REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of February 8, 2022
TO: Mayor Kelley and Members of the City Council
SUBMITTED BY: Dante Hall, City Manager
SUBJECT: Report on Polling Results Related to Extending the Existing Utility Users Tax and the Viability of Becoming a Charter City for the Limited Purpose of Increasing the Real Estate Property Transfer Tax RECOMMENDATION ACTION:
Staff recommends that the City Council:
Receive the report from the Lew Edwards Group and direct staff to proceed with planning for the placement of the Utility Users Tax measure on the City’s regularly scheduled Municipal Election in November of 2022, or Provide alternate direction
FISCAL IMPACT:
There is no fiscal impact to receiving this report. Based on the Council’s direction, staff will return to the Council to request additional funds.
EXECUTIVE SUMMARY:
In October of 2021, the City awarded a contract to the Lew Edwards Group, and FM3 Research to determine the public opinion of registered voters regarding 1) the feasibility of going to the voters in November 2022 or November 2024 to extend the existing Utility Users Tax (UUT) prior to its expiration on January 1, 2025, and 2) the viability of becoming a charter city for the limited purpose of increasing the Real Property Transfer Tax (RPTT).
Lew Edwards and FM3 Research have completed the public opinion survey and will be making a presentation about their findings and recommendations related to the UUT and RTTP initiatives (ATTACHMENT 1).
BACKGROUND AND ANALYSIS:
At its May 25th, 2021 meeting, the Council engaged in a discussion regarding the feasibility of becoming a charter city for the limited purpose of increasing the real Property Transfer Tax, the Council requested that the Charter City/RPTT item come back for additional discussion and further directed that a companion report be prepared regarding the need to extend the UUT which will otherwise expire on January 1, 2025.
The City of Hercules relies on the UUT to provide sufficient ongoing revenues to sustain current levels of service. The UUT sunsets January 1, 2025 and is estimated to generate a projected $ 3.5 million in revenue in the fiscal year which ends June 30, 2022. Without these revenues, the city would not be in the position to continue to provide the services important to our community even at the current reduced level. While there has been some improvement in revenues overall, Hercules still receives a low share of the property taxes compared to other cities in Contra Costa County, and its retail tax base while largely weathering the effects of Covid-19 is not significant enough to support current service levels without the UUT.
Attachments:
Summary Report of January 2022 Community Survey Result
January 2022 Community Opinion Survey Questions
November 9, 2021 Staff Report – Lew Edwards Group award of contract Resolution
Election Opinion Poll Services