Who We Are. Ballot Box Success

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Culver City Micheál O Leary, Former Mayor, Culver City John Fairbank, Partner, Fairbank,

1 California League of Cities: Mayors & Council Members Executive Forum Ballot Box Success Why Polling and Community Education Matter June 23, 2016 Who We Are Jim Clarke, Mayor, Culver City Micheál O Leary, Former Mayor, Culver City John Fairbank, Partner, Fairbank, Maslin, Maullin, Metz & Associates (FM3) Marc Mitchell, Vice President, Cerrell Associates

2 Update on the California Electorate & the Role of Public Opinion Research for Local City Finance Measures Impact of Current Events & the International Situation on the California Electorate Recent events in national politics and international affairs may be creating a greater willingness, even among voters who are usually fiscally conservative, to invest in their local government infrastructure and services. Recent research has suggested that the present sense of pessimism many voters feel about the ability of the state and federal governments to adequately address issues they perceive to be problems has increased the pressure for proactive local government to fill the void created by inaction at the state and federal level.

American voters believe that the country has been on the wrong track for years Views on the direction of the state have vastly improved since 2010.

3 American voters believe that the country has been on the wrong track for years Views on the direction of the state have vastly improved since Would you say that things in the State of California are generally headed in the right direction, or are they off on the wrong track? Right Direction Wrong Track Mixed/DK/NA % 40% 11% SUBTITLE Subtitle 3/Date/Persons % 18% 28% 44% 44% 42% 66% 82% 58% 46% 43% 48% 10% 13% 10% 14% 17% 10% 0% 20% 40% 60% 80% 100%

Overall voters are split on the direction of the state, but there

speaking, would you say that things in the State of California are

SUBTITLE 2 Subtitle 3/Date/Persons California voters have

4 Overall voters are split on the direction of the state, but there are notable partisan and geographic differences Generally speaking, would you say that things in the State of California are moving in the right direction, or are they off on the wrong track? SUBTITLE 2 Subtitle 3/Date/Persons California voters have maintained a more positive outlook regarding the direction of their own city or town.

5 Two-thirds continue to see their local government as more accountable than the state, but the proportion who strongly agree is much higher today. November 2016 Will Almost Certainly See Numerous Well-Funded Statewide Ballot Measures:

6 These measures will likely result in an unusually long ballot nearly everywhere in the State. Example: County Level Los Angeles County Transportation half-cent sales tax measure Parks & Recreation Parcel Tax Measure Homeless Services Tax Measure Local Level City of Long Beach General purpose one-cent City sales tax measure (June) $850 million Community College G.O. bond measure (June) $1.5 billion Unified School District G.O. bond measure As a result, cities and other local agencies proposing finance measures are now conducting more research than in previous election cycles. Two-stage Research Process: Baseline Survey Conducted 9-12 months before election Provides comprehensive evaluation of electoral environment & voter support for a proposed finance measure Tracking Survey Conducted 2-4 weeks before ballot placement deadline Provides final determination of electoral viability in context of other finance measures that will appear on the same ballot

7 Homelessness, housing and poverty are rising in salience as top concerns for voters. The intertwined issues of homelessness and the cost of housing are now viewed as the most serious problem facing California s major cities, including Los Angeles, San Francisco and Long Beach outpacing the drought. Concern over housing costs is also rising in suburban communities. Support is at record highs throughout the state for local tax and bond measures that would provide services to aid those left behind by California s economic recovery. California voters recognize that child & family poverty is getting worse and believe it is a long-term problem for the State.

8 Case Study: City of Culver City Measure Y Effects of Great Recession Significant revenue loss Costs continued increasing Investment losses at CalPERS required increased contributions from city. Costs of medical insurance for employees and retirees continued to rise. New requirements on accounting for and funding liabilities for retiree medical benefits. Without action, the city was facing more than a $7 million annual operating deficit.

9 Action by the City Proactive fiscal management resulted in cutting $6-7 million from budget through position eliminations and operating cost reductions Negotiated new labor contracts to reduce rising costs of public employee pensions and benefits. Significant reductions to the budget Focus on maintaining public service levels as much as possible RDA Elimination For nearly 30 years, the city operated a local redevelopment agency (RDA), which the city leveraged to support the high level of services provided to the community. Redevelopment was eliminated in 2012, eliminating $7.5 million in transfers and reimbursements to the General Fund. The revenue lost by RDA elimination effectively wiped out the progress the city had made in reducing the budget.

10 Going Forward The city had used millions in emergency reserves to balance the budget and preserve services. Without action, the City would have burned through all of its reserves in a matter of years. The level of reductions required to balance the budget would have been staggering, and would have altered the quality of life in Culver City. General Fund Five Year Forecast

11 General Fund Revenue Prior to Measure Y Permanent Problem The loss of RDA revenues was permanent. The revenue from the RDA to the General Fund was considered an operating and on-going source. The booming economy during the housing bubble was fueled by artificial wealth and spending. This was not a temporary problem, and a permanent solution was required.

12 Two directions Tough Choices To solve the significant operating deficit problem, either significant further cuts to expenditures were required, or the community needed to consider raising revenues. Being a full-service City, with over 75% of GF costs being personnel-related, and over 50% being public safety, any meaningful cuts would have involved huge staff and service reductions. This would have had a profound impact on the quality of life for Culver City residents. Raising Revenues Further significant cuts to the organization would have had a clear affect on the levels of service that set Culver City apart. Any local tax increase needed approval by the voters. Prop. 22 legally protected these funds from being raided by Sacramento. Funds from a local tax measure would stay local, and benefit Culver City, not the State. Any kind of property or utility tax increase would only have been paid by residents or local business and would have needed to be significant. A local sales tax increase would leverage the fact that there was a large influx of people that didn t live in Culver City but came here to shop and use our services and amenities.

Raising Revenues A half-cent local sales tax increase was estimated to generate approximately $8 million annually, and would protect the existing levels of service in Culver City.

13 Raising Revenues A half-cent local sales tax increase was estimated to generate approximately $8 million annually, and would protect the existing levels of service in Culver City. A few examples: Such a tax would add $1.50 in sales tax to a $300 shopping trip to Costco or Westfield Mall. Such a tax would add $0.05 (a nickel) in sales tax to a $10 lunch bill. Such a tax would add $150 in sales tax to a $30,000 car purchased by a Culver City resident. Case Study: City of Culver City Ballot Measure Feasibility Study Interviews Conducted: May 22-24,

The City s revitalization and safe neighborhoods stood out as principal reasons why

14 Unlike many communities in Los Angeles County and the State of California, Culver City voters were highly positive about the direction of their city in The City s revitalization and safe neighborhoods stood out as principal reasons why voters rate their city so highly, and most welcomed the Expo Line extension to Culver City.

voters were note fully aware of the city s financial constraints.

15 Many voters believed Culver City needed additional funds to maintain city services, but just one-in-five say the city has a great need, suggesting voters were note fully aware of the city s financial constraints. Although Culver City voters recognized that cuts would hurt their city and additional funds were needed

16 there was less recognition of how Culver City has been affected by the economy and state takings, and many did not know about recent steps to reduce spending and save money. However, presenting factual information about city finances and services did raise voter concern about essential city services that voters depend on.

17 Culver City Ballot Measure Culver City Essential City Services Measure To offset state budget cuts, preserve quality neighborhoods and ensure effective 911 emergency response services by retaining firefighters, police officers, and paramedics; fixing potholes/streets; maintaining parks, community centers, storm drains; continuing after school programs, senior services, graffiti removal, arts/cultural programs, and other general City services, shall the Culver City sales tax be raised one-half cent, requiring annual independent financial audits, all funds used locally, and no money for Sacramento? After hearing this simulated 75-word ballot label statement, nearly seven-in-ten said that they would vote yes on the measure if the election were held today.

18 Demographics of Vote on Culver City Half Cent Sales Tax Measure Demographics of Vote on Culver City Half Cent Sales Tax Measure

19 Voters were most likely to support the measure knowing it would require public disclosure, audits and all funds raised must remain in Culver City to maintain local services. Voters prioritized using ballot measure funds to maintain effective 911 response services and retaining public staffing levels.

Total support and the intensity of support for the

20 Maintaining effective 911 emergency response services resonated strongly with Culver City voters. Total support and the intensity of support for the Culver City ballot measure increases after voters have heard more information.

issue of city workers salaries and benefits is the

21 Largest Increase in Support for the Culver City Ballot Measure by Demographic Group Raising the issue of city workers salaries and benefits is the only negative statement that had traction with voters.

22 Support for the Culver City ballot measure was unaffected after a series of negative messages. Culver City voters identified their city measure as a high priority, even if the November ballot were to be crowded with other sales tax measures.

23 Public Education Educate residents on Council s review of revenue measures and how additional revenues would support City s services. Use both traditional and innovative approaches to engage as many Culver City residents as possible. Candid and factual messages ensured Culver City residents and businesses are fully informed of a potential sales tax measure. Key Components Factual messages and materials Influential stakeholder engagement Community meetings Media outreach Online/social media Direct mail

24 Voters Speak The City Council voted unanimously to place the matter on the ballot and let the voters of Culver City speak. Voters overwhelmingly approved Measure Y at approximately 75%. Measure Y is estimated to represent 9% of General Fund revenues for FY

25 General Fund Revenue (FY16-17) With Measure Y Looking Forward Measure Y allows Culver City to maintain services and absorb pension cost increases (barring another recession), while maintaining reserves. However, Measure Y included a 10 year sunset provision, and will either need to be renewed by the voters prior to March of 2023, or other solutions will be required.

26 Questions?

CITY OF BURBANK FINANCIAL SERVICES DEPARTMENT STAFF REPORT

CITY OF BURBANK FINANCIAL SERVICES DEPARTMENT STAFF REPORT DATE: July 17, 2018 TO: FROM: Ron Davis, City Manager Cindy Giraldo, Financial Services Director SUBJECT: Burbank Infrastructure and Community