Point 5 of the 6-Point Action Plan to address the City's budget crisis included the potential of increasing existing and/or establishing new fees, charges, and local taxes. City staff presented a detailed report on fees, charges, and local taxes to Council on May 6, 2003. Council endorsed the concept of establishing an ad hoc advisory committee to assist the City Council in its consideration of increasing existing or establishing new local taxes.

Council established both the committee's assignment and the process to be used in appointing committee members. The committee has been assigned three tasks. They are:

1. Examine further the potential for increasing existing local taxes and/or establishing new local taxes. This would include the following local taxes:

The ad hoc committee will examine the questions and issues raised by Council members as they considered the staff report on potential fees, charges and local tax increases, and as Council provided preliminary policy guidance to City staff. Through a separate motion, Council also included consideration of a real estate transfer tax, a satellite television utility user’s tax, a cable television utility user’s tax and a general tax measure and advisory measure similar to the Valley Transportation Agency’s Measure B as matters to be examined by the committee.

2. Recommend a package of increases to existing taxes and/or the establishment of new taxes for consideration by the City Council. This recommendation should include a suggested timetable for voter action on those increases to existing taxes and/or the establishment of new taxes that require voter approval.
3. Develop a recommended public information campaign that can be used to inform and educate Sunnyvale residents about any proposed increases to existing taxes and/or new local taxes that the City Council decides to take to the voters. This campaign would be designed to help voters make informed decisions if tax related issues are placed on future ballots. The campaign would not be designed or structured to advocate a certain position on any one tax related issue or the overall need to raise or establish new taxes in light of the City's budget crisis.

Council also determined the process for appointing committee members. Each Council member would appoint two committee members, who are either a representative of a business located in Sunnyvale or a registered voter/ Sunnyvale resident. Council would select up to three of its members to serve on the committee and determine the process for selecting the committee chairperson.

The Community Participation Sub-Element to the City General Plan contains several goals, policies, and action statements that address public education and involvement. These can provide guidance for the City Council as it considers establishing an ad hoc advisory committee to assist Council on this issue. Examples of goals and policies include:

Goal 7.2A Achieve a community in which citizens and businesses are informed about local issues and City programs and services.

Policy 7.2A.1 Use community and business organizations and networks as a resource for community education and outreach.

Goal 7.2B Achieve a community in which citizens and businesses are actively involved in shaping the quality of life and participate in local community and government activities.

The Mayor will distribute a consolidated list of Council members' appointments to the ad hoc advisory committee at the May 13^th City Council meeting. At this time, it would be appropriate to select up to three Council members to also serve on the committee, and to determine how to select a committee chairperson. The Council could appoint a committee chairperson from among the 17 committee members. As an alternative, the committee itself could select the chairperson. Either method could be used; the method selected is a policy decision for the City Council.

It will be important for the committee to know which general taxes, special taxes, or combination that the community most likely would support. To accomplish this, a revenue and tax study needs to be completed. Through this effort, registered voters in the community would be polled, and polling results would be analyzed to determine the level of preference for specific types and combinations of local taxes. This work will be completed by a company with specialized expertise in this area. A company representative(s) would also attend committee meetings to better understand the extent and scope of our budget crisis, and to present its findings and recommendations to the committee.

Other than staff hours to support the committee, there is no fiscal impact in establishing this ad hoc advisory committee. Depending on the nature of the committee's recommendation(s), Council's actions, and the outcome of any proposal that requires voter approval, there could be considerable added revenue generated to the City from increasing existing and/or establishing new local taxes. Estimated additional revenues were described when possible in the report discussed at the May 6^th Council meeting.

• by appointing 14 Sunnyvale registered voters/residents and/or business representatives,
• by selecting up to three Council members to serve on the committee,
• and by determining the process for selecting a chairperson.

2. Direct staff to complete additional research on one or more specific issues, and to return this issue to Council for final action at the earliest possible regular or special meeting.
3. Take no action at this time.