Agenda Item No: K.7
AGENDA REPORT
DATE: July 7, 2026
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2026-159 and Ordinance 2026-06 CM Proposed Ordinance and Resolution for Amending TUT Ordinance
Resolution 2026-159 Approving an Ordinance and Ordering that a Measure be Submitted to the Voters of the City at the General Municipal Election to be held on November 3, 2026, to Extend the City’s Transactions and Use Tax and Increase by 1% the Local Transactions and Use Tax from 1% to 2% until Ended by Voters, with the Tax Administered by the California Department of Tax and Fee Administration; and
Ordinance 2026-06 Amending Sections of Article VII of Chapter 18 of the Fairfield Municipal Code to Extend and Increase the Rate of the Existing Transactions and Use Tax by 1%, from 1% to 2% Until Ended by Voters, to be Administered by the California Department of Tax and Fee Administration
Funding Source: N/A
Contact: Farbod Pirouzmand, (707) 428-7397
RECOMMENDED ACTION
Adopt resolution.
STATEMENT OF ISSUE
The City Council has identified maintaining fiscal sustainability, preserving essential public services, investing in public infrastructure, and protecting community quality of life as ongoing strategic priorities. With an estimated $11 million structural deficit, the council is considering an update to Measure P to increase revenues with the aim of maintaining the quality of life that this measure has helped to create for the community and its stakeholders.
DISCUSSION
In November 2012, Fairfield voters approved Measure P, a one -percent local transactions and use tax designed to provide locally controlled funding for essential city services and infrastructure
improvements. The revenues generated by the measure helped protect public safety services, repair streets and roads, improve youth and senior services, and maintain Fairfield’s overall quality of life. All revenues generated by Measure P remain local and c annot be taken by the State. The Measure also called for an oversight committee of Fairfield residents to ensure the use of revenues for the services it was intended to fund.
In November 2016, Fairfield voters approved an extension of Measure P through March 31, 2033.
The ballot measure stated that the extension would preserve local funding for neighborhood police patrols, firefighting and emergency response, crime prevention programs, street maintenance, parks and recreation services, and other general g overnmental services, while maintaining independent oversight and annual audits.
Since its original passage, Measure P has become an important revenue source supporting core city operations and municipal services.
Measure P Accomplishments
Measure P reve nues have supported a variety of community investments and operational priorities throughout the city. According to the most recent annual reporting by the Measure P Citizen Oversight Committee , Measure P funding contributed to roadway and infrastructure improvements, including major roadway projects, pothole repair programs, and pedestrian safety improvements. In 2025, more than 3,000 potholes were repaired and approximately 200 crosswalks upgraded citywide.
Measure P revenues have also supported public s afety services, including maintaining police staffing levels, emergency response capabilities, firefighting services, neighborhood patrols, and crime prevention programs. The revenues from this measure have been a critical funding source for preserving public safety operations and maintaining emergency response times.
Measure P funding has supported homelessness outreach and intervention programs, including the Homeless Intervention Team (HIT), Homeless Engagement and Response Team (HEART), shelter operati ons, outreach partnerships, and contracted services focused on connecting unhoused individuals with shelter and supportive services. In 2025, local outreach efforts funded through Measure P assisted with shelter placement for approximately 315 individuals.
Measure P revenues continue to support parks, recreation programs, youth and senior services, community events, and general municipal operations intended to preserve Fairfield’s quality of life. In 2025, Measure P revenues helped support services in the following departments:
Department Expenditure
Police $12.5 Million
Fire $6 Million
Public Works $4.1 Million
Parks & Recreation $1.7 Million
Current Fiscal Conditions
Like many California municipalities, Fairfield continues to experience inflation of operational costs associated with infrastructure maintenance, public safety operations, pension obligations, homelessness response efforts, and construction costs. The fiscal year 2024 -2025 budget required the city to implement multiple strategies to address an estimated $20 million shortfall, including staffing reductions, expenditure reductions, deferred maintenance projects, and operational efficiencies.
The City has also undertaken additional efforts intended to improve long -term fiscal sustainability, including reducing departmental budgets, increasing cost recovery through fee increases, maintaining emergency reserves, and establishing pension reserve funding strategies.
In the last two fiscal years, staff have cut the city’s structural deficit from a projected $20 million to $11 million. Cost mitigation strategies included:
Frozen 24.5 positions – including 4 sworn police officers Reduced discretionary spending
Deferred maintenance
Used one-time funds to balance ongoing costs
Negotiated no cost-of-living adjustments (no pay raises) for employees Despite these efforts, expenses continue to grow in several key operational areas:
PERS - $6 million increase since 2020 (64%)
Medical - $1.4 million increase since 2020 (27%)
General Liability Insurance - $2 million increase since 2020 (143%) Internal Services - $14.1 million increase since 2020 (114%) Cost increases driven by electricity, cybersecurity, enterprise software
Streets and Roads
Maintaining Fairfield’s transportation infrastructure remains a significant financial challenge. The City’s current Pavement Condition Index (PCI) is reported at 64, slightly below the statewide average of 65. Current roadway maintenance funding levels are insufficient to fully maintain or improve pavement conditions over the long term due to increasing construction and material costs. Fairfield currently spends approximately $9 million annually on roadway maintenance , however, approximately $18 million annually would be necessary to maintain the current PCI level on an ongoing basis.
Potential Measure P Update
As part of ongoing fiscal planning discussions, the city council has evaluated options that could assist in maintaining essential municipal services and infrastructure investments over the long term. One option discussed publicly is a potential Measure P Update that would extend the existing local transactions and use tax while increasing the rate by an additional one cent, subject to voter approval.
Based on staff’s preliminary estimates, a one -cent increase could generate approximately $2 4 million annually in additional locally controlled revenue. The additional revenues will be used to continue to support public safety operations, emergency response services, roadway maintenance, parks and recreation services, homelessness response programs, and facility maintenance.
Any new Measure P revenues would continue to fall under the purview of the Measure P Citizen Oversight Committee with the same accountability provisions that currently exist such as annual independent audits, citizen oversight, and annual reporting to the community regarding revenues and expenditures.
To qualify for the ballot, 2/3 of the City Council (at least 5 out of 7 members) are required to vote affirmatively to approve the transaction and use tax ordinance. If a council member is absent from the meeting, 5 City Council Members are still required to vote affirmatively for the item to qualify for the ballot. If so approved by the Council, and then passed by a majority of the voters (50% plus 1) on Tuesday, November 3, 2026, it would go into effect on April 1, 2027.
FINANCIAL IMPACT
The proposed Measure P rate increase of one percent would provide approximately a $24 million increase in revenue per year to the general fund. The projections are based on current economic data and trends and are subject to change with economic activity within the City.
Proposed Language for Transaction and Use Tax Measure
Election on November 3, 2026
THE FAIRFIELD TRANSCATION AND USE TAX MEASURE
To provide and protect funding for Fairfield’s services, such as police, fire, 911 emergency response, neighborhood safety, street and sidewalk repair, homelessness prevention and response and general governmental use, shall an ordinance be adopted to extend the City’s sales tax and increase the rate by up to one-cent per dollar until ended by voters, adding approximately $ 24 million annually, with independent citizen oversight, annual aud its, public spending reports, and all funds locally controlled?
YES
NO
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
The c ity hired consultant s, Probolsky Research and Willi am Barry Campaigns, to assist with creating the ballot language and educational materials, which included polling research to advise Council on the measure. The surveys included standard polling questions asking prospective voters about the measure. Prospective voters received email, text message, and phone call requests to participate in the surveys. The surveys were commissioned by Probolsky Research to collect input about the Measure P ballot measure.
ALTERNATIVE ACTION
State law requires that such measures coincide with local City Council elections for public vote on the November 2026 General Election. The City Council can forgo placing the revenue measure on the November ballot. If City Council chooses not to place the Measure P Update on the November ballot, then staff will return to Council with a list of proposed service cuts to close the structural deficit.
COORDINATED WITH
City Attorney’s Office and Finance Department
STAFF CONTACT
Farbod Pirouzmand, Assistant City Manager
(707) 428-7397
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: Proposed Ordinance