What are the basic services? How does the distribution of our funds compare with other comparable and vibrant cities--eg, what percentage of the budget goes to youth programs, safety, road repairs, etc.? 133 What is the city's growth plan
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Written
Comment
# Suggestions for additional service priorities: I have the following questions:
134 Palo alto and the county, state and country need to disallow foreign realestate investment. It is not acceptable that non US citizens determine what gets developed. This leads to homelessness and barren cities without amentities citizens need.
The entire basis of the cities revenues is built on hotel taxes and no one uses hotels but AirBnB. We need to restructure the finances so that sound reliable income streams can fund basic services reliably.
The pandemic taught us that travel and tourism is completely optional.
Something more stable such as sales tax or property tax is required.
Energy taxes may also be required.
135 Stop water fluoridation. It's a toxin and proved to lower baby's IQ.
Please repair the gap of side walks. I tripped and took a fall and injured. 136 gigabit municipal fiber to every house
137 Improve electrical infrastructure
Don’t spend money on fiber services
138
Recognize that the Palo Alto demographic is heavily older toward the north, younger toward the south. concentrate services accordingly.
Make sure services needed by the older folk are easily accessible to them in the north (like a downtown library, senior center, retail, etc. 139
The Palo Alto Children's Theatre used to do plays with large casts, frequently with musicians playing, and no member of the cast or crew or musicians paid 1 cent to take part. They all worked together to enrich the community with the entertainment they provided. And our theaters need some repair, updating.
140 Increase city density, walkability and public transportation, deprioritizing cars and prioritizing people.
141
Congratulations on adding an employee to deal with gas leaf blower violators and the people that hire them. This will give us the most bang for the buck and greatly benefit our community. Next up are all of the wonderful programs the city provides for youths. Extending library services is part of this. Kids (and adults too) need a quiet place to go to.
Keep up the good focus on mask-wearing!
142 Investing into sustainability programs. It's going to be all the matters in a decade or so.
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ATTACHMENT E
Comments from Feedback Mailer
The following comments were submitted in response to the comments section of the mailed version of the survey with a perforated tear-off postcard to mail back to the City.
Written
Comment # Comment
1 Continue working on Airplane noise solutions
2 Traffic safety: Too many drivers ignore stop signs.
3 1 - Dramatically reduce pollution footprint
4 Just tarmacing street doesn't clear bumps under it. Bad for backs! S.P. Alto, Middlefield 5 The one about "community-owned assets" is very confusing. 6 More street lights in neighborhood
7 Finish putting utility wires underground across all Palo Alto 8 Build trash-to-energy converter @ Baylands
9 My granddaughter is a TEACHER and can't afford to live here most important teacher housing is no the very unacceptable answer
10 What about sustainability. 0.5) What about green initiatives & sustainability 11 The condition of many roads in Palo Alto is terrible 12 What about code enforcement?
13 The rest are so nebulous, it's impossible to make a intelligent choice 14 We need CITY-FUNDED TREE service!
15 We should allow Castilleja to build & grow
16 Top city priorities should be: police/paramedics (emergency response), utilities (public works) 17 Animal shelter/spaying
18 What does our #6 above really mean?
19 More pickleball courts!
20 Sustainability, climate change plans etc.
21 We live in a safe community, housing is a crisis. Allow more housing! 22 On the supply side by greater public ownership, i.e. public banking, ISP etc.
Comment on services: ALL DEMAND SIDE!!!
23 Fix the police! Fire the violent officers who cause the City to be sued!!! No pensions.
Comments on Services:
Expanding City Services - More mental health services
Adding public safety... - improve training and better screening of the police recruits 24 Foothill Park - take it back!
25 1 - Create more parks & open areas in this crowded city 26 We need to invest in making Palo Alto a more quitable place to live for everyone. 27 I am concerned about the judge who said utilities profits to general fund is a tax! 28 1 - prep for/mitigate/reduce climate change
29 Repair all non-working street intersection cameras
30 Stop leaf blowers (noise pollution
31 Bike friendly improvement and good tree health/canopy 32 Remove overhead utility lines
33 PLEASE SUPPORT THE AIRPORT. THANK YOU.
34 There are far more important city services than fiber-in-the-home! Comments on Services:
Expanding City Services - How is this different from all that follow? Investing in comm..., funding homeless..., improving services...., repairing streets - how are these different?
35 REAPIRA STREETS – POLICE
36 POLICE LEAF BLOWERS!!!! Bring down sound pollution
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Written
Comment # Comment
37 Especially, longer hours @ Children's Library. Whose expansion was supported thru PALF! 38 We are very disappointed w/ these questions. They are so vague. For example what does expanding services mean? What's the difference between #7 and #4 for roads? 39 Issues like crime + roads - which you ignore for libraries. Who uses a library? 40 Lucie Stern Community Center needs attention please. 41 Investing in community owned assets like community centers - particularly Lucie Stern 42 Why to roads appear twice on the list? Please define basic services versus city services. 43 Add speedbumps, reduce speeding cars.
What does expanding City services mean?
Community owned assets are already great.
City has already great work in affordable housing and homeless service area.
Put up speed limit signs.
Reduce residential and personal safety crimes (for police) 44 No to expanding City services and funding affordable housing and homeless services.
Stop police radio encryption (Number 1 - more transparency) 45 Fix Churchill bike lanes at Alma
46 Install smart meters and help with solar installs
If you want to known "improvement needed?" why "maintain?" 47 The City needs to address excessive noise from airplanes. Fun this! Top priority! 48 More active policing. Less value futurism
49 Expanding project safety net to include mental health services for adults + youth 50 1 - Fiber to the home from City Muni Internet
51 Please preserve Cal Ave as a No-Car area
52 #1 Priority: Traffic safety kids/teen bike safety - much more police vigilance needed.
Comments on services:
Cut down semis + tractor trailers off our streets!!!
Road safety standards have decreased appallingly in 3-5 years 53 1 - Fix the railroad level crossings!
54 NOT "defund" but "redesign" w/ social services
55 Maintain tree + flower beds on corners (like the 70's + 80's) 56 These streets are the worse/El Camino need ASAP atten 57 Resolve/improve traffic problem on El Camino & Embarcadero - Alma, etc. 58 Resume shuttle
59 Emergency vehicles are very noisy on Middlefield. Cut back on sirens - only use when absolutely necessary. Residences are affected by noise level.
60 I value & appreciate services that are currently provided. Thank you. 61 Please less construction! It obstructs traffic
62 WORK ON OPPOSING THE NEW IDEA OF ALLOWING 4 HOUSES ON A 50x100 Sq.ft.std LOT 63 Comments on Services:
Maintaining basic services - roads
64 Stop the stack & pack housing, you only get so many people. Get homeless off the street rehab programs
65 Lack of P.A. employees & using contractors has lead to lack of a or terrible service. Are the plans to hire people instead.
66 Stop racism - no firmament action
67 Cubberley
68 How many existing City positions are currently unfilled? 69 Castilleja? Why?
Palo Alto takes too long to make decisions on everything.
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Written
Comment # Comment
70 Don't add new things, first improve existing services. Reduce costs, simplify.
Programs like Citywide yard sale are excellent.
71 Please maintain service at College Terrace Library.
72 Removing the entrance fee to Foothills Park!
73 Invest in prepaid questionnaire returns
74 Public safety number 1 always; streets and roads number 2 75 Keep libraries open 7 days a week
(down arrow) police support
76 Getting rid of gas powered leaf blowers - priority for climate change, pollution, and public health.
Specifically repair and preservation at Lucy Stern
77 Please please improve the dumping of things in streets/yards, especially El Camino 78 Don't we already have public safety? How about "improve" Funding - esp homeless services
79 Should not group public safety services together - need more police not fire. 80 The liquid amber trees are dangerous. They need to be trimmed or replaced. Esp. dangerous for people on the street walking
81 3 - More concerts in the park
82 #1 Priority - Airplane noise needs to go!! Quality of life has suffered!!
Comments on Services
Tree maintenance-city trees
83 Please do what you can to stop the release of feral cats in any community
Comments on Services
Maintaining basic service - unnecessary waste of water for lawns is of great concern. Runoff is noticeable on a daily basis.
Expanding City services - such as processing permits and timely inspections. 84 The roundabouts and islands built, e.g. along Ross Rd., are incompetently designed and constitute a danger to the public, cyclists especially.
Comments on Services
Maintaining basic services - sewage, utilities, street sweeping 85 All of the above are important!
86 Pay attention to traffice airplane over the city. Residents should be informed and have input in projects like Rinconada park that seems to a big budget and not aesthically fitting in the park. 87 El Camino is in terrible condition south of Stanford! Please fix. 88 Enforce codes with fines. Need more housing. Crack down on short-term (<30 day) rental of homes (400+ AirB+B homes)
89 Skip the BS about airplane noise or close PA Airport 90 When it rains, the sewers/drains get backed up and flood sidewalks, it has been happening for years - when will this get fixed??
Unclog street drains! Downtown South Forest Ave odd #s side of street 91 Diverse training in case of earthquakes for elders in different languages 92 Midtown trees removed; not replaced
Restore basic services first
improving services - tree services
tree planting and maintenance in midtown
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Written
Comment # Comment
93 Please do not continue to increase utility rates. Do not start charging for electricity based on time of day usage.
94 Mental health programs. Make a natural swimming place in Foothill Park or Arastradero - instead of only concrete swimming pools.
95 Please crack down on crime.
96 PAPD and City often unresponsive and inefficient
97 City people need to answer the phones
98 What are basic services and how are these different than city services?? This survey can help you better if you explained "basic" and "city" services, thank you 99 Support Cal Ave & Downtown businesses. Bring them back to life! 100 Please subsidize and make utilities rates lower
101 Maintain the City, beautiful look and keep it clean. 102 As a downtown business owner, I see the homeless
103 I realize this is not under city jurisdiction, but something needs to be done! It seems there is nothing more dire than repairing El Camino Real!
104 Invest in smart traffic sensors to reduce idling and cut emissions by 20% or more. 105 Ensure drinking water (tap water) quality.
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ATTACHMENT F
1 May 27, 2022
To: Ed Shikada, City Manager
Fr: Public Dialogue Consortium
Re: Business and Community Stakeholder Focus Group Report – Update
On March 18, 2022 we submitted a report on the five focus groups that were conducted to date, noting that two additional community engagement events were in the “next steps” planning stage. This report provides a summary and analysis of those two events.
Outreach and Recruitment
Similar to the initial focus groups, staff compiled a comprehensive list of Palo Alto stakeholders consisting of business groups, employers, and community groups and organizations, and conducted outreach utilizing multiple platforms to invite participants to the two events. For the Public Listening Session, invitations were sent via email to community groups and organizations throughout Palo Alto, with efforts to be as inclusive as possible. For the final Focus Group, invitations were targeted to the business community, specifically the Chamber of Commerce, Palo Alto Research Park and Shopping Center, and the Silicon Valley Leadership Group. Note: an additional Focus Group was scheduled for the business community, but was cancelled due to lack of attendance.
A list of the participants for these two events is included at the end of this report.
Public Listening Session/Focus Group 6 (March 29, 2022) Eight people participated in this session. Instead of treating it as a public listening session, as originally planned, we chose to facilitate it as a focus group discussion, essentially making this event the sixth focus group in a series of seven. Six of the participants self-identified as a “resident” or “community member;” two participants self-identified as representatives of the business community.
The purposes of this session mirrored the purposes of the prior focus groups. Part one established the context for the focus group, including introductions, the agenda, and outcomes. Part two consisted of a staff presentation on the City’s Fiscal Sustainability Strategy, including revenue trends and services, and the two ballot measures under consideration. In addition, staff presented the following recommendations made by the Finance Committee at their March 28 meeting:
1. Placement of affirmation of current Gas Utility Transfer at 18% of gross receipts to be used on current uses
2. Placement of a Business License Tax (BLT) with the following characteristics:
a) Exemption for Hotels, groceries (requires % of sq. ft. of food sales),
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ATTACHMENT F
2 seasonal businesses operating less than 90 days
b) Exemption for first 5,000 sq. ft., requiring registration for all in the BRC program
c) Propose escalating rate over 3 years (begin 2024) at $0.12 / sq. ft./mo., at $0.15, and $0.20, then CPI capped at 6% per annum with excess CPI carrying over to future years
3. Recommend the City Council direct staff to proceed with a third round of polling based on Finance Committee and Council feedback
Results
• BLT: Participants expressed mostly support for the BLT, with the consensus being that the “tax is a good idea” given “the needs of the community” and the fact that “most other communities have one.” Participants did request a forecast of the projected revenue from the BLT and the Gas Funds Transfer. Two concerns were expressed about the BLT: (1) The proposed CPI adjustment and the lack of a sunset or end date will be an onerous burden on businesses, and (2) This is not the right time for a new tax given the recovery from COVID and the uncertain economic environment.
• Gas Funds Transfer: Participants expressed unanimous support for this measure, noting that passing the measure will not impact rates while failure to pass it would result in service cuts.
• Essential City Services: Participants identified transportation infrastructure, affordable housing, and climate change as priority services. • Finance Committee Recommendations: The only comment made in response to the recommendations was that basing the BLT on square footage would likely lead some businesses to seek out “creative” ways to avoid paying it.
Focus Group 7 (May 19, 2022)
This focus group was composed of 16 participants who self identified as members or representatives of the business community.
The focus of this session was markedly different from the prior focus groups.
Specifically, the purpose was to elicit input and feedback on the administrative design of the potential BLT measure based on the direction that the City Council provided at their meetings on April 18 and 25. A key component of the staff presentation was a draft BLT implementation ordinance, which documented and codified Council’s direction (copy attached here). The draft was distributed to the participants prior to the meeting and was the primary focus of the session. Following staff’s presentation of the draft ordinance, participants were asked to respond to the following questions:
• What clarifying questions, if any, do you have for staff? • What City aspects of implementation are important to you, your company, or your organization?
• What feedback do you have on the draft implementation ordinance language for the business license tax?
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3 Results
Participants and staff had a robust and detailed discussion of the draft ordinance. Based on our professional judgment, we would characterize the discussion as a healthy give- and-take of mutual learning and clarification. The focus group was focused on administration of a potential business tax if it is put on the ballot and passed. As a result, while participants did not express any of the concerns about the BLT that we heard in the prior focus groups (i.e. CPI cap, no sunset, not the right time for a new tax, and the need for a funding plan), it was understood they still held these concerns. The discussion focused on the following questions and answers.
Participant question: Would square footage not being utilized be included in the calculation of the business tax?
Staff response: Council is still considering how to tax space that is not leased or rented.
Participant question: Are there any specifics regarding the use of the funds for "general government purposes"?
Staff response: Proceeds would go to the general fund. Council plans to adopt a resolution to identify specific uses of a BLT, although this is nonbinding. Priorities identified for a resolution include new and enhanced services for public safety, affordable housing and unhoused services, investment in downtown corridors, and investment in safe rail crossings.
Participant question: How is commercial real estate property taxed? Would the owner of buildings and spaces who lease to other businesses be taxed in addition to the businesses that lease space? This seems like it would lead to double taxation.
Staff response: The intent needs to be clarified when the ordinance is adopted.
Participant question: Some businesses in the research park do not have leases but they sublease. They have a city permit to build a building, and then sublease to another entity. When subleased, the sublease tenant would then pay the BLT. But what happens/who pays during the time the space is available for sublease? Who pays the BLT? It is unclear who pays if the owner/builder of the building is waiting to find a tenant.
Staff response: If the owner is defined as a business, the business owner would be liable for the BLT until it is leased. Council is still considering how to tax space that is listed for lease.
Participant comment: For those who own a building are reducing the amount of space they use, and are looking for a tenant to lease the rest this could make a difference on the acceptability/ viability of the BLT to the business community. We need to know this
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4 right away. We would be in favor of exempting space that is listed for lease and is vacant.
Participant question: There are multiple ways to measure square footage. Who determines what measurement type to use?
Staff response: The ordinance will reference a few fundamental guidelines for measurement and potential standards that could be used. Policies and procedures will refine this definition as measurement types continue to evolve.
Participant question: Does the taxpayer self-define the standard used to define square footage?
Staff response: Yes, as long as it meets minimum standards.
Participant: Is underground parking included?
Staff response: I do not think so; we will look into this.
Participant question: How would hotels be treated in the BLT? Staff response: TOT receipts would offset what they would otherwise owe for the BLT. The business owner would pay the difference.
Participant comment: Paying prospectively would be more difficult on a new business.
The new business should have at least 90 days before they first need to pay the tax. A prospective payment approach would also create challenges for calculation of offsets. It would be easier to pay the tax on a previous period rather than a future period.
Participant question: If taxation is prospective rather than retrospective, is there a refund if you close business during the year you have already paid for? Staff response: Yes, you can apply for a refund.
Participant question: What about an apartment owner? The language as it reads seems like it would include apartment buildings and I do not see a specific exemption.
Staff response: Council has not yet determined how the tax applies to leased residential space.
Participant question: How are businesses with multiple locations taxed? Staff response: Suppose there is one corporate entity with one business license that has multiple locations in the city. When calculating square footage, the calculation would include the square footage of all locations. Only the first 5000 square feet would be exempted. This is a policy call for council.
Participant question: If I have a 25K square foot building and have five businesses occupying the space, all would be exempt due to the 5000 square feet exemption? Staff response: Yes.
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5 Participant question: Would we have to disclose our entire lease to the City? I would hope the City would accept a redacted lease with the essential information Staff response: Possibly during an audit the full lease would need to be shared.
We might be able to include a clause in the ordinance that the lease would stay confidential.
Participant question: Would details about businesses and what BLT is paid be held confidential?
Staff response: Yes.
Participant question: We need an objective standard for defining "start of occupancy." Perhaps issuance by the City of the Certificate of Occupancy could be a milestone.
Staff response: This is something for consideration. There are hurdles for those who may not have been issued this certificate yet but are paying rent during this time. It may not work in all scenarios.
Participants - Listening Session/Focus Group 6: 3-29-22 (Community)
1. John Petrilla, Palo Alto resident
2. Verdere Philpot, Palo Alto resident
3. Alison Stephens, Palo Alto Community Child Care
4. Penny Ellson, resident of Palo Alto
5. Neilson Buchanan, resident of downtown north
6. Joanne Wetzel, Palo Alto community member
7. Jeremy Hauser, consultant for stakeholders
8. Dan Kostenbauder, Silicon Valley Leadership Group
Participants - Focus group 7: 5-19-22 (Business)
1. Shweta Bhatnagar - Stanford University Government Affairs
2. Charlie Weidanz - Palo Alto Chamber of Commerce
3. Kari Martinez - GM, Bloomingdales Stanford Shopping Center
4. Luke Nixon - COO, SAP Labs
5. Nicholas Karellas - SAP, Government Relations
6. John Koselak - Executive Director, V. Living
7. Kent Leacock - VMware, Government Relations and Public Policy
8. Dan Kostenbauder - Silicon Valley Leadership Group
9. Tiffany Griego - Senior Managing Director, Stanford Research Park
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ATTACHMENT G
Attachment G - 1
Summary of Prior Work on
Potential Revenue Generating Ballot Measures
The City of Palo Alto has been discussing its options for potential revenue-generating ballot measures through 2019 and 2020. This work was suspended at City Council direction in March 2020 in order to marshal available resources to manage through the COVID-19 pandemic. A timeline of the CMRs and discussions with the Finance Committee and the City Council since April of 2019, when staff was formally directed to begin working on this project by the City Council, is included below for additional context. The date, the forum of the meeting (Finance Committee or City Council), the summary title, and the CMR number are included for ease of reference.
Timeline
4/22/2019 City Council, “2019 Fiscal Sustainability Workplan”, CMR 10267
4/22/2019 City Council, “Approve Workplan for a Potential Revenue Generated Ballot Measure”, CMR 10261
6/18/2019 Finance Committee, “Review, Comment, and Accept Preliminary Revenue Estimates for Consideration of a Ballot Measure”, CMR 10392
8/20/2019 Finance Committee, “Evaluation and Discussion of Potential Revenue Generating Ballot Measures”, CMR 10445
9/16/2019 City Council, “Evaluation and Discussion of Potential Revenue Generating Ballot Measures and Budget Amendment”, CMR 10615
10/1/2019 Finance Committee, “Revised Workplan for Consideration of a Ballot Measure”, CMR 10712
10/15/2019 Finance Committee, “Stakeholder Outreach, Initial Polling, and Discussion of a Potential Ballot Measure”, CMR 10743
11/4/2019 City Council, “Potential Ballot Measure Polling/Outreach, Contract, Solicitation Exemption and Budget Amendment”, CMR 10792
12/2/2019 City Council, “Structure and Scenarios of Initial Round of Polling for a Potential Local Tax Measure”, CMR 10891
12/17/2019 Finance Committee, “Consideration, Evaluation, and Discussion of a Revenue Generating Local Tax Ballot Measure, Review of Refined Modeling, Analysis, Tax Structure and Recommendation to the City Council”, CMR 10655
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Attachment G - 2
1/27/2020 City Council, “Update, Consideration, and Potential Direction on Possible Local Tax Measure for 2020 Election”, CMR 11019
3/23/20 City Council, “Consideration of Analysis, Public Outreach, and Refined Polling and Further Direction on a Potential Local Business Tax Ballot Measure for 2020 Election”, CMR 11161
3/23/20 City Council, “Consideration of Analysis, Public Outreach, and Refined Polling and Further Direction on a Potential Local Business Tax Ballot Measure for 2020 Election”, At-Places Memorandum
6/15/2021, Finance Committee Staff Report, “Recommend the City Council Approve the Workplan for Pursuit of a Revenue-Generating Local Ballot Measure for the November 2022 General Election; Review and Potential Guidance to Staff on Affordable Housing Funding as Referred by the Council”, CMR 12299
8/16/2021 City Council, “Approve the Workplan for Development of a Revenue-Generating Local Ballot Measure for the November 2022 General Election; Review and Potential Guidance to Staff on Affordable Housing Funds as Referred by the City Council”, CMR 12381
9/21/2021 Finance Committee, “Discuss Updates and a Recommended Further Refinement of Potential Revenue Generating Local Ballot Measures,” CMR 13514
10/19/2021 Finance Committee, “Discuss Updates and Recommend Further Refinement of Potential Revenue Generating Local Ballot Measures, and Review Draft Initial Polling Outline”, CMR 13648
11/8/2021 City Council, “Discuss Updates and Recommend Further Refinement of Potential Revenue Generating Local Ballot Measures, and Review Draft Initial Polling Outline”, CMR 13687
12/7/2021 Finance Committee, “Discuss Updates and Recommend Further Refinement of Potential Revenue Generating Local Ballot Measures”, CMR 13728
1/18/2022 Finance Committee, “Discuss Poll Results Regarding Potential 2022 Revenue Generating Ballot Measures and Recommend Further Refinement of Business License Tax and Utility Tax Proposals”, CMR 13875
1/24/2022 City Council, “Discuss Polling Results, Analysis, and Community Stakeholder Engagement Plan; Recommend Further Refined Parameters for a Possible Local Tax Ballot Measure for November 2022 Election (Business License Tax and Utility Tax Proposals); and Direct Staff on Related Items such as Community and Stakeholder Engagement Plan,” CMR 13770, p. 385 and CMR 13963, p. 462
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Attachment G - 3
3/28/2022 Finance Committee, "Revenue Generating 2022 Ballot Measures: Review Feedback from the Ballot Measure Community and Stakeholder Engagement Plan and the Second Round of Polling; Review Draft Ballot Measure Language; and Recommend to Council Further Refinement of Potential Measures Adopting a Business License Tax and Confirming the Gas Utility General Fund Transfer," CMR 13981
4/18/2022 City Council, "Revenue-Generating Ballot Measures for Fall 2022: Discuss 2nd-Round Polling Results and Feedback from Community and Stakeholder Engagement Activities; Review and Provide Staff Direction on Finance Committee Recommended Refined Parameters for a Business License Tax and an Affirmation of the Gas General Fund Transfer; and Provide Direction to Staff on Next Steps Including Launch of Third Poll, and Council's Non-Binding Intentions for Allocation of Potential Proceeds", CMR 13571, p. 162
4/25/2022 City Council, " Revenue-Generating Ballot Measures for Fall 2022: Discuss 2nd- Round Polling Results and Feedback from Community and Stakeholder Engagement Activities; Review and Provide Staff Direction on Finance Committee Recommended Refined Parameters for a Business License Tax and an Affirmation of the Gas General Fund Transfer; and Provide Direction to Staff on Next Steps Including Launch of Third Poll, and Council's Non-Binding Intentions for Allocation of Potential Proceeds (Continued from April 18, 2022)", CMR 14316 p. 62 11.g
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PLACEHOLDER
Attachment H:
Summary of Third & Final Round of Polling Results
This attachment is expected to be released on June 9th in a supplemental report.
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City of Palo Alto (ID # 13922)
City Council Staff Report
Meeting Date: 6/13/2022 Report Type: Information Reports
City of Palo Alto Page 1
Title: Informational Report on the City of Palo Alto 2022 Water Gas and Wastewater Utility Standards
From: City Manager
Lead Department: Utilities
This is an informational report and no Council action is required.
Background
The City of Palo Alto Utilit ies (CPAU) Department’s Water, Gas, and Wastewater (WGW) Engineering Division implements standard design and construction specifications for water, gas, and wastewater facilities in the public right -of-way and for CPAU -owned facilities on private property. These standards ensure that utility infrastructure is constructed and maintained in a safe, uniform, and reliable manner. The WGW Utility Standards include installation requirements, material specifications, and standardized configurations.
Discussion
CPAU Engineering staff updates the WGW Utility Standards periodically and last issued revisions in 2021. This 202 2 edition reflects current construction material availability, and incorporates up to date field practices, contract management, as well as other non -substantial technical editing (Linked Document ). A summary of the more significant revisions to the 202 2 WGW Utility Standards is provided below, and all edits are shown in redline form (Linked Document):
• Reworded some phrasing and added new language to increase clarity of standards and requirements (in various Sections).
• Included additional language to clarify Contractor’s responsibilities on cons truction projects to help City manage capital improvement project (CIP) contracts (in various Sections).
• Clarified those capitalized terms not defined in the Standards have the same meaning provided in the City’s General Conditions (Section 800). • Clarified contractor’s submittal, pre-construction meeting, and scheduling requirements (Section 800).
• Rearranged a few sections to make the sequence flow better (Section 800). • Updated the website link to City’s Traffic Control Requirements (Section 800). • Updated information on the City’s Certificate of Liability Insurance requirement and the 12 Packet Pg. 283
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permit expiration date for Recycle Water Use Permits (Section 870). • Strengthened the requirements for contractor s to investigate sewer lateral locations prior to boring gas pip e and to make multiple attempts when inspecting the sewer laterals for potential cross bore s after the gas pipe is installed by trenchless method s (Section 2200).
• Clarified the shelf -life requirement s for polyethylene pipe (Section 2300, 2400, and 2500).
• Added maximum allowable pull force for wastewater pipe -bursting operation (Section 2300).
• Updated the hardware and appurtenances for water main s based on current market availability (Sections 2660).
• Added the procedures to disconnect large diameter water services (Section 2660). • Revised the gas pipe specification per current manufacturer’s material index (Section 2685).
• Revised the operator qualification requirements for gas pipe operations (Section 2685). • Clarified the requirements for temporary sewer later al connections and flow bypass (Section 2730).
• Updated the sewer lateral connection requirements (Section 2735). • Strengthened various requirements for sewer lateral cross bore inspection s (Section 2741).
The 2022 City of Palo Alto Water Gas and Wastewater Utility Standards are available on the City’s Utility Engineering website at www.cityofpaloalto.org/gov/depts/utl/eng/standards.asp. 12 Packet Pg. 284
PALO ALTO
AIRPORT
PUBLIC WORKS DEPARTMENT
2021
ANNUAL NOISE
REPORT
(January 2021 to
December 2021)
AUG 2014 – SEPT 2015
(Q4 2014 – Q3 2015)*
Vision: Palo Alto Airport strives to balance the
interests of pilots to fly with the interests of
neighbors in a peaceful living environment. This
document is a report of the noise complaints
received by the airport in 20 21. Airport staff uses
this information to identify trends within Palo Alto
and neighboring communities. These trends inform
communications between airport staff and pilots on
the issue of noise.
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Introduction:
The following is a report on noise-related operations and complaints received by Palo Alto Airport (PAO) in 2021. The Federal Aviation Administration (FAA) defines air travel routes and procedures, including defining separation distances between aircraft, determining hazards to aviation and all other safety criteria for aircraft , and is responsible for directing and enforcing the movement of aircraft in flight.
Although organizations can petition the FAA regarding flight procedures, the FAA has the final say in what is safe and acceptable. The Airport Noise and Capacity Act (ANCA) of 1990 federally prohibits public-use airports from restricting airspace.
The FAA m easures noise based on the Yearly Day and Night Average Sound Level (DNL) and the Community Noise Equivalent Level (CNEL). While both are essentially the same, airports in California use the CNEL method to measure noise. CNEL is a method of averaging single event aircraft noise into a weighted 24-hour average. The system adds penalties to all events occurring during the evening (7pm – 10pm) and the night (10pm – 7am). The Santa Clara County Airport Land Use Commission (SCC ALUC) performed a noise study for the Palo Alto Airport using the CNEL to determine the noise contours for 55, 60, 65, and 70 decibels. The contour map is included as Attachment A.
Regarding safety and altitude , the FAA has in place Federal Aviation Regulations (FARs) that establish Minimum Safe Altitudes (MSAs) for aircraft. For fixed wing aircraft, the MSA is 1,000 feet above ground when over congested areas and 500 feet when not o ver congested areas. These MSAs apply to all fixed wing aircraft except when necessary for landing and takeoff operations. Helicopters are exempt from these altitude restrictions due to the nature of their flight. These minimum altitudes are enforced by the FAA Flight Standards District Office in San Jose, not by Palo Alto Airport. Palo Alto Airport cannot tell pilots when or where to fly; the Airport, however, does have voluntary noise abatement procedures that Palo Alto Airport recommends that pilots follow. (See the Noise Abatement Procedures section below.)
The Airport receives noise complaints via email at [email protected] and a noise complaint hotline 650-329-2405. Airport staff review and timely respond to all complaints , ascertaining information from complainants including contact information, date, time, and description of the occurrence. Various flight trackers can be used to help identify the aircraft involved and verify if FAA regulations or Palo Alto Airport procedures were violated. The Airport staff reviews and compiles all data to determine trends with flying activities.
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Purpose:
The purpose of the Palo Alto Airport Annual
Noise Report is to identify noise trends in the
surrounding areas and determine compliance
with established voluntary noise abatement
procedures.
Airspace:
The Palo Alto Airport airspace is unique. The
congested Bay Are a airspace is dominated by
SFO Class Bravo airspace, which encompasses a
30 nautical mile radius around SFO. Underneath
the Class Bravo airspace lays the Class Charlie
airspace of Oakland and San Jose international
Airports. Finally, Moffett Airfield lies approximately 4 nautical miles to the southeast of Palo Alto Airport.
As a result, Palo Alto Airport airspace ends only 1.5 nautical miles southeast of the Palo Alto Airport’s single runway (Runway 13/31). To land at Palo Alto Airport, aircraft must turn before entering Moffett’s airspace, resulting in aircraft having to space themselves in traffic patterns over the peninsula when take- off/landing volumes peak. The FAA’s Air Traffic Control Tower (ATCT) at Palo Alto Airport has a letter of agreement with Moffett’s ATCT providing Palo Alto Airport aircraft with extensions into Moffett airspace when Moffett airfield is not in use. The additional airspace is a useful mitigation tool during busy times.
Further restrictions in Palo Alto Airport airspace come from San Jose Class C airspace , starting at 1,500 feet Mean Sea Level, just southeast of Palo Alto Airport and SFO Class B airspace, starting at 2 ,500 feet Mean Sea Level, just northeast of the Palo Alto A irport. Both are identified on the Palo Alto Airport Sectional Map: San Jose Class C is shown with thick magenta lines and SFO Class B is shown with thick blue lines. These restrictions play a vital role in aircraft departures, in turn influenc ing noise abatement procedures for the Palo Alto Airport.
Noise Abatement Procedures:
Noise abatement procedures are voluntary procedures that the Airport asks pilots to follow. The Airport is prohibited from restricting airspace. Palo Alto Airport staff will speak with individual pilots and educate them about the voluntary noise abatement procedures. The Palo Alto Airport cannot levy fines on pilots that violate the voluntary noise procedures. For illustrated noise abatement procedures reference Palo Alto Airport Pilots Handout included as Attachment B.
The noise abatement procedures depend on the runway that is in use at the time. Depending on weather patterns, aircraft can depart on Runway 31 to the northwest or Runway 13 to the southeast.
Approximately 90% of the time, weather conditions require the use of Runway 31. Pilots are asked to not make a left crosswind departure from Runway 31, but instead make a “Left Dumbarton Departure” (fly to the Dumbarton Auto Bridge before making a left turn and flying over East Palo Alto) or a right 270 degree turn before departing to the south or west. When aircraft are using Runway 13, pilots are asked to make Palo Alto Airport Sectional Map
Palo Alto Airport in Green
PAO Airspace highlighted in Red
Source: http://vfrmap.com/?type=vfrc&lat=37.461&lon=-122.115&zoom=10
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a left 270-degree turn. In addition to these procedures, pilots are asked to climb to 1 ,500 feet or above ground before crossing Highway 101 and reduce power when safely able.
For arrivals, it is standard practice and necessary for pilots to descend to pattern altitude before entering the traffic pattern around PAO, sometimes requiring aircraft to descend below the 1,500 feet minimum of departing aircraft over Palo Alto. As these aircraft are descending to land the engines are generally powered back and quieter than ascending aircraft.
Airport staff continuously engages with tenants and pilots about the voluntary noise abatement procedures, always noting that safety always supersedes noise.
Findings:
The Palo Alto Airport remains one of the busiest general aviation Airports in the Bay Area with an average of 158,280 operations per year since 20 11. The year 2021 marks the second year of the Covid-19 Pandemic and during this time, o perations increased by 45,856 which is a 34% increase during 2021 compared to the 2020 calendar year and it’s the highest amount of operations since 2015. An operation is defined as either a takeoff or a landing and a touch-and-go procedure will account for two operations.
During the 2021 Calendar year, the Airport logged 253 total noise complaints from 27 households. Table 2 shows the number of complaints by quarter and includes the totals from 2020.
Table 3 sorts the complaints logged into three sections. The first one is PAO which includes all complaints that involve aircraft that performed an operation at the Airport. The next section is General which includes complaints that did not include a specific aircraft or incident of noise. These complaints may or may not involve aircraft from PAO. The last section is Non-PAO, which include aircraft that are not based or did not operate at the Airport. These flights may include California Highway Patrol, Coast Guard, Air Taxis, Pipe Table 1. Airport Operations for Palo Alto Airport
Year Air Taxi Military Total Year Air Taxi Military Total 2002 62 1 208,755 2012 1,700 16 176,564
2003 17 1 212,981 2013 1,628 14 172,653
2004 619 12 199,453 2014 1,518 22 179,900
2005 2,397 28 184,821 2015 1,082 118 172,132
2006 1,932 17 176,570 2016 708 52 153,238
2007 1,440 318 181,883 2017 872 146 148,769
2008 1,697 280 174,332 2018 760 133 146,181
2009 1,650 301 155,556 2019 920 63 150,266
2010 2,077 6 158,217 2020 620 45 112,712
2011 1,572 8 170,389 2021 566 23 158,568
Avg 1346.3 97.2 182295.7 Avg 1037.4 63.2 157098.3
Table 6. Observed violations of voluntary noise abatement procedures Table 2. Complaints Received Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 2021 Total 2020 Complaints 143 60 36 14 253 514
Households 10 11 23 10 27 29
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Surveys, Stanford Life Flight, Angel Flights, and or banner towing operations. Also included in Table 3 are the totals for 2020.
Table 4 below provides a detailed breakdown of the 253 complaints by City. Most complaints came from the City of Los Gatos, with 171 complaints logged from 1 household and most of the complaints on the first and second quarter of this year. The City of Palo Alto had a total of 39 complaints from 8 households.
Table 5 below shows the general type of aircraft identified as causing noise complaints at the Airport.
There are 2 types of engines for aircraft utilizing PAO. The first is reciprocating which is similar to an automobile engine, and the second is turboprop which is a turbine engine with a propeller that produces thrust. Aircraft are further differentiated by “multi” and “single” which denotes the number of engines for the aircraft. As Table 5 , shows single reciprocating aircraft produced the largest portion of noise complaints. This class of aircraft represents most of the fleet at PAO and usually consists of Cessna, Piper and Cirrus aircraft.
Table 3. Aircraft Association
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 2021 Total 2020 PAO 138 59 31 14 242 262
General 4 0 6 1 11 96
Non-PAO 1 1 6 13 21 104
Table 2. Complaints Received Table 4. Noise Complaints by City City C H C H C H C H C H C H
Palo Alto 4 2 10 4 19 9 6 3 39 8 38 4
Sunnyvale 1 1 1 1 2 1 85 1
Menlo Park 3 2 2 2 5 2 28 3
Saratoga 0 0 232 2
Los Gatos 129 1 42 1 1 1 171 1 77 1
Los Altos 1 1 1 1 37 3
Portola Valley 1 1 1 1 2 1 2 2
East Palo Alto 1 1 2 1 6 4 3 3 12 3 3 2
Santa Cruz 1 1 1 1 2 2
Santa Clara 1 1 2 1 1 1
Fremont 1 1 1 1 2 1 0 0
NA 1 1 1 1 2 1 9 8
San Jose 4 1 2 2 6 1 0 0
Woodside 1 1 1 1 0 0
Moutain View 1 1 2 1 2 1 5 2 0 0
Atherton 1 1 1 1 0 0
Pescadero 1 1 1 1 0 0
143 10 60 11 36 23 14 10 253 27 514 29
Total 2020Q2Q1 Q3 Q4 Total 2021
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Table 6 below shows the number of violations of the established noise abatement procedures. Airport staff makes every effort to talk to all pilots that violate these procedures, but it is difficult to talk to all transient pilots about noise abatement procedures. It is not the role of the FAA Air Traffic Control Tower to advise pilots of the noise abatement procedures, however, the City has develop ed a working relationship with the Air Traffic Control Tower (ATCT) and Air Controllers do advise pilots of the noise abatement procedures when they have the ability to do so.
Table 5. Aircraft Type
Helicopter
Multi
Reciprocating Multi Turbo Prop
Single
Reciprocating Single Turbo Prop Unknown
2020 Complaints 9 11 11 347 22 10
2021 Complaints 8 8 4 200 24 9
Table 6. Observed violations of voluntary noise abatement procedures Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
Tenant 4 3 3 1 11
Transient 0 1 3 0 4
Unknown 0 0 0 0 0
Total 4 4 6 1 15
Complaints 143 60 35 14 153
Operations 34,500 41,100 45314 30644 158568
% Compliance 99.90% 99.90% 99.90% 99.99 99.99
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Following is a noise contour map for PAO , adopted by the Santa Clara County Airport Land Use Commission (SCC ALUC) in their 2008 Comprehensive Land Use Plan , reflecting the forecasted noise contours for Palo Alto Airport in 2022.
SCC ALUC used the Integrated Noise Model which considers airport altitude, mean temperature, runway configuration, aircraft flight track definition, aircraft departure and approach profiles, aircraft traffic volume and fleet mix, and flight track utilization by aircraft types. All data is entered into the CNEL formula to prepare the noise contours for Palo Alto Airport.
The 65 decibel (db) noise level of the Airport extends beyond the airport boundaries, but is only over Palo Alto Golf Course, Palo Alto Baylands Nature Preserve, and the salt marshes in San Mateo County.
Refer to https://www.sccgov.org/sites/dpd/DocsForms/Documents/ALUC_20081119_PAO_CLUP.pdf, for a more detailed description of how the SCC ALUC prepared this map.
Attachment A
PAO Noise Contour Map
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2022 Forecasted Palo Alto Airport Noise Contour Map
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Attachment B
PAO Pilot Handout
Santa Clara County created a Pilot Handout for Palo Alto Airport that described the noise abatement procedures. When the City of Palo Alto assumed control of the Airport, the existing noise abatement procedures were adopted, with one exception, “pilots must maintain 1,500 feet or above across Highway 101” was replaced with “Aircraft are asked to climb to and maintain at least 1,500 feet before crossing Highway 101.” The change is consistent with the voluntary nature of noise abatement procedures as Airports are Federally prohibited from instructing pilots how to fly.
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Bayside Pattern – 800ft
Left
270
Right
270
Peninsula Side
Pattern – 1000ft
Left
Dumbarton
Departure
Not to be used
for navigation
Safety First
Be Aware Palo Alto
Airport Lies under SFO
Class B Airspace
Key
Pattern
Noise Abatement Departures
RWY 31
RWY 13
Noise Abatement Procedures
Please fly neighborly and be aware of the surrounding
communities. There are noise sensitive areas to the west and south of the Airport. Aircraft are asked to climb and maintain at least 1500 feet before crossing Highway 101.
Fly over the bay whenever possible.
Please use reduced power setting whenever possible to
reduce noise impacts. Even a reduction in a 200 RPM can significantly reduce noise.
Safety Always Supersedes Noise Abatement
Palo Alto Airport General Information
Bayside Pattern Alt – 800 feet
Peninsula Side Pattern Alt – 1000 feet MSL
ATCT hours of operation – 0700 – 2100 hrs
ATC / CTA Frequency – 118.600
ATC Ground Frequency – 125.000
Fuel Frequencies – 122.85 or 122.95
Airport Office Phone # – (650) 329-2444
320
Preferred West Bound Departures
Runway 31
Left Dumbarton Departure
When departing runway 31 turn right 10 on takeoff and climb over the bay. Fly straight to Dumbarton Auto Bridge before making a left turn to fly over the peninsula or to the south.
Cross Highway 101 at or above 1500 feet.
Left 270 Departure
After takeoff climb over the bay while making a 270 turn and heading west or south over the peninsula. Cross Highway 101 at or above 1500 feet.
Runway 13
Right 270 Departure
After takeoff turn right over and climb over the bay while making a 270 turn and heading west or south over peninsula. Cross Highway 101 at or above 1500 feet.
Palo Alto Airport asks for
your cooperation in reducing
the noise impact of aircraft
on the neighboring
communities.
BE A GOOD NEIGHBOR – FLY SAFELY AND QUEITLY
CAUTION
The Palo Alto Baylands preserve
is located immediately to the
north of the Airport. Watch for
birds on or near the Airport.
Be alert for bikes & pedestrians
crossing a levee road 290’ from
departure end to Runway 31.
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Attachment C
Map of Palo Alto households
This map shows the approximate location and number of complaints from households within Palo Alto. This map was generated using GIS by Airport staff.
20 4
3 3
2 2
3 2
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Schedule of Meetings
Published June 2, 2022
This is a courtesy notice only. Meeting dates, times, and locations are subject to change. Almost all Palo Alto Council and some Standing C ommittee meetings are cablecast live on Channel 26. If there happens to be concurrent meetings, one meeting will be broadcast on Channel 29.
Persons with disabilities who require auxiliary aids or services in using City facilities or programs, or who would like information on the City’ s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact: ADA Coordinator, City of Palo Alto, 650-329-2550 (voice) or 329-1199 (TDD), [email protected]. Listening assistive devices are available in th e Council Chambers. S ign language interpreters will be provided upon request with 72 hours advance notice. Please advise the City Clerk's Office (650-329-2571) of meetings or changes by 3:00 p.m. on Wednesdays for inclusion in the following week’s schedule. 6/2/2022
Meetings are held in-person and by virtual teleconference.
MONDAY, June 6
Sp. City Council Meeting, 5:00 p.m.
TUESDAY, June 7
Sp. Finance Committee Meeting, 5:30 p.m.
WEDNESDAY, June 8
Planning & Transportation Commission Meeting, 6:00 p.m.
Sp. Utilities Advisory Committee Meeting, 6:00 p.m.
THURSDAY, June 9
Human Relations Commission, 6:00 p.m.
MONDAY, June 13
Sp. Architectural Review Board Meeting, 9:30 a.m.
Sp. City Council Meeting, 5:00 p.m.
TUESDAY, June 14
Policy & Services Committee Meeting, 7:00 p.m.
THURSDAY, June 16
Architectural Review Board Meeting, 8:30 a.m.
City/School Liaison Committee Meeting, 8:30 a.m.
Public Art Commission Meeting, 7:00 p.m.
MONDAY, June 20
Sp. City Council Meeting, 3:00 p.m.
TUESDAY, June 21
Sp. City Council Meeting, 3:00 p.m.
TUESDAY, June 28
Parks and Recreation Commission, 7:00 p.m.
WEDNESDAY, June 29
Planning & Transportation Commission Meeting, 6:00 p.m.
THURSDAY, July 7
Architectural Review Board Meeting, 8:30 a.m.
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City of Palo Alto (ID # 14501)
City Council Staff Report
Meeting Date: 6/13/2022 Report Type: Action Items
City of Palo Alto Page 1
Title: Supplemental Information: Revenue -Generating Ballot Measures (Affirmation of the Natural Gas Utility Transfer and New Business Tax):
Direction to Staff on Key Policy Questions and Measure Characteristics, and Direction to Return with Final Documents for Placement of Ballot Measure(s) on the November 2022 Election and a Non -Binding Resolution for Intended Use of Business Tax Proceeds
From: City Manager
Lead Department: Administrative Services
A staff report for this item was published as part of the City Council packet that was released on June 2, 2022 (CMR 13983, packet p. 221), which includes staff’s recommendation that Council provide direction on key policy questions and ballot measure characteristics and direction to return with final documents for placement of ballot measure(s) on the November 2022 Election, including a resolution stating Council’s intended uses for Business Tax proceeds.
This supplemental memorandum transmits additional exhibits:
1. A draft of the ballot question and ordinance for a Business Tax (Attachment B)
2. A draft resolution to inform the public of Council’s intentions regarding use of Business Tax Proceeds (Attachment C)
3. Summary results of the 3rd round of polling (Attachment H) Attachments:
• Attachmenta: Attachment B: Draft Business Tax Ordinance, Ballot Question • Attachmentb: Attachment C: Business Tax Resolution
• Attachmentc: Attachment H: Palo Alto Ballot Measure Survey Analysis & Tracking Packet Pg. 298
Attachment B
NOT YET APPROVED
1 Ballot Measure Approving a Palo Alto Business Tax
Ballot Question
Shall the measure to raise funds for improving public safety, affordable housing, rail crossing safety, homeless services, economic revitalization and general city services, by
levying a tax on businesses in the City of Palo Alto at an annual rate of ______ cents/square foot occupied by the business, with annual adjustments for inflation and
exemptions for grocery stores and all businesses under
5,000 square feet, raising approximately $___ million
annually until ended by voters, be adopted?
YES
NO
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Attachment B
NOT YET APPROVED
2 Ordinance
Uncodified provisions
1. The new tax imposed by this ordinance will go into effect on January 1, 2023.
2. Notwithstanding sections 090, 100, and 110 of the codified part of this ordinance, the tax imposed by this ordinance will initially be due on the following schedule:
(a) For businesses [describe the category] the initial tax payment for the tax that has accrued since January 1, 2023 will be due on _______ and will be delinquent 30 days later if not paid.
(b) For businesses [describe the category] the initial tax payment for the tax that has accrued since January 1, 2023 will be due on _______ and will be delinquent 30 days later if not paid.
(c) For businesses [describe the category] the initial tax payment for the tax that has accrued since January 1, 2023 will be due on _______ and will be delinquent 30 days later if not paid.
(d) With its initial tax payment, each business shall provide the following information:
(1) The name of the business and the address or addresses at which it will be operating in the city.
(2) The nature of the business’s activities.
(3) The square footage in which the business will be operating in the city;
(4) If the business operator claims an offset under section 080, sufficient information and documentation to establish the business’s right to the offset and the amount of the offset;
(5) Any other information required by the Tax Administrator; and
(6) The amount of tax due based on the square footage of the business.
(e) A business that begins operating for the first time after January 1, 2023, must submit its initial tax payment and initial information by the date provided in this uncodified section or by the date provided in codified section 090, whichever is later.
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Attachment B
NOT YET APPROVED
3 Codified Provisions
010 Title
This chapter is the “City of Palo Alto Business Tax Ordinance.”
020 Definitions
The definitions in this section apply to the words and phrases used in this chapter unless the context clearly indicates otherwise.
(a) “Business” means any commercial enterprise, trade, calling, art, vocation, profession, occupation, or means of livelihood, whether or not carried on for gain or profit.
(b) “Business operator” means a person who transacts, maintains, manages, operates, controls, engages in, conducts, carries on, or owns a business in the city. It does not include the employee of a business who is not an owner or proprietor of the business.
(c) “Calendar year” means the year beginning January 1 and ending December 31.
(d) “City” means the City of Palo Alto.
(e) “CPI Index” means the Consumer Price Index—All Urban Consumers for All Items for the San Francisco-Oakland-Hayward Area or any successor to that index designated by the Federal Bureau of Labor Statistics or the city council.
(f) “Fiscal year” means the year beginning July 1 and ending June 30.
(g) “Fixed place of business” means a place of business located in the city boundaries and occupied for the particular purpose of operating a business. For the business of renting or leasing real property, the real property being rented or leased is part of the fixed place of business.
(h) “Grocery store” means a business that exists for the primary purpose of selling a range of food items to consumers for consumption off site, such as canned foods; dry goods; fresh produce; fresh meats, fish, and poultry; and any area that is not separately owned within the store where food is prepared and served, including a bakery, deli, and meat and seafood departments, or as otherwise defined in 14 CCR Section 18982(a)(3), provided that any store that combines grocery items with other retail products or services is a grocery store for the purpose of this chapter only if two-thirds or more of the occupied space is designated to the sale of grocery items as listed in this section.
(i) “Hotel” has the meaning provided in section 2.33.010. a
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Attachment B
NOT YET APPROVED
4 (j) “Operate” means to conduct a business and includes all stages of conducting a business from initial planning to the wind-down of a business, whether or not a profit is being made.
(k) “Person” means any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, receiver, syndicate or other group or combination acting as a unit and includes the plural as well as the singular number.
(l) “Quarter” means the three-month quarter of the fiscal year. The “first quarter” is the months of July, August, and September; the “second quarter” is the months of October, November, and December; the “third quarter” is the months of January, February, and March; and the “fourth quarter” is the months of April, May, and June. The term “same quarter of the previous fiscal year” means the quarter of the same number in the previous fiscal year.
(m) “Square footage” means the rentable square footage used by a business as specified in a business’s lease or, if the business floor space is owned by the business, as calculated in the same manner as if the area was rented using commonly accepted standards of measurement for leasing purposes such as the Standard Methods of Measurement published by the Building Owners and Managers Association (BOMA). Any method of measurement used must meet the following minimum standards:
(1) It shall be computed by measuring to the inside finish of permanent outer building walls and shall include space used by columns and projections necessary to the building.
(2) It shall include both the area used by the business and a proportionate share of the building service areas such as lobbies, corridors and other common areas in a building unless assigned to another business for tax calculation purposes or unless agreed otherwise between the landlord and tenant.
(3) It shall not include vertical penetrations through the building such as stairs, elevators, or heating, ventilation, air conditioning, utility, or telephone systems, except on the lowest floor of stairs and elevators.
(4) For the business of renting or leasing residential property, area used exclusively for residential purposes, areas solely for individual or family sleeping/living/cooking/hygiene are not part of the square footage, but areas used for the business operator’s offices, operational facilities, or to provide commercial services to residents including common areas such as lobbies, are part of the square footage.
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Attachment B
NOT YET APPROVED
5 (4) Square footage for businesses with multiple locations will be measured and tax assessed will be calculated based on the aggregate square footage for the business for all locations in the City.
(n) “Tax Administrator” means the Director of Administrative Services, or successor position, or their designee.
(o) “Transient” has the meaning provided in section 2.33.010.
(p) “Transient Occupancy Tax” means the tax imposed under section 2.33.020.
(q) “Transitory business” means a business that operates in the city for less than 90 days in the course of one calendar year (such as seasonal sale lots, special events, concerts/performances/circuses, filming, and party rentals).
(r) “Vacant” is to mean a severable portion of the physical location that a business is operating, such as an entire floor, a building, or a portion of a floor with independent entrance/exits, that is free from any use, fixtures, furniture, and equipment, and is available for immediate use by a new tenant.
030 Obligation to Pay Business Tax
(a) It is unlawful for any business operator, either for themselves or for any other person, to operate in the city any business taxed under this chapter without paying all business tax required by this chapter.
(b) If a business has more than one business operator, then the payment of the business tax by one business operator excuses any other business operators from the obligation to pay the business tax for that period for which the tax has been paid.
(c) The requirement to pay business tax is in addition to and separate from the requirement to obtain a business registration certificate under section 4.60.030.
(d) The payment of business tax does not authorize the doing of any act which the person or business paying the business tax is not otherwise entitled to do and does not excuse the business from complying with other applicable Code requirements.
040 Imposition of Business Tax
Any business operator operating a business at a fixed place of business in the city must pay a business tax at the following rates:
(a) Beginning January 1, 2023, the tax shall be imposed at the rate of $0.05 per month per square foot of square footage occupied or used by the business at the beginning of the quarter, with no tax being imposed for the first 5,000 square feet. a
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Attachment B
NOT YET APPROVED
6 (b) Beginning January 1, 2025, the tax shall be imposed at the rate of $0.10 per month per square foot of square footage occupied or used by the business at the beginning of the quarter, with no tax being imposed for the first 5,000 square feet. This rate shall be adjusted annually by the CPI Index as provided in section 050.
050 Annual CPI Adjustment of Tax Rate
(a) Beginning with the 2026-27 fiscal year, and each fiscal year thereafter, the tax rate shall be automatically increased by a percentage equal to the percentage increase in the CPI Index in the previous calendar year (“the CPI Increase).”
(b) Notwithstanding subdivision (a) of this section, in any year in which the CPI Increase is more than 5%, the increase in the tax rate will be limited to 5%, and the amount of the CPI Increase that exceeds 5% (“the Excess CPI Increase”) shall be added to the following fiscal year’s CPI Increase under subdivision (a) of this section.
(c) If the addition of a previous fiscal year’s Excess CPI Increase to a current fiscal year’s CPI Increase exceeds 5%, then the increase in the tax rate will again be limited to 5%, and the amount that the combination of the CPI Increase and the previous fiscal year’s Excess CPI Increase exceeds 5% will create a new “Excess CPI Increase” to be added to the following fiscal year’s CPI Increase under subdivision (a) of this section.
060 Disposition of Tax Revenue
The tax imposed by this chapter is for the purpose of raising revenue for the general governmental purposes of the city. All of the proceeds from the tax imposed by this chapter shall be placed in the city’s general fund.
070 Exemptions from Tax
(a) The following businesses are exempt from the tax imposed by this chapter:
(1) Any business exempt from the tax by the laws of the United States or the State of California;
(2) Grocery stores;
(3) Businesses that occupy or use 5,000 square feet or less in the city; and
(4) Transitory businesses.
(b) If a business operator operates a single integrated business that has two or more parts, one or more of which could be exempt from the tax imposed by this chapter if operated as a a
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Attachment B
NOT YET APPROVED
7 separate business, the city may, at its discretion, exempt from the tax any part of the business that would be exempt if operated as a separate business, provided the business’s square footage can be reasonably allocated between the parts. If the city determines that the square footage cannot be reasonably allocated between the different parts of the business, then the entire business shall be taxed, unless to do so would violate a law of the United States or the State of California.
080 Business Tax Offsets
(a) A business operator that operates a hotel in the city may deduct from the business tax it owes for a quarter for the business of operating the hotel an amount equal to the total transient occupancy tax collected and remitted to the city in the same quarter of the previous fiscal year from transients staying at the hotel.
(b) The business operator of a business that has discretion to determine the location of the place of sale, place of use or principal place of negotiation for sales or use tax purposes and which exercises that discretion and designates the city as the place of sale, place of use, or principal place of negotiation for sales or use tax purposes which results in the city receiving sales or use tax revenues that it would not otherwise have received, but for the business’s exercise of its discretion to designate the city as the place of sale, place of use or principal place of negotiation for sales or use tax purposes (“Discretionary Sales or Use Tax Sales”) may deduct from the business tax it owes for a quarter an amount equal to one half of the total sales tax or use tax received by the city from the Discretionary Sales or Use Tax Sales of that business in the same quarter of the previous fiscal year.
This offset can offset up to, but no more than, __% of the business’s quarterly business tax.
(c) A business operator of a business that has rights to property due to property ownership, a ground lease, or a lease that permits subleasing, and that is offering that property for sale or rent, may deduct from the business tax owed for the business an amount equal to the business tax associated with the square footage being offered for sale or rent, provided that the area to be sold or rented is completely vacant and available for immediate occupancy.
(d) A business claiming an offset under this section must claim the offset with its tax filing for the quarter for which the offset is claimed.
(1) If the information necessary for a business to claim an offset is not available, the business may defer claiming an offset for up to one year.
(2) The Tax Administrator may require a business claiming an offset to submit additional information to support the claim of the offset. The request for additional information must be made in writing and the information must be provided within thirty (30) days.
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8 (3) If the Tax Administrator determines that an offset claimed by a business is incorrect, the Tax Administrator may make and Initial Determination of the amount, if any, of the offset and the amount of tax due under section 150(a).
090 Quarterly Tax Payments
(a) The tax imposed by this chapter shall be paid quarterly. The tax for each quarter is due the first day of the following quarter and is delinquent thirty (30) days later.
(b) For the first quarter in which a business begins operating in the city, the business’s tax shall be prorated for the number of days that the business was operating in the quarter.
(c) For the last quarter in in which a business operates in the city before closing, the business’s tax shall be prorated for the number of days that the business was operating in the quarter.
100 Business Tax Filing for a New Business
(a) When a business begins operating in the city for the first time, the business operator must provide the Tax Administrator with the following information, verified by the business operator as true and correct under penalty of perjury of the laws of the State of California, before beginning the operation of the business in the city:
(1) The name of the business and the address or addresses at which it will be operating in the city;
(2) The date on which the business will begin operating;
(3) The nature of the business’s activities;
(4) The square footage in which the business will be operating in the city; and
(5) Any other information required by the Tax Administrator; and
110 Quarterly Tax Returns
With each quarterly tax payment, a business operator must submit a quarterly tax return which contains the following information, verified by the business operator as true and correct under penalty of perjury of the laws of the State of California:
(a) The name of the business and the address or addresses at which it will be operating in the city.
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9 (b) The nature of the business’s activities.
(c) The square footage in which the business will be operating in the city;
(d) If the business operator claims an offset under section 080, sufficient information and documentation to establish the business’s right to the offset and the amount of the offset;
(e) Any other information required by the Tax Administrator; and
(f) The amount of tax due based on the square footage of the business.
120 Agreements for Installment Payments
The Tax Collector may enter into an agreement with a business operator to allow a business operator to pay the tax on a more or less frequent basis.
130 Businesses Operating in the Same Location
(a) All business operators operating businesses in the same square footage are obligated to pay business tax measured by that square footage..
(b) The payment of business tax by a business operator absolves any other business operator from having to pay business tax measured by the same square footage.
(c) Two or more business operators that are operating businesses in the same square footage may contractually agree which business will pay the business tax measured by that square footage.
(d) If two or more business operators are operating businesses in the same square footage and one of the business operators is exempt from paying business tax measured by that square footage then no business tax shall be owed on the square footage in which the exempt business is operating.
140 Delinquent Taxes (Penalties and Interest)
(a) When a tax becomes delinquent, a penalty of 10% of the amount of the delinquent tax will be added to the amount of tax due. If the tax remains unpaid sixty (60) days after becoming delinquent, an additional penalty of 25% of the amount of the delinquent tax (excluding accrued interest and the initial penalty) will be added to the amount of tax due.
(b) On the first of each month that a tax is delinquent, interest in the amount of 1.5% of the delinquent amount, excluding penalties and interest, will be added to the amount of tax due.
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10 (c) A business operator may apply to the Tax Administrator for a reduction or waiver of any accrued penalties or interest, and the Tax Administrator may reduce or waive any accrued penalties or interest upon a finding of good cause.
150 Administrative Procedure to Assess or Correct Tax
(a) If the Tax Administrator determines that a business operator has incorrectly reported any information to the city or has not paid all or any of the tax, penalties, or interest that are due, the Tax Administrator may, using any information available to the Tax Administrator, issue an Initial Determination stating what the Tax Administrator believes to be the correct information and, if new or additional tax, penalties, or interest are due, how much tax, penalties, or interest are due. An Initial Determination must be issued within five (5) years of the last day of the quarter to which the Initial Determination applies, except in the case of an audit conducted under section 210, in which case it must be issued within ninety (90) days of the completion of the audit and can apply to any of the quarters that were subject to the audit. The Initial Determination shall be served on the business operator either personally or by U.S. mail to the most recent address for the business operator in the Tax Administrator’s records. Service is effective upon deposit of the Initial Determination in the U.S. Mail.
(b) A business operator affected by an Initial Determination may within fifteen (15) days of service of an Initial Determination contest the Initial Determination and request a hearing before the Tax Administrator by filing with the Tax Administrator a written request for a hearing. The further accrual of penalties and interest shall be tolled upon the filing of a request for a hearing. If a business operator does not contest an Initial Determination and request a hearing with the Tax Administrator within fifteen (15) days of service of the Initial Determination, the Initial Determination shall become final and cannot be appealed.
(c) If a business operator timely contests an Initial Determination and requests a hearing, the Tax Administrator shall set a hearing within thirty (30) days of the filing of the request for a hearing. Notice of the hearing shall be served on the business operator either personally or by U.S. mail to the most recent address for the business operator in the Tax Administrator’s records.
(d) At the hearing the business operator may present evidence and argument regarding the Initial Determination to show why the Initial Determination is incorrect and to show what the determination of the Tax Administrator should be. Within sixty (60) day after the close of the hearing, the Tax Administrator shall serve a Final Determination, setting forth the Tax Administrator’s determination of the facts and issues that were the subject of the Initial Determination. The Final Determination shall be served on the business operator either personally or by U.S. mail to the most recent address for the business operator in the Tax Administrator’s records. Service is effective upon deposit of the Final Determination in the U.S. Mail. Unless an appeal of a Final Determination is filed under a
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11 section 170, any penalties or interest tolled under subdivision (b) of this section will resume accruing ten (10) days after the service of the Final Determination.
160 General Administrative Remedy
(a) Any person affected by a decision of the Tax Administrator (“the challenger”), except for decisions under section 150, may challenge that decision by filing a written objection to the decision with the Tax Administrator. The objection must be filed within fifteen (15) days of the issuance of the decision being challenged. If the Tax Administrator was required to provide notice of the decision, then the time to file an objection to the decision begins to run from the date of service of the notice of the decision. The Tax Administrator shall serve a written response to the objection within thirty (30) days of the filing of the objection, which period can be extended by the Tax Administrator for an additional thirty (30) days. The Tax Administrator’s response to the objection shall be served on the challenger either personally or by U.S. mail to the most recent address for the challenger in the Tax Administrator’s records.
(b) The challenger may request a hearing on the Tax Administrator’s response to the objection by filing a request for a hearing with the Tax Administrator within fifteen (15) days of service of the response to the objection. If a timely request for a hearing on a response to the objection is filed with the Tax Administrator, the Tax Administrator shall set a hearing within thirty (30) days of the filing of the request for a hearing. Notice of the hearing shall be served on the challenger either personally or by U.S. mail to the most recent address for the challenger in the Tax Administrator’s records.
(c) At the hearing the challenger may present evidence and argument regarding the decision being challenged to show why the decision is incorrect and to show what it should be.
Within sixty (60) days after the close of the hearing, which the Tax Administrator may extend for an additional sixty (60) days, the Tax Administrator shall serve a Final Determination on the decision, setting forth the Tax Administrator’s determination of the decision that was challenged. The Final Determination shall be served on the challenger either personally or by U.S. mail to the most recent address for the challenger in the Tax Administrator’s records. Service is effective upon deposit of the Final Determination in the U.S. mail.
170 Appeals
(a) A Final Determination of the Tax Administrator under section 150, subdivision (d), or section 160, subdivision (c), can be appealed to the City Manager by filing a written notice of appeal with the City Manager within fifteen (15) days of service of the notice of the Final Determination being appealed.
(b) Only a business operator who files a timely request for a hearing on an Initial Determination under section 150 and participates in the hearing or a challenger who files an objection to a decision and files a request for a hearing on the response to the a
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12 objection under section 160 and participates in the hearing can file an appeal under this section.
(c) If a timely appeal is filed with the City Manager, the City Manager, or the City Manager’s designee, shall set a hearing within thirty (30) days of the filing of the appeal, which may be extended by the City Manager for an additional thirty (30) days. Notice of the hearing shall be served on the appellant either personally or by U.S. mail to the most recent address for the challenger in the Tax Administrator’s records. The tolling of the accrual of penalties or interest under section 150, subdivision (b), shall continue upon the timely filing of an appeal under this section.
(d) At the hearing the appellant and the Tax Administrator may present evidence and argument regarding the decision being appealed to show why the decision is correct or incorrect and to show what it should be. Within sixty (60) days after the close of the hearing, which the City Manager or the City Manager’s designee may extend for an additional sixty (60) days, the City Manager or the City Manager’s designee shall serve a written decision, setting forth the resolution of the appeal. The decision shall be served on the appellant either personally or by U.S. mail to the most recent address for the appellant in the City Manager’s records. Service is effective upon deposit of the decision in the U.S. Mail. Any penalties and interest that were tolled under section 150, subdivision (b), shall resume accruing ten (10) days after the service of the decision.
(e) A decision of the City Manager, or the City Manager’s designee, served under subdivision (d) of this section is subject to judicial review under sections 1094.5 and 1094.6 of the Code of Civil Procedure with a writ petition filed in the appropriate court within ninety (90) days of the service of the written decision. Any tax, penalties, or interest determined by the decision to be owed to the city by the appellant must be paid to the city as a precondition to filing a writ petition challenging the decision, but a claim for a refund under section 200 does not have to be filed before filing a writ petition.
190 Constitutional Apportionment
(a) No tax imposed by this chapter shall be applied to a business operator so as to constitute an undue burden on interstate commerce or intercity commerce or be violative of the equal protection or due process clauses of the United States or California constitutions.
(b) A business operator who contends that the application of a tax imposed by this chapter on the business operator constitutes an undue burden on interstate commerce or intercity commerce or violates the equal protection or due process clauses of the United States or California constitutions may apply to the Tax Administrator for an apportionment of the tax imposed on the business operator that would remove the constitutional violation by filing a written request with the Tax Administrator that explains the factual and legal basis for the claimed constitutional violation and proposes a method of apportionment that would resolve the alleged constitutional violations.
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13 (c) The Tax Administrator, in consultation with City Attorney, shall review the application and within sixty (60) days of the filing of the application issue a decision on the application. The decision on the application shall be served on the business operator either personally or by U.S. mail to the most recent address for the challenger in the Tax Administrator’s records. The decision can be challenged under section 160.
200 Refunds
(a) A business operator who believes that any tax, penalty, or interest has been illegally, erroneously, or mistakenly paid to, collected by, or otherwise received by the city may file a claim for a refund of the amount of tax, penalty, or interest claimed to have been improperly received by the city.
(b) The claim must be filed with the Tax Administrator and signed under penalty of perjury by the business operator. The claim must state:
(1) The legal and factual basis for the refund claim;
(2) The amount of tax, penalty, or interest allegedly improperly received by the city, (3) The date or dates that the improper payments were made to the city, and (4) The address of the claimant.
(c) The claim must be filed with the Tax Administrator within one (1) year of the date of the allegedly improper payment to the city.
(d) The Tax Administrator shall provide a written decision on the claim within thirty (30) days of the filing of the claim by serving the decision on the claimant either personally or by U.S. mail to the address provided in the claim. Service is effective upon deposit of the response in the U.S. Mail.
(e) A claimant may challenge the Tax Administrator’s decision on a refund claim under section 160.
(f) This section does not apply to:
(1) A claim for a refund arising out of a decision of the Tax Administrator, City Manager, or City Manager’s designee under sections 150, 160, 170, or 190; or
(2) A claim that could have been asserted by the claimant, but was not, under sections 150, 160, 170, or 190.
210 Audits
(a) The Tax Administrator may conduct an audit of any business operator to ensure proper compliance with the requirements of this chapter.
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14 (b) To initiate an audit the Tax Administrator shall provide written notice to the business operator that is the subject of the audit of the initiation of the audit by serving the notice personally or by U.S. mail to the most recent address for the business operator in the Tax Administrator’s records. The notice shall state the period of time subject to the audit.
(c) Notice of the initiation of an audit for a quarter for which either a business tax filing for a new business or quarterly tax return was submitted under section 100 or section 110 must be served within five (5) years of the last day of the quarter to which the filing or return applied.
(d) Notice of the initiation of an audit for a quarter for which neither a business tax filing for a new business nor a quarterly tax return was submitted under section 100 or section 110, but for which the business was registered as a business under section 4.60.030, must be served within seven (7) years of the last day of the quarter for which the filing or return should have been filed.
(e) Notice of the initiation of an audit for a quarter for which neither a business tax filing for a new business nor a quarterly tax return was submitted under section 100 or section 110, and for which the business was not registered as a business under section 4.60.030, must be served within ten (10) years of the last day of the quarter for which the filing or return should have been filed.
(f) Upon completion of an audit, the Tax Administrator may make an Initial Determination under subdivision (a) of section 150 of any taxes, penalties, and interest determined to be owed and not paid for the audit period. The Initial Determination must be issued within ninety (90) days of the completion of the audit. If a business operator subject to audit is unable or unwilling to provide sufficient records to enable the Tax Administrator to verify compliance with this chapter, the Tax Administrator is authorized to make a reasonable estimate of the amount of tax due and the reasonable estimate shall be entitled to a rebuttable presumption of correctness.
220 Maintenance and Review of Records
(a) Business operators must maintain for six (6) years records of square footage and information necessary to calculate the tax. If the Tax Administrator serves notice of the initiation of an audit, the information pertinent for the quarters subject to the audit must be maintained until the conclusion of the audit.
(b) The Tax Administrator may with reasonable notice inspect the premises and records of the business operator.
(c) The Tax Administrator may request the city council to issue an administrative subpoena for records of a business operator or other persons with relevant information.
230 Confidentiality of Records
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15 All documents submitted to the city by a business operator under this chapter and all documents of a business operator inspected by the Tax Administrator in the conduct of an audit are presumed to be confidential and will not be subject to public inspection to the fullest extent allowed by law and must be maintained so that the contents of the documents will not become known except to persons charged with the administration of this chapter. Confidential documents may be shared with consultants retained by the city to aid in the administration of this chapter, provided the consultants agree to maintain the confidentiality of the documents. However, nothing in this section precludes the city from aggregating information and releasing it in a manner that does not identify any particular business or connect any information with a particular business.
240 Action to Collect Delinquent Taxes
(A) Any tax, penalty, and interest imposed on a business operator under this chapter is a debt owed by the business operator to the city, which may be recovered in an action filed by the city in a court of competent jurisdiction.
(B) An action under this section shall be filed within three (3) years of an Initial Determination becoming final under subdivision (b) of section 150, the issuance of a Final Determination under subdivision (d) of section 150 that is not appealed, the issuance of a Final Determination under subdivision (c) of section 160 that is not appealed, or the issuance of a decision under subdivision (d) of section 170.
(C) During the pendency of an action filed under this section, interest will continue to accrue under subdivision (b) of section 140 until the entry of judgment.
(D) Before filing an action, the city may serve the business operator either personally or by U.S. mail at the most recent address for the business operator in the Tax Administrator’s records with notice of the pending action and give the business operator fifteen (15) days to pay all of the delinquent taxes, penalties, and fees. If all of the of the delinquent taxes, penalties, and fees are not paid within the fifteen-day period, then an additional penalty of 25% of the amount of the delinquent tax (including accrued penalties and interest) shall be added to the total delinquency and may be recovered in the action.
250 Errors Not Binding on the City
No error by the Tax Administrator or any other officer, employee, or agent of the city in the application of this chapter shall prevent, prejudice, or estop the collection by or for the city of the full amount of tax owed by any person under this chapter.
260 Dates
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16 If the last day for the performance of any act under this chapter is a Saturday, Sunday, or holiday recognized by the city, then the date for the performance of that act is extended to the next day that is not a Saturday, Sunday, or holiday recognized by the city.
270 Rules and Regulations
(a) The Tax Administrator may adopt rules and regulations that are not inconsistent with the provisions of this chapter as may be necessary to aid in the application and enforcement of this chapter.
(b) The Tax Administrator may adopt rules providing for the service or filing of any notices, filings, returns, or submittals required by this chapter. These rules may provide alternative means for serving or filing any notice, filing, return, or submittal, and may clarify the method of serving or filing any notice, filing, return, or submittal provided for in this chapter.
280 City Council Amendments
(a) The city council may amend this chapter in any way it deems necessary without the approval of the electorate, provided the amendment does not increase the amount of tax that any person would pay.
(b) Any amendment to this chapter that would reduce the amount of tax any taxpayer would pay, either temporarily or permanently, must be approved by two-thirds (2/3) of the members of the city council.
(c) Notwithstanding subdivision (a) of this section, the city council may with the approval of two-thirds (2/3) of its members and without approval of the electorate reduce, revise, or eliminate any of the business tax offsets in section 080.
290 Severability
If any word, phrase, sentence, part, section, subsection, or other portion of this chapter, or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this chapter, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The People of the City of Palo Alto hereby declare that they would have passed this ordinance, and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases had been declared invalid or unconstitutional.
300 Savings Clause
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17 No section, clause, part, or provision of this chapter shall be construed as requiring the payment of any tax that would be in violation of the Constitution or laws of the United States of America or of the Constitution or laws of the State of California.
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R
esolution No. ____
Resolution of the Council of the City of Palo Alto Describing the Council’s Intentions Regarding Uses of Proceeds of a Business Tax to be Submitted to the Voters for Approval in November 2022
R E C I T A L S
A. T
he City of Palo Alto is a safe, healthy, and vibrant community with a wide array of public services and facilities that support and enhance the lives and experiences of residents, businesses, workers and visitors to the City. These include a network of neighborhood parks and libraries; excellent public and private schools and universities; community centers, museums and theater facilities; high- quality local health care services; walkable, bikeable, safe neighborhoods; an extensive urban forest; two lively downtown areas with indoor and outdoor dining, live music and shopping opportunities; world-leading climate protection programs; and more.
B.
T
he City of Palo Alto is a well-run municipality, with a Triple-A bond rating and a reputation for pro-active fiscal management, strong ongoing investments in public infrastructure, and conservative financial planning.
C. A
s Palo Alto looks toward the future, City leaders have determined that the time has come to seek voter approval to tax businesses that operate in the City, as many neighboring communities do. A business tax would ensure that organizations that benefit from doing business in Palo Alto do their part to support the City’s work to meet evolving challenges, provide for new and expanding public needs, and maintain the high-quality environment that residents, workers, and visitors enjoy.
D. I
f a business tax is approved by voters, its proceeds will be placed in the City’s general fund for use on general government services. Each year, Council Members elected by the voters will determine the uses of those proceeds that best serve the public interest.
E.
W
ith this Resolution, the City Council informs voters of its intentions regarding the public services and programs that would be supported by business tax revenues.
Accordingly the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. Council hereby adopts the above Recitals as findings of the Council.
SECTION 2. It is the Council’s intention to use proceeds of a business tax—a general tax for general government uses—to fund new and enhanced services and programs that support safety and quality of life as the community continues to develop. The following uses, in particular, would be supported by business tax revenues:
Transportation and Safe Train Crossings. In the coming years, Palo Alto will need to need to invest substantial local funds in the improvement and safety of train crossings. CalTrain is electrifying and Attachment C
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trains are increasing in number. To maintain traffic flow, bicycle and pedestrian mobility, and safety, the City’s four at-grade road crossings must be modified and separated from the train right-of-way. It is estimated that an average investment of $250 million will be needed for the improvements needed at each crossing. City funds will be used as matching funds to secure additional county, state, and federal funds for these investments in transportation infrastructure.
Housing Affordability and Services for the Unhoused. A balanced and healthy community welcomes families and individuals from all walks of life. In Palo Alto, significant investments are needed to bring housing costs into reach for many moderate earners who work in the City, such as teachers, public safety employees, and workers in the trades and service industries. With few affordable local housing options, these workers must travel long distances between home and work, contributing to green-house gas emissions and traffic congestion. In addition, longtime residents—especially those who rent—are at risk of losing housing and being forced to relocate to other communities or become unhoused. Those who are already living in the City without housing need financial support to transition to stable, safe and clean housing. Substantial funding is needed to advance these goals.
Enhanced Local Services. Rising costs and constrained revenues have limited the City’s ability to provide services—such as police, fire, emergency services, and rejuvenation of our two downtown districts—at the level desired by the community. Stable long-term revenues from a business tax will put highly-valued City services on sound footing for the future.
SECTION 3. The Council finds that adoption of this Resolution is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST: APPROVED:
__________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: ____________________________
City Manager
__________________________
City Attorney
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220-6398
Key Findings from a Survey of Palo Alto Voters
Conducted May 22
-
26, 2022
Assessing Support for Potential
Finance Ballot Measures
ATTACHMENT H
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1 Survey Methodology
Dates May 22-26, 2022
Survey Type Dual-mode Voter Survey
Research Population Likely November 2022 Voters in Palo Alto Total Interviews 463
Margin of Sampling Error (Full Sample) ±4.9% at the 95% Confidence Level (Half Sample) ±6.6% at the 95% Confidence Level
Contact Methods
Data Collection Modes
(Note: Not All Results Will Sum to 100% Due to Rounding) Text
Invitations
Telephone
Calls
Email
Invitations
Telephone
Interviews
Online
Interviews
ATTACHMENT H
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2 Survey Goals and Approach
Assess voter reaction s to two
potential ballot measures,
with draft legal language: a
business tax and a measure to
ratify utility fund transfers.
Business tax and utility
me
asure rotated to assess
impact of ballot sequence.
Evaluate voters’ prioriti es for
business tax structure.
Gauge the impact of pro an d
con messaging on breadth
and intensity of support for
the businesses tas.
Business Tax
Utility Fund Transfer Ratification
Uses of Funds
Pro-BT Messages and Re-Vote
Anti-BT Message and Re-Vote
Business Tax and Utility Questions Rotated
Vote on One, Both, Neither?
BLT Amounts and Exemptions
Demographics
Message Blocks Rotated
ATTACHMENT H
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3 Context
ATTACHMENT H
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4 Voters in the city are have become more
pessimistic than optimistic about the city’s direction.
Q1.
36%
41%40%43%
61%
39%
35%34%37%
25% 25%24%27%
20%
14%
May 2022March 2022202120182016
Right Direction Wrong Track Don’t Know
Would you say that things in Palo Alto are generally headed in the right direction, or do you feel that things are headed in the wrong direction?
ATTACHMENT H
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5 Voter Views of a
Business Tax
ATTACHMENT H
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6 Hypothetical Ballot Language Tested
Shall the measure to raise funds for services such as
improving public safety, affordable housing, rail crossing safety, homeless services, economic revitalization and
general City services, by levying a tax on businesses in the City of Palo Alto at an annual rate of (HALF SAMPLE: 10) (HALF SAMPLE: 12) cents per square foot occupied by the business, with annual adjustments for inflation and
exemptions for grocery stores, seasonal businesses and all businesses under 5,000 square feet, raising approximately (HALF SAMPLE: $22 million) (HALF SAMPLE: $26 million)
per year until ended by voters, be adopted?
ATTACHMENT H
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7 Q2 Total. Do you think you would vote yes or no on such a measure? Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
21%
37%
1%
1%
14%
24%
2%
Total
Yes
59%
Total
No
38%
Support for the 12-cent version is no
lower than the 10-cent version, but
backing for both is very tentative.
21%
42%
5%
1%
14%
18%
4%
Total
Yes
68%
Total
No
26%
10 cents 12 cents
ATTACHMENT H
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8 Three-quarters of Democrats support the
measure; a majority of independents do.
Q2 Total. Do you think you would vote yes or no on such a measure? Initial Business License Tax Vote (Rates Combined) by Party 75%
55%
20%22%
39%
75%
3% 5% 5%
Democrats Independents Republicans
Total Yes Total No Undecided
(% of
Sample) (60%) (30%) (10%)
ATTACHMENT H
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9 Seven in ten women support the measure.
Q2 Total. Do you think you would vote yes or no on such a measure? Initial Business License Tax Vote (Rates Combined) by Gender 58%
69%
39%
26%
3% 5%
Men Women
Total Yes Total No Undecided
(% of
Sample) (48%) (51%)
ATTACHMENT H
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10 Four in five voters under 50 support the
business tax; older voters are more divided.
Q2 Total. Do you think you would vote yes or no on such a measure? Initial Business License Tax Vote (Rates Combined) by Age 80%
49%
55%
17%
47%
39%
3% 4% 6%
18-49 50-64 65+
Total Yes Total No Undecided
(% of
Sample) (41%) (29%) (30%)
ATTACHMENT H
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11 Voter Views of a
Utility Fund Measure
ATTACHMENT H
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12 Q3 Total. Do you think you would vote yes or no on such a measure? Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
20%
35%
3%
1%
17%
12%
11%
Total
Yes
59%
Total
No
30%
Shall the measure affirming the City of Palo Alto’s existing routine budget practice since 1950 of annually transferring no more than 18% of the gross revenues from the City’s natural gas utility (generated by the City’s retail natural gas rates) to its general fund to support general city services such as library services; climate change reduction; transportation; and police, fire, emergency medical, and 911 response; providing approximately $7 million annually in existing revenues, be adopted?
The utility measure also has support from
nearly three in five, and backing is also soft.
ATTACHMENT H
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13 Nearly two-thirds of Democrats back
the measure, as do almost three in
five independents.
Q3 Total. Do you think you would vote yes or no on such a measure? Initial Utility Measure Vote by Party
64%
58%
37%
22%
36%
59%
14%
7% 4%
Democrats Independents Republicans
Total Yes Total No Undecided
(% of
Sample) (60%) (30%) (10%)
ATTACHMENT H
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14 Two-thirds of business tax supporters also
back the utility measure.
Q3 Total. Do you think you would vote yes or no on such a measure? Initial Utility Measure Vote by Initial Business Tax Support 66%
47% 49%
22%
47%
15%11% 6%
36%
Among Business Tax
Supporters
Among Business Tax
Opponents
Among Undecideds
Total Yes Total No Undecided
(% of
Sample) (63%) (32%) (4%)
ATTACHMENT H
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15 About half of voters back each measure when
asked to consider them in tandem.
Q4.
If both of these measures were on the same ballot, would you vote “yes” on both, for just one, or for neither?
15%
33%
17%
18%
17%
Yes, on business tax only
Yes, on both
Yes, on utility fund transfer measure only
No, on both
Don't know
Total Yes on
Business
Tax
48%
Total Yes on
Utility
Measure
50%
Note: the sequence in which the measures were presented did not yield any meaningful difference in support.
ATTACHMENT H
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16 Structuring a
Business Tax
ATTACHMENT H
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17 Q5 a-g. Not Part of Split Sample
36%
43%
33%
29%
15%
22%
19%
34%
27%
30%
30%
43%
35%
32%
12%
12%
15%
13%
18%
12%
16%
11%
10%
13%
12%
10%
14%
22%
6%
9%
10%
15%
14%
17%
11%
Exempting seasonal businesses that operate
less than 90 days per year from the tax
Exempting grocery stores from the tax
Exempting the first 5,000 square feet of
each business from the tax
Having the tax remain in place until ended
by voters
Phasing in the tax over a 2-year period
Basing the tax on the square footage of a
business’s property in Palo Alto
Reducing business tax bills for hotels by the
amount they already pay in hotel taxes
Strng. Supp. Smwt. Supp. Don't Know Smwt. Opp. Strng. Opp. Total Supp.
Total
Opp.
71% 17%
69% 19%
63% 22%
59% 28%
58% 24%
57% 31%
51% 33%
I am going to read you a list of some of the major provisions of this measure.
Please tell me whether you support or oppose that aspect of the measure.
Voters broadly support a variety of exemptions
and phasing in the tax over two years.
ATTACHMENT H
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18 Q5 h-m. Split Sample
34%
18%
12%
16%
16%
10%
29%
31%
36%
28%
27%
24%
19%
13%
24%
16%
12%
31%
12%
15%
5%
18%
20%
14%
7%
23%
23%
22%
26%
22%
Limiting the annual increase for
inflation to 5%
Charging a tax of 12 cents per square foot
per month on current rents, an increase
averaging 1.7% per square foot
Charging a tax of 10 cents
per square foot per month
Charging a tax of 10 cents per square foot
per month on current rents, an increase
averaging 1.4%
Automatically adjusting the tax by up to
5% each year to adjust for inflation
Charging a tax of 12 cents
per square foot per month
Strng. Supp. Smwt. Supp. Don't Know Smwt. Opp. Strng. Opp. Total Supp.
Total
Opp.
62% 19%
49% 38%
49% 28%
44% 41%
43% 45%
34% 36%
I am going to read you a list of some of the major provisions of this measure.
Please tell me whether you support or oppose that aspect of the measure.
Three in five support a cap on inflation
increases; tax rates are divisive.
ATTACHMENT H
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19 Ext./Very
Impt.
64%
60%
58%
56%
55%
47%
35%
Q6. I am going to read you a list of more-specific ways in which funds generated by a tax could be spent. Please tell me how important each item is to you personally: extremely important, very important, somewhat important, or not too important. 41%
33%
31%
37%
29%
22%
16%
23%
27%
27%
19%
26%
25%
19%
21%
22%
24%
20%
25%
29%
36%
14%
17%
17%
22%
18%
22%
27%
Improving public safety response to
violent crime
Improving public safety response to
property crime
Providing outreach and supportive
services to people experiencing
homelessness
Building affordable housing
Building safe crossings for traffic and
pedestrians to go over or under
Caltrain tracks
Creating more vibrant, attractive
business districts where streets are
closed to allow better pedestrian access
Improving the University and California
Avenue business districts
Ext. Impt. Very Impt. Smwt. Impt. Not Too Impt. Don't Know Among potential uses of money, voters
prioritize improving response to crime.
ATTACHMENT H
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20 Impact of Messaging
on the Business Tax
ATTACHMENT H
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21 21%
26%
19%
22%
39%
33%
28%
31%
6%
6%
6%
14%
14%
20%
20%
18%
16%
23%
17%
Initial Business Tax Vote
Vote After Positives
Vote After Negatives
Final Business Tax Vote
Def. Yes Prob. Yes Und., Lean Yes Undecided Und., Lean No Prob. No Def. No Total Yes
Total
No
64% 32%
62% 32%
50% 44%
56% 38%
Negative messaging drives support for the
measure down to 50%.
Q2 Total, Q8 Split E, Q8 Split F & Q9 Total. Do you think you would vote yes or no on such a measure? Positives and Negatives Rotated
Mid-Point Vote Margins of Error +/-6.9%
ATTACHMENT H
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22 Segmenting the Electorate by Consistency of
Support for a Business Tax
Consistent
Yes
43%
Swing
33%
Consistent
No
24%
Consistent Yes: Voters who
consistently indicated they would
vote “yes” on the measure
Consistent No: Voters who
consistently indicated they would
vote “no” on the measure
Swing: Voters who do not fall into
any of the other categories –
remaining consistently undecided or
switching positions
The following slide shows demographic
groups that disproportionately fall into
one category or the other.
ATTACHMENT H
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23 Consistent Yes Swing Consistent No
43% of the Electorate 33% of the Electorate 24% of the Electorate Ages 18-29 Own Palo Alto Business Republican Men
Democratic Women
Ages 18-49 Independent Women Republicans Ages 50+
Democrats Ages 18-49 Women Ages 50+ Republicans
Women Ages 18-49 Democratic Women Ages 50+ Men Ages 50+ Democratic Men Ages 18-49 Independents Ages 18-49 Independents Ages 50+ Non-College Educated Women Ages 30-39 Independent Men
Renters Ages 40-49 ZIP Code 94301
Ages 18-49 Women Ages 75+
Some College or Less Democrats Ages 50+ College-Educated Men Democratic Women Ages 65+ Ages 65+
Ages 30-39 Independents Homeowners
Non-College Educated Men Asians/Pacific Islanders Ages 50+ Democrats Ages 75+ Men
Men Ages 18-49 Ages 65-74 Ages 50-64
Whites Ages 65-74
Demographic Profile of the Segments
Business License Tax Measure
ATTACHMENT H
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24 Q7. I am going to read you some statements from people who support the measure. Please tell me whether you find it very convincing, somewhat convincing, or not convincing as a reason to support the measure.
(Ranked by Very Convincing)
(FAIR SHARE) Palo Alto currently registers businesses of all sizes for $50.
That means a mom-and-pop coffee shop pays the same as a tech company with thousands of employees. This measure is a sensible way to ensure large businesses pay their fair share for the services the City provides and that their employees enjoy, like affordable housing and police and fire protection. (COMPARISON) Palo Alto does not have a business tax, unlike most communities in California . Several nearby communities have significant taxes on business, such as East Palo Alto’s tax of $2.50 per square foot annually on commercial office space over 25,000 square feet and San Francisco’s business tax of $2.85 to $5.60 per $1,000 of gross receipts annually. This tax would align Palo Alto’s tax system with those of other cities in the area.
(TAX BASE) This measure is not a tax on homeowners or shoppers, but on the city’s largest businesses. Sales taxes continue to decline in Palo Alto, and by diversifying the City’s tax base with a thoughtfully designed business tax, we will be better able to weather future financial crises without having to raise taxes on everyday residents.
(ACCOUNTABILITY) This measure will be subject to strict accountability provisions like annual financial audits; full public disclosure of all spending; and a requirement that all funds be spent locally in Palo Alto. This will ensure funds are used efficiently, effectively,and as promised.
(RESOLUTION) Though this measure will be a general tax that can fund any city need, the City Council has committed to approving a plan before the election so that voters know exactly how it will spend the money: on public safety, affordable housing, homelessness, and improving the safety of rail crossings.
Support Messages Tested
ATTACHMENT H
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25 Q7. I am going to read you some statements from people who support the measure. Please tell me whether you find it very convincing, somewhat convincing, or not convincing as a reason to support the measure.
42%
31%
30%
25%
25%
26%
33%
32%
38%
36%
68%
64%
62%
63%
61%
Fair Share
Comparison
Tax Base
Accountability
Resolution
Very Convincing Somewhat Convincing
Describing how the measure would make
business taxes fairer is broadly compelling.
ATTACHMENT H
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26 Negative Message Provided
Q9. Having heard this, would you vote yes or no on the measure? The cost of living is out of control and inflation
is on the rise – now is not the time to be
raising taxes. Local rents and taxes are already
among the highest in the nation, and we can’t
afford another business tax this size. In
addition, this tax has no expiration date on it –
it’s a forever tax that includes an automatic
cost escalator, meaning that the tax will
increase every year, giving the City a blank
check for hundreds of millions of dollars.
ATTACHMENT H
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27 Q3 Total & Q10. Do you think you would vote yes or no on such a measure? Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
20%
35%
3%
1%
17%
12%
11%
Total
Yes
59%
Total
No
30%
Initial Utility
Measure Vote
16%
41%
2%
2%
16%
12%
11%
Total
Yes
59%
Total
No
30%
Final Utility
Measure Vote
After pros and cons on the business tax
measure, support for the utility measure is
holds steady – broad, but soft.
ATTACHMENT H
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28 Conclusions
ATTACHMENT H
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29 Conclusions
• Skepticism of the electorate continues to grow, as it is in many cities around the region, with a plurality of voters saying the City is on the wrong track for the first time.
• With hypothetical measure language, a business tax measure has support from just under two‐thirds (64% to 32%); after pros and cons, 56% support it. • At the same time, the measure shows signs of soft support:
– Only one in five say they would “definitely” vote for the measure, both before and after messaging.
– After exposure to negative messaging, the measure leads by only a narrow 50% to 44% margin.
• Voters are comfortable with a measure that caps inflation adjustments at 5%.
There is no consistent preference between a 10 ‐cent and 12 ‐cent per square foot rate.
• Voters are most enthusiastic about allocating new funding toward public safety, affordable housing, and outreach to the unhoused • A measure ratifying utility fund transfers appears viable; it has support from three in five voters before and after messaging.
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For more information, contact:
[email protected]
Dave Metz
[email protected]
Miranda Everitt
1999 Harrison St., Suite 2020
Oakland, CA 94612
Phone (510) 451-9521
Fax (510) 451-0384
ATTACHMENT H
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MAY 22-26, 2022
CITY OF PALO ALTO BALLOT MEASURE SURVEY
220-6398-WT
N=463
MARGIN OF SAMPLING ERROR ±4.9% (95% CONFIDENCE INTERVAL)
A/B & C/D & E/F SPLITS
Hello, I'm ___________ from _________, a public opinion research company. I am definitely not trying to sell you anything. We are conducting an opinion survey about issues that interest people living in the City of Palo Alto and we are only interested in your opinions. May I speak to ______________? ( YOU MUST SPEAK TO THE VOTER LISTED. VERIFY THAT THE VOTER LIVES AT THE ADDRESS LISTED, OTHERWISE TERMINATE).
A. Before we begin, I need to know if I have reached you on a cell phone, and if so, are you in a place where you can talk safely without endangering yourself or others? (IF NOT ON A CELL PHONE, ASK: “Do you own a cell phone?”)
Yes, cell and can talk safely ------------------------------------------------- 82% Yes, cell but cannot talk safely --------------------------------- TERMINATE No, not on cell ----------------------------------------------------------------- 18% (DON’T READ) DK/NA/REFUSED ------------------------- TERMINATE
1. (T*) First, would you say that things in Palo Alto are generally headed in the right direction, or do you feel that things are headed in the wrong direction?
Right direction ----------------------------- 36%
Wrong direction ---------------------------- 39%
(DON'T READ) DK/NA ---------------- 25%
ATTACHMENT H
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FM3 RESEARCH 220-6398-WT PAGE 2
NOW I WOULD LIKE TO ASK YOU A FEW QUESTIONS ABOUT TWO MEASURES THAT MAY APPEAR ON THE PALO ALTO BALLOT IN THE NOVEMBER ELECTION. (SPLIT SAMPLE A ONLY: Q2 THEN Q3)
(SPLIT SAMPLE B ONLY: Q3 THEN Q2)
2. The FIRST/SECOND measure might read as follows:
“Shall the measure to raise funds for services such as improving public safety, affordable housing, rail crossing safety, homeless services, economic revitalization and general City services, by levying a tax on businesses in the City of Palo Alto at an annual rate of (SPLIT SAMPLE C: ten) (SPLIT SAMPLE D: twelve) cents per square foot occupied by the business, with annual adjustments for inflation and exemptions for grocery stores, seasonal businesses and all businesses under 5 thousand square feet, raising approximately (SPLIT SAMPLE C: 22 million dollars ) (SPLIT SAMPLE D: 26 million dollars) per year until ended by voters, be adopted?”
Do you think you would vote yes or no on such a measure? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, ASK: Do you lean toward voting yes or no?”) SPLIT A: SPLIT B: SPLIT C: SPLIT D:
ASKED ASKED 10¢/SQFT 12¢/SQFT
FIRST SECOND /$22M $26M TOTAL
TOTAL YES --------------------------------------------- 64% ------- 64% ------ 59% ---- 68% ------- 64% Definitely yes --------------------------------------------- 22% ------- 20% ------ 21% ---- 21% ------- 21% Probably yes ---------------------------------------------- 40% ------- 39% ------ 37% ---- 42% ------- 39% Undecided, lean yes --------------------------------------1% -------- 4% -------- 1% ------ 5% --------- 3% TOTAL NO ---------------------------------------------- 34% ------- 30% ------ 38% ---- 26% ------- 32% Undecided, lean no ---------------------------------------1% -------- 1% -------- 1% ------ 1% --------- 1% Probably no ----------------------------------------------- 12% ------- 15% ------ 14% ---- 14% ------- 14% Definitely no ---------------------------------------------- 21% ------- 15% ------ 24% ---- 12% ------- 18% (DK/NA) ---------------------------------------------------2% -------- 6% -------- 2% ------ 6% --------- 4%
ATTACHMENT H
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FM3 RESEARCH 220-6398-WT PAGE 3
(SPLIT SAMPLE A ONLY: Q2 THEN Q3)
(SPLIT SAMPLE B ONLY: Q3 THEN Q2)
3. The FIRST/SECOND measure might read as follows:
“Shall the measure affirming the City of Palo Alto’s existing routine budget practice since 1950 of annually transferring no more than 18 percent of the gross revenues from the City’s natural gas utility (generated by the City’s retail natural gas rates) to its general fund to support general city services such as library services; climate change reduction; transportation; and police, fire, emergency medical, and 9-1-1 response; providing approximately 7 million dollars annually in existing revenues, be adopted?” Do you think you would vote yes or no on such a measure? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, ASK: Do you lean toward voting yes or no?”) SPLIT B: SPLIT A:
ASKED ASKED
FIRST SECOND TOTAL
TOTAL YES ---------------------------------- 59% -------------------- 59% --------------------- 59% Definitely yes ---------------------------------- 20% -------------------- 20% --------------------- 20% Probably yes ----------------------------------- 34% -------------------- 37% --------------------- 35% Undecided, lean yes ---------------------------- 5% ---------------------- 1% ---------------------- 3% TOTAL NO ----------------------------------- 26% -------------------- 34% --------------------- 30% Undecided, lean no ----------------------------- 1% ---------------------- 1% ---------------------- 1% Probably no ------------------------------------ 16% -------------------- 19% --------------------- 17% Definitely no ----------------------------------- 10% -------------------- 14% --------------------- 12% (DK/NA) --------------------------------------- 15% ---------------------- 7% --------------------- 11%
4. Next, if both of these measures were on the same ballot, would you vote “yes” on both, for just one, or for neither? (IF YES ON ONE, ASK: “Which one would you vote “yes” on: the business license tax or the utility fund transfer measure?”)
Yes, on both ------------------------------------------------- 33% Yes, on business tax only --------------------------------- 15% Yes, on utility fund transfer measure only ------------- 17% No on both --------------------------------------------------- 18% (DON'T READ) DK/NA --------------------------------- 17%
ATTACHMENT H
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FM3 RESEARCH 220-6398-WT PAGE 4
THE REST OF MY QUESTIONS ARE ABOUT THE MEASURE THAT
WOULD ESTABLISH A BUSINESS TAX IN PALO ALTO.
5. First, I am going to read you a list of some of the major provisions of this measure. For each, please tell me whether you support or oppose that aspect of the measure. (IF SUPPORT/OPPOSE, ASK: “Is that strongly SUPPORT/OPPOSE or just somewhat?”) (READ RANDOMIZE)
STR SMWT SMWT STR (DK/ TOTAL TOTAL
SUPP SUPP OPP OPP NA) SUPP OPP
[ ]a. Basing the tax on the square
footage of a business’s property
in Palo Alto --------------------------------- 22% ----- 35% ---- 14% ----- 17% ----- 12% 57% 31% [ ]b. Having the tax remain in place
until ended by voters ---------------------- 29% ----- 30% ---- 12% ----- 15% ----- 13% 59% 28% [ ]c. Phasing in the tax over a two-
year period ---------------------------------- 15% ----- 43% ---- 10% ----- 14% ----- 18% 58% 24% [ ]d. Exempting grocery stores from
the tax ---------------------------------------- 43% ----- 27% ---- 10% ------ 9% ----- 12% 69% 19% [ ]e. Exempting seasonal businesses
that operate less than 90 days
per year from the tax ---------------------- 36% ----- 34% ---- 11% ------ 6% ----- 12% 71% 17% [ ]f. Exempting the first five
thousand square feet of each
business from the tax ---------------------- 33% ----- 30% ---- 13% ----- 10% ----- 15% 63% 22% [ ]g. Reducing business tax bills for
hotels by the amount they
already pay in hotel taxes ----------------- 19% ----- 32% ---- 22% ----- 11% ----- 16% 51% 33% (SPLIT SAMPLE A ONLY)
[ ]h. Automatically adjusting the tax
by up to five percent each year
to adjust for inflation ---------------------- 16% ----- 27% ---- 20% ----- 26% ----- 12% 43% 45% (SPLIT SAMPLE AE ONLY)
[ ]i. Charging a tax of ten cents per
square foot per month --------------------- 12% ----- 36% ------ 5% ----- 23% ----- 24% 49% 28% (SPLIT SAMPLE AF ONLY)
[ ]j. Charging a tax of ten cents per
square foot per month on
current rents, an increase
averaging one point four
percent --------------------------------------- 16% ----- 28% ---- 18% ----- 22% ----- 16% 44% 41% (SPLIT SAMPLE B ONLY)
[ ]k. Limiting the annual increase for
inflation to five percent ------------------- 34% ----- 29% ---- 12% ------ 7% ----- 19% 62% 19%
ATTACHMENT H
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FM3 RESEARCH 220-6398-WT PAGE 5
STR SMWT SMWT STR (DK/ TOTAL TOTAL
SUPP SUPP OPP OPP NA) SUPP OPP
(SPLIT SAMPLE BE ONLY)
[ ]l. Charging a tax of twelve cents per
square foot per month --------------------- 10% ----- 24% ---- 14% ----- 22% ----- 31% 34% 36% (SPLIT SAMPLE BF ONLY)
[ ]m. Charging a tax of twelve cents per
square foot per month on current
rents, an increase averaging one
point seven percent ------------------------ 18% ----- 31% ---- 15% ----- 23% ----- 13% 49% 38% (RESUME ASKING ALL RESPONDENTS)
6. Next, I am going to read you a list of more-specific ways in which funds generated by a tax could be spent. After I read each one, please tell me how important each item is to you personally: extremely important, very important, somewhat important, or not too important. (RANDOMIZE)
EXT VERY SMWT NOT TOO (DK/ EXT/
IMP IMP IMP IMP NA) VERY
[ ]a. Building safe crossings for traffic and
pedestrians to go over or under Caltrain tracks ----- 29% ----- 26% ---- 25% ----- 18% ----- 2% 55% [ ]b. Building affordable housing ---------------------------- 37% ----- 19% ---- 20% ----- 22% ----- 2% 56% [ ]c. Providing outreach and supportive services to
people experiencing homelessness -------------------- 31% ----- 27% ---- 24% ----- 17% ----- 1% 58% [ ]d. Improving the University and California
Avenue business districts ------------------------------- 16% ----- 19% ---- 36% ----- 27% ----- 2% 35% [ ]e. Improving public safety response to violent
crime ------------------------------------------------------- 41% ----- 23% ---- 21% ----- 14% ----- 2% 64% [ ]f. Improving public safety response to property
crime ------------------------------------------------------- 33% ----- 27% ---- 22% ----- 17% ----- 1% 60% [ ]g. Creating more vibrant, attractive business
districts where streets are closed to allow better
pedestrian access ----------------------------------------- 22% ----- 25% ---- 29% ----- 22% ----- 2% 47%
NEXT, HERE ARE SOME STATEMENTS FROM SUPPORTERS AND OPPONENTS OF THE POTENTIAL BUSINESS TAX WE HAVE BEEN DISCUSSING.
(SPLIT SAMPLE E ONLY: READ Q7 THEN Q8 THEN Q9)
(SPLIT SAMPLE F ONLY: READ Q9 THEN Q7 THEN Q8)
ATTACHMENT H
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FM3 RESEARCH 220-6398-WT PAGE 6
7. FIRST/NEXT, I am going to read you some statements from people who support the measure. After hearing each statement, please tell me whether you find it very convincing, somewhat convincing, or not convincing as a reason to support the measure. If you do not believe the statement, please tell me that too. (RANDOMIZE)
VERY SMWT NOT DON'T (DK/ VERY/
CONV CONV CONV BEL NA) SMWT
[ ]a. (RESOLUTION) Though this measure will be
a general tax that can fund any city need, the
City Council has committed to approving a
plan before the election so that voters know
exactly how it will spend the money: on public
safety, affordable housing, homelessness, and
improving the safety of rail crossings. --------------- 25% ----- 36% ---- 22% ----- 13% ----- 5% 61% [ ]b. (T-ACCOUNTABILITY) This measure will
be subject to strict accountability provisions
like annual financial audits; full public
disclosure of all spending; and a requirement
that all funds be spent locally in Palo Alto.
This will ensure funds are used efficiently,
effectively, and as promised.--------------------------- 25% ----- 38% ---- 16% ----- 17% ----- 4% 63% [ ]c. (T-COMPARISON) Palo Alto does not have a
business tax, unlike most communities in
California. Several nearby communities have
significant taxes on business, such as East Palo
Alto’s tax of $2.50 per square foot annually on
commercial office space over 25,000 square
feet and San Francisco’s business tax of $2.85
to $5.60 per 1000 dollars of gross receipts
annually. This tax would align Palo Alto’s tax
system with those of other cities in the area. -------- 31% ----- 33% ---- 22% ------ 9% ------ 5% 64% [ ]d. (T-FAIR SHARE) Palo Alto currently
registers businesses of all sizes for 50 dollars.
That means a mom-and-pop coffee shop pays
the same as a tech company with thousands of
employees. This measure is a sensible way to
ensure large businesses pay their fair share for
the services the City provides and that their
employees enjoy, like affordable housing and
police and fire protection. ------------------------------ 42% ----- 26% ---- 18% ----- 10% ----- 4% 68% [ ]e. (T-TAX BASE) This measure is not a tax on
homeowners or shoppers, but on the city’s
largest businesses. Sales taxes continue to
decline in Palo Alto, and by diversifying the
City’s tax base with a thoughtfully designed
business tax, we will be better able to weather
future financial crises without having to raise
taxes on everyday residents. --------------------------- 30% ----- 32% ---- 20% ----- 14% ----- 4% 62%
ATTACHMENT H
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FM3 RESEARCH 220-6398-WT PAGE 7
(SPLIT SAMPLE E ONLY: READ Q7 THEN Q8 THEN Q9)
(SPLIT SAMPLE F ONLY: READ Q9 THEN Q7 THEN Q8)
8. Now that you’ve learned more about it, would you vote yes or no on a measure to raise funds for services such as improving public safety, affordable housing, rail crossing safety, homeless services, economic revitalization and for general city services, by levying a tax on businesses in the City of Palo Alto at an annual rate of (SPLIT SAMPLE C: ten) (SPLIT SAMPLE D: twelve) cents per square foot occupied by the business? (IF YES/NO, ASK: “Is that definitely or just probably?”) ( IF UNDECIDED, ASK: “Do you lean toward voting yes or no?”) SPLIT E: SPLIT F: SPLIT C: SPLIT D:
ASKED ASKED 10¢/SQFT 12¢/SQFT
FIRST SECOND /$22M $26M TOTAL
TOTAL YES --------------------------------------------- 61% ------- 63% ------ 61% ---- 64% ------- 62% Definitely yes --------------------------------------------- 25% ------- 28% ------ 29% ---- 24% ------- 27% Probably yes ---------------------------------------------- 34% ------- 33% ------ 30% ---- 37% ------- 33% Undecided, lean yes --------------------------------------3% -------- 2% -------- 1% ------ 3% --------- 2% TOTAL NO ---------------------------------------------- 32% ------- 32% ------ 34% ---- 30% ------- 32% Undecided, lean no ---------------------------------------2% -------- 2% -------- 2% ------ 2% --------- 2% Probably no ----------------------------------------------- 15% ------- 14% ------ 13% ---- 16% ------- 14% Definitely no ---------------------------------------------- 15% ------- 17% ------ 20% ---- 12% ------- 16% (DK/NA) ---------------------------------------------------7% -------- 5% -------- 5% ------ 7% --------- 6%
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FM3 RESEARCH 220-6398-WT PAGE 8
(SPLIT SAMPLE E ONLY: READ Q7 THEN Q8 THEN Q9)
(SPLIT SAMPLE F ONLY: READ Q9 THEN Q7 THEN Q8)
9. FIRST/NEXT, let me read you a brief statement from opponents.
The cost of living is out of control and inflation is on the rise – now is not the time to be raising taxes.
Local rents and taxes are already among the highest in the nation, and we can’t afford another business tax this size. In addition, this tax has no expiration date on it – it’s a forever tax that includes an automatic cost escalator, meaning that the tax will increase every year, giving the City a blank check for hundreds of millions of dollars.
Having heard this, would you vote yes or no on the measure? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, ASK: “Do you lean toward voting yes or no?”) SPLIT F: SPLIT E:
ASKED ASKED
FIRST SECOND TOTAL
TOTAL YES ---------------------------------- 52% -------------------- 48% --------------------- 50% Definitely yes ---------------------------------- 21% -------------------- 16% --------------------- 19% Probably yes ----------------------------------- 28% -------------------- 28% --------------------- 28% Undecided, lean yes ---------------------------- 3% ---------------------- 4% ---------------------- 3% TOTAL NO ----------------------------------- 44% -------------------- 44% --------------------- 44% Undecided, lean no ----------------------------- 0% ---------------------- 2% ---------------------- 1% Probably no ------------------------------------ 14% -------------------- 25% --------------------- 20% Definitely no ----------------------------------- 29% -------------------- 17% --------------------- 23% (DK/NA) ----------------------------------------- 4% ---------------------- 8% ---------------------- 6% Q8/Q9 COMBINED FINAL VOTE AFTER PROS AND CONS
TOTAL YES ------------------------------ 56%
Definitely yes ------------------------------- 22%
Probably yes -------------------------------- 31%
Undecided, lean yes ------------------------- 3%
TOTAL NO -------------------------------- 38%
Undecided, lean no -------------------------- 2%
Probably no --------------------------------- 20%
Definitely no -------------------------------- 17%
(DON'T READ) DK/NA ------------------ 6%
ATTACHMENT H
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FM3 RESEARCH 220-6398-WT PAGE 9
10. And let me ask you one last time about the second measure I mentioned earlier, which would affirm the City of Palo Alto’s existing budget practice of annually transferring no more than 18 percent of the gross revenues from the City’s natural gas utility to its general fund to support City services such as homeless services; climate change reduction; transportation; and police, fire, emergency medical, and 911 response. Do you think you would vote yes or no on such a measure? (IF YES/NO, ASK: “Is that definitely or just probably?”) (IF UNDECIDED, ASK: “Do you lean toward voting yes or no?”) TOTAL YES ------------------------------ 59%
Definitely yes ------------------------------- 16%
Probably yes -------------------------------- 41%
Undecided, lean yes ------------------------- 2%
TOTAL NO -------------------------------- 30%
Undecided, lean no -------------------------- 2%
Probably no --------------------------------- 16%
Definitely no -------------------------------- 12%
(DON'T READ) DK/NA ---------------- 11%
HERE ARE MY LAST QUESTIONS, AND THEY ARE FOR STATISTICAL PURPOSES ONLY.
11. (T) Do you own a business in Palo Alto?
Yes --------------------------------------------- 7%
No -------------------------------------------- 86%
(DON’T READ) DK/NA ------------------ 7%
12. Do you own or rent your place of residence?
Own ------------------------------------------ 61%
Rent ------------------------------------------ 28%
(DON’T READ) DK/NA ---------------- 12%
13. What was the last level of school you completed?
High school graduate or less --------------- 4%
Some college/vocational school ----------- 8%
College graduate (4 years) --------------- 41%
Post graduate work/
Professional school --------------------- 44%
(DON’T READ) DK/NA ------------------ 4%
ATTACHMENT H
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Packet Pg. 357
FM3 RESEARCH 220-6398-WT PAGE 10
14. With which racial or ethnic group do you identify yourself: Latino or Hispanic, African American or Black, White or Caucasian, Asian or Pacific Islander, multiracial, or some other ethnic or racial background? (IF ASIAN OR PACIFIC ISLANDER, ASK: “Are you Vietnamese, Chinese, South Asian or East Indian, or of some other Asian background?”) Latino/Hispanic ------------------------------ 4%
African American/Black -------------------- 2%
Caucasian/White --------------------------- 47%
Vietnamese ------------------------------------ 1%
Chinese ---------------------------------------- 9%
South Asian/East Indian -------------------- 3%
Other Non-Asian/Pacific Islander -------- 1%
Other Asian/Pacific Islander --------------- 7%
Multiracial ------------------------------------ 7%
(DON’T READ) DK/NA ---------------- 20%
THANK AND TERMINATE
GENDER: Male ------------------------------------------ 48% Female --------------------------------------- 51%
Nonbinary ------------------------------------- 1%
PARTY REGISTRATION: Democrat ------------------------------------ 60% Republican ---------------------------------- 10%
No Party Preference ----------------------- 27%
Other ------------------------------------------- 3%
FLAGS
P16 ---------------------------- 56%
G16 --------------------------- 73%
P18 ---------------------------- 54%
G18 --------------------------- 74%
P20 ---------------------------- 65%
G20 --------------------------- 85%
R21 --------------------------- 88%
BLANK ------------------------ 5%
AGE
18-24 --------------------------- 8%
25-29 -------------------------- 8%
30-34 -------------------------- 6%
35-39 --------------------------- 5%
40-44 -------------------------- 5%
45-49 -------------------------- 9%
50-54 -------------------------- 9%
55-59 ------------------------- 11%
60-64 -------------------------- 9%
65-74 -------------------------- 15%
75+ --------------------------- 15%
PERMANENT ABSENTEE
Yes ---------------------------- 93%
No ------------------------------ 7%
HSEHLD. PARTY TYPE
Dem 1 ------------------------ 35%
Dem 2+ --------------------- 18%
Rep 1 --------------------------- 5%
Rep 2+------------------------- 2%
Ind 1+ ----------------------- 22%
Mix --------------------------- 18%
MODE
Phone ------------------------- 33%
Online ------------------------ 67%
CONTACT METHOD
Phone ------------------------- 33%
E-mail ------------------------ 55%
Text --------------------------- 12%
ATTACHMENT H
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Packet Pg. 358