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HomeMy WebLinkAbout2000-09-19 City Council (4)TO:HONORABLE CITY COUNCIL ATTN:FINANCE COMMITTEE FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES DATE: SUBJECT: SEPTEMBER 19, 2000 CMR: 368:00 FINANCE COMMITTEE REVIEW AND APPROVAL OF THE HIGH PRIORITY NEW INFRASTRUCTURE PROJECTS; UPDATE ON PUBLIC EDUCATION AND PUBLIC OPINION RESEARCHER FOR THE LONG RANGE FINANCIAL PLAN; REVIEW OF THE STATUS OF THE UNFUNDED EXISTING INFRASTRUCTURE NEEDS; AND UPDATE ON THE POSSIBLITY OF CREATING A REDEVELOPMENT AGENCY REPORT IN BRIEF The City has over $300 million in potential new infrastructure projects that the City Council, community and staff have identified as possible projects to be funded by the General Fund. The City’s 10-year financial forecast projects a yearly surplus of approximately $1 million. Additional funding will be required to support projects that have already been identified. In addition to the new projects, there remains a $22 million existing infrastructure deficit. Staff has proposed that the existing infrastructure deficit be funded through a combination of an increase in the transient occupancy tax and expansion of the utility user tax to interstateand international calls. In June 2000, staff requested direction from the Finance Committee regarding a proposed public opinion survey. The survey will measure public interest in prioritization of potential projects and explore funding options that voters are willing to support. The Finance Committee supported the concept of undertaking a survey, and indicated a desire to participate in drafting public opinion survey questions. Staff also committed to return to the Finance Committee with a proposed citywide list of high priority General Fund infrastructure projects for discussion with the Committee. CMR:368:00 Page 1 of 6 RECOMMENDATION Staff recommends that the Finance Committee: Review and discuss the proposed list of prioritized unfunded new infrastructure projects which could be used for a voter survey. (Attachment A) Direct staff to return to the Finance Committee with the proposed Long Range Financial Plan public opinion survey questions. BACKGROUND On February 22, 2000, the Finance Committee reviewed the first three chapters of the City’s Long Range Financial Plan (LRFP). The financial forecast showed that the General Fund would realize a small surplus for each of the ten years forecasted. Staff advised the Finance Committee that although surpluses are projected, they are not significant after, inflationary costs for employee salaries and other inflationary costs are considered. Because the financial forecast lacked the flexibility to fund needed major infrastructure projects, staff proposed that a voter survey be conducted to determine which projects voters prefer and which financing options voters are willing to pay for. On June 6, 2000, staffmet with the Finance Committee to discuss updated chapters of the City’s Long Range Financial Plan, and to present a draft scope of services for a consultant to conduct a public opinion research survey (CMR 262:00). The survey results will be used to identify voter preferences toward infrastructure projects and sensitivity to paying for those projects (CMR 321:00). At that time, the Finance Committee recommended staff seek professional assistance from a public education firm to supplement the information collected in the survey. This report requests that the Finance Committee reviews and approves the proposed prioritization list of the unfunded new infrastructure projects. It also provides the Finance Committee with updates on: the selection of a public education specialist and public opinion researcher; the status of the existing $22 million in unfunded existing infrastructure; and on the proposed Redevelopment Agency. Finally, it is requested that staff be directed return to the Finance Committee with public opinion survey questions in October. DISCUSSION Prioritization of Unfunded Infrastructure Projects When staff discussed the LRFP with the Council in July, staff committed to return to the Finance Committee with a proposed list of the high priority projects and a rationale for this prioritization. Previously, staff had presented the Finance Committee with a list of projects totaling over $300 million. During August, Executive Staff worked over three weeks to develop this prioritization. Staff developed a two step approach to prioritizing the projects. The first was to apply a series of criteria to each project. These criteria CMR:368:00 Page 2 of 6 included: health and safety; employee productivity; cost effectiveness; enhancement of service delivery; maintenance of existing facilities; and, the level of visibility to the public/supported by the public. Staff then applied four tiers: (1) absolute need; (2) advisable/recommended; (3) nice but not necessary; and, (4) subject to outside funding (proceed only when funding is secured). The matrix developed by staff is presented in Attachment A. Based on this process, the top ten new infrastructure projects are proposed to be: Traffic Calming, Civic Center Waterproofing Improvements, Community Center Renovations, Employee Workspace Improvements, Library Master Plan, Lighting Needs in Parks, Municipal Services Center Master Plan Improvements, Development of the South of Forest Avenue Park, Police Building and Renovations to Fire Stations 3 and 4, and Electronic Government Technology Improvements. Staff proposes that the Finance Committee review and discuss this list and that these projects that be considered for inclusion in the voter survey discussed below. Research Firm Selection and Survey Questions Staff has selected JD Franz Research, a public opinion and marketing research firm, to measure community sentiment regarding prioritization of potential infrastructure projects and funding options that voters are willing to support. JD Franz Research has extensive experience in conducting public agency opinion research surveys. During the initial coordination meeting, the consultant worked closely with staff to determine the proper survey methodology, the required sample size, survey techniques, and the level of confidence expected from the survey. Demographic intbrmation which is based on predetermined criteria such as gender, age, party affiliation, number of children, etc. will provide additional information that can be used to determine funding mechanisms for future City projects. The recommended approach to conducting the City’s survey includes expanding the interview scope from 400 to 600 interviews. By increasing the number of interviews, the survey will capture the opinion of residents in the community (voters and non-voters), thereby giving Council a broad overview of the community that uses City services. In addition, expanding the scope allows for more in-depth cross tabulation of demographic information, which provides greater insight into potential funding options that might be approved by voters. Of the 600 interviews, the analysis should provide information on approximately 480 registered voters. Analysis of those voters will provide demographic information on the segment of the population that will actually vote on infrastructure prioritization and funding. The survey will determine public opinion regarding the prioritization of infrastructure projects such as construction of a new police service building, funding of the Library Master Plan, etc. The consultant will analyze the survey data and prepare a detailed analysis of its findings. The development of the survey questions is currently underway and staff proposes to return to the Finance Committee with draft survey questions in October 2000. CMR:368:00 Page 3 of 6 Public Education Consultant In response to direction from Council, staff recently contracted with a public education consultant to support efforts to measure voter sensitivity to infrastructure projects and financing. Knowledgeable in financing mechanisms that are available to fund public projects, the consultant thoroughly understands the City’s commitment to community education and the process of inclusion. SAE Communications provided valuable insight into the selection of a surveyor for the voter survey project, and identified the need for a firm that provides research counsel and questionnaire design in addition to providing statistical work and analysis to accurately measure public response. To complement the public opinion survey, the consultant has proposed using STRATA, a strategic plan that is designed to augment the polling process and assist in interpreting the survey results. SAE Communications’ trademark STRATA process will be a key element of the LRFP. STRATA utilizes a highly effective proprietary planning process which includes representation of City staff, the Council, the City’s financial advisor, and community leaders to formulate an inclusive community program. The program works through a tightly focused agenda that includes community and business objectives, competitive landscapes (e.g. competing ballot measures, etc.), audience profiles, and key messages and priorities. In addition, SAE Communications will assist in gathering community response by conducting one-on-one meetings with a cross section of selected community leaders (focusing on their perception of community priorities), and serving as a liaison with the survey firm in writing, interpreting, and presenting the results to Council. Unfunded Existing Infrastructure One of Council’s highest priorities has been rehabilitation of the City’s existing infrastructure. In 1998, Council determined that rehabilitation of existing infrastructure should have priority over new facilities and that new infrastructure projects should be funded from new sources of revenue. Council conceptually approved $74 million in funding for a $95 million, ten-year infrastructure management plan, and directed staff to discuss with the Chamber of Commerce (Chamber) a proposal to use an increase in the transient occupancy tax (TOT) and/or utility user tax (UUT) to raise the remaining $21 million. Subsequently, the Finance Committee gave conceptual approval to pursuing a transient occupancy tax increase of two percent and extend the utility user tax to include interstate and international calls. Use of the TOT and UUT to raise the needed funding spreads the tax burden to both residents and the business community. These revenue increases are expected to increase the General Fund revenue by $1.7 million and $2 million annually. In addition to funding existing infrastructure improvements, the increase will fund augmented business district maintenance efforts and other General Fund needs. The LRFP survey will include questions designed to measure voter sensitivity to funding the existing infrastructure through an increase in the TOT and expansion of the UUT to interstate and international calls. CMR:368:00 Page 4 of 6 Business Registry Discussions with the Chamber of Commerce indicated an interest in implementing a business registry program in Palo Alto. The concept of a business registry emerged as a result of discussions involving implementation of a business license tax program. While business license tax programs are designed to raise revenue in support of the General Fund, a business registry is designed solely as a business and economic outreach tool. If implemented, a business registry will be designed to be 100 percent cost recovery. A registry will be of value to the business community since it provides local businesses with a database of information that can be useful in planning future business decisions. For the City, a registry program will compile vital demographic information including data on the number of employees working in Palo Alto, the total square footage of office space, and business classifications by district. This information is important in designing and implementing an effective Economic Resources planning program. Redevelopment Agency Staff has begun preliminary steps in determining the feasibility of a Redevelopment Agency. Closely tied to this effort has been the Retail Strategy Report recently completed by the City Manager’s Office. Using this document as a starting point, staff will work with the City Attorney’s Office and a redevelopment consultant to develop a feasibility report for the Finance Committee’s review. RESOURCE IMPACT The public opinion survey to determine voter preference will cost $24,000. Funds are available to pay for the survey in the 2000-01 Administrative Services Department budget. POLICY IMPLICATIONS This recommendation is consistent with prior Council direction regarding the LRFP and Infrastructure Program. ENVIRONMENTAL REVIEW This report on long-term financial planning represents preliminary policy assessment and direction to staff. It does not require California Environmental Quality Act (CEQA) review. Individual projects will be subject to environmental review as they are developed. ATTACHMENTS Attachment A:ES Major Infrastructure Project Prioritization PREPARED BY: Joyce White, Senior Financial Analyst CMR:368:00 Page 5 of 6 DEPARTMENT HEAD APPROVAL: Director, Admi~strative Services CITY MANAGER APPROVAL: Assistant City Manager CMR:368:00 Page 6 of 6 Criteria 1 2 3 4 5 6 X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Tier Attachment A ES Major Infrastructure Project Prioritization Description Animal Services facilities Arterial traffic calming Civic Center Plaza improvements/waterproofing Community Center renovation and development (South Palo Alto) Downtown Urban Design improvements A Lighting B Design enhancements Employee work space and facilities improvements Library Master Plan Lighting needs in Parks (Where needed and accepted by Public) MSC Master Plan renovation/improvements Neighborhood traffic calming Park renovation and development (including SOFA) Police Building and Fire Stations 3 & 4 upgrades Teen Center (1) Technology Improvements Communications Infrastructure/Institutional Network/eGov Computerized Traffic Management System ERP (Financial and Utilities Applications) GIS Master Plan Library Technology Plan Phone System Upgrade Radio/Telecommunications Infrastructure Arts Center/Jr. Museum renovation Golf Course Master Plan Phase II Intermodal Transportation Center PAMF/SOFA Undercrossing Parking Structures Performing Arts Facility Criteria 1 Health & Safety 2 Employee productivity 3 Cost effective 4 Enhancement of service delivery 5 Maintenance of existing facility 6 Visible to public/Great public support Tiers 1 Absolute need 2 Advisable/Recommended 3 Nice but not necessary 4 Subject to outside funding - proceed only when funding is secured The Youth Master Plan will explore optimal ways of responding to Teen needs. A Teen Center may or may not be an optimal approach.