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2022-05-10 Continued 05-03 CC MinutesContinued May 3, 2022 Meeting Alameda City Council May 10, 2022 1 MINUTES OF THE CONTINUED MAY 3, 2022 CITY COUNCIL MEETING TUESDAY- -MAY 10, 2022- -5:59 P.M. Mayor Ezzy Ashcraft convened the meeting at 6:15 p.m. Councilmember Herrera Spencer led the Pledge of Allegiance. ROLL CALL - Present: Councilmembers Daysog, Herrera Spencer, Knox White, and Mayor Ezzy Ashcraft – 4. [Note: The meeting was conducted via Zoom.] Absent: None. CONTINUED ITEM (22-325) Recommendation to Provide Direction on Potential Revenue Measures to Submit to Voters for the November 8, 2022 Election. The Interim City Manager, Miranda Everitt, FM3, and Jeremy Hauser, TBWTH Props & Measures, gave a Power Point presentation. *** (22-326) Councilmember Knox White moved approval of allowing 5 more minutes for the presentation. Vice Mayor Vella seconded the motion, which carried by the following roll call vote: Councilmembers Daysog: Aye; Herrera Spencer: Ayes; Knox White: Aye; Vella: Aye; and Mayor Ezzy Ashcraft: Aye. Ayes: 5. *** Mr. Hauser and the Public Works Coordinator completed the presentation. Mayor Ezzy Ashcraft discussed her experience working on a library parcel tax measure; inquired about concern over the polling for the infrastructure bond. Ms. Everitt responded a two-thirds threshold is very challenging; stated from February to now it has become even more challenging due to war abroad and concern about gas prices and cost of living; the approach is conservative so the City does not go to the ballot with something the voters would ultimately reject; negatives would come from Facebook, Nextdoor and the whisper network of communities; a two-thirds measures is tough in any kind of environment, let alone, one where cost of living is such a concern. Mayor Ezzy Ashcraft inquired whether a sliding scale of the bond amount was tested. Ms. Everitt responded numbers had to be picked and stuck with since it was a 20 minute survey; stated more time could be spent flushing out amounts with a narrower set of mechanisms. Continued May 3, 2022 Meeting Alameda City Council May 10, 2022 2 Councilmember Herrera Spencer inquired how much money FM3 received to do the survey. The Interim City Manager responded the $37,000 contract amount was approved by Council and includes the polling, analysis, summary and presentation. In response to Councilmember Herrera Spencer’s inquiry regarding the questions, the Interim City Manager stated Council received a summary of all of the questions; the specific, detailed question language was not attached to the staff report. Councilmember Herrera Spencer inquired whether it is possible to get a complete copy of the survey questions and responses. The Interim City Manager responded it is not considered best practice; stated it is typical to summarize survey questions and provide the analysis; the document can be provide if Council desires. Councilmember Herrera Spencer inquired is it public information. The Interim City Manager responded staff has not published the survey in detail; it is not proprietary; standard questions were asked so it would not be a privacy issue. Councilmember Herrera Spencer stated that she requested the survey at the beginning of May and did not receive it; she would like to know if the questions and answers are public information. Ms. Everitt stated it can be shared, but the context provided by the consultant team is really important in interpreting the results; an opposition campaign could use the information; ultimately, the decision is up to legal counsel. Councilmember Herrera Spencer stated that she would like to hear from the City Attorney. The City Attorney stated the survey is not subject to attorney client privilege; in some ways, up to Council discretion; two potential Public Records Act exceptions could be used; one is a balancing test whether public interest in disclosure is outweighed by other considerations; it might also qualify for deliberative process. Councilmember Herrera Spencer noted some pages have truncated questions. Ms. Everitt stated that was a formatting mistake. Councilmember Herrera Spencer noted demographic data was not provided. Ms. Everitt responded the data was collected. Continued May 3, 2022 Meeting Alameda City Council May 10, 2022 3 Councilmember Herrera Spencer stated she thinks the data should be provided. Ms. Everitt noted the data includes party registration, location in the City, age, gender and other demographic information. . Councilmember Herrera Spencer stated that she would be interested in the demographic data being shared. In response to Vice Mayor Vella’s inquiry, Ms. Everitt reviewed the infrastructure bond responses; stated the highest priorities were response times, bridge upgrades and flood prevention; some questions were regarding housing and some were general purpose. In response to Councilmember Herrera Spencer’s inquiries, the Interim City Manager reviewed the survey results, revenue generation, two-thirds voting threshold and affordable housing. In response to Councilmember Herrera Spencer’s inquiry, Ms. Everitt reviewed the various yes percentages needed to meet the two-third threshold. Mr. Hauser noted the percentages fall within the margin of error. Councilmember Herrera Spencer stated the survey was done in February; inquired whether inflation going up would have an impact. Ms. Everitt responded her conservative assumption would be that the numbers would be lower with increased concerns about cost of living. The Interim City Manager stated if Council is interested in in pursuing the infrastructure bond, more detailed questions could be asked; there could be a deeper conversation with voters about infrastructure things that matter, such as sea level rise. Mayor Ezzy Ashcraft discussed her library bond experience and the importance of the ballot measure giving voters what they want; expressed support for taking a deeper dive. Urged Council not to move forward with the cannabis tax; discussed jobs and taxation of cannabis businesses: Steven Chow, Stiiizy Alameda. Expressed opposition to the cannabis tax and business tax; stated businesses are just recovering from the pandemic; infrastructure funding is needed: Ron Mooney, Downtown Alameda Business Association. Discussed his cannabis business; urged Council not to move forward with the local cannabis tax, which would be a burden to local businesses; stated there has not been any outreach to local operators: John Ngu, Embarca. Continued May 3, 2022 Meeting Alameda City Council May 10, 2022 4 Outlined his cannabis company’s formation and plans to move the headquarters to Alameda; stated the proposed tax would put the plans in doubt; urged the Council to vote no on the tax proposal: Scott Palmer, Kiva Confections. Stated that she took the survey and was fairly cautious in what she would and would not support because she was not sure where the information was going; the emphasis seemed to be on the funding mechanism; she is a values voter; showing things will help with sea level rise and climate change is critical; encouraged more community engagement: Jennifer Rakowski, Alameda. Stated that she was priced out of Alameda; discussed the market collapse in the cannabis industry; stated the industry cannot absorb an additional tax; the tax would be paid by patients and consumers: encouraged having stakeholder lead process and a voluntary tax agreement: Nara Dahlbacka. Stated agencies throughout California are currently reducing or eliminating local excise cannabis taxes, including Humboldt, Lake, Monterey and Sonoma counties and the cities of Bellflower, Berkeley, Desert Hot Springs, Long Beach, Oakland, Palm Springs, San Diego, San Francisco, San Jose and many others; the tax being proposed would only further harm the viability of cannabis businesses and drive more people to the black market; discussed his business: Aaron Kraw, Park Social. Stated that he is a cannabis union worker and opposes the cannabis tax; discussed jobs being jeopardized: Zachery Gilmore, United Food and Commercial Workers Union. Councilmember Knox White stated that he is very unsupportive of the cannabis tax, which would be problematic at this point in time; after the cannabis industry has matured and stabilized, some form of tax can be considered, but it probably will not be in the next five years; the research is pretty clear; there would be a negative impact on businesses; the business license tax is similar with everything businesses are going through; the Transient Occupancy Tax (TOT) is probably a little premature given that the travel industry has not rebounded in any meaningful way; the TOT could come back in a few years when the economy has shifted; he shares concerns about how razor thin the two-thirds support is for an infrastructure bond, but thinks it should be probed a little bit further; the poll found that people were concerned about traffic safety, traffic congestion, homelessness and housing costs; he hopes Council could make some kind of minimum commitment to looking at supporting replacement of Emma Hood, which is probably going to be shutting down sometime this summer or fall; he would be very open to staff coming back with alternative funding suggestions if the pool is not a good fit for an infrastructure bond. Mayor Ezzy Ashcraft concurred with Councilmember Knox White; stated a measure is jeopardized if voters are not given what they say they would support; there are other ways to support Emma Hood; the public needs a better understanding of what an infrastructure bond would look like; she would like to see TOT explored; Alameda’s TOT Continued May 3, 2022 Meeting Alameda City Council May 10, 2022 5 is less than surrounding communities, including San Leandro, Oakland and Emeryville; there is no reason the City should not at least be equal to said cities. Vice Mayor Vella stated that she is interested in exploring both the TOT and infrastructure bond; Alameda has huge infrastructure needs; the influx of federal funding also requires local investment; the Climate Action Resiliency Plan (CARP) and traffic safety response times need to be prioritized; the infrastructure bond has been put off for many, many years; more detailed questions should be asked; the timeline is quick; since it is the greatest need, exploring an infrastructure bond would be of interest; the bond would only cover a fraction of the overall need; she has zero interest in cannabis or business license taxes; the cannabis tax is incredibly regressive; a fledgling industry is competing against the black market; the business license tax should not be increased coming out COVID when the City had to help businesses. Mayor Ezzy Ashcraft stated that she strongly opposes the cannabis tax; discussed cannabis being sold on the black market; stated it is not the time to increase the business license tax. Councilmember Daysog stated when it comes to infrastructure, the issue is not a revenue problem; the problem comes down to spending priorities; in the past five years, $46 million has been spent because of the unfunded liabilities policy; all of the City’s eggs have gone into one basket with regard to excess reserves; before going after new revenues, the City needs fiscal priorities and does not deserve to ask taxpayers to shore up inadequacies; he does not see how $95 million can be figured out in two months; the wiser course of action is to spend more time researching needs; since the problem lies with prioritizing revenue, he would oppose the measure. Councilmember Herrera Spencer stated that she agrees with Vice Mayor Vella in regards to cannabis; she strongly supports businesses; continued support is critical; requested the TOT information be displayed again and outlined rates; stated the average is 10.27%; Alameda is in the middle; she does not support the business license tax; she has serious concerns about an infrastructure bond; residents and the business community are struggling right now; imposing more taxes goes in the wrong direction during a high inflation period; $95 million would not stretch as far; revenue generating assets have been flipped to become expenditures, such as homes at Alameda Point being used for transitional housing and the bottle parcel not being sold; discussed high inflation; stated the City should help businesses and residents stay in town. The Interim City Manager stated the budget presentation up next mentions the pension policy; discussed the unfunded accrued pension liability; stated a few years ago, there was $200 million in deferred maintenance across the City, not including Alameda Point; the commercial construction index is going up by 14% per year; deferred maintenance just gets more and more expensive; whether or not infrastructure needs should try to be tackled through a bond is a policy decision; discussed TOT rates; stated immediate neighbors are all up around 14%; there could be a phased approach or tie to economic conditions, so the increase does not hit while hotels might be struggling. Continued May 3, 2022 Meeting Alameda City Council May 10, 2022 6 Councilmember Daysog stated that he brought up the TOT years ago; Union City has a range with the amount determined by the City Council. Mayor Ezzy Ashcraft inquired whether Councilmember Daysog is in favor of staff looking into the TOT. Councilmember Daysog responded in the affirmative; stated it probably only results in $200,000 to $300,000, which is better than nothing; visitors pays the tax, not local residents. Mayor Ezzy Ashcraft stated people pay a higher TOT in neighboring cities; it is time to address climate change; bond funds could be leveraged to get even more money; federal grants are available, but require some matching funds; she would like staff to bring back a more detailed plan for further polling on the infrastructure bond. . Councilmember Knox White stated that he would not necessarily want to move forward with the infrastructure bond if there are two very hard noes since four votes are required to put a bond measure on the ballot. The Interim City Manager confirm the infrastructure bond requires four votes; stated other items, such as TOT, have a three vote threshold. Councilmember Knox White suggested the motion be bifurcated. Councilmember Knox White moved approval of exploration of a TOT tax, including direction to staff to do additional outreach to identify what hotel owners see as a potential impacts. Councilmember Daysog seconded the motion, which carried by the following roll call vote: Councilmembers Daysog: Aye; Herrera Spencer: No; Knox White: Aye; Vella: Aye; and Mayor Ezzy Ashcraft: Aye. Ayes: 4. Noes: 1. Councilmember Knox White stated that he would only move approval of giving direction to do additional exploration on the infrastructure bond if there are four votes; he does not want staff to spend time on something that would not get four votes in the future. Mayor Ezzy Ashcraft stated perhaps, with additional information, some might take a different position. . Councilmember Knox White stated two Councilmember expressed that they ideologically have a problem with moving forward; he is a strong supporter of the infrastructure bond, but does not want to have staff spend time unless there are four votes to move forward with additional research. Continued May 3, 2022 Meeting Alameda City Council May 10, 2022 7 The Interim City Manager stated if there is an openness to gathering more information, staff is willing to do the work; a significant amount of infrastructure needs to be addressed. Vice Mayor Vella stated being one vote short of putting the measure before the people of Alameda is disappointing; allowing voters to make a decision is direct democracy; while Councilmembers may individually disagree philosophically, she would hope that her colleagues would put it to a vote of the people. Councilmember Daysog stated his grave concern is the reserve policy that has been in place since 2017 without the vote of the people; $46 million has been spent on unfunded liabilities; the policy needs to be fixed, as well as other spending priorities. Mayor Ezzy Ashcraft concurred the policy needs to be revisited, which the Interim City Manager indicated would be done; Alameda has an existential climate change threat; more information is need. Councilmember Knox White stated there is a commitment to bring back and revise the reserve policy; infrastructure funding will not be fixed from said discussion; the issues are separate; addressing concerns about the reserve policy will not fix the infrastructure problem; the City will still have an unfunded infrastructure need as well; inquired whether Councilmember Daysog is open to having a conversation with staff in the next four weeks; stated the conversation would not be committing to support a measure going on the ballot, but would be to see if there might be pieces of a supportable infrastructure bond; he understands nothing will change Councilmember Spencer’s opinion. Councilmember Daysog stated that he does not see how a $95 million infrastructure bond could be addressed between now and late July; educating people previously for the library bond required a lot of legwork; doing a $95 million infrastructure bond between now and August is not practical; the City should revisit the matter in 2024; for philosophical and practical reasons, he does not see it. Mayor Ezzy Ashcraft inquired whether the Vice Mayor has a motion. Vice Mayor Vella expressed concern about the votes not being there. Mayor Ezzy Ashcraft stated there is an opportunity to inform the voters better than they were informed by the first round of polling. Vice Mayor Vella stated Council colleagues have indicated it does not matter what the voters think; they do not want to put the matter to a vote of the people; discussed percentages and other measures; stated there is an opportunity to put a measure on the ballot, which is worth exploring, but the point is moot since other Councilmembers do not support putting it to a vote of the people. Continued May 3, 2022 Meeting Alameda City Council May 10, 2022 8 Councilmember Daysog stated that he opposes putting a measure on the ballot because the City has the wrong reserve policy in place; a lot of money that that has gone towards pensions could have gone towards infrastructure. . Councilmember Herrera Spencer stated that she would have liked more survey information; the full questions and demographic data was not provided; she has serious concerns that bonds do not have opt outs for people on fixed incomes, seniors or those who are disabled, which can be done with a parcel tax. Vice Mayor Vella stated unfunded liabilities need to be funded one way or another; infrastructure needs are not being met; the matter should be put to a vote of the people; climate change and sea level rise are real and are happening; emergency services response times impact lives; many Armenians live in a Federal Emergency Management Agency (FEMA) flood zone and are paying thousands of dollars extra in insurance. The Interim City Manager stated the pension policy conversation came up as part of the midyear budget; a revision to the policy will be coming to Council in June; discussed the Capital Improvement Program; stated the City is trying to keep up with deferred maintenance, sea level rise, climate change and redevelopment of Alameda Point. In response to Mayor Ezzy Ashcraft, Mr. Hauser stated the first step would be additional targeted polling to zero in on one specific proposal; at a two thirds level, it is really important to test the 75 word question and specific projects; the second step would be public information outreach on behalf of the City, including outlining the infrastructure needs and how a bond might be able to address the needs; additional feedback would come from a voter opinion survey of 500 residents; once a measure is placed on the ballot, the City cannot advocate for or against its passage; an independent campaign committee would have to be formed in order to advocate either for or against the measure. Mayor Ezzy Ashcraft questioned whether there is a motion to go forward with additional polling. Vice Mayor Vella stated she is not hearing Council colleagues are interested in a measure; she does not know if a motion will pass, but is happy to make one. Vice Mayor Vella moved approval of additional polling with the intent of putting the measure through. Mayor Ezzy Ashcraft seconded the motion. Under discussion, Mayor Ezzy Ashcraft stated the City should give the public a little more time to be informed and bring back information. Continued May 3, 2022 Meeting Alameda City Council May 10, 2022 9 Councilmember Knox White stated that he does not think the consultant should be asked to go and do polling; it is not about finding out what happens when voters are educated; he will not support the motion; the City has a lot of work to do; he does not support directing staff to go do additional work with consultants and spend funding on consultants for an item that has no path to actual enactment. On the call for the question, the motion failed by the following roll call vote: Councilmembers Daysog: No; Herrera Spencer: No; Knox White: No; Vella: Aye; and Mayor Ezzy Ashcraft: Aye. Ayes: 2. Noes: 3. ADJOURNMENT There being no further business, Mayor Ezzy Ashcraft adjourned the meeting at 8:02 p.m. Respectfully submitted, Lara Weisiger City Clerk The agenda for this meeting was posted in accordance with the Sunshine Ordinance.