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HomeMy WebLinkAbout2000-06-06 City CouncilCity of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL ATTENTION:FINANCE COMMITTEE FROM: . DATE: CITY MANAGER JUNE 6, 2000 DEPARTMENT: CMR:265:00 ADMINISTRATIVE SERVICES SUBJECT:VOTER SURVEY PROPOSAL TO DETERMINE: VOTER’S NEW INFRASTRUCTURE PREFERENCES AND FUNDING SENSITIVITY REPORT IN BRIEF On July 20, 1998, Council approved .a policy that new or enhanced infrastructure facilities should be. funded from specific new revenue sources. Since that time, staff has gathered a list of new projects that are high on the City’s and community’s agenda, with ¯ very roughly estimated costs. After projecting the City’s revenues and expenditures in ¯ the Long Range Financial Plan (LRFP) (CMR:139:00), it was confirmed that the City would have modest surpluses and that new revenue sources would be necessary to conduct major, new infrastructure efforts. Staff recommends that a consultant be hired.to condu.ct a Survey that will identify: 1) voter preferences and priorities for new infrastructure projects; 2) voter sensitivity to new taxes to support those projects; and 3) projects that voters favor that are not already identified in the survey. As requested, a scope of services for such a survey is attached for Finance Committee review and comments. It is recommended that the Committee direct staff to identify qualified consultants for interviews. CMR:265:00 Page 1 of 4 RECOMMENDATION Staff recommends that, after reviewing the scope of services for a voter survey, the Finance Committee: 1.Review and comment on scope of services. 2.Direct staff to select appropriate survey firms for interviews. BACKGROUND On July 20, 1998 the .Council approved a General Fund infrastructure financing and prioritization plan (CMR: 191:98). The plan approved by Council included two policies: 1) existing facilities should be prioritized over new facilities for purposes of infrastructure funding; and 2) new or enhanced infrastructure facilities should be funded from specific new revenue sources. Since Council adopted these policies, staff has been working along two paths. The first path is to identify funding sources for the remaining $21 million of the $95 million infrastructure program identified on July 20, 1998. Council conceptually approved $74 million from existing revenue sources to address existing infrastructure, but did not immediately approve staff’s recommendation to raise the balance of the needed funding from a Transient Occupancy Tax (TOT) increase. Instead, Council directed staff to work with the Chamber. of Commerce to discuss a TOT increase and other funding options. The results of those discussions and staff’s recommendations are discussed in the next installment of the LRFP to be presented June 6 (CMR:269:00). The second path has involved identifying and prioritizing new infrastructure projects. On two occasions, staff has pro.vided reports to Council identifying such projects (CMRs:412:97 and 422:98). The number of new projects and magnitude of costs associated with them, which ranged from an estimated $133 to $217 million, prompted Council and staff to delay consideration .until the City’s LRFP was completed and reviewed by Council. The preliminary LRFP, delivered to the Finance Committee on February 22, 2000, projected "modest surpluses." An important conclusion was that the City’s "long list of potential financial needs significantly exceeds these surpluses, which confirms that either new revenue sources will need to be identified, and ... approved by the voters; and/or that prioritization and reduction of current and proposed projects and services will be required." To partially solve the difficulties of prioritizing the long list of new infrastructure projects and determining how much voters are willing to tax themselves for new undertakings, staff recommended that a voter survey or poll be considered. The Finance Committee welcomed this idea and instructed staff to return with a scope of services when remaining sections of th~ LRFP were presented. CMR:265:00 Page 2 of 4 DISCUSSION Attachment A is a draft scope of services for conducting a voter survey. There are two purposes for this survey. The first is for voters to identify their highest priorities or preferences for new infrastructure projects. It is important to note, however, that prior to surveying voters, Council and staff have a significant task in deciding which projects to cite in the survey. It is expected that a list of high profile projects (four to six projects) will be provided to the consultant to conduct the survey. The survey will also ask voters if there are projects they favor that are not on the list. The second purpose of the survey is to determine how much voters are willing to pay for their high priority projects, i.e., what is the voters’ sensitivity or threshold for new taxes such as General Obligation bonds. Information provided in the LRFP shows that Palo Altans have a higher overall debt burden when compared to other communities. This primarily results from the Palo Alto Unified School District’s "Building for Excellence" program. In addition, voters in Palo Alto are facing a number of potential tax or rate increases for Santa Clara Water Valley District, and PAUSD programs, as well as City initiatives. Within the context of existing debt burden, future financial demands on voters, and the community’s desire for numerous new projects, a voter survey is critical. This survey will provide invaluable input to Council in defining and financing the City’s highest new infrastructure priorities. After the Finance Committee reviews and provides input on the survey scope of services, staff will identify appropriate consulting firms for potential interviews. Once a consultant is selected, an "all-hands" meeting will be held with the consultant to discuss the purpose of the survey and to answer questions. The next steps involve developing and reviewing the survey, conducting the survey, and interpreting its results. RESOURCE IMPACT It is roughly estimated that a basic voteropinion survey conducted by telephone will cost between $20,000 and $25,000. Funds for the survey will be allocated from the Administrative Services Department’s 2000-01 budget. POLICY IMPLICATIONS The approach contained in this report is consistent with prior policy direction from the Council and the Finance Committee. Implicit in the approach to fund high profile, new public infrastructure projects from new revenue sources is an assumption that the City may not be able to subsequently request General Obligation bonds from its voters for another decade. CMR:265:00 Page 3 of 4 TIMELINE A timeline for the survey will be determined after Committee and full Council on new infrastructure efforts. discugsions with the Finance ENVIRONMENTAL ASSESSMENT This report on infrastructure planning represents preliminary policy assessment and direction to staff. It does not require California Environmental Quality Act (CEQA) review. Infrastructure projects will be subject to environmental review as they are developed. ATTACHMENTS Attachment A: Draft of"Request for Responses-City of Palo Alto Voters Survey" PREPARED BY: Joe Saccio, Manager, Investments and Debt DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL" Director, Ad0~inistrative Services E~ILY HARRISON Assistant City Manager CMR:265:00 Page 4 of 4 ATTACHMENT A DRAFT SCOPE OF WORK FOR VOTER SURVEY The City of Palo Alto is soliciting responses from public opinion research firms interested in conducting a survey of the City’s voters. There are two purposes for this survey. The first is for voters to identify their highest priorities or preferences for new infrastructure projects. A list of high profile projects (four to six projects) will be provided to the consultant to conduct the survey. The City also is interested in learning which projects voters favor that are not on the list. The second purpose of the survey is to determine how much voters are willing to pay for their high priority projects. In other words, what is the voters’ sensitivity or threshold for new taxes such as General Obligation bonds. By the time the survey is conducted, the City will have gone through an extensive process in identifying potential new infrastructure projects. City departments will have provided a long list of prioritized projects for Council review. In turn, the Council will have reviewed department recommendations and narrowed them to the highest priorities. It is this list that will be used for the survey. Examples of new projects under discussion include a Library Master Plan, major work on thoroughfares to calm traffic, and construction of a new police building. One of the major assumptions in conducting the survey is that the City should seek voter approval for higher taxes but once in a decade. Palo Alto is a thriving, largely built-out community with a highly educated, affluent, articulate and publicly minded citizenry. Having a population of 61,000 residents, the City provides a wide and high level of municipal services for its size. These include police, fire, public works, planning, building, transportation, and community services. The City has six libraries, eight fire stations, a golf course, a Cultural Center, a Children’s Theatre, a Community Theatre, a Junior Museum and numerous parks and open spaces. The City offers a considerable array of social, recreational and cultural programs such as human services for seniors and youth, subsidized childcare, concerts, art exhibits, team sports and special, holiday events. Because of a diverse and healthy revenue base, the City has been able to provide these extensive services. The growth in current revenue sources, however, cannot keep pace with the desire for new projects and the need to rejuvenate existing facilities. Iris important to note that the City is considering an increase in its Transient Occupancy Tax and an extension of its Utility Users Tax to interstate and international calls. These increases are proposed in order to rebuild the City’s aging infrastructure. The City of Palo Alto is also in the process of establishing a new downtown parking assessment district and seeking voter approval for a storm drain rate increase. Moreover, there is increasing pressure from outside jurisdictions, such as w~rious school and water districts to ramp up their own infrastructure programs by increasing fees and assessments on Palo Alto property owners. It is necessary, therefore, for the City to hire a consultant who can efficiently and accurately identify the community’s major new project priorities and their willingness to pay for them~ It is expected that the surveyor will work closely with City staff in developing an appropriate survey. If your firm is interested in this project, please provide the following information: General firm description: Describe the history and experience of your firm with a focus on surveys for public agencies in California that are similar to Palo Alto’s request. Staff resumes: Identify the principal staff to be assigned to this project, their respective responsibilities, and the location of their primary office. Provide a brief resume of each staff member including their experience in conducting surveys in California. Scope of services: Based on the request above, summarize your understanding of this project and describe the services you will provide the City. Staff envisions an "all hands" or kickoff meeting, a meeting with council members and staff to review survey questions, a meeting to discuss survey results, and a presentation of results to Council. Provide a discussion of your methodology to include: sample size, method of selecting samples (representation of all geographic and demographic areas is important), survey techniques, and the level of confidence expected for the survey. It is expected that the survey and its results can be completed within an 8-9 week time frame. ¯Time frame for survey: TBD ¯Proposed fee: Itemize the fees for your services and include an estimate for any out- of-pocket expenses. Client references: P~ovide a list of your recent clients (contact person and phone number), particularly those with projects similarto the City of Palo’s. A sample of a survey for one these clients is highly desirable.