Clayton survey shows November parcel tax would likely fail
CLAYTON, CA (May 19, 2022) — As the City Council continues to discuss the financial challenges that Clayton will face in the coming years, we decided to hire a polling firm to assess residents’ appetite for a tax increase ballot measure in November 2022.
On May 3, the polling company presented the data from its research. As suspected, Clayton residents overwhelmingly love our city, police, library and recreation. However, few residents knew of the financial challenges that we face as a city.
In fact, the data clearly indicated that any effort to put a tax measure (e.g., parcel, sales, utility, etc.) on the ballot this November would likely fail.
Earlier this year, some council members had stated their desire to place a ballot measure this November for a specific “minimal needed” parcel tax to cover our deficit. They believed residents could be convinced of this need before voting day.
The hiring of the polling company cost the city $30,000, which was a modest sum paid for by federal America Rescue Plan Act (ARPA) funding. However, had we placed the tax on the ballot in November 2022, like some suggested, it could have cost more than $50,000.
In addition, the poll provided valuable additional information for future discussions.
Financial concerns
The city has been diligent in assessing our financial concerns and has proceeded in a timely manner, given our small staff and the incredible tasks that had been set before them. No time or money was squandered in our efforts.
However, the financial crisis remains unresolved. We have seen an increase in expenses (about 4%, soon to be exacerbated by inflation) that outpace relatively stagnant revenue increases (about 2%) on an annual basis. Past councils were aware of these financial challenges and trimmed spending annually to meet available income.
Approximately 65% of our General Fund expenditures go toward city staff, including labor costs for police, maintenance and administration. The historic budget trimming has resulted in city staff being paid 20%-30% less than surrounding cities. This has led to challenges in staffing, costs and morale.
As a result of the 2021 budget cycle, Councilmember Jeff Wan requested a discussion of a future funding ballot measure and wrote of those financial challenges in various social media outlets in July 2021. Since that time, the city finance director resigned and we hired a new one in October 2021.
The city has undergone its annual audit, which discovered challenges related to staffing turnover. In addition, the city received ARPA funding in July, which caused significant staff efforts to comply with council direction to get funding out quickly to residents and businesses in need of financial relief. The city was also busy with the Housing Element, General Fund Reserve Policy discussions and essential worker pay.
The staff schedule was full, and our small, dedicated staff worked incredible hours to complete the council’s directions. I appreciate our staff for their valiant efforts.
Financial forecast
In February 2022, the city received a 10-year financial forecast. It included two scenarios – an “as is” scenario and a wish list scenario for “unmet needs.” Staff and the Budget & Audit committee discussed the unmet needs as items that would allow our city to be ultimately more efficient. The “as is” scenario indicated a deficit in 2023 based on current spending.
It’s possible that prior councils could have addressed this sooner, but the responsibility now lies with this council and future council members to inform our citizens so we can reassess a tax measure. Based on the poll data, a robust public information campaign will be necessary to have any possibility of passing a measure in November 2024 – our next opportunity.
Personally, I would like to see a non-partisan group of residents with finance backgrounds serve as a public advisory committee for future discussions and liaison with our community. What better way to hear of our financial challenges than from a trusted neighbor?
The City Council will be discussing our budget shortfalls in the coming two months in order to continue to provide the services that residents expect. Please tune in to council meetings and be a part of the solution.
Contact Mayor Peter Cloven at peterc@claytonca.gov or 925-673-7320.