Fremont City Council Meeting: 07/21/26 07:00 PM
3300 Capitol Avenue Div/Dept: City Manager's Office
Fremont, CA 94538 Category: Plans, Policies and Studies
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5796) DOC ID: 5796
Updated: 7/17/2026 11:04 AM by Alberto Quintanilla Page 1 Consideration of a November 2026 Ballot Measure to Authorize a City of Fremont Transaction and Use Tax, Including Adoption of a Resolution and Introduction of an Ordinance
Contact Persons:
Name: Karena Shackelford Christina Briggs
Title: City Manager Assistant City Manager
Div/Dept: City Manager's Office City Manager's Office
Phone: 510-284-4063 510-284-4022
E-Mail: [email protected] [email protected]
Executive Summary: The City of Fremont takes great pride in being a well- managed City, nationally recognized for excelling in public safety, economic vitality, sustainability, fiscal stewardship, and quality of life. However, rapidly evolving economic conditions and federal and state mandates have continuously constrained the City’s ability to sustain and expand its key services and infrastructure, evidenced by over $6 million in funding that was cut as part of the Fiscal Year 2025/26 budget adoption and Fiscal Year 2025/26 budget rebalancing actions.
In 2025, the City Council conducted a study session to explore options for enhancing local funding. Based on subsequent preliminary polling results, the City Council directed staff to facilitate a process to conduct community outreach on City funding priorities to assess constituent interest in paying to maintain city service levels, and the viability of mechanisms to raise funds to maintain those services. Since the study session, City staff have carried out extensive community engagement, including an online survey, print and digital information, and in-person community meetings, to seek feedback from Fremont residents on their priorities for City services, and share information about the City’s current fiscal condition and staffing levels.
Throughout this effort, staff received consistent feedback from community members that fire protection, 911 response, homeless encampment clean- up, and maintaining essential City services were top priorities. While the preliminary survey indicated that over 50% of Fremont residents likely to participate in the November 2026 election would be supportive of a general purpose sales tax measure, support has declined by nearly 10 points, under the 50% + 1 threshold for viability outside the margin of error of the survey.
As part of this agenda item, the City Council will receive a presentation of these new survey results and determine whether or not it wishes to proceed Council Staff Report (ID # 5796) Meeting of July 21, 2026 Updated: 7/17/2026 11:04 AM by Alberto Quintanilla Page 2 with placing a half-cent sales tax measure on the November 2026 ballot in light of these results.
Background: The City of Fremont distinguishes itself as one of the region's most effective, forward-thinking, and well-managed municipalities. Guided by strong leadership, strategic planning, and a commitment to community well-being,Fremont consistently demonstrates what it means to operate a high-performing local government in the heart of the San Francisco Bay Area. The City performs this work while operating at one of the lowest staffing levels compared to other jurisdictions in the region. Despite limited staffing resources, City departments have continued to deliver results by leveraging innovation, inter-agency collaboration, and disciplined management practices. However, the City's ability to sustain this high level of service and keep pace with demand has become increasingly challenging, and service levels are impacted by the increasing uncertainty of federal and state funding.
Meeting community expectations has grown more complex locally, as the City navigates tight fiscal conditions, slowed revenue growth, and significant cost pressures due to inflation and labor-related expenses. Fremont residents expect responsive, high-quality municipal services, including public safety, emergency preparedness, maintenance, homelessness response, transportation, infrastructure, environmental programs, and community engagement, among others. For several consecutive budget cycles, the City has had to limit services and to defer service restorations, reduce non- essential maintenance support, and divert resources toward protecting core services. Notably, the recently adopted operating budget for Fiscal Year 2026/27 reflects these realities.
The City's largest revenue sources are sales tax and property tax. The City receives a very small share of sales tax revenue from the State in accordance with the State law and does not impose a local citywide Transactions and Use (Sales) Tax (TUT), as many cities do. The City's current sales tax rate is 10.25%, which is at the low end of the range in Alameda County, which spans 10.25-10.75. In terms of property tax, California cities receive a small share of the countywide base property tax rate - which is capped at one percent of a property's assessed value - determined by their historical share of property tax revenue before the passage and enactment of Proposition 13 in 1978. Proposition 13 locked each locality's percentage/share, resulting in the City of Fremont receiving the second-lowest share of property tax in Alameda County at 14.5%. The Council Staff Report (ID # 5796) Meeting of July 21, 2026 Updated: 7/17/2026 11:04 AM by Alberto Quintanilla Page 3 Cities of Berkeley (32.5%), Piedmont (30.4%), Oakland (26.7%), Alameda (25.7%), and Pleasanton (25.6%) are the cities with the top five highest percentage shares of property tax in the County.
Discussion/Analysis: On July 10, 2025, the Fremont City Council held a work session to facilitate a review of best practices used by other California cities to successfully enhance their local funding options to help address mounting unmet infrastructure and service needs. During the session, the City's consultants provided input and feedback on successful revenue sustainability planning that other cities have pursued, as well as approaches and steps that may be effective for the City of Fremont. Subsequently, the City Council received the survey results on the baseline potential local funding measure viability from the City's consultant. The survey was administered in mid-August of 2025 to likely voters in Fremont. The survey showed that approximately 60% of respondents potentially supported a half- cent sales tax increase.
The viability survey was conducted again in the summer of 2026.
Unfortunately, likely voter support has softened significantly for Fremont with new results indicating only between 46% and 43% support, a full 13- 14% point drop from a year ago. Based on these results, it is anticipated that a TUT sales tax measure is likely not viable for Fremont at this time.
Multiple indicators might explain declining support for a revenue measure. In addition to economic uncertainty due to the ongoing war and persistent inflation, there are more than 10 statewide ballot initiatives up for voter consideration in the November 2026 election. Additionally, Bay Area voters will consider a regional sales tax measure under Senate Bill 63 (Wiener, 2025) designed to support Bay Area transit agencies and prevent transportation service reductions, and several local measures that overlap the City of Fremont are in active discussion at this time.
This shift in support is not unique to Fremont, as other cities have recently suspended similar efforts following the June primary due to voter concerns about gas prices, the economy, and shifts in the national environment, among other local considerations. By overwhelming percentages, the most recent survey indicated the Fremont community is concerned about gas prices and bread-and-butter issues, with 81% citing these economic realities as concerns. The survey results are attached to this agenda item and will be shared as part of the staff's presentation.
Council Staff Report (ID # 5796) Meeting of July 21, 2026 Updated: 7/17/2026 11:04 AM by Alberto Quintanilla Page 4 Fiscal Impact: To date, the City has incurred approximately $325,000 in expenses for the following services:
* Consulting, public opinion survey - $169,500
* Graphic design, digital marketing, printing, and mail - $155,500
Should the City Council elect to place a TUT measure on the November 2026 ballot for voter consideration, the estimated cost is $770,690 - $1,004,966. * Ballot placement ranges from $610,690 to $854,966
* Consulting, graphic design, printing, mail, and digital marketing - $150,000
If placed on the ballot and approved by voters, City staff anticipate that a general half-cent-per-dollar TUT will generate approximately $30 million to $35 million annually for the City's General Fund.
Environmental Review: The proposed action is exempt from and not subject to review under the California Environmental Quality Act (CEQA) because, without limitation, it is not a "project" as defined in CEQA Guidelines Section 15378(b)(2), 15378(b)(4) and/or 15378(b)(5) and it has no possibility of a significant effect on the environment, as specified in CEQA Guidelines Section 15061(b)(3), each as a separate and independent basis for CEQA compliance. The proposed transactions and use tax measure is not a project within the meaning of CEQA because it creates a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. If revenue from the tax were used for a purpose that would have such effect, the City would undertake the required CEQA review for that particular project at the earliest feasible time prior to approval of the project.
ATTACHMENTS:
• Draft Resolution for Sales Tax Measure
• Exhibit A - Draft Sales Tax Ordinance Measure
• Fremont Ballot Measures Survey_FM3 Presentation
• Fremont Ballot Measaure_Staff Presentation
Recommendation: Receive presentation, including updated survey results, and direct staff to proceed with one of the following options:
• Option A: Defer consideration to a future election and continue with financial evaluation and community dialogue; OR
Council Staff Report (ID # 5796) Meeting of July 21, 2026 Updated: 7/17/2026 11:04 AM by Alberto Quintanilla Page 5 • Option B: Adopt a resolution to submit a general half-cent-per-dollar (0.5% or $0.005) TUT to City of Fremont voters for consideration on the November 3, 2026, election ballot and introduce an ordinance imposing a Transaction and Use Tax measure on the November 3, 2026 ballot for voter consideration.