Item Coversheet
ADMINISTRATIVE REPORT
MEETING DATE:  6/20/2018Deferred Business 12. b.
TO:Honorable Mayor and City Council
FROM:Alan Tandy, City Manager
DATE:6/15/2018
WARD: 
SUBJECT:

Placement of a Local One Cent Sales Tax (Transactions and Use) Public Safety and Vital City Services Measure on the November 6, 2018 General Election Ballot for Voter Consideration. 

STAFF RECOMMENDATION:

Based on extensive community feedback and discussion, there is significant evidence to suggest the voters of the City of Bakersfield should be given the opportunity to decide whether to adopt a reliable, locally-controlled funding stream within the City to maintain and enhance public safety services, address the fiscal stability of the City and to address quality of life issues such as homelessness.

Therefore, staff recommends the City Council:

  1. Approve a resolution calling for the placement of a general tax measure on the ballot of the November 6, 2018 general election to adopt a sales tax (transactions and use tax); and
  2. Conduct first reading of an ordinance enacting a transactions and use tax to be administered by the California Department Of Tax and Fee Administration; and
  3. Order submittal of the ordinance to the voters at the general election; and
  4. Direct the City Attorney to prepare an impartial analysis; and
  5. Approve the filing of arguments for or against the measure by any combination of up to 5 City Councilmembers and the Greater Bakersfield Chamber of Commerce
BACKGROUND:

The City of Bakersfield has a long tradition of fiscal conservatism, reflected in the City’s award-winning budgeting, low staffing to population ratios and low general fund expenditures per capita. However, there are several factors affecting the City’s fiscal outlook and threatening the long-term quality of life for residents. Those factors are summarized in detail within the staff report from the June 6, 2018 meeting on this topic and attached as reference.

After analyzing the information from staff, the community survey and input provided through over 20 community outreach sessions, on June 6, 2018, the City Council directed staff to proceed with preparing the necessary documents to place a one-cent sales tax measure on the November 2018 ballot.

Such a measure, if approved by the voters, would help the City fund the top priorities identified by the community including maintaining and improving public safety services, keeping public areas safe and clean, retaining and attracting jobs/businesses, and working with community partners to address homelessness with revenue that is locally controlled, meaning none of the revenue generated by the measure can be taken by the State. All proceeds would be invested for the benefit of Bakersfield residents.

The proposed ballot question, which meets the word limit requirements for ballot measures, is:

BAKERSFIELD PUBLIC SAFETY/VITAL CITY SERVICES MEASURE. To prevent cuts/improve 911 emergency response, police/fire protection, anti-gang/drug units, neighborhood police patrols; rapid response to assaults, robberies, gang violence, home burglaries; crime prevention; address homelessness; retain, attract jobs/businesses; unrestricted general revenue purposes; shall the measure be adopted approving an ordinance establishing a one-cent sales tax providing $50,000,000 annually until ended by voters, requiring independent audits, citizens oversight, all funds for Bakersfield?

The proposed ballot measure safeguards the use of public funds and ensures transparency and accountability. The measure requires citizens’ oversight, the publishing of an annual report and annual mandatory financial audits to ensure that all funds are spent as pledged.

Specifically, the City Council would be required to appoint a citizens’ oversight committee that would meet regularly for the purposes of ensuring the proceeds of any revenue pursuant to the related Ordinance are expended in a manner consistent with the priorities of this ballot measure. The Committee will also be required to review the annual report and audit to confirm these investment priorities.

In order for the measure to be considered a general tax measure, where a simple majority plus one of voters is required for passage, the measure must be placed on the ballot coinciding with a general City Council election. The general election for City Council this year takes place on November 6, 2018.  It should be noted that the related ordinance establishing the sales tax requires a two-thirds vote of the City Council for adoption.

The one-cent sales tax measure would be a general purpose tax, requiring the approval of a simple majority of voters. By placing a general tax on the ballot, the City Council is not approving a specific spending plan now. However, the City staff has spent several months soliciting community feedback on priorities. It is staff’s intention to address the public’s stated priorities to maintain and enhance public safety services, address the fiscal stability of the City and to address quality of life issues such as homelessness with the adoption of a specified plan immediately upon certification of election results should the measure be approved by the voters.

A sales tax increase would become effective for all applicable transactions as of April 1, 2019, and the City would budget a full fiscal year allocation of these funds starting in FY 2019-20. Importantly, funds received from this one-cent sales tax would be locally generated and therefore could not be taken by the State

Arguments for and against the ballot measure must be submitted to the City Clerk’s office no later than July 5, 2018 by 5:00 p.m. Rebuttal arguments must be submitted to the City Clerk’s office by July 16, 2018 and subsequently to the County Elections Division by Monday, August 20, 2018, by 5:00 p.m.

If approved by Bakersfield voters at the November election, the proposed ordinance would add Chapter 3.38, “Bakersfield Public Safety/Vital City Services Measure” to the Bakersfield Municipal Code. Although the ordinance would go into effect 30 days after the election result has been certified by the City Council, the effective operational date of the ordinance would be April 1, 2019. The ordinance would remain in effect until ended by voters.

Recommended Abbreviated Timeline

The following timeline provides several key dates for specific actions as recommended by staff.

  • June 20, 2018: City Council approves ballot language and supporting documents to place one-cent general sales tax measure on the November 2018 ballot
  • July 5, 2018: Arguments are due to the City Clerk’s Office by 5 p.m.
  • July 16, 2018: Rebuttal are due to the City Clerk’s Office by 5 p.m.
  • November 6, 2018: Election Day
  • Winter 2018: Election results are certified; 2nd reading of ordinance; Oversight Committee appointments made (under the scenario of the measure being approved by voters)
  • April 2019: Measure becomes operative

Note: Timeline is not comprehensive, it is meant to provide an outline of the key dates associated with a potential tax measure.

ATTACHMENTS:
DescriptionType
Blue MemoCover Memo
Written material submitted by Michael TurnipseedCorrespondence
Bakersfield Public Safety Vital City Services Measure Transactions and Use Tax ResolutionResolution
June 6th 2018 Revenue Enhancement Staff Report Item 6aBackup Material
Fiscal Outlook Presentation Presentation