DATE: January 26, 2016
TO: Mayor and City Council
FROM: Assistant City Manager
SUBJECT
Title
Update on City's Efforts for Renewal of Utility Users Tax
End
RECOMMENDATION
Recommendation
That the Council reviews preliminary polling results for renewal of the City's Utility Users Tax (UUT), confirms the recommendations of the Budget & Finance Committee, and considers possible next steps.
Body
BACKGROUND
The Utility Users Tax (UUT) was approved by Hayward voters in May of 2009 as a means of protecting critical city services in the wake of the devastating budget cut on the heels of the Great Recession. The UUT is a 5.5% tax on the use of electricity, natural gas, telecommunications (including traditional telephone service, long distance service and cellular phone service), and video/cable television services. The tax was initially adopted with a ten year sunset clause, meaning that the tax is set to expire in May 2019, unless renewed by the voters.
The UUT currently generates $16 million per year and is now the City's third largest revenue source behind property and sales taxes. About 75% of the revenue (roughly $12 million) is directly allocated to public safety operations (police and fire). The remaining $4 million generated funds other City programs such as streets and roads maintenance, library services and economic development programs. Even with an improving economy in recent years, revenues have lagged behind the demand for (and cost of) services. The City has walked a tightrope, slashing its budget to the bone while maintaining high levels of service. At the same time, employees from all bargaining groups have shouldered more of the cost of their benefits as the City has adjusted its compensation structure. Without the UUT, the City would have no choice but to enact severe service cuts in order to maintain fiscal stability and a balanced budget.
DISCUSSION
In the summer ...
Click here for full text