STAFF REPORT - CITY COUNCIL/SUCCESSOR AGENCY/PUBLIC FINANCE AUTHORITY

Staff recommends that the City Council:

1. Receive background information regarding Measure J, including prior Council actions and the outcome of the November 2024 election; and

2. Provide direction on whether to proceed with preparation of a proposed ordinance and ballot language to place a Measure J renewal or extension on the November 2026 General Election ballot; and

3. If so directed, authorize staff to return with:

   • Proposed ballot language,

   • A draft ordinance calling the election,

   • Required resolutions for ballot placement, and

   • A proposed timeline for Council consideration and adoption.

In November 2018, voters approved a one-percent (1%) transactions and use tax (Measure J) to fund police, fire, and general municipal services. The tax became effective April 1, 2019, and is scheduled to sunset on April 1, 2029.

At adoption, Council approved a Declaration of Intent outlining priorities including:

• Public safety staffing,

• Emergency preparedness,

• Recruitment and retention,

• Financial reserves.

Measure J revenues currently represent a significant portion of the General Fund and

support core municipal operations.

Between 2022 and 2024, Council discussed options including:

• Extending the tax with a new sunset; or

• Removing the sunset entirely.

A community survey indicated stronger support for an extension with a defined sunset. A measure was placed on the November 2024 ballot but did not receive sufficient voter approval.

This item is intended to determine whether the Council wishes to revisit placement of a Measure J extension on the November 2026 ballot, allowing adequate time for analysis, community engagement, and fiscal planning.

No structural recommendation (duration, sunset, rate adjustment, etc.) is being presented at this time.

Fiscal and Operational Considerations

If Measure J sunsets on April 1, 2029, the City would experience a substantial General Fund revenue reduction (Approx. $1.6M). Based on current fiscal projections, this would significantly impact:

• Police and fire services,

• Staffing levels,

• Operational capacity,

• Long-term financial stability.

Early policy direction allows sufficient time to:

• Analyze fiscal impacts,

• Evaluate service-level scenarios,

• Conduct transparent public engagement,

• Develop compliant ballot language.

• Do not direct staff to begin the process of placing Measure J on the November Ballot. 

There is no immediate fiscal impact associated with receiving this report or providing direction.

Future election-related costs (ballot placement and administration) would be brought back to Council for formal approval.