Measure G Frequently Asked Questions

What is the Parks Maintenance Tax (Measure G)?

Measure G is a City ballot measure to renew the current Parks Maintenance Tax that was first approved by voters in 1998 and renewed by the voters in 2002. Of those voting in 2002, 79% voted to approve the Parks Maintenance Tax. If approved by two-thirds of the voters, Measure G would renew the current Parks Maintenance Tax at the same rate of $49 annually for residential parcels and $40 per 1,000 sq. ft. for non-residential parcels, not to exceed a maximum of 10,000 sq. ft. If approved, the tax would be subject to renewal in six years (2012).

Measure G will be on the June 6 ballot. It requires a two-thirds (66.67%) vote to pass. It includes the same refund for low-income residents as the current Parks Maintenance Tax. The ballot measure reads as follows:

Ballot Language:

Shall Ordinance No. 2243, which extends for six years the existing Parks Maintenance Tax of $49 per year on residential units and on non-residential units in amounts specified in the Ordinance, to fund maintenance of parks, street trees, greenbelts, bike paths, medians, public landscaping, urban wildlife and habitat, swimming pools, and recreational facilities be adopted?

Is this a new tax and how much is it?

No, this is not a new tax. It has appeared on property tax bills since 1998. Measure G would renew the existing Parks Maintenance Tax at the same rate of $49 per residential parcel and $40 per 1000 sq. ft. for non-residential parcels. The following table compares the current tax with the proposed tax on the June ballot

Current Parks Tax	Proposed Parks Tax (Measure G)
Tax Rate Residential at $49 per household/year. Commercial at $40 per 1,000 sq. ft., to max of 10,000 sq. ft.	Same
4 Year Sunset (expires June 2006)	6 Year Sunset (expires June 2012)
Low Income Provision	Same
No Annual Cost of Living adjustment	Same
Use of revenue is restricted to maintain parks, greenbelts, medians, pools and recreation facilities	Same
2/3 voter approval required	Same

Why does the City have a Parks Maintenance Tax?

In 1991, the City first levied the Landscape and Lighting Assessment District (LLAD) to help offset General Fund expenditures for the maintenance of parks, greenbelts, street trees and related facilities. In 1992, the State of California began to take additional local property taxes from cities to help fund state programs, such as K-12 education. The State then cut its own funding to schools in the same amount. The net effect of this shift in tax revenue, known as the Educational Revenue Augmentation Fund (ERAF), has grown to approximately $2.5 million per year in lost General Fund dollars for the City of Davis. Cumulative revenue loss from property tax shifts to date is approximately $19 million.

The Landscape and Lighting District remained in effect until 1998, when the passage of Proposition 218 changed the requirements for the LLAD. The City replaced the LLAD with a voter-approved Parks Maintenance Tax. In 1998, the Parks Maintenance Tax passed by 78%, with a four-year sunset. In 2002, the Parks Maintenance Tax was renewed by 79% of the voters and sunsets in June 2006.

The City maintains “Special Funds”, which can only be used for specific purposes, such as the federal, state and county grants that the City administers. The Parks Maintenance Tax is considered to be a Special Fund because it can only be spent on park maintenance and related amenities. The General Fund, on the other hand, is the primary funding source for City services, such as general government, recreation programs, the majority of park maintenance, fire and police protection. Having the Parks Maintenance Tax assist with the maintenance of parks, greenbelts, trees and pool complexes frees General Fund dollars to spend on other City services.

How does the City use the revenue from the Parks Maintenance Tax?

The Parks Maintenance Tax provides $1.3 million annually, which is dedicated to assisting with the maintenance of parks, greenbelts, open space, pools, streetscapes and trees. As a special tax, revenues must be spent only for these purposes. Having a dedicated Parks Maintenance Tax means that the City can rely less on General Fund revenues to provide park maintenance, which allows additional funding for other City services, such as general government, other recreation and community programs and services, fire, and police protection.

Since the initial Parks Maintenance Tax went into effect in 1998, the City has added several parks and greenbelts, streetscapes, street trees and a pool complex. Within the last four years, the maintenance of three new community parks (Arroyo Park, Mace Ranch, and Walnut) and the Arroyo pool complex has been added. In 1998, the Parks Maintenance Tax paid for 75% of the maintenance of parks and related amenities, with the remainder paid for by the General Fund. Today, the existing tax pays for 25%, with 75% being paid for by the General Fund.

The chart that follows summarizes how community and neighborhood parks, open space, street trees and other amenities are funded. The chart also shows how the City currently uses the Parks Maintenance Tax Revenues:

**Use of Current Parks Maintenance Tax Revenue**
	Total Cost	General Fund Portion of Costs	Parks Maintenance Tax Funding	Fee/ Other Funding	% of Total Cost Funded by Parks Tax
Community and Neighborhood Parks	$1,898,869	$1,536,869	$350,000	$12,000	18%
Greenbelts	$1,047,819	$697,819	$350,000	$ -	33%
Streetscapes	$444,410	$344,410	$100,000	$ -	23%
Street Trees	$746,958	$540,958	$200,000	$6,000	27%
Open Space	$272,229	$222,229	$50,000	$ -	18%
Vandalism/Graffiti Abatement	$128,510	$66,310	$62,200	$ -	48%
Pools Complexes	$774,958	$479,858	$200,000	$95,100	26%
Total	$5,313,753	$ 3,888,453	$1,312,200	$ 113,100	25%

Why is Measure G on the June 2006 Ballot for renewal?

The Parks Maintenance Tax was approved by 78% of the voters in 1998, renewed by 79% of the voters in 2002, and sunsets in June 2006. The City Council has placed Measure G on the ballot to ask residents to continue to pay the Parks Maintenance Tax. Loss of the Parks Maintenance Tax would have a $1.3 million impact on the City’s budget starting in July 2006.

In addition to placing Measure G on the June 2006 Ballot, the City continues to seek long-term funding solutions to ensure that expenditures do not exceed revenues. To do this, the City is looking at ways to become more efficient with the services we provide, the appropriateness of the current levels of service, and ways to increase revenue to the City. Revenues may include taxes, economic development projects, and grants.

Why isn’t the City seeking an increase over the current amount of $49/year?

The City continues to seek a long-term solution to address its structural budget shortfalls. The City Council decided that, until a more comprehensive solution can be developed and implemented, continuation of the Parks Maintenance Tax at its current level of $49/year is a prudent interim solution to sustain City services.

The City Council is interested in working with the community to develop a viable long-term strategy to sustain and enhance vital services for Davis residents. This long-term strategy could include economic development, continuing efforts to improve efficiencies, improving non-tax revenues and exploring other revenues such as taxes. If the long-term strategy includes different tax measures, then those will be brought before the voters at the earliest possible date. The City Council must evaluate the different types of tax measures and other strategies to determine what makes the most sense to the community. Until such time, the City Council believes that the renewal of $49 parcel tax is an appropriate interim mechanism to use.

Why can’t the Parks Maintenance Tax be applied based on assessed value of the property?

By law, the City of Davis is not allowed to assess a parcel tax based on the value of the property. The California State Constitution provides that property tax is the only tax that is legally allowed to be levied based on the assessed value of a parcel.

Why does the tax sunset in six years?

The City Council decided that six years would give the City adequate time to develop, approve and implement comprehensive and viable long-term financial strategies. At the same time, the sunset acknowledges that the Measure is not proposed as a permanent tax.

Why doesn’t the City use the General Fund reserve instead of renewing the Parks Maintenance Tax?

The City maintains a “reserve” much like an individual or household would keep a savings account accessible for an emergency. The City Council has adopted a policy to have a General Fund reserve equal to 15% of the City’s General Fund revenues. This is a contingency reserve for general operations to help mitigate the effects of unanticipated situations such as recession, man-made or natural disasters, variances in financial forecasting, or costs imposed by other governmental agencies. The City does not use the reserve to fund ongoing services, such as those funded by the current Parks Maintenance Tax.

The General Fund reserve can fluctuate from year to year, and although it is currently above the required 15% minimum, the reserve level is forecasted to decrease as early as fiscal year 2006-07 based on the City’s current budget forecast. The long-range forecast indicates that City expenditures for the current levels of service will continue to exceed revenues, depleting the reserve by $1.6 million per year. The City is continuing to seek a long-term solution to align expenditures and revenues in order to prevent the reserve from being depleted, and using the

General Fund reserve instead of renewing the Parks Maintenance Tax would exasperate the problem.

How does renewal of the Parks Maintenance Tax fit into the City’s overall financial strategy?

The City Council has been looking at a multi-faceted approach to stabilizing the City’s budget. The major features of this approach are (1) increased efficiencies and cost savings, (2) economic development, and (3) determination of appropriate user fees and other revenue enhancement. The City Council proposes renewal of the Parks Maintenance Tax as one component of the current base revenue.

Since the last renewal of the Parks Maintenance Tax in 2002, the City Council has worked with the community to address each of the elements of the City’s overall financial strategy:

Increased Efficiencies and Cost Savings.The City constantly seeks ways to deliver services more efficiently and effectively such as the following:
- Performing audits of departments to seek potential streamlining measures
- Increasing use of volunteers to provide City services ( Examples: Fire Corps, Police Volunteers, Graffiti Abatement, Tree Planting, Mediation)
- Implementing technology and web-based services, which can decrease staff costs (Examples: Online crime reporting, recreation registration, and utility bill payments; public safety radio system to improve public safety services, wireless field reporting by police officers)
- Extending the life of equipment (Examples: Delaying purchase of new fleet vehicles.)
- Leasing city-owned facilities to generate revenue (Examples: Long-term leasing of Varsity and Historic City Hall)
- Using reduced staffing levels while work load demands and infrastructure steadily increased.
- Reducing program expenditures in order to balance the operating budget
Economic Development. Council has approved several projects aimed at expanding and diversifying the City’s sales tax base. The City Council continues to make improvements to the downtown, which is the City’s central business district, and to provide an atmosphere where local businesses can thrive and expand, thus contributing to the City’s tax base.
Equitable and Reasonable Fees: The Council has reviewed and revised fees in some areas of City programming to ensure that fees reflect both the costs to the City and the benefit to the community. Last year, the City revised recreation fees, and next year the City will review fields, pools and facility rentals. Development fees are also under review so that any growth in the City pays its fair share of development-related expenses.
Sustained and Enhanced Revenues: In 2004, voters passed Measure P, a half-cent sales tax, which contributes approximately $2.9 million per year to the City’s General Fund. This additional sales tax revenue is used to pay for some of the City’s general services. However, service demands and costs to provide City services have continued to rise, and sales tax revenues can vary with the economy. Sales tax revenues provided 24.7% of the City’s General Fund revenue in fiscal year 2004-05.

Council will work with the community to consider broad-based revenue strategies. If the Council, in partnership with the community, envisions other revenue strategies for providing and enhancing necessary City services, these new measures will be presented to the voters in future elections.

What has been the State’s impact on the City?

Since 1992, the State Legislature has taken General Fund property tax revenue away from cities and counties. As a result, Davis has lost nearly $19 million in tax revenue. The City of Davis receives, on average, less than 18% of the property tax generated within city limits. In addition, the State has fluctuated in its commitments to the City for other revenues, such as Vehicle Licensing Fees, funding for road improvements, economic development, affordable housing, child care programs, community policing programs and reimbursements of State-mandated costs. Inconsistent State actions cause fiscal strain and uncertainty to the City.

What will happen if the Parks Maintenance Tax is not renewed?

If the Parks Maintenance Tax is not renewed in June 2006, the City will need to determine how to reduce services and costs in response to the loss of $1.3 million. Although the $1.3 million is dedicated to assisting with the maintenance of parks, greenbelts, open space, street trees and pool complexes, reductions could come from any City service or program that is funded by the General Fund, including parks, greenbelts, pools, police, fire, and other recreation and community services and programs. The City Council is currently reviewing budget reduction options should Measure G fail. Such program reductions could be implemented as early as July of 2006.