Wednesday, February 2, 2022

2.1.22 Meeting Summary

There were a few significant items discussed at last night's meeting:

- We agreed to send a letter to the BART Board of Directors expressing the City's desire to remain in the current central county district, rather than be placed in the east county district.  If Clayton were to be moved to east county, it would contradict existing transportation planning in the county and not be representative of where the majority of Clayton residents use BART services.

- We discussed the 10 year general fund forecast and it is bleak at best.  Here is a look at the operational deficits that are projected beginning with the next fiscal year (Jul-22 - Jun-23):

The outlook is actually worse than the above indicates because it doesn't include deficit projections in some of our special revenue funds for things like streetlights and stormwater.  Those shortfalls align with the above and would need to be made up from the General Fund.  This would only be the baseline - there are other areas that the city has not been able to keep up with that require significant one time spending, and ongoing spending to support.  Things like police staffing, market rate wages for city staff to improve retention, rising costs of services for maintenance and audit services, etc.  If we aggregate all of these current unmet needs, it would put additional negative pressure of nearly $400K/year every year.

We have enjoyed a healthy reserve balance for quite some time.  But with operating expenditures increasing approximately 4% each year, and revenues only increasing 1.4%, it's an unsustainable pattern that needs to be addressed.

- Next we discussed how to address these financial challenges.  Back in July 2021, I raised this issue - either raise taxes, cut services, or both. . I also started a poll on Nextdoor ( with the same article, and there was quite a bit of discussion around that time.  Since then I've requested that we begin talking about the process for putting a ballot measure before the voters.  I'm glad we are now revisiting the issue, though it would have been more desirable to start earlier.

The Council went over different types of tax measures, amounts, whether it should be a general tax or a special tax (specific purpose), and whether we should engage outside consultants to help with polling, communications, and drafting ballot language.

There was general agreement that a parcel tax would be the best choice, rather than a sales, business, or utility tax.  A general tax can be used for any purpose, and has a lower threshold for voter approval (50% +1) so that was the direction the Council was moving towards.  

The amount of the potential tax was discussed, but a figure wasn't settled on.  I requested additional information about what could be achieved at different levels of funding.  This will allow a more informed discussion when we seek approval - we need to be able to clearly articulate what it is the people will get if they approve any tax.

We were split on whether outside consultants should be engaged.  I think the city has been to liberal with its spending on outside consultants.  I don't believe a polling firm will tell us anything that we don't already know, and the results of any poll are not likely to influence the outcome of what we do regardless.  We know we need to raise revenue - we should determine what the lowest amount possible is, and set the number there.  There is no poll that will change that outcome.  

I am also opposed to hiring a communications consultant.  Again, we know the channels and methods we can use to reach out to Clayton residents.  Compound that with the fact we just engaged consultants to help communication efforts around ARPA, and the housing element, and the downtown lot - it's not like there are going to be new novel approaches that were not previously considered.  

I think if we are asking the people of Clayton to agree to a tax increase, the City needs to demonstrate that it is using its resources as effectively and frugally as possible.  If we are loose with our spending, it would be more difficult to persuade the people to give the city more money.

In about a month, staff will come back with more information regarding the level of funding to seek, as well as information about potential costs of various outside consultants and what services they can provide.