive.
16%
56%
22%
4%
2%
0% 20% 40% 60% 80%
Excellent
Good
Only fair
Poor job
Don't know
Total
Only Fair/
Poor Job
26%
Total
Excellent/
Good
72%
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…?
15%
53%
23%
6%
3%
0% 20% 40% 60% 80%
Total
Only Fair/
Poor Job
29%
Total
Excellent/
Good
68%
2008 2013
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28%
16%
14%
47%
46%
49%
14%
15%
19%
8%
8%
6%
14%
12%
0%20%40%60%80%100%
Maintaining the City’s
infrastructure
Managing the City’s
budget and finances
Efficiently utilizing local
tax dollars
Strng. App.Smwt. App.Smwt. Disapp.Strng. Disapp.DK/NA
Total
Approve
Total
Disapprove
75%23%
62%23%
63%26%
4. 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.
Residents are particularly supportive of the
City’s performance maintaining infrastructure.
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DRAFT
Q5.
A slim majority of residents say the City has
“little” or “no need” for additional funding; only
five percent say there is a “great need.”
5%
35%
19%
31%
11%
0%20%40%60%
Great need
Some need
Little need
No need
Don't know
Total
Little/No
Need
50%
Total
Great/Some
Need
40%
How would you rate the City of Palo Alto’s need for additional funding?
Is there a great need for additional funding, some need, a little need or
no real need for additional funding?
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DRAFT
Q6/7.
Being specific about infrastructure projects
only slightly enhances perceptions of need.
10%
36%
22%
23%
9%
0% 20% 40% 60% 80%
Great need
Some need
Little need
No need
Don't know
11%
43%
19%
22%
5%
0% 20% 40% 60% 80%
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?
Total
Little/No
Need
45%
Total
Great/Some
Need
46%
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?
Total
Little/No
Need
41%
Total
Great/Some
Need
54%
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DRAFT
34%
31%
19%
27%
25%
22%
24%
47%
44%
55%
44%
42%
44%
40%
18%
20%
24%
25%
28%
30%
31%
5%
6%
6%
0% 20% 40% 60% 80% 100%
Ext. Imp.Very Imp.Smwt. Imp.Not Imp./DK/NA
Total
Ext./Very
Important
81%
75%
74%
70%
67%
66%
63%
8. 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
Residents’ top infrastructure priorities relate to
public safety and road maintenance.
Ensuring a modern and stable 911 emergency
communications network
Providing safe routes to school for students
Maintaining City streets and roads
Ensuring vital City facilities like fire and police
stations and the emergency command center are earthquake safe
Providing safe routes for bicyclists and pedestrians
Fixing potholes and paving City streets
Ensuring all City facilities are earthquake safe
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DRAFT
18%
20%
17%
18%
14%
20%
14%
13%
45%
40%
42%
39%
43%
37%
38%
37%
32%
33%
36%
39%
30%
29%
44%
42%
5%
7%
5%
12%
14%
5%
9%
0% 20% 40% 60% 80% 100%
Ext. Imp.Very Imp.Smwt. Imp.Not Imp./DK/NA
Total
Ext./Very
Important
63%
60%
59%
58%
58%
56%
51%
50%
8. 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
Majorities also prioritize maintenance of parks
and community centers.
Providing safe sidewalks, paths and bridges for pedestrians
Providing police officers with the facilities and resources needed to investigate and prosecute crimes commited in our community
Maintaining community centers that serve Palo Alto children, families and seniors
Maintaining City parks and recreation facilities
^Maintaining the City’s core infrastructure
Reducing traffic congestion
Repairing and maintaining City sidewalks
Upgrading pipes, irrigation and landscaping to conserve water and save money
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DRAFT
15%
15%
15%
13%
10%
10%
8%
33%
33%
33%
30%
28%
28%
21%
15%
39%
41%
42%
41%
44%
49%
50%
61%
12%
11%
10%
17%
17%
13%
21%
23%
0% 20% 40% 60% 80% 100%
Ext. Imp.Very Imp.Smwt. Imp.Not Imp./DK/NA
Total
Ext./Very
Important
49%
48%
48%
42%
38%
37%
29%
17%
8. 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
Voters are less enthusiastic about support for community
service organizations or historic restoration.
Improving the energy efficiency and environmental sustainability of City buildings and land
Making sidewalks, city buildings and parks accessible for people with disabilities
Improving heating, ventilation, lighting and electrical systems to conserve energy and save money
Providing adequate parking
Investing in facilities that encourage economic growth and generate revenue for City programs and services
Improving parks, playgrounds and playfields for youth and adult recreation
Providing facilities to support Palo Alto’s community service organizations and non-profits
Restoring Palo Alto’s historic buildings
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DRAFT
The survey tested several ballot measure concepts –
without price tags or funding mechanisms.
10. I am going to read you a list of different types of bond or tax measures that might be placed on the Palo Alto ballot to fund improvements
to different aspects of the City’s infrastructure. Please tell me if you would support or oppose increasing taxes to fund that particular set of
improvements. ^Not part of Split Sample
A Palo Alto Vital Facilities and Services Protection Measure that would provide a stable source of locally-
controlled funding to address local needs. These funds could not be taken away by the State and would
be used to support general City services and facilities, including fire, paramedics, police, streets,
sidewalks, parks, recreation, libraries and community centers.
A Fire, Paramedic, Police, Seismic Safety and Emergency Response Measure to fund improvements to
keep Palo Alto safe, including construction of a new earthquake-safe public safety building and
emergency response command center, replacing two obsolete fire stations with modern earthquake-safe
buildings, and improving communication systems to ensure rapid 9-1-1 response to fires, accidents and
other emergencies.
A Traffic Congestion Relief and Safe Streets, Sidewalks and Trails Measure to fund repair and
improvements to streets, sidewalks, and nine miles of off-road trails. This measure would provide safe
routes to school for children, improve accessibility for people with disabilities, provide a network of safe
bike paths and pedestrian walkways, increase the availability of parking, and upgrade traffic signals and
intersections to reduce congestion and improve safety.
A Parks, Open Space and Sustainability Measure that would fund improvements and investments to Palo
Alto’s parks and open space, including repairing unsafe playground equipment, creating new playfields,
improving walking and biking paths and trails, and improving irrigation systems to conserve water. It
would also include funds to the restore the historic Roth Building and repair the Ventura Community
Center
A Palo Alto Children and Families First Measure that would fund improved facilities for preschool and
childcare programs, safe routes to school, pedestrian and bike safety improvements, park and
playground improvements and neighborhood traffic calming measures.
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DRAFT
39%
33%
32%
39%
24%
34%
39%
38%
29%
41%
16%
13%
17%
17%
17%
8%
11%
10%
12%
15%
0% 20% 40% 60% 80% 100%
Streets, Sidewalk Trails Measure
^Vital Facilities Measure
Children & Families Measure
Public Safety Measure
Parks Open Space Measure
Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.DK/NA Total
Support
Total
Oppose
74%24%
72%24%
71%27%
68%30%
65%32%
10. I am going to read you a list of different types of bond or tax measures that might be placed on the Palo Alto ballot to fund improvements
to different aspects of the City’s infrastructure. Please tell me if you would support or oppose increasing taxes to fund that particular set of
improvements. ^Not part of Split Sample
Support for each of these ballot measure concepts
hovers between two-thirds and three-quarters.
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DRAFT
13. Out of all of the potential improvements to buildings, facilities, and other infrastructure that we have discussed, which do you think should
be the highest priority for City government?
When forced to choose, a plurality of residents list
street repair and related issues as their top priority.
32%
22%
12%
11%
8%
8%
6%
18%
0%10%20%30%40%
Street repair/Sidewalk repair/Infrastructure/
Pedestrian safety
Police and fire/Public safety
Bike lanes
Emergency services-earthquakes
Parking
Parks and playgrounds/Recreation/Children
Schools/Childcare
Other/DK/Nothing/Refused
(Grouped responses shown; 6% and above)
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DRAFT
33%
23%
25%
23%
31%
40%
45%
42%
43%
34%
15%
19%
20%
20%
16%
10%
9%
11%
11%
15%
0% 20% 40% 60% 80% 100%
$14 million for Fire Department
modernization
$8 million for street improvement
and repair
$6 million for sidewalk
improvement and repair
$10 million for park improvement
and repair
$25 million for bike lanes and
pedestrian paths
Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided Total
Support
Total
Oppose
72%25%
69%28%
67%31%
67%31%
65%31%
12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their
estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed
before local voters. Please tell me whether you think you would vote to support or oppose that project. *Split Sample
When presented with specifics, voters’
priorities remain public safety and streets.
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DRAFT
27%
19%
20%
21%
19%
34%
39%
35%
32%
33%
17%
23%
21%
21%
23%
20%
13%
19%
24%
22%
7%
0% 20% 40% 60% 80% 100%
$6 million for Highway 101
pedestrian/bike bridge
$3 million to renovate and upgrade
the Ventura Community Center
*$8 million for a new public safety
and emergency response
command center
$8 million for improving the
Charleston-Arastradero Corridor
*$57 million to buy land and build a
new public safety and emergency
response command center
Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided Total
Support
Total
Oppose
61%37%
57%35%
55%40%
52%45%
52%45%
12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their
estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed
before local voters. Please tell me whether you think you would vote to support or oppose that project. *Split Sample
The public safety building is middle-tier.
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DRAFT
Total
Support
Total
Oppose
47%48%
46%52%
46%50%
44%53%
38%57%
15%
17%
15%
17%
9%
32%
29%
31%
27%
30%
29%
28%
29%
27%
34%
19%
24%
21%
26%
23%
5%
0% 20% 40% 60% 80% 100%
$7 million for a new Animal
Services Center
$12 million for a new California
Avenue parking garage
$6 million for new playing fields
and recreational facilities
$21 million for a new downtown
parking garage
$3 million to restore the Roth
building and house the Palo Alto
History Museum there
Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided
12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their
estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed
before local voters. Please tell me whether you think you would vote to support or oppose that project. *Split Sample
Parking and historic restoration get less support.
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DRAFT
12. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with their
estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed
before local voters. Please tell me whether you think you would vote to support or oppose that project. *Split Sample
Streets, parks, and public safety reach two-
thirds support.
72%
69%
67%
67%
65%
61%
57%
55%
52%
52%
47%
46%
46%
44%
38%
25%
28%
31%
31%
31%
37%
35%
40%
45%
45%
48%
52%
50%
53%
57%
60%45%30%15%0%15%30%45%60%75%
Total Support Total Oppose Difference
+47%
+41%
+36%
+36%
+34%
+24%
+22%
+15%
+7%
+7%
-1%
-6%
-4%
-9%
-19%
$14 million for Fire Department modernization
$8 million for street improvement and repair
$6 million for sidewalk improvement and repair
$6 million for park improvement and repair
$25 million for bike lanes and pedestrian paths
$6 million for Highway 101 pedestrian/bike bridge
$3 million to renovate and upgrade the Ventura Community Center
*$8 million for a new public safety and emergency response command center
$8 million for improving the Charleston-Arastradero Corridor
*$57 million to buy land and build a new public safety and emergency response command center
$7 million for a new Animal Services Center
$12 million for a new California Avenue parking garage
$6 million for new playing fields and recreational facilities
$21 million for a new downtown parking garage
$3 million to restore the Roth building and house the Palo Alto History Museum there
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DRAFT
Two versions of the public safety building
concept were tested.
City-Funded Public-Private Partnership
A $57 million project to purchase
land and construct a new
earthquake-safe public safety and
emergency response command
center, with upgraded dispatch
technology for police, fire and
paramedic service as well as more
safe and secure space for
interviewing crime victims and
storing and analyzing crime
evidence.
$8 million of city investment to
construct a new earthquake-safe
public safety and emergency
response command center, with
upgraded dispatch technology for
police, fire and paramedic service
as well as more safe and secure
space for interviewing crime
victims and storing and analyzing
crime evidence. $49million in
additional funding for the project
would come from a private
developer in exchange for rights to
build new commercial offices near
Page Mill Road and El Camino.
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DRAFT
12n/o. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters, along with
their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure was placed
before local voters. Please tell me whether you think you would vote to support or oppose that project. Split Sample
A public-private partnership draws
only slightly higher support.
19%
33%
23%
22%
3%
0% 20% 40% 60% 80%
Strong support
Somewhat support
Somewhat oppose
Strong oppose
Undecided
Total
Oppose
45%
Total
Support
52%
20%
35%
21%
19%
5%
0% 20% 40% 60% 80%
Total
Oppose
40%
Total
Support
55%
$57 million to buy landand build a
new public safety and emergency
response command center
$8 millionfor a new public
safety and emergency
response command center
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DRAFT
27%
20%
10%
5%
11%
16%
10%
0% 20% 40% 60% 80%
Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
12n/o combined. I am going to read you a list of specific infrastructure improvements projects that might be placed before Palo Alto voters,
along with their estimated costs. Keep in mind that these costs are just rough estimates, and would be carefully refined before any measure
was placed before local voters. Please tell me whether you think you would vote to support or oppose that project. Split Sample
Taken together, support for either approach to the
public safety building is no higher than in 2008.
20%
34%
22%
20%
4%
0% 20% 40% 60% 80%
Strong support
Somewhat support
Somewhat oppose
Strong oppose
Undecided
Total
Oppose
43%
Total
Support
53%
Conceptual Support for a $50M+ Public Safety Bond by Year
2008 2013
Total
No
32%
Total
Yes
57%
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DRAFT
Q9.
Close to 2/3 of residents say they would support a bond
or tax measure to fund infrastructure maintenance and
improvement after hearing a list of needed projects.
21%
44%
13%
14%
8%
0%20%40%60%
Strong support
Somewhat support
Somewhat oppose
Strong oppose
Undecided
Total
Oppose
27%
Total
Support
65%
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?
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DRAFT
45%
35%
25%
20%
30%
30%
28%
29%
8%
14%
19%
19%
13%
18%
24%
29%
0%20%40%60%80%100%
$100 per year
$150 per year
$200 per year
$250 per year
Very Will.Smwt. Will.Smwt. Unwill.Very Unwill.DK/NA Total
Willing
Total
Unwilling
75%21%
64%33%
53%43%
48%48%
11. 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?
Predictably, voters are more willing to pay
smaller amounts for an infrastructure measure.
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DRAFT
25%
24%
18%
39%
38%
33%
16%
21%
22%
18%
12%
24%
0% 20% 40% 60% 80% 100%
Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided Total
Support
Total
Oppose
64%35%
62%33%
51%46%
14. 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 using that particular way of raising new revenue for
these purposes.
Voters are more supportive of issuing
bonds or increasing the transient occupancy
tax than of other funding mechanisms.
Issuing bonds, allowing the City to
borrow money to complete the
projects and pay it back over time
with money from local property
taxes
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
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DRAFT
17%
8%
10%
6%
34%
33%
28%
24%
23%
20%
27%
28%
23%
34%
34%
41%
0% 20% 40% 60% 80% 100%
Strng. Sup.Smwt. Sup.Smwt. Opp.Strng. Opp.Undecided Total
Support
Total
Oppose
51%46%
41%54%
38%61%
29%69%
14. 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 using that particular way of raising new revenue for
these purposes.
A parcel tax, sales tax, and UUT get less support.
Establishing a business license tax
to be paid by any business
operating in Palo Alto
Establishing a flat tax on every
parcel of property in Palo Alto
Increasing the local sales tax rate
paid by anyone who shops in
Palo Alto
Increasing the utility users tax,
which is added to electricity, gas,
water and phone bills
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DRAFT
14. 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 using that particular way of raising new revenue for
these purposes.
None of the funding concepts reaches a two-
thirds super-majority.
64%
62%
51%
51%
41%
38%
29%
35%
33%
46%
46%
54%
61%
69%
75%60%45%30%15%0%15%30%45%60%75%
Total Support Total Oppose Difference
+29%
+29%
+5%
+5%
-13%
-23%
-40%
Issuing bonds, allowing the City to borrow money to
complete the projects and pay it back over time
with money from local property taxes
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 business license tax to be paid by any
business operating in Palo Alto
Establishing a flat tax on every parcel of property in
Palo Alto
Increasing the local sales tax rate paid by anyone who
shops in Palo Alto
Increasing the utility users tax, which is added to
electricity, gas, water and phone bills
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DRAFT
Voters express striking confidence in City government and its financial
management.
The central challenge is that voters do not attach much urgency to infrastructure
issues; they believe the City is handling them well and not much additional
fundingisrequired.
At the same time, 66% of voters are supportive of a ballot measure to finance
infrastructureimprovements–thoughmostonlytentatively.
A ballot measure to fully fund a public safety building is unlikely to receive two-
thirds support; however, the public share of a public-private partnership could
likelywinapprovalaspartofabroaderpackage.
Chancesforameasure’ssuccesswilllikelybemaximizedby:
–Focusing ballot measures around public safety and transportation (including bike and
pedestrian) improvements, subjectareas whichconsistentlydraw the most support.
–Placing projects together in packages, which pair projects that draw enthusiastic public
reaction withothers that are more lukewarm.
–Using general obligation bonds as the financing mechanism to the extent possible at
the two-thirds level;severalother taxes couldbefeasiblewitha simplemajority vote.
–Keeping costs close to the level of voters’expressed willingness to pay, which seems to
peak at $125 per year (for two-thirds support) and $200 per year (for majority support.)
Conclusions
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For more information, contact:
1999 Harrison St., Suite 1290
Oakland, CA 94612
Phone (510) 451-9521
Fax (510) 451-0384
Dave@FM3research.com
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APRIL28,30,MAY1-5,2013
CITYOFPALOALTOINFRASTRUCTUREISSUES SURVEY
220-3577-WT
N=603
MARGINOF SAMPLINGERROR±4.0%(95%CONFIDENCEINTERVAL)
DRAFTTOPLINERESULTS
Hello, I'm ___________ from F-M-Three, a public opinion research company. We are conducting an
opinion survey about some important issues that concern residents of Palo Alto. I am definitely not trying to
sell you anything, we are only interested in your opinions. May I speak to______________? (YOU MUST
SPEAK TO THE VOTER LISTED. VERIFY THAT THE VOTER LIVES AT THE ADDRESS
LISTED, OTHERWISETERMINATE).
1. Before we begin, I need to know if I have reached you on a cell phone, and if so, are you in place
whereyoucantalksafelywithoutendangeringyourselforothers?
Yes,cellandinsafeplace----------------------------------33%
Yes,cellnotinsafeplace---------------------TERMINATE
No,notoncell-----------------------------------------------67%
(DON’T READ)DK/NA/REFUSED ------TERMINATE
2. First,Iamgoingtodescribeseveraldifferenttypesofelections. After I describeeachone, pleasetell
meif youvoteinevery electionofthattype,mostofthem,some,a few orifyounevervoteinthat
typeofelection. Here isthefirstone…(READLIST;DONOTROTATE)
EVERY MOST SOME FEW NONE (DK/NA)
[]a. StatewideNovembergeneral
electionsforGovernor,
Congressandthestate
legislature---------------------------------------------77%-----16%------7% --TERM.--TERM.-TERM.
[]b. StatewideJuneprimary elections
forGovernor,Congressandthe
statelegislature--------------------------------------57%-----20%-----12%-----3%--------9%-------0%
[]c. Specialelectionsforlocalballot
measures----------------------------------------------47%-----20%-----18%-----6%--------7%-------1%
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FAIRBANK, MASLIN,MAULLIN,METZ&ASSOCIATES 220-3577-WT PAGE2
3. (T) And 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…?(READ RESPONSES AND
RECORD)
EXCELLENT/GOOD-------------------68%
Excellent------------------------------------15%
Good-----------------------------------------53%
FAIR/POOR-------------------------------29%
Onlyfair,or--------------------------------23%
Poorjob---------------------------------------6%
(DON'T READ)Don'tknow-------------3%
4. Next,Iamgoingtoread youalistofspecificaspectsoftheCityof Palo Alto’sworkinmanaging
Citygovernment. After Iread eachone, pleasetellmewhetheryougenerallyapproveordisapprove
ofthejobtheCityisdoinginthatarea.(IFAPPROVE/DISAPPROVE,ASK:Isthatstrongly
APPROVE/DISAPPROVE orjustsomewhat?) (RANDOMIZE)
(DON’T
STR. SW SW STR. READ)TOTAL TOTAL
APP. APP. DISAPP. DISAPP. DK/NA APP. DISAPP.
[]a. Maintainingthe
City’sinfrastructure-------------------------28%-----47%-----14%-----8%-------3%75% 23%
[]b. ManagingtheCity’sbudgetand
finances----------------------------------------16%-----46%-----15%-----8%------14%62% 23%
[]c. Efficientlyutilizinglocaltaxdollars------14%-----49%-----19%-----6%------12%63% 26%
(RESUME ASKINGALLRESPONDENTS)
5. How would you rate the City of Palo Alto’s need for additional funding? Is there a great need for
additional funding, some need, a little need or no real need for additional funding?(READ
RESPONSESAND RECORD)
GREAT/SOMENEED------------------40%
Greatneed------------------------------------5%
Someneed----------------------------------35%
LITTLE/NO NEED----------------------50%
Littleneed,or------------------------------19%
Noneed -------------------------------------31%
(DON'T READ)Don'tknow-----------11%
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(SPLIT SAMPLE A ONLY)
6. 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
realneedfor additionalfunding?(READRESPONSES ANDRECORD)
GREAT/SOMENEED------------------46%
Greatneed----------------------------------10%
Someneed----------------------------------36%
LITTLE/NO NEED----------------------45%
Littleneed,or------------------------------22%
Noneed -------------------------------------23%
(DON'T READ)Don'tknow-------------9%
(SPLIT SAMPLE B ONLY)
7. 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?
(READRESPONSES ANDRECORD)
GREAT/SOMENEED------------------54%
Greatneed----------------------------------11%
Someneed----------------------------------43%
LITTLE/NO NEED----------------------41%
Littleneed,or------------------------------19%
Noneed -------------------------------------22%
(DON'T READ)Don'tknow-------------5%
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FAIRBANK, MASLIN,MAULLIN,METZ&ASSOCIATES 220-3577-WT PAGE4
(RESUME ASKINGALLRESPONDENTS)
NEXT I WOULD LIKE TO GIVE YOU SOME INFORMATION ABOUT ISSUES RELATED TO
IMPROVING AND MAINTAINING PUBLIC BUILDINGS AND FACILITIES, AS WELL AS
STREETS, SIDEWALKS,PARKSAND OTHERINFRASTRUCTUREINPALOALTO.
AS YOU MAY KNOW, IN 2010, THE CITY COUNCIL APPOINTED A BLUE RIBBON CITIZENS’
ADVISORY COMMISSION TO EVALUATE THE CONDITION OF THE CITY’S STREETS,
SIDEWALKS, PARKS, PUBLIC FACILITIES AND OTHER BASIC INFRASTRUCTURE. AS A
RESULT THE COMMISSION IDENTIFIED APPROXIMATELY 300 MILLION DOLLARS IN
NEEDED IMPROVEMENTS.
8. Now 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,veryimportant,somewhatimportant,ornotimportant.(RANDOMIZE)
(DON’T TOTAL
EXT. VERY SMWT NOT READ)EXT/
IMP. IMP. IMP. IMP. DK/NA VERY
[]a. MaintainingtheCity’scoreinfrastructure-----------14%-----43%---- 30%------4%------8%58%
(SPLIT SAMPLE A ONLY)
[]b. MaintainingCitystreetsandroads--------------------19%-----55%---- 24%------3%------0%74%
[]c. Reducingtrafficcongestion----------------------------20%-----37%---- 29%-----13% -----1%56%
[]d. Providingsafesidewalks,pathsandbridgesfor
pedestrians-------------------------------------------------18%-----45%---- 32%------5%------0%63%
[]e. Providingadequateparking----------------------------13%-----30%---- 41%-----16% -----1%42%
[]f. Improvingtheenergyefficiencyand
environmentalsustainabilityofCitybuildings
andland----------------------------------------------------15%-----33%---- 39%-----11% -----1%49%
[]g. Improvingparks,playgroundsandplayfields
foryouthandadultrecreation--------------------------10%-----28%---- 49%-----13% -----0%37%
[]h. EnsuringvitalCityfacilitieslikefireandpolice
stationsandtheemergencycommandcenter
areearthquakesafe---------------------------------------27%-----44%---- 25%------4%------0%70%
[]i. ProvidingfacilitiestosupportPaloAlto’s
communityserviceorganizationsandnon-
profits-------------------------------------------------------8%-----21%---- 50%-----20% -----1%29%
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(DON’T TOTAL
EXT. VERY SMWT NOT READ)EXT/
IMP. IMP. IMP. IMP. DK/NA VERY
(SPLIT SAMPLE A ONLYCONT.)
[]j. Providingpoliceofficerswiththefacilitiesand
resourcesneededtoinvestigateandprosecute
crimescommitedinourcommunity------------------20%-----40%---- 33%------7%------0%60%
[]k. Makingsidewalks,citybuildingsandparks
accessibleforpeoplewithdisabilities----------------15%-----33%---- 41%-----10% -----1%48%
[]l. Upgradingpipes,irrigationandlandscapingto
conservewaterandsave money-----------------------13%-----37%---- 42%------7%------2%50%
(SPLIT SAMPLE B ONLY)
[]m. Investinginfacilitiesthatencourageeconomic
growthandgeneraterevenueforCityprograms
andservices-----------------------------------------------10%-----28%---- 44%-----14% -----3%38%
[]n. Ensuringamodernandstable9-1-1emergency
communicationsnetwork -------------------------------34%-----47%---- 18%------0%------1%81%
[]o. Providingsaferoutesforbicyclistsand
pedestrians-------------------------------------------------25%-----42%---- 28%------5%------1%67%
[]p. Providingsaferoutestoschoolfor
students ----------------------------------------------------31%-----44%---- 20%------3%------2%75%
[]q. RestoringPaloAlto’shistoricbuildings---------------2%-----15%---- 61%-----22% -----1%17%
[]r. FixingpotholesandpavingCitystreets--------------22%-----44%---- 30%------4%------0%66%
[]s. RepairingandmaintainingCitysidewalks-----------14%-----38%---- 44%------5%------0%51%
[]t. Improvingheating,ventilation,lightingand
electricalsystemstoconserveenergyandsave
money------------------------------------------------------15%-----33%---- 42%------8%------2%48%
[]u. MaintainingCityparksandrecreationfacilities----18%-----39%---- 39%------3%------0%58%
[]v. EnsuringallCityfacilitiesare earthquakesafe-----24%-----40%---- 31%------5%------1%63%
[]w. MaintainingcommunitycentersthatservePalo
Altochildren,familiesandseniors--------------------17%-----42%---- 36%------4%------1%59%
(RESUME ASKINGALLRESPONDENTS)
9. Next, many of these projects and improvements are beyond the scope of the City’s existing budgetand
may require additional funding through a local voter-approved bond or tax measure. Based on what
you’ve heard, do you think youwouldsupportoroppose abondor tax measure to fundsome group of
these projects to maintain and improve Palo Alto’s infrastructure?(IF SUPPORT/OPPOSE, ASK:
“Isthatstronglyorjustsomewhat?”)
TOTALSUPPORT----------------------65%
Stronglysupport---------------------------21%
Somewhatsupport-------------------------44%
TOTAL OPPOSE------------------------27%
Somewhatoppose--------------------------13%
Stronglyoppose----------------------------14%
(DON'T READ)Don'tknow-------------8%
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FAIRBANK, MASLIN,MAULLIN,METZ&ASSOCIATES 220-3577-WT PAGE6
10. NextIam goingtoread youalistofdifferenttypesofbondortaxmeasuresthatmightbeplacedon
thePaloAltoballottofundimprovementstodifferentaspectsoftheCity’sinfrastructure. Afteryou
heareach one,please tellmeif youwouldsupportoropposeincreasingtaxestofundthatparticular
setofimprovements.Hereisthefirstone…((IF SUPPORT/OPPOSE, ASK:“Isthatstronglyor
justsomewhat?”)RANDOMIZE)
(DON’T
STRG. S.W. S.W. STRG. READ)TOTAL TOTAL
SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP.
(ALWAYSASK a. FIRST)
[]a. APaloAltoVitalFacilitiesand
ServicesProtectionMeasurethat
wouldprovideastablesourceof
locally-controlledfundingtoaddress
localneeds. Thesefundscouldnot
betakenawayby theStateand
wouldbeusedtosupportgeneral
Cityservicesandfacilities,
includingfire,paramedics,police,
streets,sidewalks,parks,recreation,
librariesandcommunitycenters.----------33%-----39%-----13%---- 11%------4%72% 24%
(RANDOMIZE)
(SPLIT SAMPLE A ONLY)
[]b. AFire,Paramedic, Police, Seismic
SafetyandEmergency Response
Measuretofundimprovementsto
keepPaloAltosafe, including
constructionofanewearthquake-
safepublicsafetybuildingand
emergencyresponsecommand
center,replacingtwoobsoletefire
stationswithmodernearthquake-
safebuildings,andimproving
communicationsystemstoensure
rapid9-1-1responsetofires,
accidentsandotheremergencies.----------39%-----29%-----17%---- 12%------3%68% 30%
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(DON’T
STRG. S.W. S.W. STRG. READ)TOTAL TOTAL
SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP.
(SPLIT SAMPLE B ONLY)
[]c. ATrafficCongestionReliefand
Safe Streets, SidewalksandTrails
Measuretofundrepairand
improvementstostreets,sidewalks,
andninemilesofoff-roadtrails.
Thismeasurewouldprovidesafe
routestoschoolforchildren,
improveaccessibilityforpeople
withdisabilities,provideanetwork
ofsafebikepathsandpedestrian
walkways,increasetheavailability
ofparking,andupgrade traffic
signalsandintersectionstoreduce
congestionandimprovesafety.------------39%-----34%-----16%-----8%-------2%74% 24%
(SPLIT SAMPLE A ONLY)
[]d. AParks,Open Space and
SustainabilityMeasurethatwould
fundimprovementsandinvestments
toPaloAlto’sparksandopenspace,
includingrepairingunsafe
playgroundequipment,creatingnew
playfields,improvingwalkingand
bikingpathsandtrails,and
improvingirrigationsystemsto
conservewater.Itwouldalso
includefundstotherestorethe
historicRothBuildingandrepairthe
VenturaCommunityCenter----------------24%-----41%-----17%---- 15%------3%65% 32%
(SPLIT SAMPLE B ONLY)
[]e. APaloAltoChildrenandFamilies
FirstMeasurethatwouldfund
improvedfacilitiesforpreschool
and childcareprograms, saferoutes
toschool,pedestrianandbikesafety
improvements,parkand playground
improvementsandneighborhood
trafficcalmingmeasures.-------------------32%-----38%-----17%---- 10%------2%71% 27%
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FAIRBANK, MASLIN,MAULLIN,METZ&ASSOCIATES 220-3577-WT PAGE8
(RESUME ASKINGALLRESPONDENTS)
11. 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
wehavebeendiscussing?(IF WILLING/UNWILLING, ASK:)“Would that be very
WILLING/UNWILLING,to pay that amount, or just somewhat? (SPLIT SAMPLE A READ TOP
TO BOTTOM, SPLIT SAMPLE BREADBOTTOM TO TOP)
(DON’T
VERY SMWT SMWT. VERY READ)TOTAL TOTAL
WILL. WILL. UNWL. UNWL. DK/NA WILL. UNWL.
[]a. 250dollarsperyear--------------------------20%-----29%-----19%---- 29%------4%48% 48%
[]b. 200dollarsperyear--------------------------25%-----28%-----19%---- 24%------4%53% 43%
[]c. 150dollarsperyear--------------------------35%-----30%-----14%---- 18%------3%64% 33%
[]d. 100dollarsperyear--------------------------45%-----30%------8%----- 13%------3%75% 21%
NOWIWOULD LIKE TO ASKYOU ABOUTSOME MORE SPECIFICAPPROACHES TO
IMPROVINGTHECITY’SINFRASTRUCTURE.
12. Iam goingtoreadyoua listofspecificinfrastructureimprovementsprojectsthatmightbeplaced
beforePaloAltovoters,alongwiththeirestimatedcosts. Keepin mindthatthesecostsarejustrough
estimates,andwouldbe carefullyrefinedbefore anymeasurewasplaced beforelocalvoters. After
youheareach one,pleasetellme whetheryouthinkyouwouldvotetosupportoropposethatproject.
Hereisthefirstone…(IFSUPPORT/OPPOSE, ASK:“Isthatstronglyorjustsomewhat?”)
(RANDOMIZE)
(DON’T
STRG. S.W. S.W. STRG. READ)TOTAL TOTAL
SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP.
[]a. A14milliondollarprojectto
replaceand modernizetwo
seismically-unsafelocalfire
stations,bringthemuptocode
standardsandincreasetheFire
Department’scapacitytorespondto
firesandotheremergencies----------------33%-----40%-----15%---- 10%------2%72% 25%
[]b. A25milliondollarprojecttocreate
anewnetworkofon andoff-street
bikelanes,pathsandpedestrian
walkwaystohelpensurethat
children,commutersand
recreationalusershavesaferoutes
towork,schoolandother
destinations------------------------------------31%-----34%-----16%---- 15%------3%65% 31%
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(DON’T
STRG. S.W. S.W. STRG. READ)TOTAL TOTAL
SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP.
[]c. Asixmilliondollarprojectto
completethefundingforayear-
roundpedestrianandbicyclebridge
overHighway1-0-1atAdobeCreek
toconnectSouthPaloAlto
neighborhoodswiththeBaylands
Naturepreserveandrecreational
andemploymentopportunities-------------27%-----34%-----17%---- 20%------2%61% 37%
[]d. Aneightmilliondollarprojectthat
wouldaugmentexistingfundingto
repairandimprovestreets,
enhancingsafetyandaccelerating
thegoalofensuringthatPaloAlto
hasexcellentstreets
throughouttheCity--------------------------23%-----45%-----19%-----9%-------3%69% 28%
[]e. Asixmilliondollarprojectthat
wouldaugmentexistingfundingto
repairandimprovesidewalks
throughouttheCitytoimprove
pedestriansafety------------------------------25%-----42%-----20%---- 11%------2%67% 31%
[]f. Atenmilliondollarprojecttorepair
andimproveparksandopenspace
facilities,includingreplacingunsafe
playgroundequipment;upgrading
pipesandirrigationsystemsto
conservewater;repairingand
maintainingpathways,ballfields,
andtenniscourts;improving
lighting;andreplacingworn
benches,drinkingfountainsand
otherparkinfrastructure--------------------23%-----43%-----20%---- 11%------2%67% 31%
[]g. Eightmilliondollarstocompletethe
fundingforaprojecttoimprove
landscaping,lighting,trafficsignals
andsignagealongtheCharleston-
ArastraderoCorridor,including
bikelanesonbothsidesofthe
street;reductionfromfourlanesof
traffictothree;crosswalk
improvementstoincreasesafety;
andimprovementstoreducetraffic
speedandcongestion—especially
aroundschoolpickupanddrop-off
pointsforchildren----------------------------21%-----32%-----21%---- 24%------2%52% 45%
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(DON’T
STRG. S.W. S.W. STRG. READ)TOTAL TOTAL
SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP.
[]h. Asixmilliondollarprojecttofund
newplayingfieldsandrecreational
facilitiesforlocalresidentsand
youthathleticgroups,locatedonten
acresofland atthegolf course------------15%-----31%-----29%---- 21%------4%46% 50%
[]i. A21milliondollarprojectto
increaseparkingavailabilityby
constructinganewdowntown
parkinggaragewithapproximately
350additionalspaces------------------------17%-----27%-----27%---- 26%------3%44% 53%
[]j. A12milliondollarprojectto
increaseparkingavailabilityby
constructinganewCalifornia
Avenueparkinggarage with
approximately200additionalspaces------17%-----29%-----28%---- 24%------2%46% 52%
[]k. Asevenmilliondollarprojectto
fundtheconstructionofanewand
relocatedAnimalServicesCenter---------15%-----32%-----29%---- 19%------5%47% 48%
[]l. Athreemilliondollarprojectto
helpfundtherestorationofthe
historicRothBuildingandtohouse
thePaloAltoHistoryMuseumthere ------9%------30%-----34%---- 23%------4%38% 57%
[]m. Athreemilliondollarprojectto
renovateandupgradetheVentura
CommunityCentertoimprovethe
qualityofchildcareservicesfor
infants,toddlersandpreschoolers
offeredthere ----------------------------------19%-----39%-----23%---- 13%------7%57% 35%
(SPLIT SAMPLE A ONLY)
[]n. A57milliondollarprojectto
purchaselandandconstructanew
earthquake-safepublicsafetyand
emergencyresponsecommand
center,withupgradeddispatch
technologyforpolice,fireand
paramedicservice aswellasmore
safeandsecure space for
interviewingcrimevictimsand
storingandanalyzingcrime
evidence----------------------------------------19%-----33%-----23%---- 22%------3%52% 45%
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FAIRBANK, MASLIN,MAULLIN,METZ&ASSOCIATES 220-3577-WT PAGE11
(DON’T
STRG. S.W. S.W. STRG. READ)TOTAL TOTAL
SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP.
(SPLIT SAMPLE B ONLY)
[]o. Eightmilliondollarsofcity
investmenttoconstructanew
earthquake-safepublicsafetyand
emergencyresponsecommand
center,withupgradeddispatch
technologyforpolice,fireand
paramedicservice aswellasmore
safeandsecure space for
interviewingcrimevictimsand
storingandanalyzingcrime
evidence.Forty-ninemilliondollars
inadditionalfundingfortheproject
wouldcomefrom aprivate
developerinexchangeforrightsto
buildnewcommercialofficesnear
PageMillRoad andEl Camino------------20%-----35%-----21%---- 19%------5%55% 40%
(RESUME ASKINGALLRESPONDENTS)
13. Next,outofallofthepotentialimprovementstobuildings,facilities,andotherinfrastructurethatwe
havediscussed,whichdoyouthinkshouldbethehighestpriorityforCitygovernment?(OPEN-END;
RECORDVERBATIM RESPONSE)
Streetrepair/sidewalkrepair/infrastructure/pedestriansafety-------------------32%
Policeandfire/publicsafety-----------------------------------------------------------22%
Bikelanes---------------------------------------------------------------------------------12%
Emergencyservices-earthquakes-----------------------------------------------------11%
Parking--------------------------------------------------------------------------------------8%
Parksandplaygrounds/recreation/children-------------------------------------------8%
Schools/childcare--------------------------------------------------------------------------6%
Needtomanage themoneytheyalreadyhave---------------------------------------4%
Animalservices ---------------------------------------------------------------------------3%
Traffic---------------------------------------------------------------------------------------3%
Other----------------------------------------------------------------------------------------5%
Idon’tknow-------------------------------------------------------------------------------6%
Nothing-------------------------------------------------------------------------------------2%
Refused-------------------------------------------------------------------------------------5%
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FAIRBANK, MASLIN,MAULLIN,METZ&ASSOCIATES 220-3577-WT PAGE12
14. Finally, I am going to read you a list of severalmethods that might be used to raise money to fund the
types of infrastructure repairs and improvements we have been discussing. After you hear each one,
please tell me if you would support or oppose using that particular way of raising new revenue for
these purposes.FIRST/NEXT, would you support or oppose_____(RANDOMIZE)(IF
SUPPORT/OPPOSE, ASK:)“Isthatstrongly SUPPORT/OPPOSE orjustsomewhat?
(DON’T
STRG. S.W. S.W. STRG. READ)TOTAL TOTAL
SUPP. SUPP. OPP. OPP. DK/NA SUPP. OPP.
[]a. Issuingbonds,allowingtheCityto
borrowmoneytocompletethe
projectsandpayitback overtime
withmoneyfromlocalproperty
taxes--------------------------------------------25%-----39%-----16%---- 18%------2%64% 35%
[]b. Increasingthetransientoccupancy
tax,chargedtohotelandmotel
guests-------------------------------------------24%-----38%-----21%---- 12%------5%62% 33%
[]c. Increasingtheutilityuserstax,
whichisaddedtoelectricity,gas,
waterandphonebills-------------------------6%------24%-----28%---- 41%------2%29% 69%
[]d. Establishingabusinesslicensetaxto
bepaidbyanybusinessoperatingin
PaloAlto---------------------------------------17%-----34%-----23%---- 23%------3%51% 46%
[]e. Increasingtherealestatetransfer
taxrate–paidwhena propertyis
boughtorsold---------------------------------18%-----33%-----22%---- 24%------4%51% 46%
[]f. Increasingthelocalsalestaxrate
paidbyanyonewhoshopsinPalo
Alto---------------------------------------------10%-----28%-----27%---- 34%------2%38% 61%
[]g. Establishingaflattaxonevery
parcelofpropertyinPaloAlto-------------8%------33%-----20%---- 34%------5%41% 54%
HERE ARE MYLAST QUESTIONS,AND THEYAREFOR STATISTICALPURPOSES ONLY.
15. (T)Doyou ...(READ LIST),
Ownasinglefamilyhome---------------59%
Ownacondominium------------------------7%
Rentanapartmentorhome--------------30%
(DON'T READ)Refused------------------5%
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FAIRBANK, MASLIN,MAULLIN,METZ&ASSOCIATES 220-3577-WT PAGE13
(ASK Q16IFCODE1 OR2IN Q15)
16. (T)Didyoubuyyourhomebefore 1978orin1978orafter?
Before1978---------------------------------27%
In1978orafter----------------------------72%
(DON'T READ)Refused------------------1%
(RESUME ASKINGALLRESPONDENTS)
17. (T)What wasthelastlevelofschoolyoucompleted?
Grades1-8------------------------------------0%
Grades9-12-----------------------------------0%
Highschoolgraduate------------------------4%
Some college/vocationalschool---------10%
Collegegraduate(4years)---------------33%
Postgraduatework/professionalschool52%
(DON'T READ)Refused------------------1%
18. (T) Withwhichracialorethnicgroupdoyouidentifyyourself:LatinoorHispanic,African
AmericanorBlack, CaucasianorWhite,South Asian,someotherAsianorPacific Islandergroupor
someotherethnicorracialbackground?(READ CHOICES BELOW)
Hispanic/Latino------------------------------2%
Black/AfricanAmerican--------------------2%
Anglo/White--------------------------------71%
SouthAsian-----------------------------------6%
SomeotherAsian/PacificIslandergroup9%
Other(SPECIFY_____) -------------------0%
(DON’T READ) MIXED -----------------1%
(DON'T KNOW/REFUSED)------------8%
19. (T) Idon’tneedtoknow theexact amount,butI’mgoingtoreadyousomecategoriesforhousehold
income. Wouldyoupleasestopmewhen Ihave readthe categoryindicatingthetotalcombined
incomeforallthepeople inyourhouseholdbeforetaxesin2012?
$50,000orless-------------------------------8%
$50,001-$100,000-----------------------17%
$100,001-$150,000----------------------20%
$150,001–$200,000---------------------12%
Morethan$200,000-----------------------26%
(DON'T KNOW/REFUSED)----------17%
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FAIRBANK, MASLIN,MAULLIN,METZ&ASSOCIATES 220-3577-WT PAGE14
THANK ANDTERMINATE
GENDER (BY OBSERVATION):Male------------------------------------------48%
Female---------------------------------------52%
PARTYREGISTRATION:Democrat------------------------------------53%
Republican----------------------------------16%
NoPartyPreference-----------------------28%
Other-------------------------------------------3%
FLAGS
P08------------------------------------------- 49%
G08------------------------------------------ 75%
P10------------------------------------------- 55%
G10------------------------------------------ 75%
P12------------------------------------------- 56%
G12------------------------------------------ 94%
Blank------------------------------------------2%
VOTE BY MAIL
1---------------------------------------------- 14%
2---------------------------------------------- 11%
3+------------------------------------------- 56%
Blank---------------------------------------- 19%
AGE
18-29---------------------------------------- 15%
30-39---------------------------------------- 12%
40-49---------------------------------------- 18%
50-64---------------------------------------- 28%
65-74---------------------------------------- 13%
75+------------------------------------------ 14%
PERMANENTABSENTEE
Yes-------------------------------------------74%
No--------------------------------------------26%
HOUSEHOLDPARTY TYPE
Dem1---------------------------------------28%
Dem2+-------------------------------------18%
Rep1 ------------------------------------------9%
Rep2+----------------------------------------5%
Ind1+---------------------------------------26%
Mix-------------------------------------------15%
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Attachment C. Infrastructure Project Costs
(all costs/revenues in millions of dollars)
May 29, 2013
Projects costs and project‐specific funding
Polling Support (sum of strongly
& somewhat support) Project
Estimated
Cost
Committed
Funding
Net Cost with
Committed
Potential
Funding
Net Cost with
Committed
and Potential
72%Fire Stations 14.2 0 14.2 0 14.2
69%Streets 8 0 8 0 8
67%Sidewalks 6 0 6 0 6
67%Parks Catch Up 9.8 0 9.8 0 9.8
Subtotal 38 0 38 0 38
65%Bike/Pedestrian Plan 25 1.5 23.5 0 23.5
61%Bike Bridge 10 8.35 1.65 0 1.65
57%Ventura Community Center 3 0 3 0 3
52%Public Safety Building 57 0 57 48 9
52%Charleston/Arastradero 9.75 2.27 7.48 0.35 7.13
Subtotal 104.75 12.12 92.63 48.35 44.28
47%Animal Services Center 6.9 0 6.9 0 6.9
46%Playing Fields (at Golf Course)6 0 6 0 6
46%Cal. Avenue Parking Garage 12 0 12 0 12
44%Downtown Parking Garage 21 0 21 0 21
38%History Museum at Roth Building 3 0 3 0 3
Subtotal 48.9 0 48.9 0 48.9
not polled Byxbee Park 3.6 0 3.6 0 3.6
not polled Surface Catch Up 8.8 0 8.8 0 8.8
not polled Buildings Catch Up 4.5 0 4.5 0 4.5
not polled Cubberley Deferred Maintenance 6.9 0 6.9 0 6.9
not polled Civic Center 16 0 16 0 16
Subtotal 39.8 0 39.8 0 39.8
Total 231.5 12.1 219.3 48.4 171.0
Total (excluding parking garages, History Museum, Ventura) 192.5 12.1 180.3 48.4 132.0
les
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The project information and cost estimate information on this sheet represent staff’s best information at this
time. Staff will continue to refine the information as new and more precise information becomes available.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes
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Attachment D. Potential Bundled Infrastructure Measures
Potential Bundled Infrastructure Measures
Survey Bundled Project description
Polling Support
(sum of strongly and
somewhat supportive) Potential Projects
Estimated
Cost
Committed
Funding
Net Cost with
Committed
Potential
Funding
Net Cost with
Committed
and Potential
Streets 8 0 8 0 8
Sidewalks 6 0 6 0 6
Bike/Pedestrian Plan 25 1.5 23.5 0 23.5
Bike Bridge 10 8.35 1.65 0 1.65
Charleston/Arastradero 9.75 2.27 7.48 0.35 7.13
Cal. Avenue Parking Garage 12 0 12 0 12
Downtown Parking Garage 21 0 21 0 21
Totals:91.75 12.12 79.63 0.35 79.28
72%
A Palo Alto Vital Facilities and Services Protection Measure that would provide a stable source of locally-controlled funding to address local needs. Th
Ventura Community Center 3 0 3 0 3
Bike/Pedestrian Plan 25 1.5 23.5 0 23.5
Parks Catch Up 9.8 0 9.8 0 9.8
Charleston/Arastradero 9.75 2.27 7.48 0.35 7.13
Streets 8 0 8 0 8
Sidewalks 6 0 6 0 6
Totals:61.55 3.77 57.78 0.35 57.43
Public Safety Building 57 0 57 48 9
Fire Stations 14.2 0 14.2 0 14.2
Totals: 71.2 0.0 71.2 48.0 23.2
74%
71%
A Traffic Congestion Relief and Safe Streets, Sidewalks
and Trails Measure to fund repair and improvements to
streets, sidewalks, and nine miles of off‐road trails. This
measure would provide safe routes to school for
children, improve accessibility for people with
disabilities, provide a network of safe bike paths and
pedestrian walkways, increase the availability of parking,
and upgrade traffic signals and intersections to reduce
congestion and improve safety.
A Palo Alto Children and Families First Measure that
would fund improved facilities for preschool and
childcare programs, safe routes to school, pedestrian and
bike safety improvements, park and playground
improvements and neighborhood traffic calming
measures.
A Fire, Paramedic, Police, Seismic Safety and Emergency
Response Measure to fund improvements to keep Palo
Alto safe, including construction of a new earthquake‐
safe public safety building and emergency response
command center, replacing two obsolete fire stations
with modern earthquake‐safe buildings, and improving
communication systems to ensure rapid 9‐1‐1 response
to fires, accidents and other emergencies.
A Palo Alto Vital Facilities and Services Protection
Measure that would provide a stable source of locally‐
controlled funding to address local needs. These funds
could not be taken away by the State and would be used
to support general City services and facilities, including
fire, paramedics, police, streets, sidewalks, parks,
recreation, libraries and community centers.
68%
Information on potential projects is not provided for this measure, as it is structured as a general
measure whose revenues would not be dedicated to specific uses.
The project information and cost estimate information on this sheet represent staff’s best information at this
time. Staff will continue to refine the information as new and more precise information becomes available.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes
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1 5/29/2013
Attachment E: Public Safety Building Update
The Planned Community (PC) zone change at 395 Page Mill and 3045 Park Blvd., if approved,
would allow construction of two four‐story office buildings, totaling 311,000 square feet at 395
Page Mill Road, and a three‐story approximately 44,500 square foot public safety building (as
the primary proposed public benefit), along with associated parking. The applicant has
estimated the value of the construction of the public safety building (including land) and
associated parking at $49.3 million. The project at this value also assumes that the applicant
would build the public safety building and parking garage (at a presumably lower cost than the
City could.)
At the May 7, 2013 meeting of the Infrastructure Committee, staff reported that the City’s
architect, Michael Ross of RossDrulisCusenberry Architecture Inc. (RDC), is working in an
advisory role to the applicant’s architect, DES Architects and Engineers (DES), to address the key
criteria for a successful public safety building. Since the May 7, 2013 meeting, Michael Ross has
continued to work with City staff and DES to refine the building configuration and layout for the
“Operational Basement” approach that is preferred by the Police Department.
The proposed public safety building, along with the proposed office buildings at 395 Page Mill
Road, is scheduled to be considered for initiation by the Planning and Transportation
Commission at its May 29, 2013 meeting. The staff report to the PTC recommends initiation of
the project, and describes the recent improvements to the public safety building proposal as
follows:
Construction of an approximately 44,500 square foot Public Safety Building with 191
dedicated parking spaces. The Public Safety Building would be located on the southern
portion of the site with 191 parking spaces in two below grade levels.
The below grade parking levels will be for the exclusive use of the Public Safety Building.
Office parking of 388 spaces will be accommodated in the above grade portion of the
parking garage.
The PSB will have a 20 foot stand‐off (setback) from all property lines and a 45 foot
stand‐off from the proposed parking garage. The building separation will allow for
parking for a media truck and emergency vehicle.
The additional front setback allows for improved security, and provides space for
mature landscaping and a pedestrian plaza at the front of the building.
The PSB frontage has been modified to provide 100 percent publicly accessible functions
along the ground floor. This will help to enliven the street during the day and create a
“lantern effect” at night along Park Blvd.
The project now proposes a series of landscaped bulb‐outs that will visually narrow the
streetscape while providing sufficient space for bicycle lanes.
The proposed four (4) driveway ramps have been reduced to three (3) ramps, and will
reduce conflicts with pedestrian and vehicular traffic.
The FAR for this site has been reduced from 3.40 to 2.80 with the relocation of 51
parking spaces and further refinement of the parking garage design.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Both Michael Ross and Police Department staff agree that the proposed public safety building
site is workable, and that the proposed building with the recent improvements to the design is
a strong public benefit that would be highly valuable to the community if approved.
As reported to the Infrastructure Committee on May 7, 2013, Staff believes that enough
progress can be made in the project’s review process to effectively inform decisions about the
need for an infrastructure measure in December 2013 and is committed to work to that
schedule. The project review process is currently proceeding according to the schedule that
was provided on April 7, and which is also attached. It is anticipated that Council will be able to
consider the project and the feasibility of the EIR in March 2014.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Sep May
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
2012 2014
Sep
Council
Prescreening
Dec-12
Applicant Submits
Revised Plans
Feb
PTC Initiation
1st Hearing May
Infrastructure
Committee
May
Initiate EIR
Jun
Circulate
NOP
Jul
PTC
EIR Scoping
Aug
ARB Preliminary
Hearing
Nov
Circulate
EIR
Dec
PTC
EIR Hearing
Mar
CC
Hearing
Feb
PTC
Hearing
Jan
ARB
Hearing
Jul -Aug
Focus Groups
Sep- Nov
Potential
Tracking
Survey
Apr -Jun
Baseline Survey
395 Page Mill Road and 3045 Park Blvd. Planned Community Zone Change, EIR Schedule,
Evaluation of the Proposed Public Benefit
& Public Opinion Research for Potential Infrastructure Finance Measure
May 7, 2013
May
PTC Initiation
2nd Hearing
Public Benefit Evaluation
Public Opinion Research for Potential Infrastructure Finance Measure
City Council Considers Infrastructure Committee Recommendations on Opinion Research Findings
Sep
Admin
Draft
EIR
PSB Design
Public Benefit Analysis
Preliminary Traffic Study}
Sep
Council
Update
Feb-Apr
Final
Survey
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Attachment F. Potential Revenue Sources
May 29, 2013
Potential Revenue Sources to Fund Infrastructure Projects
Currently Available Revenue Sources (in millions)Potential Revenue Ballot Measure Types
Infrastructure/Housing $22.1
Sustainability 12.3
Parks 1.0
Community Centers 1.4
Citywide Traffic TBD GO Bonds ($100 per year)57
GO Bonds ($150 per year)86
GO Bonds ($200 per year)114
Available 3.6 GO Bonds ($250 per year)143
Projected FY2013 End 6‐10
Total:$44.0 ‐ $48.0 Business License Tax 51%3.3 46.2
Parcel Tax ($200 per parcel) 41%4 56
Sales Tax 1/8 cent increase 38%2.6 36.4
Potential or Projected Revenue Increases
Soure of New Revenue
New Hotels (2014)1.7 23.8
New Hotels (after 2014)0.7 9.8 Cities TOT Rates
Digital Readerboard 0.8 11.2 San Francisco 14.0%
Auto Dealership at MSC 0.8 11.2 San Jose 10.0% Amount
Oakland 14.0%$100 75%
Menlo Park 12.0%$150 64%
Lease LATP site 3 42 East Palo Alto 12.0%$200 53%
Mountain View 10.0%$250 48%
Total:8.4 117.6 Sunnyvale 9.5%
Santa Clara 9.5%
Redwood City 12.0%
Santa Barbara 12.0%
Anaheim 15.0%
Potential Funding from New Tax Measures
New tax measure Annual Revenue
Sales tax increase of 1/8 cent 2.6
Transient Occupancy Tax increase of 1 percent 0.9
Documentary Transfer Tax increase of $1.10 per $100,000 of value 1.8
Utility User's Tax increase of 1 percent 2.2
Business License Tax (2009 analysis)3.3
Parcel Tax of $200 per parcel 4.0
46.2
56
One‐time Funding
36.4
12.6
25.2
30.8
Lease Current Police
Building 1.4 19.6
One‐Time
Revenue (30‐
year COPs)
Support for
Additional Taxes
Estimated Annual
Revenue
1 Note that polling support is with respect to the revenue measure
type, not the amount of the tax or bond
One‐Time
Revenue
(GO Bond,
Annual
Revenue
Polling Support1
(sum of strongly
and somewhat
supportive)
Type of Revenue Measure
or Tax Increase
Utility Users Tax 1% Increase 29%2.2 30.8
Transient Occupancy Tax 1%
Increase
1.8 25.2
64%
62%0.9 12.6
Documentary Transfer Tax
$1.1 per $100,000 increase 51%
Stanford Medical
Center Mitigation
Downtown In‐Lieu
Parking 1.2
Development Impact
and In‐Lieu Fees
Infrastructure Reserve
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Attachment G. Finance Mechanisms and Election Requirements
Updated May 29, 2013
*General taxes can be coupled with an advisory measure expressing voters’ preference that tax be used for particular purpose. If the ballot
language itself expressly restricts use of tax proceeds to infrastructure or other specific uses, it becomes a Special Tax. Special taxes require a 2/3 vote,
but need not be placed on a General Election ballot.
Funding Type
Description
General Election
Required
(Even years only)
Vote
Requirement
Comments
Taxes
General Obligation (GO)
Bond
Property Tax based on %
of assessed value
No 2/3
Parcel Tax Property tax based on
flat rate per parcel
No 2/3
Sales Tax
Tax on goods Yes, if structured as a
general tax*
Majority Can be increased in 1/8 increments up
to 1% maximum
Utility Users Tax
Tax on utility charges Yes, if structured as a
general tax*
Majority
Documentary Transfer
Tax
Tax on real property
deeds
Yes, if structured as a
general tax*
Majority
Transient Occupancy
Tax (Hotel Tax)
Tax on hotel rates Yes, if structured as a
general tax*
Majority
Business License Tax
Tax on businesses Yes, if structured as a
general tax*
Majority City doesn’t currently have
Other Funding Mechanisms
Certificates of
Participation (COPs)
Financing lease that
allows issuance of tax
exempt debt
N/A N/A Must have identified revenue stream for
repayment.
Utility Revenue Bonds Bonds secured by utility
rates
N/A N/A Must have identified revenue stream for
repayment. Utility bonds cannot be
used to fund General Fund operations.
TRIP COP’s COP’s secured by City
portion of gas tax
N/A N/A California Communities sponsored
program to leverage gas tax revenues.
Can only be used for certain street
improvements.
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INFRASTRUCTURE COMMITTEE
MINUTES
Page 1 of 16
Special Meeting
Thursday, June 6, 2013
The Infrastructure Committee met on this date in the Council Conference
Room at 5:04 P.M.
Present: Berman, Klein (Chair), Scharff, Shepherd
Absent:
Chair Klein announced that the meeting would end at 6:30 P.M., and an
additional meeting regarding the baseline survey results would be scheduled
the first week of August 2013.
ACTION ITEMS
1. Review Baseline Survey Results and Make Recommendations to the
City Council on Next Steps in Considering an Infrastructure Finance
Measure.
Sheila Tucker, Executive Assistant to the City Manager, noted the Staff
Report included supplemental information regarding revenue sources that
could be dedicated to infrastructure projects.
James Keene, City Manager, inquired whether the full meeting time would be
devoted to survey results.
Chair Klein did not believe the survey results would require the full time.
Ms. Tucker reported Staff was prepared to discuss details of the survey
results if the Infrastructure Committee (Committee) wished.
Mr. Keene requested the order of topics be reversed.
Chair Klein wanted to cover the survey results, and requested Staff present
the information in 15-20 minutes.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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MINUTES
Page 2 of 16
Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Dave Metz, Fairbank, Maslin, Maullin, Metz, and Associates, reported
demographic information for each question would not be covered in the
presentation; however, the information was available. For each survey
question, he separated the responses by demographic, geographic and
attitudinal subgroups of the Palo Alto electorate. The presentation provided
information regarding the essential recommendations. The survey covered a
randomly selected sample of 603 voters in Palo Alto who, based on past
voting behavior, were considered likely to vote in the November 2014
election. The survey was conducted at the end of April and beginning of May
2013. In a number of places in the data, he would draw comparisons with
prior surveys he performed for the City for the Library Bond. Broadly, local
voters remained overwhelming pleased with the performance of City
government. This was different from other communities where many voters
were unhappy with local government performance. One side effect of the
happiness was that the community did not see a critical need for additional
funding for infrastructure. Approximately half of local voters saw some need
for funding for infrastructure projects. When voters were asked about a
series of potential ballot measures that pulled together packages of
infrastructure improvements under various subject headings, many
packages received support from approximately two-thirds of voters. Those
questions did not assign a specific funding mechanism or cost to those
improvements. A majority, but not a super majority, of voters indicated
they would support a Public Safety Building (PSB) fully funded by the City.
Support was slightly higher for a public-private partnership for a PSB. In the
abstract, approximately two-thirds of voters would be willing to vote for a
ballot measure that would provide additional funds for infrastructure
improvements. Specific funding mechanisms that generally received the
strongest support were General Obligation (GO) bond measures or an
increase in the transient occupancy tax (TOT), both of which received
support from more than 3 in 5 voters. A variety of other mechanisms
received less support. One of the first questions in the survey asked
respondents how they would rate the overall job being done by City
government as excellent, good, fair, or poor. More than two-thirds rated the
City's performance as either excellent or good. Relatively few responses
were in the excellent category; however, that was consistent with other
communities. Approximately 1 in 20 voters believed the City was doing a
poor job. Those numbers were comparable to the numbers generated in
2008. Another question asked voters how they felt about the City's
performance in a variety of specific subject areas, with a response of
approve or disapprove. By margins greater than 2 to 1, voters approved the
City's performance. In the area of maintaining infrastructure, 75 percent of
respondents felt the City was doing a good job, and 28 percent strongly
approved. This was the first indicator in the data that voters did not see an
infrastructure crisis. More broadly, voters did not see a need for additional
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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MINUTES
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
funding for City services in the larger sense. Respondents were asked how
they would rate the City of Palo Alto's need for additional funding broadly.
Only 40 percent of voters perceived some need for additional funding for the
City; 50 percent saw little or no need; and almost one-third saw no need for
additional funding. In most cities, respondents were less satisfied with City
government, did not believe they received the services they wanted, and
perceived a need for more resources.
Vice Mayor Shepherd inquired whether satisfaction with City government
typically paired with the low need for additional funding.
Mr. Metz indicated there was a logical connection between the two.
Dissatisfaction with City government usually occurred because of service
reductions, and voters tied service reductions to a lack of revenue.
Additional questions asked more specifically about whether the public saw a
great need or some need for funding to maintain and improve infrastructure.
The sample was divided into groups, each of which was randomly selected.
One half was asked about maintaining and improving infrastructure as a
generic category. The second half was asked about specific categories. In
neither formulation did two-thirds of voters perceive a need for more
infrastructure funding. The more specific the question, the greater the
constituency favored providing additional funding. In either formulation of
the question, only 1 in 10 respondents indicated a great need for
infrastructure funding. Again, the perception was that the City did a good
job of handling these issues. It might seem as though respondents were not
willing to provide funding for infrastructure. As respondents went through
the remaining questions and heard specific ideas it became apparent that
was not the case. The public did see some areas where improvements were
needed and where they would be willing to fund them. He developed a
series of questions moving from general to specific to try to understand how
voters would rank a variety of potential infrastructure priorities. The first
and most general question mentioned the Infrastructure Blue Ribbon
Commission (IBRC) process and the City's most pressing infrastructure
needs, and then provided respondents with a list of different categories of
need that had been identified. Respondents were asked whether they
thought each category was an extremely important, very important,
somewhat important, or not important priority. Two-thirds or more of voters
rated a number of items as either extremely important or very important,
which was significant for a finance measure requiring a super majority vote.
The two categories with the most support were public safety and
transportation.
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MINUTES
Page 4 of 16
Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Council Member Berman inquired about the difference between fixing
potholes and paving City streets and maintaining streets and roads.
Mr. Metz explained that language was used in a split-sample question
describing the same types of projects in different ways to determine if the
result was meaningfully different. Maintaining City streets and roads
received slightly higher support, but the intensity of support was essentially
the same. Approximately one-third of voters rated the top-ranked items as
extremely important. Lesser ranked items were rated as extremely
important by one-quarter of voters. Voters did not necessarily perceive
many problems with the City's infrastructure; therefore, they were
supportive but not with a lot of strength behind those sentiments. The
second tier was comprised of items that at least half, but less than two-
thirds, of voters said were very important priorities. Generally, park related
issues tended to be in the tier behind public safety and transportation as
public priorities. Less than half of voters rated the items lowest on the list
as very important priorities.
Mr. Keene suggested the Committee would want the data regarding
geographic variances.
Chair Scharff requested copies of the data for the Committee.
Ms. Tucker had the information.
Chair Klein felt asking questions and having Mr. Metz extract the information
would be more productive than reading the data.
Mr. Metz could do that. One question attempted to combine various
infrastructure priorities into five items for ballot measures. One item was
framed as being a general tax to support City services and facilities generally
and requiring a simple majority approval. The other four items were framed
around categories of services: public safety; traffic congestion and
transportation; parks, open space, and sustainability; and services for
children. He did this in order to understand the overall level of public
support for collections of infrastructure projects and to determine any
distinctions between them. He did not assign a cost or specify a funding
mechanism, because those factors could reduce support. Almost all of the
categories were within the range of receiving two-thirds support. Parks and
open space did not receive two-thirds support, but was within the margin of
error. The two categories with the most intense support were a Streets,
Sidewalk, and Trails measure and a Public Safety measure. In terms of
aggregate support, they all were close in support.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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MINUTES
Page 5 of 16
Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Council Member Berman asked if the 6 percent increase in strong support
was worth more than the 4 percent increase in total support when
comparing a vital facilities measure to a public safety measure.
Mr. Metz reported strong support was a critical indicator. The intensity of
support for an early question was the most important indicator. At the end
of the survey, respondents were asked to state of all the potential
infrastructure improvements discussed, which ones stood out as the highest
priority. A majority of respondents mentioned something related to streets,
sidewalks, pedestrian safety improvements or police and fire and public
safety improvements. The final survey question provided respondents with
the list of potential improvements specified by the Committee along with a
cost for each project. When asked if they would support or oppose spending
the specific dollar amounts on each of the priorities, respondents answered
within the same set of issues. Two-thirds of voters indicated they would
support fire department modernization; street improvement and repair;
sidewalk improvement and repair; and bike lanes and pedestrian paths.
Interestingly, park improvement and repair was roughly equivalent to the
others in support. The most intense support was for the Fire Department
spending and bike lanes and pedestrian paths, with both exceeding 30
percent. Both PSB questions received a majority but not two-thirds support.
Less than half of voters were willing to support parking, Animal Services,
playing fields and recreational facilities, and the Roth Building; and a
plurality would oppose funding for these projects. A split sample was
utilized to test the response to a PSB fully funded by the City at $57 million;
and to a PSB funded by the City at $8 million and by a private developer
with $49 million in exchange for the right to build new commercial offices
near Page Mill Road and El Camino Real. The difference in responses was
within the survey's margin of error. In each case, a majority but less than
two-thirds of respondents expressed support.
Council Member Berman asked if the response was not accurate because of
the lack of detail for the public-private partnership.
Mr. Metz could have performed an entire survey on the PSB subject alone.
Talking through detail would potentially impact people's support. The
question was designed to state only the most salient points. Some voters
could be hesitating to support a PSB project, because they wanted more
details. He did not believe the City had public support for a two-thirds vote
on the PSB alone. Survey results were a bit lower but close to the results of
the 2007 survey.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Vice Mayor Shepherd felt public support would not reach the two-thirds level
no matter what the Council did.
Mr. Metz agreed it would be difficult. The 2008 survey was not entirely
equivalent to the 2013 survey; however, the general patterns were
consistent over time. Support for a PSB did not appear to be close to the
two-thirds level needed for a ballot measure.
Council Member Berman asked if adding context to the questions would
change support.
Mr. Metz reported that based on survey results in 2007 and 2008, the level
of support could increase; however, he was not confident it would reach a
stable two-thirds percentage. One question generally asked the voters to
indicate whether they supported a voter approved bond or tax measure to
fund some group of infrastructure projects described in the survey. By a 65
to 27 margin, voters responded yes. The strong support was only 21
percent, but the question omitted many details. He was encouraged by this
response, because earlier questions did not indicate a pressing need for
additional infrastructure funds. Voters' willingness to spend money to
support specific projects was relatively high and encouraging.
Chair Klein noted a strong support of 21 percent and a somewhat support of
44 percent, which added up to 65 percent. The undecided group of 8
percent were people who would likely vote. Undecided voters generally split
their vote with one-third supporting and two-thirds opposing. One-third of 8
percent added to 65 percent equaled 67.7 percent, slightly more than a two-
thirds majority. There were other ways to view the numbers to receive a
more positive result.
Mr. Metz did not dispute that. The undecided category would vote one way
or the other. Additional factors were the 4 percent margin of error and the
lack of project details.
Vice Mayor Shepherd inquired whether the next survey would have a
directed focus.
Mr. Metz replied yes. The point of this survey was to assess voters'
reactions to all the building blocks that could be assembled into a measure.
Reaction to the buildings blocks in this survey would provide a direction for
the next survey and a more precise analysis. Another question asked
respondents to indicate the amount they would be willing to pay in order to
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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support infrastructure improvements regardless of the funding mechanism.
Two-thirds of respondents would support paying $100 per year, and a simple
majority would support paying $200 per year.
Mayor Scharff inquired whether that question would apply to a bond
measure or parcel tax.
Mr. Metz explained any finance measure would have some fiscal impact
which could be estimated for individual households. The ballot language for
a parcel tax stated exactly how much each household would pay. Language
for other funding mechanisms did not state a specific amount.
Mayor Scharff asked if the results indicated a parcel tax in the amount of
$100 per year per parcel would likely receive 75 percent support.
Mr. Metz answered roughly yes.
Mayor Scharff felt a bond was more difficult, because it varied by property
value.
Mr. Metz could review the geographic data, determine a rough estimate of
the amount respondents would pay, and then match that amount to the
amount they stated they were willing to pay.
Mayor Scharff noted each homeowner paid a different amount due to
Proposition 13.
Mr. Metz could estimate the amount.
Chair Klein recalled the Library Bond measure provided a great deal of detail
for voters to understand the amount the average household would pay.
Mayor Scharff requested the amount individual homeowners would pay
under the Library Bond.
Chair Klein answered approximately $120.
Mayor Scharff stated some households paid $600-$800.
Council Member Berman explained the amount depended on the assessed
value of the home.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Mr. Metz added the amount was usually expressed per $100,000 of assessed
value.
Mayor Scharff inquired whether the Committee would receive that
information.
Mr. Keene indicated Staff knew the distribution of the value of houses.
Mayor Scharff asked if support for a bond measure was more nuanced than
for a parcel tax.
Mr. Metz replied yes. In the next round of research, questions would contain
specific proposals, and follow-up questions would allow the respondent to
calculate the amount he would pay and state how that affected his
willingness to support the proposal.
Chair Klein noted the Library Bond measure was in the amount of $76
million, which cost homeowners approximately $125 per year.
Joe Saccio, Assistant Director of Administrative Services, could provide some
examples for the median assessed value.
Mr. Metz reported one question asked the respondents whether they would
support or oppose each funding mechanism in the abstract. The question
provided a relative sense of which types of funding mechanisms seemed to
be most palatable to voters. Bonds were at the top of the list. The TOT,
real estate transfer tax and business license tax scored relatively well.
Mayor Scharff inquired whether 52 percent support and a margin of error of
4 percent was really a majority.
Mr. Metz stated the TOT, real estate transfer tax and business license tax
were definitely in a second tier. The lower tier included parcel tax, sales tax,
and utility users tax.
Council Member Berman asked if a bond received more support because of
the aspect of paying it later.
Mr. Metz felt that was one factor. Another factor was the concept of
borrowing money to invest in a long-lasting resource.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Mayor Scharff noted earlier in the discussion a parcel tax of $100 received
strong support. This question indicated weak support for a parcel tax. He
asked how those two points should be interpreted.
Mr. Metz explained the $100 mentioned earlier was not specifically for a
parcel tax. In this question, the parcel tax was less popular relative to the
other funding mechanisms. If the City decided to have a parcel tax, then
placing the amount at approximately $100 would increase the level of
success. Support for a sales tax was significantly lower than typical, which
may have resulted from the phrasing of the question and not specifying a
rate. He urged the Committee not to discard a sales tax increase based on
this data. A bond measure might be the way to proceed, because most
voters expressed a willingness to support it. Based on the polling data,
voters expressed high confidence in City government and its financial
management paired with a low sense of urgency for infrastructure issues.
That did not deter voters from being willing to support the idea of increasing
their taxes to fund infrastructure improvements; however, the support was
not intense. The burden would be on the City to educate the public
regarding the necessity for improvements and the necessity for a tax
increase. For the PSB, the idea of a public-private partnership packaged
with other public safety improvements might be more likely to reach two-
thirds support. Four things would significantly enhance the potential for
success of a measure: focusing on public safety and transportation;
combining projects in packages to the greatest extent possible; focusing on
GO bonds as a funding mechanism to obtain two-thirds support; and
remembering the levels of rough willingness to pay.
Council Member Berman inquired whether a voter would be likely to support
a package containing improvements the voter did and did not support.
Mr. Metz reported in general packaging improvements with strong support
with improvements not highly opposed would be the best combination.
Future research could empirically test package combinations.
Mayor Scharff stated the more intense the opposition to an improvement,
the less likely it should be included in a package.
Mr. Metz agreed that intense opposition for an improvement was problematic
for obtaining a two-thirds majority support.
Mayor Scharff indicated a bond measure required a two-thirds vote, while
increasing the TOT required a simple majority vote, Support for a bond
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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measure was 64 percent, and support for increasing the TOT was 62
percent. Increasing the TOT was more likely to pass than a bond measure.
Mr. Metz reported inclusion of the word tax generally had more impact than
inclusion of the word bond.
Vice Mayor Shepherd felt a new PSB was a fiduciary responsibility; yet, the
public seemed ambivalent. She wanted to better understand how to
interpret the public response.
Mr. Metz explained that one question attempted to define implicitly the
deficiencies in the public safety infrastructure and to place the PSB in the
context of a system of public safety facilities. Respondents supported that
with 68 percent total support and 39 percent strong support. However, the
dollar amount and the funding mechanism were missing from the question.
He believed the two-thirds support would remain when respondents received
the full context. This type of concept could be tested in the future research.
The whole could be greater than the sum of the parts.
Vice Mayor Shepherd asked if the Committee should communicate better or
focus on more polling to assist the communication process.
Mr. Metz recalled in 2007 and 2008, the public had no idea of the
deficiencies of the PSB. When the public received that type of information in
focus groups, they were concerned. The City should create a communication
program to communicate the need to the public. In terms of obtaining
funding for improvements, the survey provided helpful information in terms
of public safety. The net sum of all results seemed to indicate that a PSB
was possible.
Vice Mayor Shepherd preferred to have community support for full City
funding of a PSB. She liked the idea of implementing a business license tax,
because it could also fund economic needs.
Chair Klein suggested comments were outside of Mr. Metz's area of
expertise.
Council Member Berman noted the majority of residents supported a PSB;
however, the support did not reach the two-thirds level.
Mr. Keene stated polling on packages and different messaging that could
change support would be performed.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Mayor Scharff agreed there was strong support for a PSB, but it was not at
the two-thirds level.
Mr. Metz noted support for a PSB was consistent from 2008 forward.
Mayor Scharff felt the community wanted a PSB; however, the challenge was
funding a PSB. He asked if more polling should be conducted on the amount
the public was willing to pay.
Mr. Metz suggested the Committee should assess the amount of money
resulting from various funding mechanisms. Even if the public favored one
funding mechanism, it might not yield enough money to fund the number of
projects needed. He could test that information if the Committee wished.
Mayor Scharff felt that was true for a real estate transfer tax.
Chair Klein noted the public supported an increase in the TOT by 81 percent
in a previous election; however, the current survey indicated 62 percent
support for an increase in the TOT. He asked if Mr. Metz could explain that
disparity.
Mr. Metz explained the current survey asked respondents to support a tax
mechanism without indicating how the tax would be used.
Chair Klein understood the City did not state how the funds would be used
when campaigning for an increase in the TOT.
Lalo Perez, Administrative Services Director, Chief Financial Officer, asked if
the survey question indicated the percentage of tax increase.
Mr. Metz answered no.
Mr. Perez felt the difference may result from the previous measure stating
the percentage of increase.
Mayor Scharff felt the City stated the uses for the funds generated by the
tax increase.
Mr. Keene reported the campaign and the materials indicated the uses.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Chair Klein indicated a 2 percent increase in the TOT would generate slightly
less than $2 million annually.
Mr. Saccio added that amount did not include the new hotels.
Chair Klein requested Mr. Metz comment on survey results which differed
from other cities' results.
Mr. Metz noted the largest difference was the initial juxtaposition of
favorable attitudes toward City government with less perception of financial
need. A number of other communities had higher support for investments in
public safety, but generally those communities had much higher crime rates.
Lack of support for a sales tax was the most counterintuitive result.
Council Member Berman inquired whether the demographics of the survey
aligned with the demographics of residents likely to vote.
Mr. Metz reported it was exactly in line with likely voters.
Ms. Tucker reported the Staff Report reviewed the costs for the 14
infrastructure projects. Attachment C indicated the level of support for the
14 infrastructure projects in terms of super majority, majority, or less than
majority, and the costs. Staff included the Jay Paul Company proposal and
receipt of outstanding grants when calculating the costs. The total project
costs excluded the two parking garages, the History Museum and Ventura.
Because bundled projects polled well, Staff reviewed packages that received
a super majority vote and which projects could fit into that type of theme
and the total cost. The four categories of revenue were existing revenue
that could be earmarked for infrastructure; potential new revenue sources;
the amount of funding resulting from the four types of funding mechanisms;
and Certificates of Participation (COP). At the beginning of the Staff Report,
Staff provided questions for the Committee to consider in determining which
projects would be placed on a ballot measure.
Chair Klein requested Staff combine Attachments C and F.
Ms. Tucker would do so.
Chair Klein suggested the Committee begin eliminating projects without
strong support and compiling project bundles.
Mr. Saccio reviewed the potential revenue sources found on Attachment F.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Vice Mayor Shepherd inquired whether Staff could isolate revenue from new
hotels and earmark that as a revenue source for repaying a COP.
Mr. Saccio reported Staff had information regarding the amount of tax each
hotel generated.
Vice Mayor Shepherd did not feel hotel revenue was a new revenue source in
the traditional sense.
Council Member Berman asked what would happen if a new hotel filed for
bankruptcy in 2025.
Mr. Saccio indicated the General Fund would be responsible for replacing
that lost revenue.
Chair Klein asked if Staff meant GO bond or COP in the far right column
under Potential Revenue Ballot Measure Types.
Brad Eggleston, Assistant Director of Public Works, stated the types were
shown in the order of the amount of support received in the poll.
Chair Klein did not understand the right-hand column.
Mr. Eggleston indicated the title of the right column should state GO Bond,
COP.
Council Member Berman requested Staff review the table.
Mr. Eggleston reiterated that polling questions related only to the type of tax
or bond measure, not the percent of the increase. A $200 per parcel tax
resulted in one-time funding of $56 million; whereas a $200 per year GO
bond resulted in $114 million.
Mr. Saccio noted the document transfer tax was based on $1.10 per $1,000
of value, not $100,000 of value.
Chair Klein asked if the State imposed a limit on the amount of increase for
the real estate transfer tax.
Mr. Saccio was not aware of such a limit.
Attachment A. June 6, 2013 Staff Report and Meeting Minutes 1.a
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Mr. Perez reported the best method to receive the best rating from the
rating agencies was to pledge full General Fund revenues as alternate
revenues for COPs.
Vice Mayor Scharff inquired about the total infrastructure dollar amount.
Council Member Berman responded $132 million excluding the parking
garages, History Museum and Ventura.
Mr. Eggleston added that amount assumed the Jay Paul Company proposal
was approved.
Mayor Scharff requested the amount if the proposal was not approved.
Mr. Eggleston replied $219 million with the parking garages, History Museum
and Ventura. Without those items and the Jay Paul Company proposal, the
total was $180 million.
Chair Klein indicated the information was contained in Attachment C.
Vice Mayor Shepherd felt it was unwise to deduct the cost for the PSB,
because that appeared to indicate the Council would approve the proposal.
Chair Klein stated the amount was not deducted.
Mr. Saccio reported funding all $132 million in projects would result in each
residential property owner paying approximately $226 based on a median
average assessed valuation of $654,000.
Mayor Scharff believed a bond would affect young families
disproportionately.
Mayor Scharff asked if the total infrastructure cost included $35 million for
the Bicycle and Pedestrian Transportation Plan.
Mr. Keene answered yes.
Mr. Eggleston added the total included $25 million for the Bicycle and
Pedestrian Transportation Plan. The Bike Bridge was originally a part of the
$25 million.
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Chair Klein requested Committee Members consider removing infrastructure
projects and rank ordering the remaining projects. Attachment F indicated
available resources totaled $44-$48 million and new revenue sources not
requiring a vote totaled $70 million, for a grand total of $117 million.
Because all those revenues sources might not occur, Committee Members
should consider projects totaling $100 million.
Mayor Scharff suggested Staff present information on potential revenue
sources to allow the Committee to make recommendations to the Council.
Chair Klein explained that was the reason he suggested projects total $100
million.
Mayor Scharff felt the Committee needed that information in order to make
choices.
Chair Klein noted the Staff Report indicated Staff would present information
regarding the reader board to the Finance Committee.
Mr. Keene indicated Staff discussed presenting the information directly to
the Council. He requested direction regarding presentation of reader board
information.
Chair Klein suggested Staff present the same information to the Committee
and the Finance Committee.
Mr. Perez added that the Policy and Services Committee was reviewing use
of Stanford funds. Staff made recommendations to fund a portion of the
Bicycle and Pedestrian Transportation Plan with Stanford funds.
Chair Klein felt Committee Member's ranking of projects would shape the
final recommendations to the Council.
Vice Mayor Shepherd would apply rankings to new revenue sources as well.
Chair Klein agreed ranking would work for projects and revenue sources.
Mr. Perez read the language in Ballot M for an increase of the TOT.
Chair Klein indicated the next meeting would be in August 2013, and he
preferred to begin the meeting at 3:00 P.M. or 4:00 P.M.
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Final Minutes: June 6, 2013
Mayor Scharff preferred 3:00 P.M.
ADJOURNMENT: The meeting was adjourned at 6:40 P.M.
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City of Palo Alto (ID # 3992)
Committee for Potential Infrastructure Finance Measure
Staff Report
Report Type: Meeting Date: 8/6/2013
City of Palo Alto Page 1
Summary Title: Infrastructure Finance Measure
Title: Continue Discussion on Baseline Survey Results and Make
Recommendations to the City Council on Next Steps in Considering an
Infrastructure Finance Measure
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends that the Infrastructure Committee continue its discussion on the public
opinion survey results and make recommendations to the City Council on: 1) areas of further
study for opinion research, 2) uses of current or potential new revenue sources to fund
infrastructure projects, or 3) other next steps.
Background
On June 6, 2013, the City’s Infrastructure Committee reviewed the preliminary findings of a
baseline survey assessing the community’s opinions about a potential finance measure to fund
infrastructure needs. Attachment A provides the staff report for the meeting and the meeting
minutes. The staff report presented the preliminary findings of the baseline survey.
Supplemental information was also provided on the status of infrastructure project costs,
currently available revenue sources, grant applications, potential revenue sources, and debt
financing alternatives intended to support the Committee’s discussion and recommendations
to the City Council about next steps.
No formal action was taken at the June 6 Infrastructure Committee meeting regarding
recommendations to the City Council on next steps. Given the volume and complexity of the
information, the Committee decided to continue its discussion after the Council recess, in early
August. At the meeting, the Committee underscored the importance of Council determining in
the near term whether to dedicate currently available and potential new revenue sources to
infrastructure as a factor in making decisions about whether to pursue a finance measure.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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City of Palo Alto Page 2
At the June 6 meeting the Committee provided some direction to staff on repackaging
information for the next meeting in early August 2013. Committee members were also asked to
give further thought over the July recess to projects and funding mechanisms that the
Committee may recommend eliminating for further study and projects that may be bundled
into ballot measure packages for further study, based on the survey results. Committee
members were asked to return at the August meeting with a rank order list of infrastructure
projects and to identify potential funding mechanisms.
In addition, on June 24th, a study session was held to share the survey findings with the full
Council prior to the July recess. No action was taken at the study session.
Discussion
In preparation for the Committee meeting, staff prepared a series of worksheets designed to
assist Committee members in the preparation work on potential recommendations that the
Committee may make to the full Council about: 1) areas of further study for opinion research,
2) uses of current or potential new revenue sources to fund infrastructure projects, or 3) other
next steps.
The work sheets are included as Attachment B. This spreadsheet is designed to help Committee
members prioritize infrastructure projects and to match the cost of those projects with
potential funding mechanisms and levels. Instructions on how to use the worksheet are
provided in the first tab. Staff also met with Committee members the week of July 29 to review
the worksheets, how to use them, and to answer any questions on using this tool.
The following also provides some key policy questions and considerations that staff included in
the June 6 staff report that the Committee may want to consider in reviewing the survey
findings and supplemental material and making its recommendations to the Council.
1. Removing projects that do not have strong support?
2. Focusing continued efforts around specific projects such as public safety and transportation
(including bike and pedestrian) improvements?
3. Proceeding with further study on a bundled measure that combines multiple projects?
4. Proceeding with further study on funding for a public safety building individually or bundled
with other projects?
5. Proceeding with further study on specific finance mechanisms that received more than
simple majority support including a General Obligation Bond, Transient Occupancy Tax,
business license tax, or real estate transfer tax and considering multiple measures?
6. Evaluating further the issuance of Certificates of Participation to fund infrastructure needs?
7. Designating current funding to infrastructure projects (that did not have strong support)
that could be allocated at the Council’s discretion such as the Stanford Mitigation Funds?
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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City of Palo Alto Page 3
Timeline
The Committee will bring forward their recommendations to the Council in late August, 2013. If
areas are recommended for further study for opinion research, staff will develop a revised plan
and schedule for proceeding with the research.
Attachments:
Attachment A. June 6, 2013 Staff Report & Meeting Minutes (PDF)
Attachment B. Infrastructure Worksheets (PDF)
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Final Minutes: June 6, 2013
Dave Metz, Fairbank, Maslin, Maullin, Metz, and Associates, reported
demographic information for each question would not be covered in the
presentation; however, the information was available. For each survey
question, he separated the responses by demographic, geographic and
attitudinal subgroups of the Palo Alto electorate. The presentation provided
information regarding the essential recommendations. The survey covered a
randomly selected sample of 603 voters in Palo Alto who, based on past
voting behavior, were considered likely to vote in the November 2014
election. The survey was conducted at the end of April and beginning of May
2013. In a number of places in the data, he would draw comparisons with
prior surveys he performed for the City for the Library Bond. Broadly, local
voters remained overwhelming pleased with the performance of City
government. This was different from other communities where many voters
were unhappy with local government performance. One side effect of the
happiness was that the community did not see a critical need for additional
funding for infrastructure. Approximately half of local voters saw some need
for funding for infrastructure projects. When voters were asked about a
series of potential ballot measures that pulled together packages of
infrastructure improvements under various subject headings, many
packages received support from approximately two-thirds of voters. Those
questions did not assign a specific funding mechanism or cost to those
improvements. A majority, but not a super majority, of voters indicated
they would support a Public Safety Building (PSB) fully funded by the City.
Support was slightly higher for a public-private partnership for a PSB. In the
abstract, approximately two-thirds of voters would be willing to vote for a
ballot measure that would provide additional funds for infrastructure
improvements. Specific funding mechanisms that generally received the
strongest support were General Obligation (GO) bond measures or an
increase in the transient occupancy tax (TOT), both of which received
support from more than 3 in 5 voters. A variety of other mechanisms
received less support. One of the first questions in the survey asked
respondents how they would rate the overall job being done by City
government as excellent, good, fair, or poor. More than two-thirds rated the
City's performance as either excellent or good. Relatively few responses
were in the excellent category; however, that was consistent with other
communities. Approximately 1 in 20 voters believed the City was doing a
poor job. Those numbers were comparable to the numbers generated in
2008. Another question asked voters how they felt about the City's
performance in a variety of specific subject areas, with a response of
approve or disapprove. By margins greater than 2 to 1, voters approved the
City's performance. In the area of maintaining infrastructure, 75 percent of
respondents felt the City was doing a good job, and 28 percent strongly
approved. This was the first indicator in the data that voters did not see an
infrastructure crisis. More broadly, voters did not see a need for additional
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
funding for City services in the larger sense. Respondents were asked how
they would rate the City of Palo Alto's need for additional funding broadly.
Only 40 percent of voters perceived some need for additional funding for the
City; 50 percent saw little or no need; and almost one-third saw no need for
additional funding. In most cities, respondents were less satisfied with City
government, did not believe they received the services they wanted, and
perceived a need for more resources.
Vice Mayor Shepherd inquired whether satisfaction with City government
typically paired with the low need for additional funding.
Mr. Metz indicated there was a logical connection between the two.
Dissatisfaction with City government usually occurred because of service
reductions, and voters tied service reductions to a lack of revenue.
Additional questions asked more specifically about whether the public saw a
great need or some need for funding to maintain and improve infrastructure.
The sample was divided into groups, each of which was randomly selected.
One half was asked about maintaining and improving infrastructure as a
generic category. The second half was asked about specific categories. In
neither formulation did two-thirds of voters perceive a need for more
infrastructure funding. The more specific the question, the greater the
constituency favored providing additional funding. In either formulation of
the question, only 1 in 10 respondents indicated a great need for
infrastructure funding. Again, the perception was that the City did a good
job of handling these issues. It might seem as though respondents were not
willing to provide funding for infrastructure. As respondents went through
the remaining questions and heard specific ideas it became apparent that
was not the case. The public did see some areas where improvements were
needed and where they would be willing to fund them. He developed a
series of questions moving from general to specific to try to understand how
voters would rank a variety of potential infrastructure priorities. The first
and most general question mentioned the Infrastructure Blue Ribbon
Commission (IBRC) process and the City's most pressing infrastructure
needs, and then provided respondents with a list of different categories of
need that had been identified. Respondents were asked whether they
thought each category was an extremely important, very important,
somewhat important, or not important priority. Two-thirds or more of voters
rated a number of items as either extremely important or very important,
which was significant for a finance measure requiring a super majority vote.
The two categories with the most support were public safety and
transportation.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Final Minutes: June 6, 2013
Council Member Berman inquired about the difference between fixing
potholes and paving City streets and maintaining streets and roads.
Mr. Metz explained that language was used in a split-sample question
describing the same types of projects in different ways to determine if the
result was meaningfully different. Maintaining City streets and roads
received slightly higher support, but the intensity of support was essentially
the same. Approximately one-third of voters rated the top-ranked items as
extremely important. Lesser ranked items were rated as extremely
important by one-quarter of voters. Voters did not necessarily perceive
many problems with the City's infrastructure; therefore, they were
supportive but not with a lot of strength behind those sentiments. The
second tier was comprised of items that at least half, but less than two-
thirds, of voters said were very important priorities. Generally, park related
issues tended to be in the tier behind public safety and transportation as
public priorities. Less than half of voters rated the items lowest on the list
as very important priorities.
Mr. Keene suggested the Committee would want the data regarding
geographic variances.
Chair Scharff requested copies of the data for the Committee.
Ms. Tucker had the information.
Chair Klein felt asking questions and having Mr. Metz extract the information
would be more productive than reading the data.
Mr. Metz could do that. One question attempted to combine various
infrastructure priorities into five items for ballot measures. One item was
framed as being a general tax to support City services and facilities generally
and requiring a simple majority approval. The other four items were framed
around categories of services: public safety; traffic congestion and
transportation; parks, open space, and sustainability; and services for
children. He did this in order to understand the overall level of public
support for collections of infrastructure projects and to determine any
distinctions between them. He did not assign a cost or specify a funding
mechanism, because those factors could reduce support. Almost all of the
categories were within the range of receiving two-thirds support. Parks and
open space did not receive two-thirds support, but was within the margin of
error. The two categories with the most intense support were a Streets,
Sidewalk, and Trails measure and a Public Safety measure. In terms of
aggregate support, they all were close in support.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
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Council Member Berman asked if the 6 percent increase in strong support
was worth more than the 4 percent increase in total support when
comparing a vital facilities measure to a public safety measure.
Mr. Metz reported strong support was a critical indicator. The intensity of
support for an early question was the most important indicator. At the end
of the survey, respondents were asked to state of all the potential
infrastructure improvements discussed, which ones stood out as the highest
priority. A majority of respondents mentioned something related to streets,
sidewalks, pedestrian safety improvements or police and fire and public
safety improvements. The final survey question provided respondents with
the list of potential improvements specified by the Committee along with a
cost for each project. When asked if they would support or oppose spending
the specific dollar amounts on each of the priorities, respondents answered
within the same set of issues. Two-thirds of voters indicated they would
support fire department modernization; street improvement and repair;
sidewalk improvement and repair; and bike lanes and pedestrian paths.
Interestingly, park improvement and repair was roughly equivalent to the
others in support. The most intense support was for the Fire Department
spending and bike lanes and pedestrian paths, with both exceeding 30
percent. Both PSB questions received a majority but not two-thirds support.
Less than half of voters were willing to support parking, Animal Services,
playing fields and recreational facilities, and the Roth Building; and a
plurality would oppose funding for these projects. A split sample was
utilized to test the response to a PSB fully funded by the City at $57 million;
and to a PSB funded by the City at $8 million and by a private developer
with $49 million in exchange for the right to build new commercial offices
near Page Mill Road and El Camino Real. The difference in responses was
within the survey's margin of error. In each case, a majority but less than
two-thirds of respondents expressed support.
Council Member Berman asked if the response was not accurate because of
the lack of detail for the public-private partnership.
Mr. Metz could have performed an entire survey on the PSB subject alone.
Talking through detail would potentially impact people's support. The
question was designed to state only the most salient points. Some voters
could be hesitating to support a PSB project, because they wanted more
details. He did not believe the City had public support for a two-thirds vote
on the PSB alone. Survey results were a bit lower but close to the results of
the 2007 survey.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Vice Mayor Shepherd felt public support would not reach the two-thirds level
no matter what the Council did.
Mr. Metz agreed it would be difficult. The 2008 survey was not entirely
equivalent to the 2013 survey; however, the general patterns were
consistent over time. Support for a PSB did not appear to be close to the
two-thirds level needed for a ballot measure.
Council Member Berman asked if adding context to the questions would
change support.
Mr. Metz reported that based on survey results in 2007 and 2008, the level
of support could increase; however, he was not confident it would reach a
stable two-thirds percentage. One question generally asked the voters to
indicate whether they supported a voter approved bond or tax measure to
fund some group of infrastructure projects described in the survey. By a 65
to 27 margin, voters responded yes. The strong support was only 21
percent, but the question omitted many details. He was encouraged by this
response, because earlier questions did not indicate a pressing need for
additional infrastructure funds. Voters' willingness to spend money to
support specific projects was relatively high and encouraging.
Chair Klein noted a strong support of 21 percent and a somewhat support of
44 percent, which added up to 65 percent. The undecided group of 8
percent were people who would likely vote. Undecided voters generally split
their vote with one-third supporting and two-thirds opposing. One-third of 8
percent added to 65 percent equaled 67.7 percent, slightly more than a two-
thirds majority. There were other ways to view the numbers to receive a
more positive result.
Mr. Metz did not dispute that. The undecided category would vote one way
or the other. Additional factors were the 4 percent margin of error and the
lack of project details.
Vice Mayor Shepherd inquired whether the next survey would have a
directed focus.
Mr. Metz replied yes. The point of this survey was to assess voters'
reactions to all the building blocks that could be assembled into a measure.
Reaction to the buildings blocks in this survey would provide a direction for
the next survey and a more precise analysis. Another question asked
respondents to indicate the amount they would be willing to pay in order to
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
support infrastructure improvements regardless of the funding mechanism.
Two-thirds of respondents would support paying $100 per year, and a simple
majority would support paying $200 per year.
Mayor Scharff inquired whether that question would apply to a bond
measure or parcel tax.
Mr. Metz explained any finance measure would have some fiscal impact
which could be estimated for individual households. The ballot language for
a parcel tax stated exactly how much each household would pay. Language
for other funding mechanisms did not state a specific amount.
Mayor Scharff asked if the results indicated a parcel tax in the amount of
$100 per year per parcel would likely receive 75 percent support.
Mr. Metz answered roughly yes.
Mayor Scharff felt a bond was more difficult, because it varied by property
value.
Mr. Metz could review the geographic data, determine a rough estimate of
the amount respondents would pay, and then match that amount to the
amount they stated they were willing to pay.
Mayor Scharff noted each homeowner paid a different amount due to
Proposition 13.
Mr. Metz could estimate the amount.
Chair Klein recalled the Library Bond measure provided a great deal of detail
for voters to understand the amount the average household would pay.
Mayor Scharff requested the amount individual homeowners would pay
under the Library Bond.
Chair Klein answered approximately $120.
Mayor Scharff stated some households paid $600-$800.
Council Member Berman explained the amount depended on the assessed
value of the home.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Mr. Metz added the amount was usually expressed per $100,000 of assessed
value.
Mayor Scharff inquired whether the Committee would receive that
information.
Mr. Keene indicated Staff knew the distribution of the value of houses.
Mayor Scharff asked if support for a bond measure was more nuanced than
for a parcel tax.
Mr. Metz replied yes. In the next round of research, questions would contain
specific proposals, and follow-up questions would allow the respondent to
calculate the amount he would pay and state how that affected his
willingness to support the proposal.
Chair Klein noted the Library Bond measure was in the amount of $76
million, which cost homeowners approximately $125 per year.
Joe Saccio, Assistant Director of Administrative Services, could provide some
examples for the median assessed value.
Mr. Metz reported one question asked the respondents whether they would
support or oppose each funding mechanism in the abstract. The question
provided a relative sense of which types of funding mechanisms seemed to
be most palatable to voters. Bonds were at the top of the list. The TOT,
real estate transfer tax and business license tax scored relatively well.
Mayor Scharff inquired whether 52 percent support and a margin of error of
4 percent was really a majority.
Mr. Metz stated the TOT, real estate transfer tax and business license tax
were definitely in a second tier. The lower tier included parcel tax, sales tax,
and utility users tax.
Council Member Berman asked if a bond received more support because of
the aspect of paying it later.
Mr. Metz felt that was one factor. Another factor was the concept of
borrowing money to invest in a long-lasting resource.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Mayor Scharff noted earlier in the discussion a parcel tax of $100 received
strong support. This question indicated weak support for a parcel tax. He
asked how those two points should be interpreted.
Mr. Metz explained the $100 mentioned earlier was not specifically for a
parcel tax. In this question, the parcel tax was less popular relative to the
other funding mechanisms. If the City decided to have a parcel tax, then
placing the amount at approximately $100 would increase the level of
success. Support for a sales tax was significantly lower than typical, which
may have resulted from the phrasing of the question and not specifying a
rate. He urged the Committee not to discard a sales tax increase based on
this data. A bond measure might be the way to proceed, because most
voters expressed a willingness to support it. Based on the polling data,
voters expressed high confidence in City government and its financial
management paired with a low sense of urgency for infrastructure issues.
That did not deter voters from being willing to support the idea of increasing
their taxes to fund infrastructure improvements; however, the support was
not intense. The burden would be on the City to educate the public
regarding the necessity for improvements and the necessity for a tax
increase. For the PSB, the idea of a public-private partnership packaged
with other public safety improvements might be more likely to reach two-
thirds support. Four things would significantly enhance the potential for
success of a measure: focusing on public safety and transportation;
combining projects in packages to the greatest extent possible; focusing on
GO bonds as a funding mechanism to obtain two-thirds support; and
remembering the levels of rough willingness to pay.
Council Member Berman inquired whether a voter would be likely to support
a package containing improvements the voter did and did not support.
Mr. Metz reported in general packaging improvements with strong support
with improvements not highly opposed would be the best combination.
Future research could empirically test package combinations.
Mayor Scharff stated the more intense the opposition to an improvement,
the less likely it should be included in a package.
Mr. Metz agreed that intense opposition for an improvement was problematic
for obtaining a two-thirds majority support.
Mayor Scharff indicated a bond measure required a two-thirds vote, while
increasing the TOT required a simple majority vote, Support for a bond
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
measure was 64 percent, and support for increasing the TOT was 62
percent. Increasing the TOT was more likely to pass than a bond measure.
Mr. Metz reported inclusion of the word tax generally had more impact than
inclusion of the word bond.
Vice Mayor Shepherd felt a new PSB was a fiduciary responsibility; yet, the
public seemed ambivalent. She wanted to better understand how to
interpret the public response.
Mr. Metz explained that one question attempted to define implicitly the
deficiencies in the public safety infrastructure and to place the PSB in the
context of a system of public safety facilities. Respondents supported that
with 68 percent total support and 39 percent strong support. However, the
dollar amount and the funding mechanism were missing from the question.
He believed the two-thirds support would remain when respondents received
the full context. This type of concept could be tested in the future research.
The whole could be greater than the sum of the parts.
Vice Mayor Shepherd asked if the Committee should communicate better or
focus on more polling to assist the communication process.
Mr. Metz recalled in 2007 and 2008, the public had no idea of the
deficiencies of the PSB. When the public received that type of information in
focus groups, they were concerned. The City should create a communication
program to communicate the need to the public. In terms of obtaining
funding for improvements, the survey provided helpful information in terms
of public safety. The net sum of all results seemed to indicate that a PSB
was possible.
Vice Mayor Shepherd preferred to have community support for full City
funding of a PSB. She liked the idea of implementing a business license tax,
because it could also fund economic needs.
Chair Klein suggested comments were outside of Mr. Metz's area of
expertise.
Council Member Berman noted the majority of residents supported a PSB;
however, the support did not reach the two-thirds level.
Mr. Keene stated polling on packages and different messaging that could
change support would be performed.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Mayor Scharff agreed there was strong support for a PSB, but it was not at
the two-thirds level.
Mr. Metz noted support for a PSB was consistent from 2008 forward.
Mayor Scharff felt the community wanted a PSB; however, the challenge was
funding a PSB. He asked if more polling should be conducted on the amount
the public was willing to pay.
Mr. Metz suggested the Committee should assess the amount of money
resulting from various funding mechanisms. Even if the public favored one
funding mechanism, it might not yield enough money to fund the number of
projects needed. He could test that information if the Committee wished.
Mayor Scharff felt that was true for a real estate transfer tax.
Chair Klein noted the public supported an increase in the TOT by 81 percent
in a previous election; however, the current survey indicated 62 percent
support for an increase in the TOT. He asked if Mr. Metz could explain that
disparity.
Mr. Metz explained the current survey asked respondents to support a tax
mechanism without indicating how the tax would be used.
Chair Klein understood the City did not state how the funds would be used
when campaigning for an increase in the TOT.
Lalo Perez, Administrative Services Director, Chief Financial Officer, asked if
the survey question indicated the percentage of tax increase.
Mr. Metz answered no.
Mr. Perez felt the difference may result from the previous measure stating
the percentage of increase.
Mayor Scharff felt the City stated the uses for the funds generated by the
tax increase.
Mr. Keene reported the campaign and the materials indicated the uses.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Chair Klein indicated a 2 percent increase in the TOT would generate slightly
less than $2 million annually.
Mr. Saccio added that amount did not include the new hotels.
Chair Klein requested Mr. Metz comment on survey results which differed
from other cities' results.
Mr. Metz noted the largest difference was the initial juxtaposition of
favorable attitudes toward City government with less perception of financial
need. A number of other communities had higher support for investments in
public safety, but generally those communities had much higher crime rates.
Lack of support for a sales tax was the most counterintuitive result.
Council Member Berman inquired whether the demographics of the survey
aligned with the demographics of residents likely to vote.
Mr. Metz reported it was exactly in line with likely voters.
Ms. Tucker reported the Staff Report reviewed the costs for the 14
infrastructure projects. Attachment C indicated the level of support for the
14 infrastructure projects in terms of super majority, majority, or less than
majority, and the costs. Staff included the Jay Paul Company proposal and
receipt of outstanding grants when calculating the costs. The total project
costs excluded the two parking garages, the History Museum and Ventura.
Because bundled projects polled well, Staff reviewed packages that received
a super majority vote and which projects could fit into that type of theme
and the total cost. The four categories of revenue were existing revenue
that could be earmarked for infrastructure; potential new revenue sources;
the amount of funding resulting from the four types of funding mechanisms;
and Certificates of Participation (COP). At the beginning of the Staff Report,
Staff provided questions for the Committee to consider in determining which
projects would be placed on a ballot measure.
Chair Klein requested Staff combine Attachments C and F.
Ms. Tucker would do so.
Chair Klein suggested the Committee begin eliminating projects without
strong support and compiling project bundles.
Mr. Saccio reviewed the potential revenue sources found on Attachment F.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Vice Mayor Shepherd inquired whether Staff could isolate revenue from new
hotels and earmark that as a revenue source for repaying a COP.
Mr. Saccio reported Staff had information regarding the amount of tax each
hotel generated.
Vice Mayor Shepherd did not feel hotel revenue was a new revenue source in
the traditional sense.
Council Member Berman asked what would happen if a new hotel filed for
bankruptcy in 2025.
Mr. Saccio indicated the General Fund would be responsible for replacing
that lost revenue.
Chair Klein asked if Staff meant GO bond or COP in the far right column
under Potential Revenue Ballot Measure Types.
Brad Eggleston, Assistant Director of Public Works, stated the types were
shown in the order of the amount of support received in the poll.
Chair Klein did not understand the right-hand column.
Mr. Eggleston indicated the title of the right column should state GO Bond,
COP.
Council Member Berman requested Staff review the table.
Mr. Eggleston reiterated that polling questions related only to the type of tax
or bond measure, not the percent of the increase. A $200 per parcel tax
resulted in one-time funding of $56 million; whereas a $200 per year GO
bond resulted in $114 million.
Mr. Saccio noted the document transfer tax was based on $1.10 per $1,000
of value, not $100,000 of value.
Chair Klein asked if the State imposed a limit on the amount of increase for
the real estate transfer tax.
Mr. Saccio was not aware of such a limit.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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MINUTES
Page 14 of 16
Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Mr. Perez reported the best method to receive the best rating from the
rating agencies was to pledge full General Fund revenues as alternate
revenues for COPs.
Vice Mayor Scharff inquired about the total infrastructure dollar amount.
Council Member Berman responded $132 million excluding the parking
garages, History Museum and Ventura.
Mr. Eggleston added that amount assumed the Jay Paul Company proposal
was approved.
Mayor Scharff requested the amount if the proposal was not approved.
Mr. Eggleston replied $219 million with the parking garages, History Museum
and Ventura. Without those items and the Jay Paul Company proposal, the
total was $180 million.
Chair Klein indicated the information was contained in Attachment C.
Vice Mayor Shepherd felt it was unwise to deduct the cost for the PSB,
because that appeared to indicate the Council would approve the proposal.
Chair Klein stated the amount was not deducted.
Mr. Saccio reported funding all $132 million in projects would result in each
residential property owner paying approximately $226 based on a median
average assessed valuation of $654,000.
Mayor Scharff believed a bond would affect young families
disproportionately.
Mayor Scharff asked if the total infrastructure cost included $35 million for
the Bicycle and Pedestrian Transportation Plan.
Mr. Keene answered yes.
Mr. Eggleston added the total included $25 million for the Bicycle and
Pedestrian Transportation Plan. The Bike Bridge was originally a part of the
$25 million.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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MINUTES
Page 15 of 16
Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Chair Klein requested Committee Members consider removing infrastructure
projects and rank ordering the remaining projects. Attachment F indicated
available resources totaled $44-$48 million and new revenue sources not
requiring a vote totaled $70 million, for a grand total of $117 million.
Because all those revenues sources might not occur, Committee Members
should consider projects totaling $100 million.
Mayor Scharff suggested Staff present information on potential revenue
sources to allow the Committee to make recommendations to the Council.
Chair Klein explained that was the reason he suggested projects total $100
million.
Mayor Scharff felt the Committee needed that information in order to make
choices.
Chair Klein noted the Staff Report indicated Staff would present information
regarding the reader board to the Finance Committee.
Mr. Keene indicated Staff discussed presenting the information directly to
the Council. He requested direction regarding presentation of reader board
information.
Chair Klein suggested Staff present the same information to the Committee
and the Finance Committee.
Mr. Perez added that the Policy and Services Committee was reviewing use
of Stanford funds. Staff made recommendations to fund a portion of the
Bicycle and Pedestrian Transportation Plan with Stanford funds.
Chair Klein felt Committee Member's ranking of projects would shape the
final recommendations to the Council.
Vice Mayor Shepherd would apply rankings to new revenue sources as well.
Chair Klein agreed ranking would work for projects and revenue sources.
Mr. Perez read the language in Ballot M for an increase of the TOT.
Chair Klein indicated the next meeting would be in August 2013, and he
preferred to begin the meeting at 3:00 P.M. or 4:00 P.M.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Infrastructure Committee Special Meeting
Final Minutes: June 6, 2013
Mayor Scharff preferred 3:00 P.M.
ADJOURNMENT: The meeting was adjourned at 6:40 P.M.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Instructions
This spreadsheet is designed to assist Infrastructure Committee members in some advance
reflection and prep work on potential recommendations that the Committee may make to the full
Council about: 1) areas of further study for opinion research, 2) uses of current or potential new
revenue to fund infrastructure projects, 3) or other next steps.
Step 1: Prioritize Projects
The objective of the exercise is to prioritize infrastructure projects and to match the cost of those
projects with potential funding mechanisms and levels. A scale (in increments of $7 million) is
provided in Column K to monitor total costs as projects and funding sources are dragged into or
populate Columns L and M.
The first step is to "drag" boxes in Column O (projects and their costs) into Column L. Place your
highest priority project at the top of Column L (starting at cell L4) and then other projects in
descending each boxes is priority order below the highest priority. The height of of the roughly
proportional to the dollar ($) amount cited in each box and to the scale in Column K. Again, highest
priority project at top; lowest at the bottom.
Step 2: Prioritize Funding Sources
The second step is to "drag" a box (see below on how to "drag") from Columns Q and R (funding
sources) into Column M. Place the "ideal" or most favored source (e.g. currently available funding
source) at the top of Column M (starting at cell M4). Then, place other sources in descending
priority order below the highest priority in Column M. At the end of the exercise, Columns L and M
should have projects/costs and funding sources that are roughly equal and that fit between 0 to
171 on the scale or between 0 to 220. Two boxes are provided in Column K for the Public Safety
Building (PSB): one at 9.0 million and one at $57.0 million. The latter is supplied in the event the
City fully funds the PSB. If this option is seclected, then the scale increases from $171 million to
Note that four of the sources ‐ all with thick borders $220 million. ‐ are dedicated to specific uses
such as downtown parking in‐lieu fees which can only be used to expand or build garages. A
"General Obligation" box in green is shown toward the bottom of Column R. This box can be sized
to need should this funding option be selected.
If Committee members want to create an alternative or second scenario (or priority and funding
order), an additional worksheet ("Alternate Worksheet") is provided in the third tab. Repeat the
process described above to create a second scenario. At the bottom and left of the worksheet
(B36), space is provided to type in your assumptions, notes etc.
To "drag" a box "click" on it. You should see it surrounded by squares and circles. Go to the top,
middle rectangular box and place your cursor just to the right of it and on the dotted line. Arrows
looking like a plus sign should appear. Click on this sign and this will allow you to drag a box into
the appropriate column. You need to gently drag the box when at the top or bottom of the screen
to be able to make the spreadsheet move up or down or to move a box into a column.
For the Committee's information a list of funding sources is provided in the 4th tab and a list of
"bundled" projects with voter support % is provided in the 5th tab. It's highly recommended to
print these instructions first and then use when looking at the spreadsheet.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Uses: Infrastructure Projects in Millions Sources for Infrastructure Funding ‐ Scenario I
Polling
Support (sum
of strongly &
somewhat
support) Project
Est.
Cost
Commit.
Funding
Net Cost
with
Commit.
Potential
Fund.
Net Cost
with
Commit.
and
Potential
Scale in
Millns
Projects/Uses ‐
Scenario I Sources ‐ Scenario I Projects and Costs for Scenario I Sources of Funding for Scenario I Sources of Funding for Scenario I
X /Currently Available Funds Currently Available X
72%Fire Stations 14.2 0.0 14.2 0.0 14.2 1‐7 X /X
69%Streets 8.0 0.0 8.0 0.0 8.0 14 X /X
67%Sidewalks 6.0 0.0 6.0 0.0 6.0 21 X /X
67%Parks Catch Up 9.8 0.0 9.8 0.0 9.8 28 X /X
Subtotal 38.0 35 X /X
65%Bike/Pedestrian Plan 25.0 1.5 23.5 0.0 23.5 42 X /X
61%Bike Bridge 10.0 8.4 1.7 0.0 1.7 49 X /New & Potential Revenues for COPs New & Potential Revenues for COPs X
57%Ventura Community Ctr.3.0 0.0 3.0 0.0 3.0 56 X /X
52%Public Safety Building 57.0 0.0 57.0 48.0 9.0 63 X /X
52%Charleston/Arastradero 9.8 2.3 7.5 0.4 7.1 70 X /X
Subtotal 44.3 77 X /X
47%Animal Services Center 6.9 0.0 6.9 0.0 6.9 84 X /X
46%Playing Fields (Golf Crse)6.0 0.0 6.0 0.0 6.0 91 X /X
46%Cal. Avenue Parking Gar.12.0 0.0 12.0 0.0 12.0 98 X /X
44%Downtown Parking Gar.21.0 0.0 21.0 0.0 21.0 105 X /X
38%History Mus.‐Roth Bldg 3.0 0.0 3.0 0.0 3.0 112 X /X
Subtotal 48.9 119 X /X
not polled Byxbee Park 3.6 0.0 3.6 0.0 3.6 126 X /X
not polled Surface Catch Up 8.8 0.0 8.8 0.0 8.8 133 X /X
not polled Buildings Catch Up 4.5 0.0 4.5 0.0 4.5 140 X /X
not polled Cubberley Defer. Maint.6.9 0.0 6.9 0.0 6.9 147 X /X
not polled Civic Center 16.0 0.0 16.0 0.0 16.0 154 X /X
Subtotal 39.8 161 X /X
Total 231.5 12.1 219.3 48.4 171.0 171 X /X
178 X /X
Assume Public Safety Building is fully funded by City 48.0 185 X /X
192 X /X
Total 219.0 199 X /X
206 X /X
213 X /Potential Excess Annual Surplus General Obligation Bonds X
220 X /X
X /X
NOTES ON ASSUMPTIONS USED FOR EXERCISE X /X
les
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22.1 m. in Stanford DA
Infra/Housing
12.3 m. in Stanford
DA/Sustainability
8.0 m. Infrastructure Res.
33.6 m. in COPs from New
Hotels @2.4 m. annually
25.2 m. in COPs from TOT
increase of 2% @1.8 m.
annually
62% support
25.2 m. In COPs from Doc.
Trans. Tax increase by $1.10 per
$1,000 value @ 1.8 m. annually
51% support
46.2 m. in COPs for Business
License Tax at $3.3 m.
annually
51% support
11.2 m. in COPs for Digital
Readerboard @0.8 m. annually
11.2 m. in COPs from Auto Deal. @
MSC @0.8 m. annually
19.6 m. from Police Bldg.
rental @1.4 m. annually
after renovation costs
36.4 m. in COPs for Sales Tax
increase of 1/8 cent @2.6 m.
annually
38% support
42.0 m. in COPs from LATP
rental revenue @3.0 m.
annually
Fire Stations = 14.2 m. 72%
support
Streets = 8.0 m. 69% support
Sidewalks = 6.0 m. 67%
Parks Catch UP = 9.8 m. 67%
Bike/Pedestrian Plan = 23.5
m. 65% support
Bike Bridge = 1.7 m. 61% support
Ventura CC = 3.0 m. 57% support
Public Safety Bldg = 9.0 m. 52%
support
Charleston/Arastr. 7.1 m. 52%
Animal Svces. = 6.9 m. 47% support
Playing Fields = 6.0 m. 46% support
Cal Ave Garage = 12.0 m. 46%
support
Downtown Garage = 21.0 m.
44% support
History Mus. = 3.0 m. 38% support
Byxbee Park = 3.6 m. NP
Surface Catch Up = 8.8 m. NP
Bldgs Catch Up = 4.5 m. NP
Cubberley Def. Maint = 6.9 m.
Civic Center = 16.0 m. NP
Estimated 1.0 m. tax surplus for pay‐
as‐you‐go‐projects
28.0 m. in COPs for $100
annual Parcel Tax
41% support
38.0 m. for projects receiving
2/3 survey support. GO
bonds can be sized
differently for this exercise
30.8 m. in COPs from UUT
increase of 1% @2.2 m.
annually
29% support
1.0 m in Park Impact Fees
1.4 m in Commun. Ctr. Impact Fees
1.2 m. in Downtown Parking In‐Lieu
Public Safety Building = $57
million 52% support
Attachment B. August 6, 2013 Staff Report and Meeting Minutes
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Uses: Infrastructure Projects in Millions Sources for Infrastructure Funding ‐ Scenario II
Polling
Support (sum
of strongly &
somewhat
support) Project
Est.
Cost
Commit.
Funding
Net Cost
with
Commit.
Potential
Fund.
Net Cost
with
Commit.
and
Potential
Scale in
Millns
Projects/Uses ‐
Scenario II
Sources ‐ Scenario
II Projects and Costs for Scenario I Sources of Funding for Scenario I Sources of Funding for Scenario I
X /Currently Available Funds Currently Available X
72%Fire Stations 14.2 0.0 14.2 0.0 14.2 1‐7 X /X
69%Streets 8.0 0.0 8.0 0.0 8.0 14 X /X
67%Sidewalks 6.0 0.0 6.0 0.0 6.0 21 X /X
67%Parks Catch Up 9.8 0.0 9.8 0.0 9.8 28 X /X
Subtotal 38.0 35 X /X
65%Bike/Pedestrian Plan 25.0 1.5 23.5 0.0 23.5 42 X /X
61%Bike Bridge 10.0 8.4 1.7 0.0 1.7 49 X /New & Potential Revenues for COPs New & Potential Revenues for COPs X
57%Ventura Community Ctr.3.0 0.0 3.0 0.0 3.0 56 X /X
52%Public Safety Building 57.0 0.0 57.0 48.0 9.0 63 X /X
52%Charleston/Arastradero 9.8 2.3 7.5 0.4 7.1 70 X /X
Subtotal 44.3 77 X /X
47%Animal Services Center 6.9 0.0 6.9 0.0 6.9 84 X /X
46%Playing Fields (Golf Crse)6.0 0.0 6.0 0.0 6.0 91 X /X
46%Cal. Avenue Parking Gar.12.0 0.0 12.0 0.0 12.0 98 X /X
44%Downtown Parking Gar.21.0 0.0 21.0 0.0 21.0 105 X /X
38%History Mus.‐Roth Bldg 3.0 0.0 3.0 0.0 3.0 112 X /X
Subtotal 48.9 119 X /X
not polled Byxbee Park 3.6 0.0 3.6 0.0 3.6 126 X /X
not polled Surface Catch Up 8.8 0.0 8.8 0.0 8.8 133 X /X
not polled Buildings Catch Up 4.5 0.0 4.5 0.0 4.5 140 X /X
not polled Cubberley Defer. Maint.6.9 0.0 6.9 0.0 6.9 147 X /X
not polled Civic Center 16.0 0.0 16.0 0.0 16.0 154 X /X
Subtotal 39.8 161 X /X
Total 231.5 12.1 219.3 48.4 171.0 171 X /X
178 X /X
Assume Public Safety Building is fully funded by City 48.0 185 X /X
192 X /X
Total 219.0 199 X /X
206 X /X
213 X /Potential Excess Annual Surplus General Obligation Bonds X
220 X /X
X /X
NOTES ON ASSUMPTIONS USED FOR EXERCISE X /X
tw
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22.1 m. in Stanford DA
Infra/Housing
12.3 m. in Stanford
DA/Sustainability
8.0 m. Infrastructure Res.
33.6 m. in COPs from New
Hotels @2.4 m. annually
25.2 m. in COPs from TOT
increase of 2% @1.8 m.
annually
62% support
25.2 m. In COPs from Doc.
Trans. Tax increase by $1.10 per
$1,000 value @ 1.8 m. annually
51% support
46.2 m. in COPs for Business
License Tax at $3.3 m.
annually
51% support
11.2 m. in COPs for Digital
Readerboard @0.8 m. annually
11.2 m. in COPs from Auto Deal. @
MSC @0.8 m. annually
19.6 m. from Police Bldg.
rental @1.4 m. annually
after renovation costs
36.4 m. in COPs for Sales Tax
increase of 1/8 cent @2.6 m.
annually
38% support
42.0 m. in COPs from LATP
rental revenue @3.0 m.
annually
Fire Stations = 14.2 m. 72%
support
Streets = 8.0 m. 69% support
Sidewalks = 6.0 m. 67%
Parks Catch UP = 9.8 m. 67%
Bike/Pedestrian Plan = 23.5
m. 65% support
Bike Bridge = 1.7 m. 61%
Ventura CC = 3.0 m. 57%
Public Safety Bldg = 9.0 m. 52%
support
Charleston/Arastr. 7.1 m. 52%
Animal Svces. = 6.9 m. 47% support
Playing Fields = 6.0 m. 46%
Cal Ave Garage = 12.0 m. 46%
support
Downtown Garage = 21.0 m.
44% support
History Museum = 3.0 m. 38%
Byxbee Park = 3.6 m. NP
Surface Catch Up = 8.8 m. NP
Bldgs Catch Up = 4.5 m. NP
Cubberley Def. Maint = 6.9 m. NP
Civic Center = 16.0 m. NP
Estimated 1.0 m. tax surplus for
pay‐as‐you‐go‐projects
28.0 m. in COPs for $100
annual Parcel Tax
41% support
38.0 m. for projects receiving
2/3 survey support. GO
bonds can be sized
differently for this exercise
30.8 m. in COPs from UUT
increase of 1% @2.2 m.
annually
29% support
1.0 m in Park Impact Fees
1.4 m in Commun. Ctr. Impact Fees
1.2 m. in Downtown Parking In‐Lieu
Public Safety Building = $57
million 52% support
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SOURCES USED IN SCENARIO SPREADSHEET POLLING SUPPORT
Currently Available Resources In Millions
Stanford DA for Infrastructure/Housing 22.1
Stanford DA for Sustainability 12.3
Parks 1.0
Community Centers 1.4
Downtown In‐Lieu 1.2
Infrastructure Reserve (6‐10 million)8.0
Subtotal 46.0
Projected Revenue Increases
New Hotels 2.4 Estimated to generate $33.6 million in COPs
TOT Increase of 2%
From 12% to 14% 1.8 Estimated to generate $25.2 million in COPs 62%
Sales Tax Increase
From 1.0% to 1.125% or 1/8 cent 2.6 Estimated to generate $36.4 million in COPs 38%
GO Bonds 38.0
64%
Digital Readerboard 0.8 Estimated to generate $11.2 million in COPs
LATP Rental Revenue 3.0 Estimated to generate $42.0 million in COPs
Business License Tax
New tax 3.3 Estimated to generate $46.2 million in COPs 51%
Documentary Transfer Tax
Increase from $3.30 to $4.40 per thousand 1.8 Estimated to generate $25.2 million in COPs 51%
of sale value
Utility Users Tax
Increase from 5% to 6% 2.2 Estimated to generate $30.8million in COPs 29%
Parcel Tax
New tax at $200 per parcel 4.0 Estimated to generate $56.0million in COPs 41%
Auto Dealership at MSC
Lease revenue 0.8 Estimated to generate $11.2 million in COPs
Police Building
Lease Revenue 1.4 Estimated to generate $19.6 million in COPs
(Does not include renovation costs)
Estimated to impact median single family home
assessed value by $65 per year
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Potential Bundled Infrastructure Measures
Survey Bundled Project description Potential Projects
Estimated
Cost
Committed
Funding
Net Cost
with
Committe
Potential
Funding
Net Cost with
Committed
and Potential
Streets 8.00 ‐ 8.00 ‐ 8.00
Sidewalks 6.00 ‐ 6.00 ‐ 6.00
Bike/Pedestrian Plan 25.00 1.50 23.50 ‐ 23.50
Bike Bridge 10.00 8.35 1.65 ‐ 1.65
Charleston/Arastradero 9.75 2.27 7.48 0.35 7.13
Cal. Avenue Parking Garage 12.00 ‐ 12.00 ‐ 12.00
Downtown Parking Garage 21.00 ‐ 21.00 ‐ 21.00
Subtotals:91.75 12.12 79.63 0.35 79.28
Ventura Community Center 3.00 ‐ 3.00 ‐ 3.00
Bike/Pedestrian Plan 25.00 1.50 23.50 ‐ 23.50
Parks Catch Up 9.80 ‐ 9.80 ‐ 9.80
Charleston/Arastradero 9.75 2.27 7.48 0.35 7.13
Streets 8.00 ‐ 8.00 ‐ 8.00
Sidewalks 6.00 ‐ 6.00 ‐ 6.00
Subtotals:61.55 3.77 57.78 0.35 57.43
Public Safety Building 57.00 ‐ 57.00 48.00 9.00
Fire Stations 14.20 ‐ 14.20 ‐ 14.20
Subtotals 71.2 0.0 71.2 48.0 23.2
71%
68%
A Traffic Congestion Relief and Safe Streets, Sidewalks
and Trails Measure to fund repair and improvements to
streets, sidewalks, and nine miles of off‐road trails.
This measure would provide safe routes to school for
children, improve accessibility for people with
disabilities, provide a network of safe bike paths and
pedestrian walkways, increase the availability of
parking, and upgrade traffic signals and intersections to
reduce congestion and improve safety.
A Palo Alto Children and Families First Measure that
would fund improved facilities for preschool and
childcare programs, safe routes to school, pedestrian
and bike safety improvements, park and playground
improvements and neighborhood traffic calming
measures.
A Fire, Paramedic, Police, Seismic Safety and
Emergency Response Measure to fund improvements
to keep Palo Alto safe, including construction of a new
earthquake‐safe public safety building and emergency
response command center, replacing two obsolete fire
stations with modern earthquake‐safe buildings, and
improving communication systems to ensure rapid 9‐1‐
1 response to fires, accidents and other emergencies.
74%
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INFRASTRUCTURE COMMITTEE
WORKING MINUTES
Page 1 of 22
Special Meeting
Tuesday, August 6, 2013
The Infrastructure Committee met on this date in the Council Conference
Room at 4:03 P.M.
Present: Berman, Klein (Chair), Scharff, Shepherd
Absent:
ORAL COMMUNICATIONS
None
ACTION ITEMS
1. Continue Discussion on Baseline Survey Results and Make
Recommendations to the City Council on Next Steps in Considering an
Infrastructure Finance Measure.
Chair Klein suggested the Infrastructure Committee (Committee) discuss
projects they wished to see eliminated and to discuss projects that needed
to be funded through regular Infrastructure Funds. The Committee planned
on integrating regular infrastructure projects with special infrastructure
projects because Staff was going to prepare for the Capital Improvement
Program (CIP) Budget for Fiscal Year (FY) 2015. He inquired when Staff
begins preparing the CIP Budget.
Mike Sartor, Director of Public Works reported Staff usually began CIP
budgeting in August of each year.
Mayor Scharff felt the Public Safety Building (PSB) should be considered
separately and he requested an update regarding the Jay Paul Project.
Brad Eggleston, Assistant Director of Public Works reported scheduling for
the Jay Paul Project was not set. He noted that the preliminary traffic
studies could be presented to the Council in early 2014.
Mayor Scharff inquired whether the Jay Paul Project was following the
previous timeline.
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WORKING MINUTES
Page 2 of 22
Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Mr. Sartor understood the schedule for the project changed because of the
complexity of the traffic study. He relayed that Aaron Aknin, Acting Planning
Director said the consultant recommended the Traffic Study needed to
include traffic impacts from Stanford University. He expected that the
Economic Benefit Study would be presented to Council in early 2014.
Mayor Scharff asked when the Council could make a decision on the Project.
Mr. Sartor needed to consult with the Planning Department to determine
that.
Chair Klein understood all aspects of the Jay Paul Project were delayed. If
the Committee waited for a decision on PSB, then they needed to delay all
decisions for six months to a year.
Mayor Scharff suggested a separate Bond Measure for PSB.
Sheila Tucker, Executive Assistant to the City Manager reminded the
Committee that PSB did not poll well. It was unlikely that the City would
proceed with a Finance Measure for PSB. Staff was looking for other
revenue to fund PSB.
Chair Klein felt it was too early to make a determination regarding the PSB.
He suggested the Committee proceed with the assumption that the Jay Paul
Project would not be approved.
Mayor Scharff asked if the Committee wanted to recommend reserving funds
for a future PSB, assuming the Jay Paul Project was not approved.
Chair Klein agreed funds could be set aside for PSB and questioned the
amount needed to be set aside.
Aaron Aknin, Acting Planning Director mentioned that the Planning and
Transportation Commission (PTC) reported on two scoping meetings that
were related to the Jay Paul Project Environmental Impact Report (EIR)
because they wanted more citizen input. The scoping period ended, and
Staff received a number of comments. The preliminary Traffic Report and
Public Benefits Analysis were scheduled for presentation in late August or
September of 2013; Staff was finalizing the public benefits analysis.
Additional analysis for the Traffic Study was required and a preliminary
analysis needed to be presented in September 2013.
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WORKING MINUTES
Page 3 of 22
Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Chair Klein inquired whether the information would be presented to the
Council in September 2013.
Mr. Aknin replied yes and said a preliminary Traffic Analysis would focus on
key intersections and roadway segments.
Mayor Scharff asked when Staff expected the project to be presented to the
Council for a decision.
Mr. Aknin indicated the decision process could start in the spring and
decision making could begin in the summer of 2014.
Chair Klein inquired whether the Project was on the PTC's Agenda for the
week prior.
Mr. Aknin stated that the meeting being referred to was the second EIR
scoping session.
Chair Klein asked if there was anything to report from the PTC meeting.
Mr. Aknin reported there were significant concerns in adjacent
neighborhoods regarding parking and traffic; a secondary concern dealt with
massing issues, related to the building itself.
Vice Mayor Shepherd wanted the Committee to consider holding a
referendum regarding the PSB. She thought the Council needed to know the
community's interest in having a PSB that functioned for emergency
purposes. She suggested a referendum or advisory vote in June 2014
regarding the Jay Paul Project or an Infrastructure Committee vote in
November 2014.
Chair Klein indicated that a referendum was not part of the Committee's
Agenda.
Vice Mayor Shepherd requested the topic be agendized for a future meeting.
She did not want to prioritize projects without some resolution of the PSB
issue.
Mayor Scharff mentioned that he could advocate for funds to purchase land
for a PSB with a plan for a future PSB. He thought it was premature to hold
a referendum.
Council Member Berman suggested the Committee analyze funding for a PSB
at a more appropriate time.
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Page 4 of 22
Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Chair Klein noted the net cost of the PSB was $56 million, minus $19 million
from revenues that came from leasing the current Police Department
building. He requested Staff to comment on the rental income of $42 million
from the Los Altos Treatment Plant (LATP) property.
Mr. Eggleston explained that the figure of $42 million was based on issuing
Certificates of Participation (COP) to obtain funds from a rental stream of $3
million a year. Staff was in the process of determining an acceptable
remediation plan that would also delineate the amount of land the City
would have for development.
Chair Klein inquired about possible tenants.
Mr. Eggleston did not consider tenants because the $3 million amount was
based on discussions with the real estate manager regarding the likely rental
stream per acre.
Chair Klein believed remediation of the LATP land had not progressed.
Mr. Eggleston could not speak to the status of the project. Recently, Staff
provided funding for remediation in the CIP Budget.
Mr. Sartor reported Staff spoke with the State about Area C, which was
cleared for development and resulted in approximately 2.1 acres. Staff was
working to obtain approval of wetlands mitigation for the remaining
property. He guessed Area B could provide an additional 4-6 acres.
Chair Klein inquired about a possible date for a tenant to take possession of
the property.
Mr. Eggleston indicated the approval process could be completed in February
or March 2014. The next step was development and of construction plans.
He estimated nine months to a year for completion of work once approvals
were obtained.
Chair Klein inquired whether the land could be available for lease in middle
to the late part of 2015.
Mr. Eggleston responded yes, in approximately two years.
Council Member Berman inquired about projects other than the Bicycle and
Pedestrian Transportation Plan for which the Stanford University Medical
Center (SUMC) Development Agreement Sustainability Funds could be used.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
James Keene, City Manager felt both Sustainability Funds and Infrastructure
Funds were flexible. The question was which fund the Council felt was
appropriate to use.
Council Member Berman inquired about community center impact fees.
Joe Saccio, Assistant Director Administrative Services reported community
center impact fees were collected from redevelopment projects. They were
used for expansion of facility capacity or renovation of facilities to increase
capacity. The funds were to be used for community centers only.
Council Member Berman inquired whether COPs based on rental income
from the current PSB could be used to fund a new PSB.
Mr. Saccio reported issuance of COPs would have to pay for renovations to
the existing building as well as construction of a new building. Staff
projected an ongoing revenue stream from rental of that area. He inquired
about estimated costs for renovating the existing building.
Mr. Sartor did not recall the amount.
Mr. Saccio indicated some of the rental income stream could be utilized for
debt service on a new PSB, in addition to the cost of renovation of the
existing building.
Council Member Berman inquired whether COPs could be issued while the
existing building remained in use.
Mr. Saccio stated COPs could be issued to pay for both.
Ms. Tucker inquired whether Staff assumed $1-3 million for renovations.
Mr. Eggleston believed that was the amount included in the report.
Chair Klein inquired whether the Infrastructure Reserve Fund balance of $8
million included the surplus from FY 2013.
Mr. Saccio indicated Staff had not closed the books for FY 2013. He thought
there would be a surplus from FY 2013, but the amount was unknown.
Mr. Keene believed the surplus would be more than $1 million.
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Page 6 of 22
Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Chair Klein estimated the surplus would be $2 million, based on preliminary
reports.
Mr. Saccio indicated $2 million was possible.
Mr. Keene noted that outstanding liabilities needed to be booked before the
surplus could be determined.
Mr. Saccio reported the table included $1 million, which was money that
Staff believed could result from current tax revenue streams.
Mr. Keene reported the ten-year plan to resurface streets was accelerated to
eight years, due to the additional funding. He suggested having Council
approve additional funds in order to reach a five-year plan.
Mayor Scharff inquired whether Staff could resurface streets any faster than
the current rate.
Mr. Sartor indicated the primary constraint to resurfacing streets was the
Utility Undergrounding Program.
Mayor Scharff asked if it was logical to provide additional funding for street
resurfacing if the rate of resurfacing could not be increased.
Mr. Sartor stated the current funding level in the five-year CIP for each year
was approximately $5 million.
Mayor Scharff understood $8 million was listed in addition to CIP funding.
Mr. Keene explained that $8 million was the gap identified in the original
Infrastructure Blue Ribbon Commission (IBRC) analysis.
Chair Klein noted a separate item on the list for sidewalks.
Mr. Eggleston reported $8 million was a theoretical number used in a
questionnaire to poll the public's interest in streets. Staff was working to
accomplish goals faster, regardless of the level of funding.
Mayor Scharff requested that Staff address sidewalks, now that progress on
streets was highly visible. He inquired whether $6 million for sidewalks
would provide the same level of improvements as $8 million did for street
improvement.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Mr. Eggleston did not know but said the five-year CIP plan doubled the
sidewalks budget by adding $1 million per year. The goal was to return to
the original 30-year plan for sidewalk districts. He knew that the CIP
amount would not repair all problems, it would just complete the cycle
through sidewalk districts. The $6 million amount in the Infrastructure
Project List allowed Staff to repair some of the worst areas of sidewalks.
Mayor Scharff inquired whether Staff needed more money to continue street
resurfacing because if the $8 million was not needed to resurface streets,
then the funds could be moved to sidewalks. He requested more Staff input
regarding prioritization of projects to ensure the Committee considered all
possible projects.
Chair Klein agreed with Mayor Scharff. He did not want to ignore the
baseline poll results, but wanted to be practical as well. He asked when the
Committee could review the CIP plan for FY 2015.
Mr. Keene inquired whether the intention was to reprogram the amount of
money set aside.
Mr. Sartor reported that Staff typically started CIP planning in August of
each year, then Staff returned to the Committee in October to begin
preliminary discussions of CIP projects. CIP projects were based on projects
included in the FY 2014 CIP.
Chair Klein wanted to ensure projects were integrated between the CIP list
and the Infrastructure Project List.
Mr. Keene noted Staff attempted to respond to the PTC's desire to correlate
the CIP with the Comprehensive Plan. He suggested Staff work with the
Committee prior to the PTC meeting.
Chair Klein suggested the meetings be simultaneous.
Mr. Sartor indicated the Committee was reviewing catch-up and keep-up
needs and funding sources, which the CIP also did.
Mr. Keene believed the Committee was considering all funding streams and
wanted to ensure the CIP funding stream was programmed correctly. He
suggested that Staff provide a schedule for the CIP at the Committee's
meeting in September 2013.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Vice Mayor Shepherd felt the Committee was looking for anything in the CIP
that substantially changed from the adopted FY 2014 CIP, to revenues from
FY 2015
Chair Klein did not want to make changes to the CIP, but wanted to compare
CIP projects with infrastructure projects.
Mayor Scharff suggested that some CIP projects could need funding at the
current time. Infrastructure projects were traditionally not on the CIP list.
He thought it could be more important to accelerate some of the CIP
projects.
Mr. Saccio noted every year some projects were removed from the five-year
CIP; however, Staff had to ask each department about new projects and
new priorities.
Mr. Eggleston reported the CIP project list showed a surface catch-up
amount of $8.8 million, of which $3.7 million was sidewalk catch-up. Staff
was working to update the catch-up amounts included in the adopted five-
year plan.
Chair Klein requested Staff review the 19 infrastructure projects and
determine whether the amounts were accurate, such as the Civic Center
amount.
Mr. Sartor explained $16 million for the Civic Center was a rough estimate
that was prepared for removing the plaza deck and redoing the steel
tensioning cables. It did not concern the tower renovations.
Chair Klein asked if that work still needed to be performed.
Mr. Sartor did not know. He suggested that Staff could ask a consultant to
review the status of the waterproofing membrane to determine if it needed
replacing. The study was performed approximately 10 years ago.
Mayor Scharff stated the roof did not leak.
Mr. Sartor indicated that the garage leaked, but Staff took steps to correct
that. The question was whether the membrane and the tensioning cables
were at risk.
Mayor Scharff understood that the City needed to perform the work within a
certain number of years.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Mr. Sartor reported that a consultant recommended the work be done and
estimated the cost at $16 million, but did not provide a timeline for the
work.
Mayor Scharff believed the issue was important. The impact was expected
to be tremendous if the parking structure was not to be used. He thought
the work should be done before it became a crisis.
Mr. Sartor indicated the next step was to review the study and determine a
timeline for the work.
Mr. Keene said Staff would review the issue.
Chair Klein noted parks catch-up work was ongoing over several years, and
inquired whether $9.8 million was still needed.
Mr. Keene was curious about the interface between the Parks Master Plan
and park improvements.
Mr. Sartor indicated Greg Betts, Director of Community Services would
report on that.
Mayor Scharff stated the City prepared Master Plans, but did not implement
them. He inquired whether the City had other Master Plans that should be
included on the infrastructure Project List.
Mr. Sartor reported the Storm Drain Master Plan was part of the Enterprise
Fund, and not relevant to the current discussion.
Chair Klein inquired about $8.8 million for surface catch-up.
Council Member Berman noted the amount was now $5.1 million.
Mr. Eggleston explained the $8.8 million amount included $3.7 million for
sidewalk catch-up.
Chair Klein noted the list contained $8 million for streets, $6 million for
sidewalks, and $8.8 million for surface catch-up.
Mr. Eggleston stated the $8.8 million amount did include sidewalks. The
catch-up numbers needed to be updated to reflect amounts included in the
FY 2014 Budget.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Chair Klein inquired about the difference between sidewalks and surface
catch-up.
Mr. Eggleston indicated they were the same.
Mayor Scharff felt the categories were combined because of the baseline
poll.
Chair Klein noted the list contained three different items for streets and
sidewalks: streets, sidewalks, and surface catch-up.
Mr. Eggleston agreed the sidewalks amount was included twice and the
surface catch-up needed to be updated. The remaining surface catch-up
was not the same as streets. It involved resurfacing parking lots at City
facilities, resurfacing trails, and upgrading traffic signals.
Council Member Berman inquired about the status of the Infrastructure
Management System.
Mr. Sartor reported the Information Technology (IT) Department issued a
Request for Proposal (RFP). Proposals were due the following week. He did
not anticipate having a functioning infrastructure management system prior
to the FY 2016 CIP.
Council Member Berman wanted the infrastructure management system to
remain a priority
Mr. Sartor stated it was a high priority project.
Chair Klein asked if projects should be removed from the list.
Vice Mayor Shepherd did not believe projects should be removed, rather he
thought they should be delayed to identify funding sources. Critical
categories were streets, sidewalks, surface catch-up, and the Roth Building.
The City needed a strategic funding plan for a PSB, fire stations, Bicycle and
Pedestrian Transportation Plan, the Bike Bridge, and the parks catch-up,
which included Byxbee Park.
Mr. Sartor noted the Bike Bridge was funded.
Mayor Scharff understood the City needed $1.6 million to fully fund the Bike
Bridge.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Mr. Sartor explained the design could lower the cost, such that the Bike
Bridge would be fully funded.
Vice Mayor Shepherd stated SUMC Development Agreement funds were
utilized to fund the Bike Bridge.
Mr. Sartor added the City received $4 million from the One Bay Area Grant
(OBAG).
Vice Mayor Shepherd inquired whether the Bike Bridge was included in the
$23 million amount for the Bicycle and Pedestrian Transportation Plan.
Chair Klein responded no.
Mr. Eggleston explained the original amount for the Bicycle and Pedestrian
Transportation Plan was $35 million; therefore, the Bike Bridge was not
included.
Vice Mayor Shepherd was interested in developing funding strategies for
garages in California Avenue and Downtown. Building catch-up at Cubberley
Community Center and the Civic Center needed to be considered as well.
Council Member Berman prioritized fire stations, PSB’s, streets, and
sidewalks. Identifying resources to catch-up streets, sidewalks, and parks
was important. The Bicycle, the Pedestrian Transportation Plan, and a
Downtown garage were also important. Other projects were not high
priority, such as the California Avenue garage. He wanted to better
understand surface catch-up.
Mayor Scharff wanted a new PSB potentially funded through COPs. Fire
stations were the highest priority, followed by Downtown and California
Avenue garages, and the Bicycle and Pedestrian Transportation Plan. Most
of streets, sidewalks, and surface catch-up were probably included in CIP.
He was interested in accelerating repair of sidewalks. He needed more
information about many of the remaining projects before assigning a
priority. The Council needed to address the Roth Building and the History
Museum.
Vice Mayor Shepherd inquired whether the City could sell the Roth Building.
Chair Klein reported that the City owned the building and the City had a
lease option with the History Museum.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Mayor Scharff suggested the Bike Bridge be removed from the list because it
would be built. The remaining projects were small and difficult to prioritize.
The Council needed to resolve the issues around the Cubberley Community
Center before deciding whether to prioritize improvements at Cubberley
Community Center. The Council needed to make a policy decision regarding
the Animal Services site before the Committee decided to fund
improvements to the building.
Mr. Sartor related that the Animal Services building was renovated to make
it functional.
Mayor Scharff believed there was sufficient funding for all projects and
requested the City Attorney be present to discuss funding mechanisms.
Vice Mayor Shepherd felt the lack of funding mechanisms made prioritizing
projects difficult.
Chair Klein wanted to give the Bike Bridge highest priority because it was
funded.
Mr. Sartor noted the Committee set aside $9 million in funding.
Chair Klein suggested the funding be moved to another category because
funds from the SUMC Development Agreement could be utilized instead.
Vice Mayor Shepherd indicated the SUMC Development Agreement funds
were included in the amounts.
Chair Klein indicated the next priority was a PSB. He agreed with Mayor
Scharff's suggestion to issue COPs as a funding source.
Mr. Sartor stated Staff was proceeding with the LATP project.
Chair Klein noted ten projects were identified as being funded potentially
through COPs. He wanted to see the PSB funded through COPs if the Jay
Paul Project was not approved. Next in priority were fire stations and a
Downtown garage.
Vice Mayor Shepherd inquired whether a Downtown district could be created
to fund two parking garages.
Molly Stump, City Attorney asked if Vice Mayor Shepherd was referring to
Assessment Districts.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Mr. Saccio reported the last Assessment District required a concerted effort
by the City and major developers to adopt. A financial advisor said
Assessment Districts were no longer utilized because of Proposition 218 a
Proposition amending the California Constitution (Articles XIIIC and XIIID)
which requires the local government to have a vote of the affected property
owners for any proposed new or increased assessment before it could be
levied. Redevelopment Agencies (RDA) and COPs were common ways to
finance garages. Another alternative was a private entity.
Vice Mayor Shepherd inquired whether the private entity would build a
garage and charge for parking.
Mr. Saccio replied yes.
Mayor Scharff asked if the Council could impose a Documentary Transfer Tax
on commercial buildings to fund construction of garages. He suggested a
tax of $0.20 per square foot on all commercial space Downtown. He noted
that property owners would not agree to another Assessment District, and
remarked that he opposed the restrictions of an Assessment District.
Ms. Stump indicated a series of court decisions interpreting Proposition 218
made it difficult to create Assessment Districts. Mayor Scharff was
suggesting a tax applied to commercial space in a particular part of town but
the some areas needed to be voted on by all residents.
Mayor Scharff suggested that the tax could apply to all commercial space in
Palo Alto, with the revenue divided among locations.
Chair Klein added the basic question was whether the City could impose a
different property tax.
Ms. Stump said she would research structuring a tax in such a way. Many
taxes were developed such that the burden of paying them fell on some and
not others.
Mayor Scharff believed the commercial space generated the parking need;
therefore, he thought it should pay for the parking garage.
Ms. Stump noted the Assessment District model was not illegal but the
requirements were difficult to meet.
Mayor Scharff inquired whether a tax on commercial space was discussed
when the Business License Tax was proposed.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Vice Mayor Shepherd indicated a Graduated License Tax was discussed. She
inquired about a tax under a property tax concept for all property over 50
feet in height.
Ms. Stump suggested some type of Business Tax that would reach the types
of businesses with physical space Downtown, but would not impact smaller
businesses with no employees or businesses that operated from a residence.
Chair Klein reported that would be a Graduated Business License Tax rather
than a Real Property Tax, which would be subject to Proposition 13, a
Proposition that decreased property taxes by assessing property values at
their 1975 value and restricted annual increases of assessed value of real
property to an inflation factor, not to exceed 2 percent per year.
Mr. Saccio explained that private developers utilized Mello-Roos Districts (an
Act that enabled "Community Facilities Districts" (CFDs) to be established by
local government agencies as a means of obtaining community funding) to
carve out districts within a city. This was voted on more by residents, rather
than businesses. He was not able to remember whether approval required a
two-thirds or majority vote; Staff was going to explore the possibility
further.
Chair Klein believed a Business License Tax would be straightforward, with
the Council utilizing a companion Measure to pledge use of the funds for
parking garages.
Ms. Stump noted a companion measure would carry a great deal of weight
with subsequent policymakers.
Vice Mayor Shepherd inquired whether this was a Business License Tax or a
Registry.
Mr. Saccio stated it was a Tax. The Measure was based on the receipts from
businesses, and the maximum tax would be $30,000 for all categories,
except retail; the maximum annual cap for retail was $20,000. There was a
small Business Exemption recommended, with a minimum tax of $75. It
was slightly complex and applied to all businesses. He noted that the
amount could be tailored depending on how much the Council wanted to
present to the voters.
Chair Klein requested comments regarding funding sources.
Mayor Scharff wished to utilize the Transient Occupancy Tax (TOT), and
asked if it required a majority vote.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Ms. Stump reported increasing the TOT required a simple majority vote in a
General Municipal Election for general governmental purposes. She thought
it was possible for the Council to include a companion Measure.
Mayor Scharff recommended increasing the TOT from 12 percent to 15
percent in order to raise approximately $37 million through COPs.
Council Member Berman noted that polling indicated 62 percent of
respondents supported a two percent increase.
Mayor Scharff did not believe there would be a difference between two
percent and three percent with regard to support. He inquired whether the
$37 million included revenue from hotels under construction.
Mr. Saccio answered no.
Mayor Scharff suggested the second funding source could be COPs, which
would be based on revenue from new hotels to raise $33.6 million. With
SUMC Development Agreement Funds, the total amount reached was $100
million. This was the easiest method for funding the Infrastructure Projects.
He suggested having the LATP income stream be held in reserve and
believed the Committee should make a policy decision recommendation to
the Council on the reader board.
Council Member Berman asked where Palo Alto ranked in comparison to
surrounding cities with respect to the amount of TOT levied.
Mr. Saccio indicated Palo Alto was higher than surrounding cities.
Mayor Scharff stated cities comparable to Palo Alto charged 14 percent.
Ms. Stump added Anaheim charged 15 percent.
Mayor Scharff inquired about the amount of TOT San Francisco levied.
Mr. Saccio reported San Francisco and Oakland charged 14 percent; Menlo
Park, East Palo Alto, Santa Barbara, and Redwood City charged 12 percent;
and Anaheim charged 15 percent. Palo Alto currently charged 12 percent,
which was adopted five or six years ago.
Chair Klein explained Palo Alto was a leader when it increased the TOT to 12
percent.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Council Member Berman preferred not to utilize COPs in order to reserve the
increased funding sources for future needs. He thought the Council should
consider a bond to fund projects supported by the community. He
suggested the bond be $48 million for: fire stations, streets, sidewalks,
parks catch-up, and half the Bicycle and Pedestrian Transportation Plan.
SUMC Development Agreement funds covered the remaining funds for the
Bicycle and Pedestrian Transportation Plan. COPs and SUMC Development
Agreement funds were eligible to support $33 million for a PSB. He wanted
to retain some SUMC Development Agreement funds as unallocated. The
Infrastructure Reserve Fund, COPs on a digital reader board, and Downtown
parking in-lieu fees were potential funding sources for a Downtown garage.
Vice Mayor Shepherd wanted to present a digital reader board and auto
dealerships at the Municipal Service Center (MSC) site to the Council for a
policy decision. She did not believe auto dealerships were viable at the MSC
site.
Chair Klein explained the Committee did not have a proposal to present to
the Council regarding either a digital reader board or an automobile
dealership.
Council Member Berman asked why those funding sources were listed if
there were no proposals.
Chair Klein explained they were listed as possible funding sources. Concrete
proposals were presented to the Council.
Vice Mayor Shepherd supported Mayor Scharff's statement.
Mayor Scharff wanted the Committee to develop a concrete proposal for
presentation to the Council.
Chair Klein reported that the Council already made a policy decision to
pursue an automobile dealership at the MSC site.
Vice Mayor Shepherd relayed that she had not previously heard of a policy
decision.
Chair Klein confirmed the City was pursuing an automobile dealership for the
MSC site.
Vice Mayor Shepherd stated some Council Members opposed an automobile
dealership.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Chair Klein inquired whether Vice Mayor Shepherd was opposed to an
automobile dealership.
Vice Mayor Shepherd replied yes.
Mayor Scharff inquired about other uses of the property that would generate
revenue for the City. Restaurants, retail shops, and recreational facilities
were possibilities.
Chair Klein related there was a history of negotiations with automobile
dealerships.
Vice Mayor Shepherd prioritized funding sources as: the General Obligation
Bond for public safety projects, a COP based on the LATP revenue stream,
SUMC Development Agreement Funds, Police Building Rental Funds, and
lastly a Business License Tax for a parking structure.
Mayor Scharff felt the community wanted a PSB, but did not want to pay for
it.
Vice Mayor Shepherd agreed.
Mayor Scharff believed residents would not approve a bond for a PSB.
Chair Klein agreed with Mayor Scharff's approach. Approximately $47
million was available to fund projects. Issuing COPs based on increasing the
TOT to 14 percent produced $60 million, totaling approximately $107
million, enough to cover all projects except the PSB. He mentioned COPs
based on a Business License Tax could be issued to fund the PSB if the Jay
Paul Project failed. He preferred a Ballot Measure requiring only a majority
vote; a Bond Measure required a two-thirds vote. Polling indicated a
majority of Palo Alto citizens favored a new PSB and were willing to pay for
it; however, a majority vote was not sufficient to approve a Bond Measure.
Each of the taxes proposed to fund COPs had the potential of having
Advisory Measures.
Council Member Berman asked what source Chair Klein proposed to use to
fund a PSB.
Chair Klein replied that a Business License Tax was a possibility.
Council Member Berman noted that in the past, the community was not in
support of a Business License Tax.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Chair Klein said there were other funding sources.
Council Member Berman was concerned that utilizing COPs tied up revenue
that could be used for other expenses. He wanted to discuss why the
Committee was hesitant to take advantage of community support on other
projects.
Chair Klein felt that was a topic worth discussing. The only potentially
unmanageable expenditures for the City were healthcare and pension costs,
and the community was not in support of a tax increase to pay for those
costs.
Council Member Berman preferred to utilize a Bond for projects that the
community supported and to reserve annual revenue sources for health and
pension costs.
Mayor Scharff felt only one tax measure should be presented on the ballot in
2014.
Council Member Berman asked which tax measure Mayor Scharff would
include on the ballot.
Mayor Scharff answered an increase in the TOT.
Council Member Berman inquired about revenue from the new hotels.
Mayor Scharff explained revenue from new hotels was the basis for issuing a
COP, and a COP was not placed on the ballot. Council Member Berman
suggested saving the revenue stream to fund future pension and benefit
costs; however, the community wanted to deal with infrastructure needs.
Council Member Berman preferred utilizing a bond rather than a TOT
increase.
Mayor Scharff believed only one tax measure would be placed on the ballot,
and inquired whether Council Member Berman recommended a $70 million
bond.
Council Member Berman proposed a bond in the amount of $48.2 million
with remaining funds coming from SUMC Development Agreement funds and
revenue from the Police Building.
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Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Mayor Scharff proposed a TOT increase to provide $40 million while Council
Member Berman proposed a General Obligation Bond in the amount of $48
million.
Council Member Berman disagreed with using COPs as a funding source.
Chair Klein felt bonds were not democratic, and obtaining a two-thirds vote
was difficult.
Ms. Tucker reported the $38 million amount was based on the four projects
that received more than two-thirds support in the poll. Respondents
indicated they were willing to pay $72 million.
Council Member Berman explained his proposal of a $48 million bond was
conservative in order to obtain community support.
Vice Mayor Shepherd noted the tax-free status of General Obligation Bonds
could end as part of the proposed Federal tax plan. If the cost of General
Obligation Bonds increased, then she preferred a different funding source.
Council Member Berman needed time to consider the different funding
sources as discussed, and inquired whether the Committee needed to make
a decision at the current time.
Chair Klein was not ready for a decision.
Mayor Scharff added Staff needed to provide accurate cost estimates.
Chair Klein requested that Staff revise the lists of projects and funding
sources.
Ms. Tucker suggested the next Committee meeting be held as soon as Staff
provided the requested information.
Chair Klein inquired whether Staff could be ready by the first Tuesday in
September, September 3, 2013.
Mr. Saccio said that would give him time to return with accurate cost
estimates for the projects and a comparison of infrastructure projects with
CIP projects. He noted that Staff would not have CIP input from City
departments prior to the September 3, 2013 meeting.
Mr. Eggleston added Staff would need to provide a flow chart and schedule
the CIP planning process.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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WORKING MINUTES
Page 20 of 22
Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Vice Mayor Shepherd recalled the Telephone User Tax would be placed on
the ballot for clean-up, and inquired whether that was too many measures
for one ballot.
Chair Klein explained Mayor Scharff suggested one tax measure as a
practical matter, that it was not a rule for ballot measures.
Mr. Saccio inquired whether the Committee wished to remove any revenue
sources from the list.
Vice Mayor Shepherd suggested the Committee not consider a Sales Tax.
Council Member Berman recommended removing revenue streams that
polled badly.
Ms. Tucker noted the Sales Tax results were an anomaly. The consultant
recommended the Council not eliminate the possibility of a sales tax pending
further study.
Council Member Berman agreed that further polling was needed regarding
increasing a Sales Tax. The Utility User Tax (UUT) and Parcel Tax were able
to be removed from the list.
Chair Klein asked if the Committee wanted to remove the Sales Tax from the
list.
Mayor Scharff noted there was an issue regarding Sales Tax.
Council Member Berman wanted to poll further for a Sales Tax.
Mayor Scharff advocated for a Sales Tax increase; however, there was a
limit on the amount that could be increased.
Ms. Stump reported local authorities could impose a specific amount of Sales
Tax.
Mr. Saccio believed 0.75 percent remained available for local authorities to
impose.
Ms. Tucker reported Sales Sax did not poll well because of the lack of
context in the poll questions.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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WORKING MINUTES
Page 21 of 22
Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Chair Klein wanted to retain Sales Tax as a possible funding source with
better polling questions.
Mr. Saccio inquired whether the Committee wished to remove the Parcel Tax
and UUT.
Chair Klein did not prefer a Parcel Tax.
Mayor Scharff wanted to remove the Parcel Tax and UUT.
Council Member Berman concurred.
Vice Mayor Shepherd inquired whether the poll should include the Telephone
User Tax.
Ms. Stump reported the City had a larger interest in cleaning up the
Telephone User Tax, but it could be combined with a rate increase.
Chair Klein suggested that the increase of the Telephone User Tax be
presented to a different Council Committee.
Ms. Tucker felt the Committee should consider the interaction of taxes
placed on the same ballot.
Chair Klein requested Staff eliminate the Parcel Tax from the list of possible
funding sources.
Council Member Berman added that the UUT needed to be removed.
Chair Klein was not sure the UUT should be eliminated.
Council Member Berman noted it received only 29 percent support from
respondents.
Vice Mayor Shepherd suggested the Finance Committee could request
inclusion of the UUT in the next poll.
Shakari Byerly, Fairbank, Maslin, Maullin, Metz & Associates (FM3), reported
a UUT was one of the more difficult funding mechanisms to pass, and was
not surprised it did not poll well.
Mr. Saccio stated clean-up of the UUT was very important, and clean-up
needed to be considered before changing the rate.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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WORKING MINUTES
Page 22 of 22
Special Infrastructure Committee Meeting
Working Minutes: August 6, 2013
Chair Klein indicated similar clean-up measures of the UUT around the State
were approved.
Charles Heath, TBW Strategies did not believe the poll results reflected the
chances of the clean-up measure.
Vice Mayor Shepherd asked if other ballot measures were standalone.
Ms. Byerly believed there were standalone measures as well as measures to
broaden and reduce the tax.
Mr. Saccio explained the tax was reduced by 1/2 percent to increase the
popularity of broadening the tax.
Mr. Heath reported in some instances the rate was increased to fund specific
projects.
Mr. Saccio recalled the UUT in Palo Alto passed narrowly when it was
implemented.
Chair Klein requested Staff remove the UUT and Parcel Tax from the list of
possible revenue sources. The next Committee meeting was scheduled for
September 3, 2013 at 4:00 P.M.
ADJOURNMENT: The meeting was adjourned at 6:10 P.M.
Attachment B. August 6, 2013 Staff Report and Meeting Minutes 1.b
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Attachment C. Draft FY 2015-2019 Capital Budget Process
FY 2015-2019 Capital Budget Process
(Draft)
Sep 2013 Jun 2014
Oct 2013 Nov 2013 Dec 2013 Jan 2014 Feb 2014 Mar 2014 Apr 2014 May 2014 Jun 2014
May 2014
Finance
Committee
review
Proposed CIP
Apr 2014
PTC review for
Comprehensive Plan
consistency
Sep 2013
Departments begin
internal planning
for CIP
Mar 2014
PTC Infrastructure
Subcommittee meeting
Nov 2013
Review & ranking
of proposed CIP
Oct 2013
Kick‐off
meeting
Dec 2013
Rough book
distributed for review
Nov 2013
Departments
enter
proposed CIP
Jan 2014
Revisions based
on CIP reviews
Feb 2014
City Manager
internal hearing
Budget Process
Infrastructure Revenue Ballot Measure
Apr 2014
Proposed budget
released to
City Council
Feb 2014 ‐Apr 2014
Final Survey
Oct 2013 ‐Nov 2013
Focus Group
Jun 2014
City Council
adoption
Policy Decision
to Place Measure
on Ballot June 30
Nov 2013 ‐Jan 2014
Potential
Tracking
Survey
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All Proposed Projects
Note: The IBRC New category refers to projects that were not identified as being part of keep-up or catch-up by IBRC.
City of Palo Alto
Adopted Capital Improvement Program 2014-2018
General Fund
Project No.Name
Page
No.Status IBRC Category FY 2014 (1)FY 2015 FY 2016 FY 2017 FY 2018
PF-14004 California Avenue Parking District Parking Improvements 0 Annual Recurring Catch-up Buildings and Facilities 186,400 0 0 0 222,800
PF-14003 University Avenue Parking District Parking Improvements 0 Annual Recurring Catch-up Buildings and Facilities 340,900 234,800 122,900 93,900 117,600
PF-93009 Americans with Disabilities Act Compliance 3 Annual Recurring Catch-up Buildings and Facilities 138,277 100,000 100,000 100,000 100,000
PF-07002 Baylands Interpretive Center Improvement 7 Nonrecurring Catch-up Buildings and Facilities 0 0 0 0 0
PE-15005 Cubberley Mechanical and Electrical Upgrades 17 Nonrecurring Catch-up Buildings and Facilities 0 150,000 1,300,000 0 0
PF-14000 Cubberley Roof Replacements 19 Nonrecurring Catch-up Buildings and Facilities 453,931 385,000 465,000 50,000 150,000
PF-05002 Municipal Service Center Improvements 32 Nonrecurring Catch-up Buildings and Facilities 0 341,000 550,000 0 0
PF-15000 Rinconada Pool Locker Room 34 Nonrecurring Catch-up Buildings and Facilities 0 400,000 0 0 0
PE-15011 Ventura Buildings Improvements 38 Nonrecurring Catch-up Buildings and Facilities 0 90,000 600,000 0 0
PG-14002 Cameron Park Improvements 49 Nonrecurring Catch-up Parks and Open Space 0 0 0 0 124,000
PG-14001 Peers Park Improvements 68 Nonrecurring Catch-up Parks and Open Space 0 0 0 0 205,000
PG-14000 Ramos Park Improvements 69 Nonrecurring Catch-up Parks and Open Space 0 175,000 0 0 0
PE-13017 El Camino Median Landscape Improvements 81 Nonrecurring Catch-up Streets and Sidewalks 46,445 230,000 50,000 776,000 0
PE-14018 Baylands Interpretive Center Improvements and Boardwalk Repair 8 Nonrecurring Keep-up Buildings and Facilities 66,445 215,000 2,100,000 0 0
PF-01003 Building Systems Improvements 11 Annual Recurring Keep-up Buildings and Facilities 112,440 100,000 100,000 100,000 100,000
PE-09003 City Facility Parking Lot Maintenance 13 Annual Recurring Keep-up Buildings and Facilities 265,422 200,000 200,000 200,000 200,000
PF-02022 Facility Interior Finishes Replacement 20 Annual Recurring Keep-up Buildings and Facilities 407,440 105,000 105,000 105,000 105,000
PE-14012 Junior Museum & Zoo Improvements 27 Nonrecurring Keep-up Buildings and Facilities 0 0 1,175,000 0 0
PE-14015 Lucie Stern Buildings Mechanical/Electrical Upgrades 29 Nonrecurring Keep-up Buildings and Facilities 2,791,964 0 0 0 0
PF-17000 MSC Building A, B, & C Roofing Replacement 31 Nonrecurring Keep-up Buildings and Facilities 0 0 0 1,100,000 0
PF-00006 Roofing Replacement 36 Annual Recurring Keep-up Buildings and Facilities 38,111 45,000 40,000 100,000 0
AC-86017 Art in Public Places 41 Annual Recurring Keep-up Parks and Open Space 50,000 50,000 50,000 50,000 50,000
PG-06003 Benches, Signage, Fencing, Walkways, and Perimeter Landscaping 43 Annual Recurring Keep-up Parks and Open Space 150,000 150,000 150,000 150,000 150,000
PE-13008 Bowden Park Improvements 45 Nonrecurring Keep-up Parks and Open Space 199,041 0 0 0 0
PE-13005 City Hall/King Plaza Landscape 50 Nonrecurring Keep-up Parks and Open Space 124,041 0 0 0 0
PG-18000 Golf Course Driving Range Net and Artificial Turf Replacement 52 Nonrecurring Keep-up Parks and Open Space 0 0 0 0 770,000
PE-18012 Hoover Park Improvements 55 Nonrecurring Keep-up Parks and Open Space 0 0 0 0 490,000
PE-18010 Mitchell Park Improvements 59 Nonrecurring Keep-up Parks and Open Space 0 0 0 0 386,000
OS-09001 Off-Road Pathway Resurfacing and Repair 60 Annual Recurring Keep-up Parks and Open Space 100,000 100,000 100,000 100,000 100,000
OS-00001 Open Space Trails and Amenities 62 Annual Recurring Keep-up Parks and Open Space 164,000 175,000 175,000 175,000 175,000
PG-09002 Park and Open Space Emergency Repairs 64 Annual Recurring Keep-up Parks and Open Space 75,000 75,000 75,000 75,000 75,000
PE-13003 Parks Master Plan 66 Nonrecurring Keep-up Parks and Open Space 155,677 0 0 0 0
PE-18015 Robles Park Improvements 72 Nonrecurring Keep-up Parks and Open Space 0 0 0 0 325,000
(1) For FY 2014, salaries and benefits have been included in certain CIP projects where appropriate and possible. Unallocated salaries and benefits are included in CIP AS-10000.
Attachment D. Tabular Listing of CIP Projects
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All Proposed Projects
Note: The IBRC New category refers to projects that were not identified as being part of keep-up or catch-up by IBRC.
City of Palo Alto
Adopted Capital Improvement Program 2014-2018
General Fund
Project No.Name
Page
No.Status IBRC Category FY 2014 (1)FY 2015 FY 2016 FY 2017 FY 2018
PG-14003 Seale Park Improvements 73 Nonrecurring Keep-up Parks and Open Space 0 0 0 0 121,000
PG-13001 Stanford/Palo Alto Soccer Turf Replacement 74 Nonrecurring Keep-up Parks and Open Space 625,000 0 770,000 0 0
PG-06001 Tennis and Basketball Court Resurfacing 76 Annual Recurring Keep-up Parks and Open Space 215,000 215,000 215,000 215,000 215,000
PO-12001 Curb and Gutter Repairs 79 Annual Recurring Keep-up Streets and Sidewalks 361,929 250,000 100,000 100,000 100,000
PO-89003 Sidewalk Repairs 85 Annual Recurring Keep-up Streets and Sidewalks 2,429,895 1,715,781 1,709,877 2,065,000 2,065,000
PO-11000 Sign Reflectivity Upgrade 87 Annual Recurring Keep-up Streets and Sidewalks 91,385 50,000 50,000 50,000 50,000
PO-05054 Street Lights Improvements 89 Annual Recurring Keep-up Streets and Sidewalks 140,000 290,000 300,000 300,000 150,000
PE-86070 Street Maintenance 91 Annual Recurring Keep-up Streets and Sidewalks 5,724,016 5,437,622 5,437,622 5,119,386 4,753,635
PE-13012 Structural Assessment of City Bridges 95 Nonrecurring Keep-up Streets and Sidewalks 185,394 0 0 0 0
PO-11001 Thermoplastic Marking and Striping 97 Annual Recurring Keep-up Streets and Sidewalks 121,509 75,000 75,000 75,000 75,000
PL-00026 Safe Routes to School 106 Annual Recurring Keep-up Traffic and Transportation 169,536 100,000 100,000 100,000 100,000
PL-05030 Traffic Signal and ITS Upgrades 108 Annual Recurring Keep-up Traffic and Transportation 665,589 210,000 215,000 220,000 225,000
PL-12000 Transportation and Parking Improvements 110 Annual Recurring Keep-up Traffic and Transportation 373,205 225,000 225,000 225,000 225,000
AC-14000 Art Center Auditorium Audio, Visual, and Furnishings 5 Nonrecurring New Buildings and Facilities 0 150,000 0 0 0
AC-14001 Baylands Nature Interpretive Center Exhibit Improvements 10 Nonrecurring New Buildings and Facilities 0 0 0 56,000 0
PE-12017 City Hall First Floor Renovations 15 Nonrecurring New Buildings and Facilities 900,000 0 0 0 0
FD-14002 Fire Ringdown System Replacement 22 Nonrecurring New Buildings and Facilities 157,500 0 0 0 0
PF-14002 Fire Station 1 Improvements 24 Nonrecurring New Buildings and Facilities 280,377 0 0 0 0
PD-14000 Internal Alarm System Replacement 26 Nonrecurring New Buildings and Facilities 78,000 0 0 0 0
PE-13020 Byxbee Park Trails 47 Nonrecurring New Parks and Open Space 89,233 0 0 0 0
PG-13003 Golf Course Reconfiguration and Baylands Athletic Center Improvements 53 Nonrecurring New Parks and Open Space 8,045,505 0 0 0 0
PE-14010 LATP Site Development Preparation and Security Improvements 57 Nonrecurring New Parks and Open Space 1,668,782 0 0 0 0
PE-08001 Rinconada Park Improvements 70 Nonrecurring New Parks and Open Space 189,233 1,150,000 0 0 2,785,000
PE-12011 Newell Road/San Francisquito Creek Bridge Replacement 83 Nonrecurring New Streets and Sidewalks 0 2,500,000 0 0 0
PE-13014 Streetlight Condition Assessment 93 Nonrecurring New Streets and Sidewalks 220,078 0 0 0 0
PL-04010 Bicycle & Pedestrian Transportation Plan - Implementation Project 99 Annual Recurring New Traffic and Transportation 1,318,009 1,200,000 1,200,000 1,200,000 1,200,000
PL-14000 El Camino Real & Churchill Avenue Intersection Improvements - Design 101 Nonrecurring New Traffic and Transportation 283,651 0 0 0 0
PE-11011 Highway 101 Pedestrian/Bicycle Overpass Project (formerly PL-11000)103 Nonrecurring New Traffic and Transportation 1,396,168 8,190,000 0 0 0
PL-14001 Matadero Creek Trail 104 Nonrecurring New Traffic and Transportation 383,651 2,000,000 150,000 0 0
AS-10000 Salaries and Benefits - General Fund CIP Projects (unallocated)113 Annual Recurring Salaries Salaries 1,976,191 4,001,526 4,116,321 4,292,233 4,475,923
Sum: 33,954,370 31,080,729 22,121,720 17,192,519 20,385,958
(1) For FY 2014, salaries and benefits have been included in certain CIP projects where appropriate and possible. Unallocated salaries and benefits are included in CIP AS-10000.
Attachment D. Tabular Listing of CIP Projects
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Buildings and Facilities
$18,491,207
15%
Parks and Open Space
$22,211,512
18%
Streets and Sidewalks
$43,270,574
35%
Traffic and Transportation
$21,899,809
17%
Salaries and Benefits-
unallocated
$18,862,194
15%
Adopted FY2014-18 General Fund CIP Total by Category
Buildings and Facilities
Parks and Open Space
Streets and Sidewalks
Traffic and Transportation
Salaries and Benefits- unallocated
Attachment E. CIP Plan, Graphs, and Source of Funds 1.e
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Adopted FY2014-2018 CIP by IBRC Recommendation
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
FY2014 FY2015 FY2016 FY2017 FY2018
Buildings and Facilities
New- IR
Funded
Keep-up
Catch-up
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
FY2014 FY2015 FY2016 FY2017 FY2018
Parks and Open Space
New- Outside
Funded
New- IR
Funded
Keep-up
Catch-up
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
FY2014 FY2015 FY2016 FY2017 FY2018
Streets and Sidewalks
New- Outside
Funded
New- IR
Funded
Keep-up
Catch-up
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
FY2014 FY2015 FY2016 FY2017 FY2018
Traffic and Transportation
New- Outside
Funded
New- IR Funded
Keep-up
Catch-up
Attachment E. CIP Plan, Graphs, and Source of Funds 1.e
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FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total
SOURCES
General Fund Annual Capital Transfer 13,226,485 13,627,465 14,047,123 14,509,006 15,001,285 70,411,364
Interest Income 1,075,000 1,075,000 1,075,000 1,075,000 1,075,000 5,375,000
Project Reimbursements:
Gas Tax Fund (PE-86070 -Street Maintenance)1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 6,500,000
Gas Tax Fund (PL-00026 - Safe Routes To
School)100,000 100,000 100,000 100,000 100,000 500,000
Gas Tax Fund (PL-12000 Transportation and
Parking Improvements)225,000 225,000 225,000 225,000 225,000 1,125,000
OBAG Nondiscretionary Funding (PE-86070 -
Street Maintenance)477,353 477,353 954,706
Vehicle License Fee Street Funding (PE-86070 -
Street Maintenance)365,751 365,751 365,751 365,751 365,751 1,828,755
Stanford (FD-14002 Fire Ringdown System
Replacement)24,000 24,000
Grant from Caltrans Highway Bridge Program
(PE-12011 Newell Road Bridge/SF Creek)
2,213,250 2,213,250
Bonds (PG-13003 - Golf Reconfiguration and
Baylands Athletic Center)5,045,505 5,045,505
SF Creek JPA (PG-13003 - Golf Reconfiguration
and Baylands Athletic Center)
3,000,000 3,000,000
Stanford Univ Medical Center agreement (PL-
04010 Bicycle and Ped. Transp. Plan)1,200,000 1,200,000 1,200,000 1,200,000 4,800,000
Grant (PE-11011 Highway 101
Pedestrian/Bicycle Overpass Project)1,396,168 8,190,000 9,586,168
Grant (PL-14001 Matadero Creek Trail)2,000,000 2,000,000
Univ Ave Parking Permit Fees (PF-14003 Univ
Ave Parking Improvements)340,900 234,800 122,900 93,900 117,600 910,100
Cal Ave Parking Permit Fees (PF-14004 Cal Ave
Parking Improvements)186,400 222,800 409,200
TOTAL SOURCES $26,762,562 $31,008,619 $18,435,774 $18,868,657 $19,607,436 $114,683,048
City of Palo Alto- Capital Fund- Sources of Funds
FIVE-YEAR PLAN
Attachment E. CIP Plan, Graphs, and Source of Funds 1.e
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Attachment F. Revised Infrastructure Project Summary Sheet
(all costs/revenues in millions of dollars)
September 3, 2013
Projects costs and project-specific funding
Polling Support (sum of strongly
and somewhat supportive)Project Polling Cost
CIP Total
Funding
Estimated
Cost
Committed
Funding
Net Cost with
Committed
Potential
Funding
Net Cost with
Committed
and Potential
72%Fire Stations 14 0 14.2 0 14.2 0 14.2
69%Streets 8 25.5 0 0 0 0 0
67%Sidewalks 6 8.5 6 0 6 0 6
67%Parks Catch Up 10 6.5 8.9 0 8.9 0 8.9
65%Bike/Pedestrian Plan 25 8.75 25 8.75 16.25 0 16.25
61%Bike Bridge 6 9.86 10 8.35 1.65 0 1.65
57%Ventura Community Center 3 0.69 0 0 0 0 0
52%Public Safety Building 57 0 57 0 57 48 9
52%Charleston/Arastradero 8 0.25 9.75 2.27 7.48 0.35 7.13
47%Animal Services Center 7 0 6.9 0 6.9 0 6.9
46%Playing Fields (at Golf Course)6 0 6 0 6 0 6
46%Cal. Avenue Parking Garage 12 0 12 0 12 0 12
44%Downtown Parking Garage 21 0 21 0 21 0 21
38%History Museum at Roth Building 3 0 3 0 3 0 3
not polled Byxbee Park na 0 3.6 0 3.6 0 3.6
not polled Surface Catch Up na 4.5 3.4 0 3.4 0 3.4
not polled Buildings Catch Up na 0.3 4.2 0 4.2 0 4.2
not polled Cubberley Deferred Maintenance na 0 6.9 0 6.9 0 6.9
not polled Civic Center na 0 tbd 0 tbd 0 tbd
Subtotals:197.9 19.4 178.5 48.4 130.1
shaded cells are those which have been updated since the Infrastructure Committee's meeting on August 6, 2013
two-thirds
support
majority
support
less than majority
support
The project information and cost estimate information on this sheet represent staff’s best information at this
time. Staff will continue to refine the information as new and more precise information becomes available.
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Attachment G. Revised Revenue Sources
SOURCES USED IN SCENARIO SPREADSHEET
Currently Available Resources In Millions
Stanford DA for Infrastructure/Housing 22.1
Stanford DA for Sustainability 12.3
Parks 1.0
Community Centers 1.4
Downtown In‐Lieu 1.2
Infrastructure Reserve (6‐10 million) 8.0
Two Parcels on Middlefield Road 2.2
Additional Surplus from Higher Revenues
(ongoing)
1.0
Subtotal 49.2
Projected Revenue Increases
Expected Based on Current Projections
New Hotels 2.4 Estimated to generate $33.6 million in COPs
Potential Future Pending Council Decisions
GO Bonds 38.0
64%
TOT Increase (includes new hotels)
From 12% to 14% (2% increase) 2.2 Estimated to generate $30.8 million in COPs
From 12% to 15% (3% increase) 3.3 Estimated to generate $46.2 million in COPs
Business License Tax
New tax 3.3 Estimated to generate $46.2 million in COPs 51%
Documentary Transfer Tax
Increase from $3.30 to $4.40 per thousand 1.8 Estimated to generate $25.2 million in COPs 51%
of sale value
Sales Tax Increase
From 1.0% to 1.125% or 1/8 cent 2.6 Estimated to generate $36.4 million in COPs 38%
Auto Dealership at MSC
Lease revenue 0.8 Estimated to generate $11.2 million in COPs
Police Building
Lease Revenue 1.4 Estimated to generate $19.6 million in COPs
(Does not include renovation costs)
Digital Readerboard 0.8 Estimated to generate $11.2 million in COPs
LATP Rental Revenue 1.3‐2 Estimated to generate $18.2 to $28.0 million in COPs
62%
POLLING SUPPORT
Estimated to impact median single family home
assessed value by $65 per year
1.g
Packet Pg. 149
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