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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 1 Section Name: STUDY SESSION Account Number: 10-1311 File ID: 25-10779 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: January 12, 2026
SUBJECT:
Potential Ballot Measures for November 2026 — Survey Results and Council Direction RECOMMENDATION:
Receive a presentation from the City’s consultant, True North Research, concerning the potential Revenue Measures Polling Survey results and provide staff with direction on whether to proceed with informing and educating the community about one of the potential ballot measures in preparation for the November 2026 election.
BACKGROUND:
At the June 16, 2025 City Council meeting to adopt the FY 25-26 Citywide budget, the City Council adopted a General Fund budget that anticipated a budget deficit of $12 million. City staff has revised its estimated budget deficit to $14 million since the adoption of the budget because the State’s adopted budget only included 67 percent of the total Vehicle License Fee (VLF) backfill owed to the City in FY 25-26. Due to this estimated budget deficit and the anticipated budget deficits projected over the next 10 years as part of the General Fund 10-year forecast, the City has implemented a Fiscal Sustainability Plan. As part of this plan, staff continues to review opportunities to reduce General Fund expenditures, improve cost recovery and cost allocation, pursue grant opportunities, and strategize Citywide economic development.
Another key component of this plan is to review revenue enhancement options such as a November 2026 ballot measure to bring in new revenues to both sustain city services at their current levels by offsetting the projected $5 -$7 million per year structural operating deficits and to fund the estimated $350 million in capital improvements and infrastructure needs for which there is insufficient funding.
City staff reviewed potential ballot measure options with the Revenue Measure Ad Hoc Committee on August 6, 2025.
Then staff reviewed the potential ballot measure options with the full Council on August 16, 2025. Council expressed a desire to better understand San Mateo voter sentiments regarding a 1/4 cent transactions and use (“sales”) tax and a General Obligation Bond, and polling was conducted through a statistically reliable survey in November 2026.
Revenue Measure Options
Transactions and Use Tax (sales tax)
The City can add a transactions and use tax, also known as a district or local add-on sales tax, on top of the regular sales tax. A sales tax applies to merchandise that is delivered within a jurisdiction and does not apply to grocery items or prescription medicines. San Mateo voters approved Measure S, a sales tax, in November 2015, which extended Measure L, a 1/4 cent sales tax. Since the passage of Measure RR in November 2020 to support Caltrain operations, the sales tax rate in the City of San Mateo has been 9.625 percent. The State of California imposes a limit of two percent above the statewide base sales tax rate (7.25%). Since 0.625 percent of the City’s current sales tax is exempt from this limit, the City still has 1/4 cent of capacity left before reaching the limit. If another entity places a sales tax measure on the ballot before the City uses its cap, the City may no longer have the option to add a 1/4 cent sales tax for local funding that stays within the City limits. In order to pass, this measure would require a simple majority (50% plus 1) voter approval, and the
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proceeds can be used to fund general municipal services, such as:
keeping streets, sidewalks, parks, infrastructure, and community facilities safe, clean, and well-maintained fixing potholes
providing quick responses to 911 emergencies
paving and maintaining local streets and roads
providing fire protection and paramedic services.
General Obligation Bond
Another specific type of revenue enhancement that the City could pursue is a General Obligation (GO) bond. A GO bond requires 2/3 voter approval and once approved authorizes the City to sell bonds based on a levy or tax on real and personal property within the City limits. For a GO bond, the voters approve a maximum bond issuance amount and the use of the bond proceeds, but not a specific tax rate or annual payment. Revenues from a GO bond can only be used for approved infrastructure improvements and not for operating expenses. Thus, this revenue source is appropriate for addressing the City’s unfunded capital improvement needs. The City’s municipal advisor, UFI, analyzed three scenarios for potential GO bond issuances. In each scenario they developed what the tax rate per $100,000 of assessed value would be for a parcel, based on an estimated total amount of bond proceeds being approved. Table 1 outlines the estimated tax rates and bond proceeds.
As shown, property owners would pay approximately $30 per $100,000 of assessed valuation on their property per year if the City received approval to bond $325 million, close to the amount currently estimated in unfunded infrastructure needs.
Survey Methodology and Objectives
Between November 10 and November 15, 2025, True North Research administered the survey to a stratified random sample of 1,012 registered voters in the City of San Mateo who are likely to participate in the November 2026 election.
The survey followed a mixed-method design that employed multiple recruiting methods (email, text, and telephone) and multiple data collection methods (telephone and online). The average interview lasted 17 minutes and the survey is statistically reliable.
One of the objectives of the study was to determine how support for a local revenue measure may vary depending on the type of financial mechanism employed: bond or sales tax. To reliably estimate support for the different types of measures, a split-sample methodology was employed such that half of voters were administered a survey that focused on a bond measure and the other half were asked questions regarding a potential sales tax measure. All 1,012 respondents received common questions that applied to both types of measures.
Key Findings - Is a revenue measure feasible for 2026?
Voters have a high regard for the quality of life in San Mateo (86% rate it as excellent or good) and are generally satisfied with the City’s provision of services (74% very or somewhat satisfied). How these sentiments translate into support for a
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local revenue measure—and the feasibility of the measure if placed on a ballot in 2026 — depends on the type of measure being considered.
Sales Tax
A majority of voters initially exhibited support for a 1/4 cent sales tax to fund San Mateo city services, such as fire protection, paramedic, and 911 emergency response, police and crime prevention, keeping local streets, sidewalks, parks, infrastructure, and community facilities safe, clean, and well maintained, and addressing homelessness. With just the information conveyed in the 75-word ballot statement, 53% of voters indicated they would support the sales tax at the Initial Ballot Test (3% above the requisite simple majority threshold). Additionally, support for the sales tax increased over the course of the interview in response to the projects that could be funded and the arguments tested, ending the survey 6% above the threshold required for passage at the Final Ballot Test.
General Obligation Bond
The survey results were less promising with respect to the feasibility of a $325 million bond to pave and maintain local streets, fix potholes, improve intersections for traffic flow/safety, repair/replace aging infrastructure, upgrade community parks and playfields, and repair/restore community facilities including fixing deteriorating roofs, plumbing, sewer, and electrical systems. Although 59% of respondents initially supported the bond, the threshold required for passage of a bond is higher (two-thirds). Support for the bond also declined over the course of the survey in response to tax rate information and negative arguments, landing at 54% at the Final Ballot Test.
Key Findings Summary
The results of this survey indicate that a general sales tax may be feasible for the November 2026 ballot provided that it focuses on voters’ priorities and is accompanied by robust voter/opinion leader engagement, education, and communication. The results of the survey indicate that a general obligation bond is not feasible given that it needs two- thirds voter approval and landed 13 percentage points below this level at the Final Ballot Test. Figure 2 below provides the Final Ballot Test percentages for both the bond and sales tax. Additionally, True North Research’s Baseline Revenue Measure Survey Summary report can be seen in full as Attachment 1.
Figure 2 Final Ballot Test
January 7, 2026 City Council Ad Hoc Committee Meeting
At the January 7 meeting, City staff and True North Research presented the results of the Baseline Revenue Measure
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Survey Summary, and the Ad Hoc Committee (Deputy Mayor Fernandez and Councilmember Cwirko-Godycki) recommended to continue educating and informing the community about the potential 1/4 cent sales tax measure. The Ad Hoc Committee stated that since the City still has 1/4 cent of capacity left before reaching its sales tax limit, it’s important to act now and keep the 1/4 cent of sales tax within the City. If another entity places a sales tax measure on the ballot before the City reaches the limit, the City may no longer have the option to add sales tax for local funding. The Ad Hoc Committee also recommended that the City should pause education and outreach for the general obligation bond based on the Final Ballot Test results, and the need for two-thirds approval.
Options for City Council Consideration
1. Should the City staff proceed with education and outreach on the sales tax measure and return to Council for a decision whether to place it on the November 2026 ballot?
2. Should the City proceed with education and outreach on the general obligation bond and return to Council for a decision whether to place it on the November 2026 ballot?
3. Should the City proceed with education and outreach on the sales tax measure and general obligation bond and return to Council for a decision whether to place one or both on the November 2026 ballot?
4. Should the City not proceed with education and outreach on either the sales tax measure or the general obligation bond and no longer pursue a revenue measure for the November 2026 ballot? Next steps
If staff receives City Council direction to move forward with option 1, 2, or 3, staff will engage in an educational outreach effort to inform the community about the potential November 2026 ballot measures from January through July 2026. This outreach will include meeting with dozens of community stakeholder organizations and providing educational information to the community. Informational outreach to the full community will include communitywide mailers and digital advertising that is linked to a City dedicated informational website. State election law requires that the City no longer spend City resources or staff time on outreach to the community once Council makes a final determination that an item will be placed on the ballot, which is anticipated to be decided in July 2026.
BUDGET IMPACT:
There are no costs associated with receiving this report. Funding for consultant services is available for Council consideration during the January 12, 2026 City Council Regular Meeting.
ENVIRONMENTAL DETERMINATION:
This item is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – San Mateo Revenue Measure Baseline Survey Report
STAFF CONTACT
Zachary Reda, Senior Management Analyst
[email protected]
(650) 435-0823