February 24, 2011

A New Tax for the City A New Tax for the City of Tracyof Tracy

Facilitator: Zane H. Johnston, Facilitator: Zane H. Johnston, Finance & Administrative Finance & Administrative

DirectorDirector

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Tracy Faced Big Fiscal Tracy Faced Big Fiscal ChallengeChallenge

• Commissioned Study to identify areas to cut, revamp, consolidate, etc.

• Study noted a new revenue source would also be necessary to balance budget if essential services were to be maintained

• City thought initially this would be a parcel tax

• City decided to poll community to find out what residents thought

Why Conduct a Poll?Why Conduct a Poll?

The Godbe Research ProcessThe Godbe Research ProcessProject Kick-

Off Meeting

Review Data / Demographics

DraftInstrument

Develop Sample Design

Pretestand Program

FieldSurvey

Analysis& Reporting

Presentationof Findings

Post-ProjectSupport

Essential Components of a Revenue Measure SurveyEssential Components of a Revenue Measure Survey

Issues of ImportanceIssues of Importance

First Ballot TestFirst Ballot Test

Tax ThresholdTax Threshold

Projects/ProgramsProjects/Programs Pro ArgumentsPro Arguments Con ArgumentsCon Arguments

Duration/Special FeaturesDuration/Special Features

Second Ballot TestSecond Ballot Test

DemographicsDemographics Voter BehaviorVoter Behavior Geographic VariablesGeographic Variables

Important IssuesImportant Issues

Not At AllImportant

Somewhat Important

Very Important

Extremely Important

Note: The above rating questions have been abbreviated for charting purposes. The responses were recoded to calculate mean scores: “Extremely Important” = +3, “Very Important” = +2, “Somewhat Important” = +1, and “Not at all Important” = 0.

Opinions of Half-Cent Sales TaxOpinions of Half-Cent Sales Tax

To help prevent additional budget cuts and maintain City of Tracy services, including Police (patrol, 911, police command, gang/narcotics enforcement, crime investigations, other police services); Fire protection, emergency services, and other fire services; Park/sports field maintenance; City administration; Senior, teen, and youth services; Art programs; and other general services shall the City of Tracy enact a half-cent sales tax, with resident oversight, annual independent audits, and all funds used for City of Tracy services only?

Yes / No

64% / 29%

62% / 34%

Opinions of Measure DurationOpinions of Measure Duration

Service Priorities – Tier I

Somewhat More Likely

Much More Likely

No Effect

Note: The above rating questions have been abbreviated for charting purposes. The responses were recoded to calculate mean scores: “Much More Likely” = +2, “Somewhat More Likely” = +1, “No Effect” = 0, “Somewhat Less Likely” = -1, and “Much Less Likely” = -2.

Somewhat Less Likely

Informative Statements

Somewhat More Likely

Much More Likely

No Effect

Note: The above rating questions have been abbreviated for charting purposes. The responses were recoded to calculate mean scores: “Much More Likely” = +2, “Somewhat More Likely” = +1, and “No Effect” = 0.

Split SampleSplit Sample

Important Issues (n = 600)

Sales Tax Measure (n = 300) Utility Tax Measure (n = 300)

Influence of Supporting Arguments (n = 300)

Support for Different Tax Rates (n = 300)

Influence of Opposing Arguments (n = 300)

Sales Tax Measure (n = 300)

Influence of Programs on Voter Support (n = 300)

Influence of Projects on Voter Support (n = 300)

Influence of Supporting Arguments (n = 300)

Influence of Opposing Arguments (n = 300)

Support for Different Tax Rates (n = 300)

Support for Different Tax Durations (n = 300)

Utility Tax Measure (n = 300)

Demographic Questions (n = 600)

Support for Different Tax Durations (n = 300)

Opinions of Parcel TaxOpinions of Parcel TaxTo help maintain and prevent additional budget cuts to police patrols, crime prevention, anti-drug and gang-prevention programs; 911 emergency response times; fire protection; and firefighters and police officers shall the City of Tracy levy $200 per residential parcel annually, exempting seniors, with resident oversight, annual independent audits, and all funds used only for City of Tracy police, fire, and emergency medical services?

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Continuing the Tracy Continuing the Tracy StoryStory

• City now armed with valuable information obtained from the poll

• City now needed to interpret this information and translate it into a ballot measure to be considered by voters

• City also needed a public information process to communicate to the community about the City’s fiscal situation

Turning Theory into Turning Theory into Reality…Reality…

How to Convert Your City How to Convert Your City Studies and Polling Studies and Polling

Results into a Winning Results into a Winning CampaignCampaign

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What is Legally What is Legally Permissible City Permissible City Communication?Communication?

• The City of Tracy, like others, is legally permitted to convey a full range of information to voters, including facts about the City’s budget deficit, existing and future budget cuts, and information gathered from the Community Survey.

• The City of Tracy successfully utilized all of its communication vehicles, including the Internet, city newsletters, and community presentations.

• The information conveyed included what the public told us about their service priorities and the proposed sales tax solution.

15*Should not be construed as providing legal advice. Confer with your City Attorney on these matters.

A City’s Right to A City’s Right to Communicate is Communicate is

ProtectedProtected

As described in Vargas vs. Salinas *:

• City-issued information cannot expressly advocate any partisan position.

• City-issued information is also evaluated within the context of its “style, tenor, and timing.”

• Cities and other public agencies have a right to speech, within these parameters.

• Work closely with your City Attorney, and utilize common sense practices so that your Public Education Program is being implemented within established City practices. Getting a proactive start on your long-term community communications is essential!

*Should not be construed as providing legal advice. 16

Tracy’s Educational Tracy’s Educational OutreachOutreach

• Following the completion of the community survey, results were carefully analyzed.

• A City Communications Outreach Program strategy was developed with the input of all parties: Consultants, Executive Staff, and City Attorney.

• The City of Tracy convened an outstanding Outreach Team for this project, who deployed by:

• Issuing internal updates to staff at all levels

• Refining database of key Community Organizations and Opinion Leaders

• Making scores of Speakers Bureau presentations

• Mailing Opinion Leader updates, convening meetings with the City Manager and Influentials, as needed

• Sending Utility Bill Inserts with pertinent factual, budgetary information

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The Importance of The Importance of Internal CommunicationInternal Communication

• Internal stakeholders (city staff, associations, volunteers) are the backbone of our service delivery. It is important to work from the “inside out” by educating your internal constituents so that the “Team” understands:

• Your proposed plan or revenue solution• How and why the community’s priorities must be

strongly represented within the City’s plan.

• Upon completion of the survey, we:• Issued E-mail updates from the City Manager• Delivered “Hot off the Presses” survey debriefs by

GRA to Department Heads and Department Head meetings with consultants

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Speakers’ Bureau ExampleSpeakers’ Bureau Example

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Speakers’ Bureau messages were tested in advance in the poll, ensuring they were user-friendly and effective.

Only easy-to-understand, effective facts and information were utilized; everyone stayed “on point.”

Opinion Leaders and the Opinion Leaders and the Public-at-LargePublic-at-Large

• The City of Tracy mailed updates to Opinion Leaders regarding the budget process and community feedback surrounding the potential for what became Measure E.

• Selected Personal Meetings with the City Manager and Key Influentials helped to address additional questions or concerns.

• The City also provided budget information to constituents through utility bill inserts, ensuring that residents were properly informed and not surprised by the placement of Measure E on the ballot.

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Drafting Measure EDrafting Measure EBallot LanguageBallot Language

• All pertinent facts and information tested in the survey was “embedded” into the staff report, resolution and ballot question.

• The ballot materials were specifically drafted to address community priorities expressed in the polling:

• General Purpose Measure requiring simple majority passage

• Fiscal Accountability Protections: Independent Citizens Oversight, 5-year sunset clause

• A ballot question that was specifically tested in polling for clarity and effectiveness

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YES on E CampaignYES on E Campaign

• While the City continued to convey factual information on Measure E, a separate YES on E campaign committee was formed to directly advocate for its passage.

• YES on E raised over $50,000• YES on E volunteers called and identified

more than 1,000 supporters• YES on E ran four newspaper ads (one per

week for four weeks), sent two campaign mailers to voters, put up 550 yard signs and billboards, and placed three targeted messages to all voters

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The Results in TracyThe Results in Tracy

• Measure E passed with 59% approval (needed simple majority)

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Why Tracy was Why Tracy was SuccessfulSuccessful

• We had fiscal credibility (prior good fiscal management)

• We communicated facts and kept on message

• We used a variety of communication vehicles available to us

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Fiscal CredibilityFiscal Credibility

• City had history of good fiscal management (strong reserves, low debt, etc.)

• We put our house in order first before asking voters for additional taxes (implemented all of the recommendations from the previous study)

• Implemented important “public perception items”

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Communicated Facts Communicated Facts (Kept on Message)(Kept on Message)

• 27% drop in property taxes in 3 years• 34% drop in sales tax• Has not been a corresponding drop in demand

for services• 80% of General Fund taxes go to public safety• State actions (previous and current) hurt City• City already made all the cuts not having an

adverse impact on essential services• Defined “value” of services received • Tax would not harm economy or place Tracy in

adverse relationship to neighboring communities

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Used a Variety of Used a Variety of Communication Communication

VehiclesVehicles

• 2 mailers to “key opinion leaders”• Speakers bureau made 35 presentations

– 800+ “movers and shakers”• 3 newsletter inserts – 1 full edition –

“Plug into the Facts”• 4 time per week broadcast on Cable TV• Website update• Political Campaign (outside of City’s

efforts)

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If it worked in TracyIf it worked in TracyIt can work for youIt can work for you

• Since 2001 65% of majority vote local tax measures and 46% of 2/3 vote measures have passed statewide

• Tracy is relatively conservative• Had local Tea Party opposition• Passed at same time as conservative

revolution swept nation• VALUE – VALUE – VALUE !!!!!

• Zane Johnston, Finance Director Zane Johnston, Finance Director 209-831-6800 209-831-6800 |zane.johnston@ci.tracy.ca.us

• Bryan Godbe, President, Godbe ResearchBryan Godbe, President, Godbe Research

650-479-1127 650-479-1127 wbgodbe@godberesearch.com

• Catherine Lew, Lew Edwards Group Catherine Lew, Lew Edwards Group 510-594-0224 x216 510-594-0224 x216 catherine@lewedwardsgroup.com

Questions & DiscussionQuestions & Discussion