City Will Revisit Funding for Tax Renewal Polling

The City Council narrowly agreed to spend nearly $25,000 on public polling to gauge how residents feel about renewing the user utility tax, which could come before voters as early as November.
Councilmembers will have to revisit the item to discuss funding later, as some discussed last week their willingness to pay for the item through their discretionary funds appropriated to them each fiscal year. The city’s user utility tax (or UUT), which derives income through cellphone, cable and other such bills, is slated to sunset in 2022.
With the COVID-19 pandemic having effectively kicked the nation into an economic recession and local revenue streams already significantly disrupted, the UUT’s advocates aim to create some income stability for the city by renewing the tax. The city aims to place renewal on the November ballot this year, presumably after garnering enough community support ahead of time.
“We have a major election coming up in a major election year,” Councilwoman Marina Khubesrian said at last week’s City Council meeting. “I don’t want to go into it blind. I realize the stressors, but I’m more stressed out about the UUT not passing and I want to have more concrete ways to reach out to all of our residents, not just the ones who are tuned into politics or specifically political, because we need way more than them to win this ballot measure during these crazy times.”
Though the city could hold special elections next year for the renewal, it would be significantly cheaper to add the measure to the November ballot because most of the county also will be having elections, thereby sharing costs. Additionally, the high-profile presidential election is expected to bring a high turnout of voters.
“I think it has to go on this November,” Khubesrian said.
Councilmen Michael Cacciotti and Richard Schneider opposed the contract, which was listed on the meeting agenda as a consent item but pulled for discussion. With an eye on saving money in light of the crisis, they argued that prior polling on the issue was recent enough and that the local advocacy group was capable of rallying voters to renew the UUT.
“I think the residents are pretty much aware of how much the utility tax is necessary for the city budget and I think we’re going to have to put it on the 2020 ballot,” Schneider said. “I don’t think that the polling is going to find anything out that the advocacy group doesn’t know and can’t use. I think this is an expense we can avoid.
“I think this kind of polling is unnecessary to do again,” Schneider added. “We can get the appropriate information out to the public from the advocacy group. They’re going to use the same information whether or not we do the polling.”
Cacciotti added that having the election itself would effectively gauge public opinion on the UUT and tell the city whether it needed to do more to sell its renewal in a future special election. A handful of public comments on this issue called on the city to forgo this expense as well.
“Whether this comes back positive or negative, I think we’ve got to go forward with the vote,” Cacciotti said. “If we fight out there and we lose — if things are so bad in the community — then we look at plan B. We’ve got still a year and a half or so.”
Mayor Pro Tem Diana Mahmud said she normally would have agreed to withhold the polling, but felt the current moment called for the city to determine how confident it could be with the tax’s renewal.
“I’m concerned that the financial uncertainty is going to affect peoples’ perspectives on the UUT,” Mahmud said, adding that she felt strongly enough to put $5,000 of her discretionary funds toward it and asked her peers to follow suit.
Khubesrian, who committed to at least $3,000 of her discretionary funds toward the item last week, echoed Mahmud’s concerns.
“We’re in such a different situation now from where we were last year,” she said, referencing the voter-approved sales tax in the prior November election. “The landscape has completely changed, as far as I can tell.”
City Manager Stephanie DeWolfe added that it was standard for cities to conduct polling before putting any measure on ballots.
“I don’t know of any city that would risk putting an item on the ballot without doing polling first,” she said. “It’s unheard of to do a ballot measure without polling.”
The city could maximize the return-on-investment for the polling, which will be conducted by True North Research Inc. Khubesrian added a specific line in her motion to include questions on Airbnb rentals, which are outlawed in South Pasadena but nevertheless persist. Legalizing — and taxing — the rentals could help buoy city revenues, she said.
DeWolfe noted that the state was fairly likely to compel the city to scrap its 45-foot height limit for buildings in an effort to make the city achieve its required housing element. Voters approved that height limit decades ago, so the matter could be returned to polls in the future.
“We may be forced into that by the state, so that is a third item we probably should be looking at as part of this poll,” DeWolfe added.
If the City Council does not agree on funding the contract with discretionary funding, money will be used from the General Fund to pay for the work.