Brief
ing: Financial Analysis
and P
olling
January
16, 2024
ATTACHMENT 1
Pre
sentation Outline
Con
text:
• Pr
ojections for the City budget, services,
and infrastructure projects
• Expenditures forecasted to outpace
revenue
Br
iefing:
• E
valuation of revenue options and
feasibility
• Data from research
• Measure of community support
R
ecommended Action:
• D
irect staff to further explore tax measure
through:
• Comm
unication & outreach
• Tracking poll
• Returning to Council with additional information
ATTACHMENT 1
Ci
ty Council Priorities
Fis
cal Years
2023/2024
& 2024/2025
ATTACHMENT 1
Ci
ty Budget
Make-up
(General
Fund)
ATTACHMENT 1
ATTACHMENT 1
Sum
mary of General Fund
Budget Projections
• Modes
t growth in
revenue projected
• Expenditures are
increasing faster than
revenues
• Result is a projected
structural deficit would
not allow for the City to
maintain current service
levels
• Current staffing levels
and current service
levels are anticipated to
cost more than future
projected revenues
ATTACHMENT 1
Cap
ital Improvement Program
2-Year Budget (General Fund)
• The g
eneral fund has very
limited capacity for CIP
projects
• Approximately 1% of the
general fund is programmed
for general City projects
• $2.49M total programmed
over 2-years
• Over 80% of funding devoted
to repairs (bridges, storm
drains, parks)
• Less than 20% for new or
community enhancement
projects (Alston Park
restroom and study for
Oxbow pedestrian bridge)
New
Pr
ojects ,
$425,000
R
epair
Projects ,
$2,067,000
ATTACHMENT 1
Fin
ancial Analysis
In addition t
o continuing current service levels, there is community desire to increase programs, improve services, bolsterstaffing and to fund infrastructure projects—current revenue levels are projected to fall short of even the status quo level into the future
E
valuated potential options
for increased revenue
Revenue amount generated
Allowable uses, restrictions
Voter approval requirements
Potential for community support
Op
tions
evaluated
Transient Occupancy Tax
Parcel Tax
Community Facilities
District (CFD)
Sales Tax
ATTACHMENT 1
Summ
ary of Findings
T
ransient
Occupancy Tax
(TOT)—each 1%
increase yields
approx. $2.5M,
paid by visitors,
existing rate is high
compared to other
communities (15%)
F
inding: would not
generate sufficient
funding, would be
impactful for local
business & not
likely to gain
support (requires
1/2+ voter
approval)
P
arcel Tax—paid
on property tax
bills, analysis
reviewed uniform
rate per parcel and
uniform rate per
square foot
F
inding: the tax
increase to reach
even the minimum
revenue targets is
too high to be
practical (requires
2/3+ voter
approval)
Com
munity
Facilities District
(CFD)—paid on
property tax bills,
reviewed rates for
single and multi-
family residential
and commercial/
industrial
F
inding: the tax
increase to reach
even the minimum
revenue targets is
too high to be
practical (requires
2/3+ voter
approval)
Gene
ral Sales
Tax—1% increase
yields approx.
$21M, existing rate
of 7.75% among
lowest in region,
visitors contribute
Fin
ding: funding
level would support
community and
safety services,
infrastructure and
building projects
(requires 1/2+ voter
approval)
ATTACHMENT 1
Local
Sales Tax Measures—General & Special
General
Sales Tax
– Cities
may place on ballot
– Requires 50%+1 voter approval
– Statewide over 75% of
measures passed since 2001
– Must be placed on ballot for
g
eneral election (Nov.)
– Available for all governmental
purpos
es at discretion of City
Co
uncil
– Recommended option
Spe
cial Sales Tax
– Cities
and special districts may
place
on ballot
– Requires 66.7% voter approval
– Statewide less than 50% of
measur
es passed since 2001
– May be placed on any ballot
(Sp
ecial/ Primary/General)
– Must be spent on purposes in
specific
ally defined expenditure
plan
on ballot
ATTACHMENT 1
Sta
tewide Results: Local General Sales Tax
Some
of the Communities
Voting for Approval
% of
Measures
Passed
Total #
Passed by
Voters
# of
General
Sales Tax
Measures
General
Municipal
Election
Sausalito, San Anselmo, Chico,
Ontario, Pacifica, Tehachapi,
Vallejo
72%3447Nov 2022
Sonoma, Petaluma,
Healdsburg, San Rafael, San
Pablo, South Lake Tahoe,
Concord, Orinda
85%6071Nov 2020
Sebastopol, Santa Rosa,
Alameda, Sacramento,
Pasadena, Redwood City
90%5258Nov 2018
St. Helena, Fairfield, Vacaville,
Suisun City, Fairfax, Capitola86%5159Nov 2016
So
urce: CaliforniaCityFinance.com
ATTACHMENT 1
Mar
in
Nap
a
Sol
ano
Sono
ma 15
7.2 5%
State Min
ATTACHMENT 1
Polling
Purpose:
• Det
ermine level of support for a
local sales tax on the November
2024 ballot for investments in
pu
blic safety, community
in
frastructure, and community
ser
vices.
Process:
• Research firm prepared
qu
estionnaires and contacted a
samp
le of likely registered voters
b
y text, email, and phone.
• 25 minutes duration, conducted to
measur
e level of support for a tax
initia
tive and programs of most
sup
port.
• The methodology resulted in
s
tatistically valid response data.
ATTACHMENT 1
L
anguage from Polling
T
o protect and maintain funding for City of
Napa services that the State cannot take such
as:
– Repair potholes, streets/sidewalks;
– Water quality;
– Fire protection;
– Parks/recreation;
– Cleaning up
encampments/abandoned vehicles;
– Connecting homeless residents to
mental health services;
– 911 emergency response times;
– Senior and youth programs;
– Constructing essential public
safety/city facilities; and
– General government use.
Shall the City of Napa measure be adopted
levying a 1¢ sales tax, raising $21 million
dollars annually, until ended by voters,
including yearly audits?
ATTACHMENT 1
Polling
Questionnaire
• As
ked respondent how they would vote on the tax
measure
• Listed various city services/programs, asked
respondent if they would be more or less likely to
support measure with specific service/program
• Statements of factual informational were
provided and respondent asked a second time
how they would vote on the tax measure
• Messages intended to provide critical views were
provided and respondent asked a third time how
they would vote on the tax measure
ATTACHMENT 1
Polling
Data
A
ll 3 times the measure was
read, more than 50% of
respondents said they would
definitely or probably vote yes
P
ositive starting point for
potential future ballot measure
Mos
t support garnered for
services and operations related
to a safe, clean, and healthy
community
ATTACHMENT 1
Expen
ditures: Critical Community
Services and Infrastructure
• At
1¢, approximately $21M annually
will
be generated
• The general tax can support
in
vestments like:
– Community infrastructure
including
streets, sidewalks,
clean waterways, and parks
– Public safety, emergency
o
perations, and community
ce
nter services and facilities
– Youth and senior programs
• Expenditures can be phased to
make significant community
in
vestments right away, and address
long term needs
ATTACHMENT 1
Ste
ps to Date
• Financial ana
lysis of options
• Voter polling
• Discussions with leadership of
each
employee bargaining group
• Provided employee briefing
• Initial discussions with several
Ci
ty partners
• Developed a draft
c
ommunication plan
Ste
ps to Date
• Financial ana
lysis of options
• Voter polling
• Discussions with leadership of
each
employee bargaining group
• Provided employee briefing
• Initial discussions with several
Ci
ty partners
• Developed a draft
c
ommunication plan
Rec
ommended Action:
• Direc
t staff to:
– Hold discussions with broad
r
ange of City stakeholders
– Solicit feedback from
c
ommunity groups and
pa
rtners
– Conduct tracking poll to
up
date measurement of
c
ommunity support
– Prepar
e legal documents
f
or proposed ballot measure
– Re
turn to Council in June 2024
wit
h information for Council to
c
onsider placing the measure
on t
he November 2024 ballot
Rec
ommended Action:
• Direc
t staff to:
– Hold discussions with broad
r
ange of City stakeholders
– Solicit feedback from
c
ommunity groups and
pa
rtners
– Conduct tracking poll to
up
date measurement of
c
ommunity support
– Prepar
e legal documents
f
or proposed ballot measure
– Re
turn to Council in June 2024
wit
h information for Council to
c
onsider placing the measure
on t
he November 2024 ballot
ATTACHMENT 1