Fiscal Sustainability: A Community Conversation

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On August 10, the City Council continued their fiscal sustainability conversations by approving revenue ballot measures for voter consideration on November 8, 2022. 

Introduction

A core City value continues to be how to maintain a high quality of City services in a fiscally sustainable way, with many ongoing community conversations dedicated to the topic. The global pandemic has impacted the City’s ability to provide City services at the levels residents expect and deserve.

As we all recover from the fiscal and health impacts of the pandemic together, we invite you to join a conversation about our future, and how we can maintain and deliver the services you need and expect. Even with improved service delivery, it will be a long time before fiscal sustainability is realized and full City service levels are restored.

The new City budget focuses on fiscal sustainability, community recovery, and near-term restorations of services. For more on the City’s budget, go to www.cityofpaloalto.org/budget.

To support general government services and programs, on August 10, the City Council approved placement of two revenue measures on the November 2022 ballot for voter consideration. 

What’s New

Measure K & Measure L Community Questions

NEW August 2022! On August 10 the City Council continued their fiscal sustainability discussions. At this meeting, the City Council passed a motion to place two measures before voters on the General Election ballot this November 8: one to establish a new business tax (Measure K), the other to affirm the decades old practice of annually transferring a percentage of revenues from the natural gas utility to the City’s general fund (Measure L). The measures would generate approximately $16.6 million in gross revenues annually. To learn more:

  • View a recent blog issued on the Council action 

Read the blog here

  • Read City Council August 10 Special Meeting Materials: 

August 10 Revenue Measures Staff Presentation

Meeting Materials from August 10

Measure K Advisory Spending Resolution adopted August 22, 2022(PDF, 345KB)

  • Gain official election materials

Election Materials

June 2022: Council adoption of FY 2023 budget took place in addition to continued decisions regarding placement of potential ballot measures on November 2022 ballot. For the Adopted budgets, go to www.cityofpaloalto.org/budget

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Community Conversations on the Fiscal Health of the City

In April, the City Council considered related ballot measure items and voted to: 1) establish a new Business Tax and 2) affirm of the current natural gas utility transfer. 

The first measure is a Business Tax which if passed by voters, will generate revenue to support general government purposes and programs. Staff and the Council actively engaged with the community through Fiscal Sustainability: A Community Conversation, that included online and mail-in surveys, focus groups geared towards community and business members, and a community-wide listening session.

The second measure will affirm the decades long practice of City gas ratepayers funded contributions to general City services to support a variety of City programs and services. A great majority of municipal utilities in California make similar transfers to support these services.

To ensure long term planning continues to be rooted in the community, we have been asking residents to provide their input on service priorities. The City has hosted several opportunities for community feedback including focus group discussions and a community informational session. The online survey continues to be open to gain input. Thank you to the hundreds of community members who have shared input to date. 

Final documents adopted by the Council for voter consideration can be found above under “What’s New.”

Community Input on Services Most Important to You

Annually as part of the budget process and beginning in early 2022, the City has engaged in a community outreach effort to get feedback on service priorities, which helps inform the City Council decisions as part of the budget process and long-term fiscal sustainability strategies. 

Join the conversation in the following ways:

For a complete history of this community conversation, see the Archived prior work content below.

Archived Prior Work on Ballot Measures

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. 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 as well as stakeholder and community engagement materials. The documents are ordered chronologically by date for ease of reference.

  • 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
  • 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
  • 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
  • May 2022: Community Information Session PowerPoint  Fiscal Sustainability Community Informational PPT May 2022(PDF, 3MB)
  • May 19, 2022 Budget Blog Post: Fiscal Sustainability Conversations: Investing in the Community’s Future here
  • June 2022: Fact Sheet and FAQ  Fiscal Sustainability & New Revenue to Support Community Needs Long‐Term(PDF, 398KB)
  • 6/13/2022 City Council, "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," CMR 13983 p. 221
  • 6/13/2022 City Council, 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," CMR 14501, p. 298
  • 6/20/2022 City Council, "Adoption of Resolutions: (1) Placing a Measure Affirming the Gas Utility Transfer on the November 2022 Ballot; (2) Placing a Business Tax on the November 2022 Ballot; and (3) Adopting a Spending Plan for Business Tax Proceeds,” CMR 13984, p. 911
  • 8/1/2022 City Council, “Adoption of Resolutions: (1) Placing a Business Tax on the November 2022 Ballot; (2) Placing a Measure Affirming the Natural Gas Utility Transfer on the November 2022 Ballot; and (3) Establishing Advisory Spending Guidelines for Business Tax Proceeds,” CMR 14540, p. 89
  • 8/8/2022 City Council, “Adoption of Resolutions: (1) Placing a Business Tax on the November 2022 Ballot; (2) Placing a Measure Affirming the Natural Gas Utility Transfer on the November 2022 Ballot; and (3) Establishing Advisory Spending Guidelines for Business Tax Proceeds,” CMR 14639 p. 187
  • 8/10/2022 City Council, “November 2022 Ballot Measures: (1) Repeal of a Resolution Adopted Supplemental on August 8, 2022, and Adoption of a Revised Resolution Placing a Report Presentation 2 Special Meeting August 10, 2022 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org. Business Tax on the November 2022 Ballot; (2) Adoption of a Resolution Placing a Measure Affirming the Natural Gas Utility Transfer on the November 2022 Ballot,” Supplemental Report

 

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