City Council Staff Report Page 1 of 5 March 10, 2026
Staff Report
Agenda Item No. 5.3
DATE: March 10, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Receive a Report on the Results of the Community Survey to Consider Placing a Measure on the November 2026 Ballot to Extend the Utility Users' Tax and Provide Direction
EXECUTIVE SUMMARY
The City Council has been considering whether to seek voter approval to extend, and potentially increase, the existing Utility Users’ Tax (“UUT”), which is scheduled to sunset on December 31, 2028. To inform this discussion, the City retained Godbe Research to conduct a statistically reliable survey of likely November 2026 voters to gauge community attitudes toward potential UUT extensions and rate adjustments.
The survey results provide insight into voter perspectives regarding possible rate increases, duration options, and continued support for the existing tax. Based on these results, staff is seeking City Council direction on whether to continue exploring a potential ballot measure for the November 2026 General Municipal Election.
If the City Council is supportive of further exploration, staff requests initial direction on the general framework of a potential measure, including possible tax rates and duration. With City Council support, staff would begin a community education effort to share information with residents about the potential extension of the UUT and return to the City Council at a future meeting for consideration of final ballot language.
STRATEGIC PLAN ALIGNMENT
This item is in alignment with Goal A. Financial Stability and Sustainability of the City Council Strategic Plan. Under Goal A, it is specifically related to the following strategies:
• Strategy 1: Develop a comprehensive fiscal sustainability model to address the General Fund’s long-term structural deficit.
• Strategy 8: Determine the feasibility of a revenue ballot measure for November 2024 and/or November 2026 to address critical facilities and infrastructure needs. • Strategy 9: Pursue the placement of a voter-approved revenue measure on a ballot to address the funding gap between revenues and expenditures for fundamental public safety and other city services.
Agenda Item No. 5.3
City Council Staff Report Page 2 of 5 March 10, 2026
BACKGROUND
On a regular and ongoing basis, the City conducts a comprehensive review of its longterm financial forecast, which was most recently presented to the City Council at the City Council retreat on August 23, 2025. This is to ensure the City may continue to fund core services and to help plan and prepare for any unprecedented fiscal challenges or economic uncertainties that may arise. While the City currently maintains a healthy General Fund reserve, this is primarily due to salary savings from vacant positions, deferred maintenance and capital projects, and assistance during the pandemic through an influx of American Rescue Plan Act (ARPA) funds. The General Fund is currently projected to fall to the minimum reserve fund balance of twenty percent of its annual operating expenditures by 2029. This anticipated operating budget deficit is approximately $2.8 million per year.
There is a need to identify new and ongoing stable revenue sources to address the operating budget deficit and to provide the City with long-term stability. Hence, it is not constantly facing a “fiscal cliff.” Prudently, the City Council has expressed its commitment to protecting reserve levels and its interest in exploring voter-approved revenue measures to provide financial stability and maintain existing service levels. In 2020, voters approved the initial UUT; in 2022, voters approved an extension of the City’s one-half cent sales tax; and in 2024, voters approved an update to the business license tax.
The City engaged TeamCivX and Godbe Research to evaluate possible approaches to stabilize and increase revenues. Specifically, the City Council considered either increasing the citywide Landscape and Lighting District (“LLAD”) or extending and possibly increasing the existing UUT. To facilitate this analysis, the City Council formed an Ad Hoc Subcommittee in September 2025, comprising Mayor Singh and Councilmember Nishihira. After consideration of the Ad Hoc Subcommittee’s analysis and recommendation, the City Council concurred that it would prioritize an extension of the existing UUT because the measure would otherwise sunset in 2028. Also, the LLAD had a more flexible timeline that was not dictated by the calendar of the November state-wide general election. The City Council could seek property-owner approval to modify the LLAD outside the election cycle.
Based on the City Council’s determination to focus on the UUT for the November 2026 general election, the City Council authorized the Ad Hoc Subcommittee to oversee a community survey to gauge voter attitudes and support for the extension of the measure.
The statistically reliable survey was prepared by Godbe Research and TeamCivX and executed in January and February 2026. The survey asked voters to consider various durations for the UUT extension and potential increases.
DISCUSSION
Community Survey Overview
The community survey was conducted January 20 through February 7, 2026, of likely November 2026 voters in Union City, with a sample size of 468 respondents and a margin of error of ±4.48% (see Attachment 1).
Agenda Item No. 5.3
City Council Staff Report Page 3 of 5 March 10, 2026
Table 1 summarizes the survey results regarding the proposal to adjust the UUT rate from 5% to 6.5% or 7.5%, with various time durations.
The measure was posed multiple times during the survey to gauge:
A. Initial uninformed support for the measure to add 2.5% to the existing 5% UUT (total 7.5%);
B. Interim support and how it fared after informational statements were read describing the purpose of the measure;
C. Final support and how it fared after critical statements were read, describing likely arguments against the measure;
D. Alternative 1 support and how it fared after a 6.5% rate was provided; E. Alternative 2 support and how it fared with a 16-year duration; F. Alternative 3 support and how it fared with an 8-year duration; and G. Alternative 4 support and how it fared at the current 5% rate with an 8-year extension was provided.
Table 1
A B C D E F G
Initial
Uninformed
(5%+2.5%)
Interim
(Informational
Statements,
7.5%)
Final
(After
Critical
Statements
7.5%)
Alt. 1
(6.5%)
Alt. 2
(16-year
duration)
Alt. 3
(8-year
duration)
Alt. 4
(5% at
8-year
duration)
Support 44.5% 50.9% 43.5% 48.8% 43.4% 46.4% 55.4%
Oppose 36.7% 37% 46.8% 41% 45% 43.6% 35.8%
Don’t
Know 18.8% 12.1% 9.7% 10.2% 11.6% 10% 8.8%
The survey results indicate that pursuing an increase at this time may be met with uncertainty, as only 50.9% support it. While this is slightly over the 50% support needed for its passage as a general tax, it is solidly within the margin of error. Further, following critical statements regarding the measure, support drops to 43.5%. The only alternative that received consistent support was Alternative 4, which was no increase in the rate and an eight-year extension.
As background, Union City voters approved a 5% UUT in November 2020 with 56.9% voter approval. The existing UUT will expire in December 2028. Waiting until the November 2028 general election would create significant financial uncertainty. To successfully extend the measure for eight years now would have the measure sunsetting in 2036.
As the City Council considers next steps, it should be mindful of future election cycles and the expiration dates of the revenue measures. As illustrated in Table 2, the general election in 2028 or 2032 could be available for consideration of other ballot measures, such as a bond measure for facilities or other possible revenue measures. By 2030, the City Council will need to be mindful of the one-half-cent sales tax, which expires in early 2034. While the City Council could wait until the general election of 2032 to consider the extension of the one-half cent sales tax, doing so will allow only one opportunity to present this measure to the voters before the expiration date of March 31, 2034.
Agenda Item No. 5.3
City Council Staff Report Page 4 of 5 March 10, 2026
Table 2
General
Elections 2026 2028 2030 2032 2034 2036
Suggested
Renewal
UUT -
8-year
duration
½ cent
sales tax UUT
Expiration
UUT
expires
December
2028
½ cent sales
tax expires
March 2034
UUT expires
December
2036
Staff is now seeking City Council direction on whether the Council supports further exploring a possible ballot measure for November 2026. If so, staff are requesting direction on the measure's framework, including a possible rate and duration.
FISCAL IMPACT
There is no immediate impact associated with the consideration of this item. The Fiscal impact on the General Fund would depend on the direction received by the City Council and the outcome of any potential ballot measure.
The City’s long-term financial forecast indicates a shortfall averaging $2.8 million from FY 2025 to FY 2035. The General Fund is projected to fall below the minimum reserve fund balance goal of 20% of its annual operating expenditures by 2029 and to be depleted by 2035 if no corrective action is taken. The financial forecast assumes no expansion of staff or City services.
RECOMMENDATION
Staff recommends that the City Council receive the survey results prepared by TeamCivX and Godbe Research as presented in Attachment 1 and provide direction regarding a potential ballot measure for the November 2026 election, including:
1. Whether or not to proceed with an extension to the Utility Users’ Tax; and
2. If so, provide initial direction on any adjustments to the 5% tax rate currently set, and the possible duration of the tax/sunset dates beyond December 31, 2028.
With City Council support to continue exploring a potential ballot measure, staff would begin community education and outreach to share information with residents regarding the possible extension of the Utility Users’ Tax. Staff would return to the City Council in July 2026 to consider placing a measure on the November 2026 ballot.
Agenda Item No. 5.3
City Council Staff Report Page 5 of 5 March 10, 2026
Prepared by: Joan Malloy, City Manager
Submitted by: Joan Malloy, City Manager
Attachments
1. Attachment 1 – 2026 Revenue Measure Survey Results