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Home My WebLink About2022-04-20; City Council; ; City Financial Status and Municipal Revenue StudyCA Review CAB Meeting Date: April 20, 2022 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: Laura Rocha, Deputy City Manager – Administrative Services laura.rocha@carlsbadca.gov, 442-339-2415 Jason Haber, Director of Intergovernmental Affairs jason.haber@carlsbadca.gov, 442-339-2958 Subject: City Financial Status and Municipal Revenue Study District: All Recommended Action 1.Receive a report on city finances and the results of research conducted to determine voter interest in potential local revenue enhancement measures to fund essential municipal services and facilities. 2.Provide feedback and direction to staff. Executive Summary The City of Carlsbad has always prided itself on providing a high level of service to the community, responsibly managing public resources and working in partnership with the community to realize its vision for the future. As the city transitions from a time focused on building a great city to maintaining what has been created, the needs, priorities and revenue sources are changing. Carlsbad has been able to maintain strong financial health by planning ahead and using the best data available to make informed decisions. One tool used by the city’s Finance Department is a 10-year forecast of planned spending and expected revenues. During the presentation of the annual budget in 2021, staff identified a potential gap in funding in fiscal year 2025-26. At that time, city staff recommended, and the City Council approved, a study of potential new revenue sources. Identifying potential future funding gaps serves as an early indicator that spending needs to be modified, new revenues brought in, or both, in order to maintain long term fiscal sustainability. For example, during the 2008 recession, staff identified a similar funding gap, and the City Council adjusted the timing of certain projects and made other changes to the city budget that successfully closed the gap. This report provides an overview of the city’s current financial status and the findings of a study exploring potential new revenue sources that could be considered as part of an overall strategy to ensure the city’s ongoing fiscal health. April 20, 2022 Item #1 Page 1 of 70 Discussion Background Cities have several options when determining how best to close a funding gap, including postponing major new projects, finding more efficient ways to deliver services, eliminating services that aren’t core to the city’s mission and expanding the revenue base. Staff recommended this study of potential new sources of revenue in 2021 so that the City Council could consider all the options available to ensure the city’s ongoing financial health, and the City Council approved the funding. Current fiscal condition Following the Great Recession of 2007-09, the city has thrived through the longest recovery and expansionary period in United Stated history. Since 2012, proceeds from the city, the city’s property, sales and transient occupancy taxes have increased approximately 55%, 79% and 118%, respectively. Below is a chart showing the General Fund’s revenues and expenditures since fiscal year 2011-12. Note: Transfers include financing district, storm water, golf course, workers’ compensation, risk, fleet, infrastructure replacement and general capital construction. Although ongoing revenues have exceeded ongoing expenses each year, expenditures overall are increasing at a more rapid rate, at 70%, compared to revenues, 59%, over the past 10 years, since FY 2011-12. Personnel costs have increased, on average, by 6% each year. Similarly, maintenance and operations costs have increased, on average, by 10% each year. The increase in expenditures, particularly in recent years, was also driven by new requirements imposed by the state and federal governments that cost the city money but are not eligible for reimbursement. For example, the city is responsible for reducing greenhouse gas emissions by state deadlines, which requires a multi-year comprehensive effort involving nearly every city department. $- $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000 $160,000,000 $180,000,000 $200,000,000 FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 FY21-22 (Budget) General Fund revenues, expenditures and transfers General Fund Revenues General Fund Expenditures Transfers April 20, 2022 Item #1 Page 2 of 70 I I I I I ■ ■ ■ ■ New/expanded city services 2017 – 2022 The city has also added several new or expanded city operations and services in recent years. These services include, but are not limited to: Beach Lifeguard program Internal audit program Trail ranger program Lagoon patrol (on-water) Enhanced cybersecurity program Sustainable mobility program New environmental initiatives Innovation and data analytics Homeless Response Program Community Choice Energy electrical service Expanded public health role Citizens Police Academy Mobile library program Intergenerational programs (Parks & Rec) Expanded city arts and culture programs New citizens committees New and expanded park amenities New community special events Policy body worn cameras New City Council subcommittees: Legislative and Economic Development Diversity, equity and inclusion program Age-friendly cities initiative Steps already taken to safeguard financial health Consistent with the city’s well-established track record of prudent financial management, staff and the City Council have taken the following steps in recent years to support ongoing fiscal sustainability: 1. Strong general fund reserve policy The City of Carlsbad maintains a healthy general fund reserve, sometimes called a rainy-day fund, to protect against unanticipated changes that could negatively affect city finances. City Council Policy Statement No. 74 requires the city hold in reserve an amount equivalent of 40% of the Annual General Fund operating budget. The chart below shows that the city has been able to maintain a reserve account that is higher than the 40% required by City Council policy. April 20, 2022 Item #1 Page 3 of 70 80% 70% 60% 50% 40% 30% 20% 10% 0% FY12-13 FY13-14 FY14-15 Healthy General Fund Reserves Actual amount of money the city has in reserve -. - FYlS-16 FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 FY21-22 (Budget) Strategic use of reserves On June 18, 2019, the City Council adopted revisions to the city’s General Fund Reserve policy (City Council Policy Statement No. 74). These changes narrowed how General Fund reserves could be used to three purposes: 1. To mitigate financial impacts resulting from a natural disaster or other catastrophic events 2. To respond to the challenges of a changing economic environment 3. To continue demonstrating prudent fiscal management and creditworthiness This new policy provides greater City Council control over how reserves are spent and opened the door to using General Fund reserves to strategically put the city in a better long-term financial position. • For example, in FY 2016-17 and FY 2020-21, approximately $30 million was used to fund the City’s General Capital Construction Fund, Infrastructure Replacement Fund, and to reduce the city’s CalPERS pension debt, its unfunded liability, which helps save the city money in the long run. • These investments mean that the city has money set aside to keep major infrastructure well- maintained, thus avoiding costly emergency repairs. 2. Putting money away for future needs The city has consistently allocated the equivalent of 6% of estimated General Fund revenues each year to an infrastructure replacement fund. This enables the city to keep up with maintenance and prolong the useful life of approximately $1.2 billion worth of city infrastructure and to be in a position to replace infrastructure as needed. On June 8, 2021, the City Council approved City Council Policy Statement No. 91, which formalizes not just setting aside funding each year for infrastructure replacement but also for general construction needs and investments in technology, which has become a costly yet critical part of efficient and effective city operations. 3. Reducing pension debt In recent years, unfunded liabilities, or pension debt, have caused cities in California to cut back on public services. Three cities have declared bankruptcy. Pension debt is the difference between how much money is available to pay for the pensions city employees receive when they retire, and the money needed to pay for the actual benefits. Pension debt is an estimate because it’s not possible to know exactly how well the pension fund investments will perform nor how many employees will retire, at what age they will retire and how long they will live. The City of Carlsbad has long recognized the financial uncertainty caused by the state’s pension system. That’s why Carlsbad was one of the first cities in the region to enact pension reform, pre-dating state reforms in 2013. This and other strategies have reduced the city’s pension debt considerably compared to most other cities in the state. What is the problem? In the early 2000s, CalPERS, the state agency that manages pensions for cities, anticipated investment returns would be higher than the investments actually performed. This resulted in less money than expected in the overall pension fund, thus increasing the pension debt for cities. Since this time, CalPERS has taken several steps to improve transparency and the financial health of its fund: • In December 2016, CalPERS reduced the assumed rate of return for investments, from 7.5% to 7.0% over three years, from FY 2018-19 to FY 2020-21. • In February 2018, CalPERS decreased the amortization period for new pension liabilities from 30 years to 20 years effective July 1, 2019. • In FY 2020-21, CalPERS reported an investment return of 21.2% which, under CalPERS’ “Funding Risk Mitigation Policy,” triggered a reduction in the discount rate used to calculate contributions April 20, 2022 Item #1 Page 4 of 70 from employers and those employees who joined CalPERS since 2013, when the Public Employees’ Pension Reform Act was passed. • This reduction from 7.0% to 6.8% will affect contributions starting in FY 2023-24. While these changes will provide long-term benefits to the pension plan, they will also increase the city’s required pension contributions. One way to reduce the city’s long-term pension costs is by making early payments to reduce the pension debt. • In 2019, the City Council adopted a Pension Funding Policy (City Council Policy Statement No. 86). This policy states that the city will strive to maintain an 80% funded status. Said another way, the goal of this policy is to keep Carlsbad’s pension debt at no more than 20%. • Since FY 2016-17, the city has contributed $56.4 million to CalPERS to reduce the city’s unfunded liability and thereby achieve interest savings. • These contributions were in addition to the annual required contributions set by CalPERS. Even though CalPERS is continuing to take prudent measures to manage the pension liability for its participants, the annual costs paid by participating members will continue to increase. And, while CalPERS has outperformed its assumed rate of return on investments over the last 10-years, future economic uncertainty is likely to have a profound impact on its investment performance, which will impact the city’s annual required contributions. 4. Strategic use of general fund surpluses By taking a conservative approach to estimating revenues and by actively managing spending, the City of Carlsbad often ends the year with a General Fund surplus. This means the city has spent less General Fund money than the amount of General Fund revenues coming in. On Aug. 27, 2019, the City Council approved City Council Policy Statement No. 87, which provides greater City Council oversight and a strategy for allocating surplus money each year. Among the allowed uses of General Fund surplus money are ensuring the General Fund’s reserve is at or above its target amount and reducing pension debt. Once those two goals are met, surplus money may be carried forward to the next budget year to fund one-time expenses associated with City Council goals and other needs, as approved by the City Manager or City Council, depending on the amount. 5. New internal budget policies In addition to supporting the City Council in developing and enacting the new budget policies described in this report, the City Manager immediately upon appointment put new budget practices in place at the organizational level. These include: • Eliminating the automatic cost of living increase to department budgets. Instead, departments must demonstrate with objective data the need for any year-over-year increase to their budgets. • Eliminating the ability of departments to automatically carry forward up to 10% of unspent budget to the following year. • Recommending additional staff positions only under three conditions: 1. Needed to comply with new legal and regulatory requirements 2. To support a City Council priority 3. To address a critical public safety need • In 2022, challenging all departments to reduce their annual budgets by 2%. April 20, 2022 Item #1 Page 5 of 70 Fiscal forecast Even though these combined actions have greatly improved the city’s financial sustainability, the long- term financial forecast shows a future gap in funding if the city continues to maintain and build the public safety, infrastructure, parks, recreation and other services that contribute to the quality of life expected by Carlsbad residents. Changing conditions Looking ahead five years, several conditions point to the need to identify new ongoing sources of revenue: • Economic conditions, inflation, housing, and the impacts to the city’s primary revenue sources (sales, property and transient occupancy tax). • More demand for city services due to increases in population, including residents, employees and visitors. New state housing laws in particular are expected to result in increases to the city’s population greater than current service models anticipated. • As the city approaches a time when most of the major new development has occurred, revenue from development fees will decrease significantly. City infrastructure, originally funded by those fees, is now aging and needs maintenance or replacement. o The FY 2021-22 Adopted Capital Improvement Program Budget included $56.2 million in new appropriations, with $612.6 million in projected projects over the next 15 years. • Expenditures increasing at a faster rate than the city’s revenues o Although we predict revenues will exceed expenditures on an annual basis for the next few years, we are seeing this excess diminish which results in an ever-increasing budget deficit. City staff have historically presented financial forecasts to the City Council annually as part of the City Council goal-setting and budget process. With growing economic uncertainty due to the COVID-19 pandemic and other factors outside the city’s control, since 2020, staff have presented the City Council with an update on the city’s financial condition quarterly. At various times in recent years, planned spending has exceeded expected revenue when looking at a five-year forecast. The last two years in particular have shown these two lines crossing coinciding with decreases in sales tax and hotel tax revenue related to the COVID-19 pandemic. Carlsbad’s economic recovery has been strong, however at this time expenditures are expected to exceed revenues in FY 25-26. $- $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 FY20 FY21 FY22 FY23 FY24 FY25 FY26$ (in thousands)General Fund five-year forecast Revenues Expenditures April 20, 2022 Item #1 Page 6 of 70 - Revenue study Cities have several options to consider in determining how best to close an anticipated funding gap, including postponing major new projects, finding more efficient ways to deliver services, eliminating services that aren’t core to the city’s mission and expanding the revenue base. In 2021, the City Council approved a project to study potential new sources of revenue so they could better understand these options. City staff hired a firm specializing in municipal revenue studies and strategy to identify and assess revenue enhancement options for the City of Carlsbad, Terris Barnes Walters Boigon Heath Lester Inc., or TBWBH Props & Measures. The firm’s findings and recommendations are presented in the memorandum attached as Exhibit 1. The memo’s summary of local considerations and priorities states that “in Carlsbad, sales tax appears to be the most sensible choice for further exploration.” Noting that “…it’s the most popular statewide, the most popular tool for other local cities, and has extremely high pass rates. It’s also by far the most promising for revenue…” The memo goes on to say: “(T)here are urgent reasons to consider a local sales tax measure for Carlsbad, as a limited local sales tax increment is available to local jurisdictions under state law. If SANDAG (the San Diego Association of Governments), North County Transit or the County passed their own sales tax measures, these would limit (or even eliminate) Carlsbad’s ability to capture local sales tax revenue in the future.” Because commercial cannabis is the second-most popular revenue tool among California and San Diego County cities, TBWBH Props & Measures studied Carlsbad voters’ attitudes toward potential future legalization as demonstrated in survey results included in Exhibit 2. While some of Carlsbad’s neighboring cities generate significant revenue from legalized cannabis sales, due to the sensitive and complex nature of this issue, TBWBH Props & Measures does not recommend considering cannabis measures at this time. In considering a potential increase in the transient occupancy tax, the city’s hotel/motel/lodging tax, the memo states that such a measure should not be pursued in Carlsbad without first engaging with the affected hotels and local lodging industry representatives. The city also hired True North Research Inc. to determine voter interest in potential local revenue measures and advise the city on structuring a potential future ballot measure that is consistent with voter priorities. The survey summary report is presented in Exhibit 2. The report’s key findings, observations and recommendations are: 1. The majority of Carlsbad voters support a 1 cent-on-the-dollar sales tax measure. 2. Reducing the tax rate to less than 1 cent does not significantly improve a measure’s chance for passage. 3. Voters’ priorities include maintaining parks, open spaces and recreation facilities, maintaining streets and roads, keeping trash and pollution out of waterways and off beaches, keeping public areas and facilities clean and graffiti free, 911 emergency response, and fire protection and prevention. 4. If the City Council wants to pursue a sales tax measure, the next step would be to expand the conversation with the community to build awareness and understanding of the city’s needs and consensus on a proposal. 5. An effort totally independent from the city, would be needed to campaign for the measure’s approval. April 20, 2022 Item #1 Page 7 of 70 Tax measures As stated in Exhibit 1, in the past 10 years, 269 local sales tax measures have passed in California, mostly for cities, at an 81% passage rate. In San Diego County, Imperial Beach, Oceanside, Chula Vista (twice), Del Mar, and National City have all passed local sales tax measures, with only Lemon Grove’s failing. The tables below show San Diego County cities and their respective sales tax rates. Sales tax rates in North County cities Sales tax rates in other San Diego County cities Carlsbad 7.75% Coronado 7.75% Encinitas 7.75% Lemon Grove 7.75% Escondido 7.75% San Diego 7.75% Poway 7.75% Santee 7.75% San Marcos 7.75% El Cajon 8.25% Solana Beach 7.75% La Mesa 8.50% Oceanside 8.25% Chula Vista 8.75% Vista 8.25% Imperial Beach 8.75% Del Mar 8.75% National City 8.75% Average 7.97% Average 8.10% April 20, 2022 Item #1 Page 8 of 70 Sales Tax Rates in San Diego County Carlsbad 7.75 Chula Vista 8.75 Coronado 7.75 Del Mar 8.75 El Cajon 8.25 Encinitas 7.75 Escondido 7.75 Imperial Beach 8.75 La Mesa 8.5 Lemon Grove 7.75 National City 8.75 Oceanside 8.25 Poway 7.75 San Diego 7.75 San Marcos 7.75 Santee 7.75 Solana Beach 7.75 Vista 8.25 0 2 4 6 8 Cities considering options to enhance General Fund revenue often look to the criteria below: • Adequacy and certainty – Does the option sustainably generate annual needed revenue? Is the option subject to significant variation? • Equity and fairness – Is the fiscal burden appropriately spread and proportionate to surrounding communities? Does the option avoid highly skewed economic incentives? • Transparency – Is information on revenue and the tax system and how it operates easy to find and understand • Simplicity – Does the option require multiple ballot measures (potentially causing voter confusion and fatigue)? Would the option be highly burdensome, costly, or complicated to administer (by the city of payors)? A general sales tax measure requires a simple majority vote. If approved, the city would begin receiving the new revenues approximately six months after the election. Below are incremental estimates of additional sales tax revenues across sales tax categories. A full-cent measure, if approved, would generate approximately $30 million in additional revenue for the city annually. Category Incremental tax rate percent* 1/4 1/2 3/4 1 General retail $2,233,801 $4,467,601 $6,701,402 $8,935,202 Food products $1,516,306 $3,032,613 $4,548,919 $6,065,225 Transportation $1,639,098 $3,278,196 $4,917,295 $6,556,393 Construction $138,090 $276,180 $414,271 $552,361 Business-to-business $151,584 $303,167 $454,751 $606,334 Miscellaneous $19,320 $38,639 $57,959 $77,278 Subtotal $5,698,199 $11,396,396 $17,094,597 $22,792,793 Purchases made outside city $1,723,402 $3,446,804 $5,170,206 $6,893,609 Total $7,421,601 $14,843,200 $22,264,803 $29,686,402 *Amounts are estimates based on calendar year 2021 actual sales tax and estimated point of destination capture rates. Options Staff are requesting that the City Council consider the city’s financial outlook and consultants’ findings, observations and recommendations and provide feedback and direction on next steps, either at this meeting or at a future meeting. Options for City Council direction include: 1. Accept the report and take no further action at this time. 2. Direct staff to gather additional information. 3. Direct staff to return with a resolution authorizing the next steps in the process of putting a measure on the November 2022 ballot. This process would include: • Developing informational materials and a communication plan to educate, inform and engage voters • Develop the 75-word ballot question • Finalize tax rate, structure and duration of the proposed measure • Develop clear and understandable expenditure plans or resolutions of intent April 20, 2022 Item #1 Page 9 of 70 • Work with the City Attorney to consider potential taxpayer accountability protections, such as independent citizens’ oversight and public reporting • Work with the City Attorney to develop ordinances/resolutions required for calling the election • Present recommendations and documents to the City Council for formal approval Aug. 12, 2022, is the deadline for placing an item on the Nov. 8, 2022, election ballot. Fiscal Analysis Completing the tasks outlined in Option 3 is estimated to cost up to $100,000. The General Fund’s non- departmental contingency has sufficient funds available to cover this amount. The cost to place a ballot measure on the Nov. 8, 2022, general election ballot was estimated by the County of San Diego Registrar of Voters in early 2021 to be between $60,000 and $90,000. Staff have requested but have not yet received an updated cost estimate from the county. If the City Council decides to place a ballot measure on a future ballot, staff would request funding authorization for the associated cost at that time. Next Steps To be determined by City Council direction. Environmental Evaluation In keeping with California Public Resources Code Section 21065, this action does not constitute a project within the meaning of the California Environmental Quality Act in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Public Notification This item was noticed in keeping with the Ralph M. Brown Act and it was available for public viewing and review at least 24 hours before the scheduled meeting date. Exhibits 1. TBWBH Props & Measures Memorandum 2. True North Research Voter Opinion Survey Summary Report April 20, 2022 Item #1 Page 10 of 70 PROPS & MEASURES STRATEGY & COMMUNICATIONS • 415.291.1894 • INFO@PROPSANDMEASURES.COM • WWW.PROPSANDMEASURES.COM • SAN FRANCISCO · LOS ANGELESTo: Jason Haber, City of Carlsbad From: Jared Boigon, Props & Measures Inc. Date: April 20, 2022 Re: Potential Revenue Measure Feasibility Our firm has been engaged to help the City of Carlsbad evaluate the feasibility of revenue enhancement options that would require voter approval. We’ve prioritized those that have shown to be effective and voter-approved by other cities, as well as those that produce the most potential revenue. We’ve also evaluated specific local political considerations. The top recommended options have been tested in a scientific survey of registered voters, conducted by True North Research, and results are covered in a separate report. Voter Approval Thresholds and Election Timing Overall, California cities generally pursue ballot measures to generate general fund revenue, which require simple majority voter approval, or ballot measures to generate dedicated funds for a specific purpose, which require 2/3 voter approval. By law, those measures requiring simple majority approval must appear on a regularly- scheduled election ballot when some City elected officials are also up for election.1 In Carlsbad, that limits the available election date to even-year November Council election dates. A super- majority of Councilmembers Is required to place such a measure before voters; in Carlsbad, at least 4 votes out of 5. (Successful measures most often come from unanimous Council votes.) Other San Diego County and California Cities By far, the most popular local revenue enhancement tool for other cities in San Diego County and California is sales tax, most commonly for the general fund, requiring simple majority voter approval. In the past 10 years, 269 local sales tax measures2 have passed in California, mostly for cities, at an 81% passage rate. (The passage rate improves when special taxes requiring 2/3 approval are excluded). In San Diego County, Imperial Beach, Oceanside, Chula Vista (twice), Del Mar and National City have all passed local sales tax measures, with only Lemon Grove failing. 1 Cities may declare a “fiscal emergency” by unanimous Council vote, and then be empowered to call general fund enhancement measures for off-cycle election dates. 2 Data source for all statistics: CaliforniaCityFinance.com, Michael Coleman Exhibit 1 April 20, 2022 Item #1 Page 11 of 70 PROPS & MEASURES STRATEGY & COMMUNICATIONS • 415.291.1894 • INFO@PROPSANDMEASURES.COM • WWW.PROPSANDMEASURES.COM • SAN FRANCISCO · LOS ANGELES 2 Cannabis taxes have become the second most popular local tax in California: 156 measures passed and only 20 failed since Nov 2012. The local legalization of cannabis production and/or sales generally comes with proposed taxation. In San Diego County, Lemon Grove, Oceanside, La Mesa, Vista (twice) and the City of San Diego have passed cannabis tax measures. Voters in La Mesa and Encinitas rejected measures. TOT (Transient Occupancy Taxes), or hotel/motel/lodging taxes, are also relatively popular with voters: 81 have passed statewide, at a 73% pass rate, since 2012. Again, the pass rate increases if we exclude those requiring 2/3 approval. Locally, only Santee has passed one, and the City of San Diego has attempted various versions to fund various specific purposes, with the most recent effort still mired in litigation. Parcel taxes, which always require 2/3 voter approval, are popular among California cities, counties and special districts, but the passage rate is much lower: only 51% statewide since Nov 2012, and none in San Diego County. Five different parcel tax measures for local fire protection and community service districts within San Diego County have all failed in the past ten years. Additional Options without San Diego County Examples The following types of measures appear in other parts of California to varying degrees. Utility User Taxes (UUT): 34 of these have passed around the State in the past ten years, most often as a modernization of an outdated 911 tax or fee ordinance. In many cases, the rate is kept level or even lowered while expanding the base of payers to include cell phone users, which generates modest revenue. The pass rate is about 69%; revenue may not be significant. 26 city, county or special district bond measures have passed (out of 47 attempts): while school bonds only require 55% approval, these other local bonds always require 2/3 voter approval and are therefore quite challenging. Revenue is limited only to capital expenditures, and therefore may not be the ideal solution for Carlsbad. Some cities have pursued specific ballot measures for a variety of business license taxes, often modernizing outdated fee and licensing structures. In some cases, these include a parking tax. 29 business license tax measures have passed in the last ten years in California. Often these require significant lead time, including a qualified outside consultant to study the existing business license structure and develop recommended alternatives. Finally, the documentary (property) transfer tax has become increasingly popular recently as the cost of land and housing continues to skyrocket. 6 of 7 such measures passed in 2020. 13 have been attempted in the past 10 years. These can be applied differently to different types of properties; for example, Santa Monica voters approved an increase of $3 per $1,000 of the sale price when it exceeds $5 million, raising an estimated $3 million annually. April 20, 2022 Item #1 Page 12 of 70 PROPS & MEASURES STRATEGY & COMMUNICATIONS • 415.291.1894 • INFO@PROPSANDMEASURES.COM • WWW.PROPSANDMEASURES.COM • SAN FRANCISCO · LOS ANGELES 3 Prop 218 Prop 218 allows California cities to pursue various taxes, fees and assessments, including landscape and lighting districts. These are highly variable and can even include special elections with weighted ballots limited to property owners only. As they are not generally limited to the same electorates and election calendars, we didn’t consider them in this analysis. Local Considerations and Priorities 1. Sales Tax In Carlsbad, sales tax appears to be the most sensible choice for further exploration, as it has been for so many other California and San Diego County cities. Sales tax is the primary focus of our scientific survey of registered voters, conducted by True North Research. Obviously, it’s the most popular statewide, the most popular tool for other local cities, and has extremely high pass rates. It’s also by far the most promising for revenue: a one-cent increase could bring in excess of $20 million annually to the general fund. Out-of-town visitors to Carlsbad (both tourists and residents of nearby areas) could pay half or more of the proceeds, lessening the burden on residents and providing a source of income to help defray the impacts of visitors. There are urgent reasons to consider a local sales tax measure for Carlsbad, as a limited local sales tax increment is available to local jurisdictions under state law. If SANDAG, North County Transit or the County passed their own sales tax measures, these would limit (or even eliminate) Carlsbad’s ability to capture local sales tax revenue in the future. In fact, an initiative effort is currently underway proposing a ballot initiative to capture sales tax increment for SANDAG, potentially facing county voters in November 2022. 2. Cannabis We don’t recommend considering any cannabis measures for 2022; however, we did include some general questions in the scientific poll to measure Carlsbad voter attitudes towards potential future legalization. Those results are included in the True North Research report. As noted above, cannabis is the second-most popular revenue tool among California and San Diego County cities. Of course, local revenue can’t be collected until some type of cannabis business is legalized, and this is a sensitive and complex discussion that can’t be completed in time for November 2022. Some of your neighbors do generate significant revenue from legalized cannabis sales. April 20, 2022 Item #1 Page 13 of 70 PROPS & MEASURES STRATEGY & COMMUNICATIONS • 415.291.1894 • INFO@PROPSANDMEASURES.COM • WWW.PROPSANDMEASURES.COM • SAN FRANCISCO · LOS ANGELES 4 3. TOT (hotel/motel/overnight lodging tax) In Carlsbad, a 1% increase in TOT could generate up to $3 million annually, according to the City Finance Department. We do not recommend pursuing this measure in Carlsbad without sufficient outreach and engagement with the affected hotels and local lodging industry leaders. We did not include it in the scientific survey of voters. In Carlsbad particularly, it is important to consider the political implications related to the local hospitality industry. Many local hotels already contribute to various special districts for certain public services related to their properties. TOT increases can be popular with voters in areas with high overnight tourism, like Carlsbad. Recently, some jurisdictions have begun exploring lodging tax measures that levy a higher rate on vacation rental properties, to account for some community impacts on neighborhoods, and to balance the disproportional fees paid by traditional hotels, motels and inns. April 20, 2022 Item #1 Page 14 of 70 Exhibit 2 April 20, 2022 Item #1 Page 15 of 70 THIS PAGE INTENTIONALLY LEFT BLANK April 20, 2022 Item #1 Page 16 of 70 Table of ContentsiCity of Carlsbad True North Research, Inc. © 2022. . . . . . . . . . . . . . . . T ABLE OF CONTENTS Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii List of Figures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Motivation for Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Overview of Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Organization of Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 About True North. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Just the Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Quality of Life & City Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Initial Ballot Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Positive Arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Interim Ballot Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Negative Arguments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Final Ballot Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Support at Lower Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Cannabis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Fiscal management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Quality of Life & City Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Quality of Life. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Question 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Changes to Improve Carlsbad. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Question 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Overall Performance Rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Question 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Initial Ballot Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Question 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Support by Subgroups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Reasons for Opposing Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Question 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Projects & Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Question 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Service Ratings by Initial Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Positive Arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Question 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Positive Arguments by Initial Support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Interim Ballot Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Question 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Support by Subgroups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Negative Arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Question 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Negative Arguments by Initial Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Final Ballot Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Question 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Change in Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Final Ballot Test at Lower Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Question 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Cannabis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 April 20, 2022 Item #1 Page 17 of 70 Table of ContentsiiCity of Carlsbad True North Research, Inc. © 2022. . . . . . . . . . . . . . . . Opinion of Allowing Cannabis Businesses in City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Question 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Opinion by Type of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Question 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Support for Tax on Cannabis Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Question 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Fiscal Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Question 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Background & Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Questionnaire Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Programming, Pre-Test & Translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Sample. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Statistical Margin of Error. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Recruiting & Data Collection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Data Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Rounding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Questionnaire & Toplines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 April 20, 2022 Item #1 Page 18 of 70 List of TablesTrue North Research, Inc. © 2022 iiiCity of Carlsbad . . . . . . . . . . . . . . . . L IST OF TABLES Table 1 Demographic Breakdown of Support at Initial Ballot Test. . . . . . . . . . . . . . . . . . . . 15 Table 2 Top Projects & Services by Position at Initial Ballot Test. . . . . . . . . . . . . . . . . . . . . 18 Table 3 Top Positive Arguments by Position at Initial Ballot Test . . . . . . . . . . . . . . . . . . . . 20 Table 4 Demographic Breakdown of Support at Interim Ballot Test . . . . . . . . . . . . . . . . . . 22 Table 5 Negative Arguments by Position at Initial Ballot Test. . . . . . . . . . . . . . . . . . . . . . . 24 Table 6 Demographic Breakdown of Support at Final Ballot Test . . . . . . . . . . . . . . . . . . . . 26 Table 7 Movement Between Initial & Final Ballot Test. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Table 8 Demographics of Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 April 20, 2022 Item #1 Page 19 of 70 List of FiguresTrue North Research, Inc. © 2022 ivCity of Carlsbad . . . . . . . . . . . . . . . . L IST OF FIGURES Figure 1 Quality of Life. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Figure 2 Quality of Life by Years in Carlsbad, Overall Satisfaction, Child in Hsld & Party . . . . 9 Figure 3 Quality of Life by Age, Homeowner on Voter File & Gender . . . . . . . . . . . . . . . . . . 10 Figure 4 Changes to Improve City. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Figure 5 Overall Satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure 6 Overall Satisfaction by Years in Carlsbad & Age. . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure 7 Overall Satisfaction by Homeowner on Voter File, Gender, Party & Child in Hsld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Figure 8 Initial Ballot Test. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Figure 9 Reasons for not Supporting Measure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Figure 10 Projects & Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Figure 11 Positive Arguments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Figure 12 Interim Ballot Test. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Figure 13 Negative Arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Figure 14 Final Ballot Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Figure 15 Final Ballot Test at Half Cent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Figure 16 Opinion of Allowing Cannabis Businesses in Carlsbad. . . . . . . . . . . . . . . . . . . . . . 29 Figure 17 Opinion of Allowing Cannabis Businesses in Carlsbad by Years in Carlsbad, Child in Hsld & Party. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Figure 18 Opinion of Allowing Cannabis Businesses in Carlsbad by Age, Homeowner on Voter File & Gender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Figure 19 Opinion of Allowing Types of Cannabis Businesses in Carlsbad . . . . . . . . . . . . . . 31 Figure 20 Support For Establishing Tax on Cannabis-Related Businesses . . . . . . . . . . . . . . . 31 Figure 21 Support For Establishing Tax on Cannabis-Related Businesses by Years in Carlsbad, Party & Fiscal Management Rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Figure 22 Support For Establishing Tax on Cannabis-Related Businesses by Age, Homeowner on Voter File, Allow Cannabis Biz in Carlsbad & Child in Hsld . . . . . . 32 Figure 23 Fiscal Management Rating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Figure 24 Fiscal Management Rating by Years in Carlsbad, Overall Satisfaction & Party. . . . . 33 Figure 25 Fiscal Management Rating Age, Homeowner on Voter File & Child in Hsld. . . . . . . 34 Figure 26 Maximum Margin of Error Due to Sampling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 April 20, 2022 Item #1 Page 20 of 70 IntroductionTrue North Research, Inc. © 2022 1City of Carlsbad . . . . . . . . . . . . . . . . I NTRODUCTION Located along seven miles of beautiful coastline in north San Diego County, the City of Carlsbad is known for its small-town beach community character, support for active lifestyles, and the strength and diversity of its local economy. Incorporated in 1952 and currently home to an esti- mated 115,501 residents1, the City’s team of full-time and part-time employees provides a full suite of municipal services including police, fire, public works, planning, parks and recreation, and community development. The City of Carlsbad has long been one of the most fiscally conservative cities in the region. Fees on new development have paid for needed infrastructure and maintenance, and helped sustain high quality municipal services at a level above what otherwise would have been possible. As development has slowed in recent years, however, the City’s revenues have not kept pace with the growing costs associated with providing municipal services and facilities. Although the City has been proactive in responding to this challenge by reducing its costs, deferring maintenance projects, cutting back on basic services where feasible, and through effective financial manage- ment practices, the practical reality is that existing revenues will not support the high quality services that residents have come to expect on an ongoing basis. To provide the funding required to maintain and improve the quality of essential city services, the City of Carlsbad is considering establishing a local revenue measure. MOTIVATION FOR RESEARCH The primary purpose of this study was to produce an unbiased, statistically reliable evaluation of voters' interest in supporting a general sales tax measure to provide the funding noted above. Additionally, should the City decide to move for- ward with a revenue measure, the survey can guide how best to structure the measure so it is consistent with the community's priorities and expressed needs. Specifically, the study was designed to: • Gauge current, baseline support for enacting a local sales tax to provide funding for general municipal services; • Identify the types of services voters are most interested in funding, should the measure pass; • Expose voters to arguments in favor of, and against, the proposed tax measure to assess how information affects support for the measure; and • Estimate support for the measure once voters are presented with the types of information they will likely be exposed to during an election cycle. It is important to note at the outset that voters’ opinions about tax measures are often some- what fluid, especially when the amount of information they initially have about a measure is lim- ited. How voters think and feel about a measure today may not be the same way they think and feel once they have had a chance to hear more information about the measure during the elec- tion cycle. Accordingly, to accurately assess the feasibility of establishing a sales tax increase to fund municipal services, it was important that in addition to measuring current opinions about the measure (Question 5), the survey expose respondents to the types of information voters are likely to encounter during an election cycle, including arguments in favor of (Question 8) and 1. Source: California Department of Finance estimate for January 2021. April 20, 2022 Item #1 Page 21 of 70 IntroductionTrue North Research, Inc. © 2022 2City of Carlsbad . . . . . . . . . . . . . . . . opposed to (Question 10) the measure, and gauge how this type of information ultimately impacts their voting decision (Questions 9 & 11). OVERVIEW OF METHODOLOGY For a full discussion of the research methods and tech- niques used in this study, turn to Methodology on page 36. In brief, the survey was administered to a random sample of 894 voters in the City of Carlsbad who are likely to participate in the November 2022 election. The survey followed a mixed-method design that employed multiple recruiting methods (email, text and telephone) and multiple data collection methods (telephone and online). Administered between March 11 and March 17, 2022, the average interview lasted 17 minutes. ORGANIZATION OF REPORT This report is designed to meet the needs of readers who prefer a summary of the findings as well as those who are interested in the details of the results. For those who seek an overview of the findings, the sections titled Just the Facts and Conclusions are for you. They provide a summary of the most important factual findings of the survey in bul- let-point format and a discussion of their implications. For the interested reader, this section is followed by a more detailed question-by-question discussion of the results from the survey by topic area (see Table of Contents), as well as a description of the methodology employed for col- lecting and analyzing the data. And, for the truly ambitious reader, the questionnaire used for the interviews is contained at the back of this report (see Questionnaire & Toplines on page 39) and a complete set of crosstabulations for the survey results is contained in Appendix A. ACKNOWLEDGMENTS True North thanks the City of Carlsbad for the opportunity to assist the City in this important effort. The collective expertise, local knowledge, and insight provided by city staff and representatives improved the overall quality of the research presented here. A special thanks also to Jared Boigon (TBWBH Props & Measures) for assisting in the design of the survey. DISCLAIMER The statements and conclusions in this report are those of the authors (Dr. Timothy McLarney and Richard Sarles) at True North Research, Inc. and not necessarily those of the City of Carlsbad. Any errors and omissions are the responsibility of the authors. ABOUT TRUE NORTH True North is a full-service survey research firm that is dedicated to providing public agencies with a clear understanding of the values, perceptions, priorities, and concerns of their residents and voters. Through designing and implementing scientific surveys, focus groups, and one-on-one interviews as well as expert interpretation of the findings, True North helps its clients to move with confidence when making strategic decisions in a variety of areas—such as planning, policy evaluation, performance management, establishing fiscal priori- ties, passing revenue measures, and developing effective public information campaigns. During their careers, Dr. McLarney and Mr. Sarles have designed and conducted over 1,200 sur- vey research studies for public agencies, including more than 400 revenue measure feasibility studies. Of the measures that have gone to ballot based on Dr. McLarney’s recommendation, 95% have been successful. In total, the research that Dr. McLarney has conducted has led to over $34 billion in voter-approved local revenue measures. April 20, 2022 Item #1 Page 22 of 70 Just the FactsTrue North Research, Inc. © 2022 3City of Carlsbad . . . . . . . . . . . . . . . . J UST THE FACTS The following section is an outline of the main factual findings from the survey. For the reader’s convenience, we have organized the findings according to the section titles used in the body of this report. Thus, if you would like to learn more about a particular finding, simply turn to the appropriate report section. QUALITY OF LIFE & CITY SERVICES • More than nine-in-ten voters shared favorable opinions of the quality of life in Carlsbad, with 53% reporting it is excellent and 42% stating it is good. Approximately 5% of voters surveyed said the quality of life in the City is fair, whereas less than 1% used poor or very poor to describe the quality of life in Carlsbad. • When asked what changes city government could make to improve the quality of life in Carlsbad, limiting growth and development/preserving open space was the frequently men- tioned (16%), followed by addressing homeless issues (15%), improving public safety (8%), providing more affordable housing (6%), reducing traffic congestion (5%), and improving parking (5%). Approximately one-in-five respondents could not think of a change to Carlsbad that they desired (12%) or indicated that no changes are needed, everything is fine as is (8%). • Nearly nine-in-ten voters surveyed indicated that they were satisfied with the City of Carlsbad’s efforts to provide municipal services, with 42% saying they were very satisfied and 43% somewhat satisfied. Approximately 10% reported that they were dissatisfied with the City’s overall performance, whereas 4% were unsure or unwilling to state their opinion. INITIAL BALLOT TEST • With only the information provided in the ballot language, 57% of likely November 2022 vot- ers surveyed indicated that they would support the proposed one-cent sales tax to fund gen- eral municipal services, whereas 34% stated that they would oppose the measure and 9% were unsure or unwilling to share their vote choice. • When those who opposed the measure or were unsure at the Initial Ballot Test were asked the reason for their position, a belief that taxes are already too high (45%) and the percep- tion that city funds have been/will be mismanaged or misspent (27%) were the most com- mon responses, followed by a need for more information (16%) and the belief that the City already has enough money (12%). SERVICES When presented with a list of 15 services that could be funded by the sales tax measure, voters were most interested in using the money for: • Maintaining parks, open spaces, and recreation facilities including courts, fields, and play- grounds • Maintaining local streets and repairing potholes • Keeping trash and pollution out of local waterways and off our beaches • Keeping public areas, buildings, and restrooms clean and free of graffiti • Providing quick responses to 911 emergencies • Providing fire protection and prevention services April 20, 2022 Item #1 Page 23 of 70 Just the FactsTrue North Research, Inc. © 2022 4City of Carlsbad . . . . . . . . . . . . . . . . POSITIVE ARGUMENTS When presented with arguments in favor of the measure, voters found the following arguments to be the most persuasive: • The funding raised by this measure will allow the City to keep up with basic repairs and maintenance to streets, sidewalks, storm drains, and public facilities. If we don't take care of it now, it will be a lot more expensive to repair in the future. • Fast emergency response times for 911 calls are critical for saving lives. This measure will ensure that we have enough police officers, firefighters, dispatchers, and paramedics to respond quickly to 911 emergencies. • By keeping our city safe, clean and well-maintained, this measure will help protect our prop- erty values and keep Carlsbad a special place to live. INTERIM BALLOT TEST • After learning more about the services that could be funded, as well as hearing arguments in favor of the measure, overall support for the proposed sales tax measure among likely November 2022 voters increased to 61%, with 25% of voters indicating that they would defi- nitely vote yes on the measure. Approximately 32% of respondents opposed the measure at this point in the survey, and an additional 7% were unsure or unwilling to state their vote choice. NEGATIVE ARGUMENTS Of the arguments in opposition to the measure, voters found the following arguments to be the most persuasive: • Taxes are already too high - we can't afford another tax increase. This is especially true for seniors and others on fixed-incomes. • Local businesses and residents have been hit hard by the pandemic and inflation. Many are struggling to stay afloat. Now is not the time to raise taxes. • There are no guarantees on how funds will be spent, which means the City can divert the money to pet projects. The City government can't be trusted with our tax dollars. FINAL BALLOT TEST • After providing respondents with the wording of the proposed measure, a list of services that could be funded by the measure, as well as arguments in favor of and against the pro- posal, support for the one-cent sales tax measure was found among 58% of likely November 2022 voters, with 25% indicating that they would definitely support the measure. Approxi- mately 33% of respondents were opposed to the measure at the Final Ballot Test, and 8% were unsure or unwilling to state their vote choice. SUPPORT AT LOWER RATE • Voters who did not support the proposed measure at the Final Ballot Test were asked if they would support the measure at a lower sales tax rate of one-half cent. An additional 6% of voters indicated they would support the measure under this condition. April 20, 2022 Item #1 Page 24 of 70 Just the FactsTrue North Research, Inc. © 2022 5City of Carlsbad . . . . . . . . . . . . . . . . CANNABIS • Overall, 41% of respondents indicated that the City of Carlsbad should allow cannabis busi- nesses to operate in the City, 38% opposed the idea, and 21% were unsure or unwilling to state. • The majority of all respondents were in favor of allowing research and testing of cannabis products (59%) and medicinal retail cannabis dispensaries to operate in the City (54%). • Respondents were more evenly split in their opinion regarding businesses that deliver can- nabis to private residences being headquartered in Carlsbad (46% in support vs. 40% opposed) and the manufacturing of cannabis edibles (41% in support vs. 42% opposed). • Less than one-in-four respondents favored allowing recreational retail cannabis dispensaries (39%) and the indoor cultivation of cannabis on commercial properties (37%) in Carlsbad. • Approximately three-quarter (74%) of voters indicated they would support taxing cannabis- related businesses if the City were to allow them, while 15% opposed such a tax and 11% were unsure or unwilling to state. FISCAL MANAGEMENT • Most voters gave the City of Carlsbad positive marks for how it manages its finances, with 18% rating the City’s performance as excellent, 44% good, and 18% fair. Less than 4% of respondents rated the job the City has done in managing its finances as poor or very poor, while 16% confided they were not sure or preferred to not answer the question. April 20, 2022 Item #1 Page 25 of 70 ConclusionsTrue North Research, Inc. © 2022 6City of Carlsbad . . . . . . . . . . . . . . . . C ONCLUSIONS The bulk of this report is devoted to conveying the details of the study findings. In this section, however, we attempt to ‘see the forest through the trees’ and note how the collective results of the survey answer the key questions that motivated the research. The following conclusions are based on True North’s interpretations of the survey results and the firm’s collective experience conducting revenue measure studies for public agencies throughout the State. Is it feasible to place a local sales tax measure on the ballot in 2022? Yes. Carlsbad voters have a very high opinion of the quality of life in the city, and they value the services they receive from the City of Carlsbad. Together, these sentiments translate into solid natural support (57%) for establishing a one cent sales tax to provide funding for general city ser- vices such as such as fire protection, paramedic, and 911 emergency response, police patrols and crime prevention, maintenance of streets, parks, open space, beaches, and infrastructure, traffic management, addressing homelessness, and other city services. The results of this study suggest that if structured appropriately and combined with an effective public outreach/education effort and a solid independent campaign, the proposed sales tax measure has a good chance of passage if placed on the November 2022 ballot. Having stated that a general sales tax measure is feasible, it is important to note that the measure’s prospects will be shaped by external factors and that a recommendation to place the measure on the November 2022 ballot comes with several qualifications and conditions. Indeed, although the results are promising, all revenue measures must overcome chal- lenges prior to being successful. The proposed measure is no exception. The following paragraphs discuss some of the challenges and the next steps that True North and TBWBH Props & Measures recommend. Which services do Carlsbad voters view as priorities? A general tax is “any tax imposed for general governmental purposes”2 and is distinguished from a special tax in that the funds raised by a gen- eral tax are not earmarked for a specific purpose(s). Thus, a general tax provides a municipality with a great deal of flexibility with respect to what is funded by the measure on a year-to-year basis. Although the Carlsbad City Council would have the discretion to decide how to spend the revenues, the survey results indicate that voters are primarily interested in using the proceeds to fund public works and pub- lic safety. Specifically, voters most strongly favored using measure pro- ceeds to maintain parks, open spaces, and recreation facilities including courts, fields, and playgrounds, maintain local streets and repair pot- holes, keep trash and pollution out of local waterways and off local beaches, keep public areas, buildings, and restrooms clean and free of 2. Section 1, Article XIIIC, California Constitution. April 20, 2022 Item #1 Page 26 of 70 ConclusionsTrue North Research, Inc. © 2022 7City of Carlsbad . . . . . . . . . . . . . . . . graffiti, provide quick responses to 911 emergencies, and provide fire protection and prevention services. How might public infor- mation/education affect support for the pro- posed measure? As noted in the body of this report, individuals’ opinions about revenue measures are often not rigid, especially when the amount of information presented to the public on a measure has been limited. Thus, in addition to measuring current support for the measure, one of the goals of this study was to explore how the introduction of additional information about the measure may affect voters’ opinions about the proposal. It is clear from the survey results that voters’ opinions about the pro- posed sales tax measure are somewhat sensitive to the nature, and amount, of information they have about the measure. Information about the specific services that could be funded by the measure, as well as arguments in favor of the measure, were found by many voters to be compelling reasons to support the measure—effectively increasing sup- port for the proposal by 4% at the Interim Ballot Test. However, voters also exhibited some sensitivity to opposition arguments, and there is a risk they could be swayed by divisive and hyper-partisan campaigning during the November election cycle. Accordingly, one of the keys to building and sustaining support for the proposed measure will be the presence of an effective, well-organized public outreach effort and a sep- arate, independent campaign that focuses on the need for the measure as well as the many benefits that it will bring. How might changes to the economic or politi- cal climate alter support for the measure? A survey is a snapshot in time—which means the results of this study and the conclusions noted above must be viewed in light of the current economic and political climates. On the one hand, this should provide some reassurances to the City that a local sale tax measure is feasible. Even with concerns regarding the pandemic, inflation, high gas prices, and the trajectory of the economy, voters were generally supportive of the proposed measure. On the other hand, the months leading up to the November 2022 elec- tion are likely to be punctuated with significant events on the public health, economic, and political fronts. Exactly how these events unfold and may shape voters’ opinions remains to be seen. Should the economy and/or political climate improve, support for the measure could increase. Conversely, negative economic and/or political developments (including devolving into a hyper-partisan environment), could dampen support for the measure below what was recorded in this study. How do Carlsbad voters feel about cannabis businesses operating in the City? Under California law, it is legal for adults to use cannabis for medical and recreational purposes. The law also allows local cities like Carlsbad to decide whether to allow cannabis businesses to operate within their boundaries, as well as the types of restrictions and regulations to place on cannabis businesses. Although Carlsbad does not currently allow can- April 20, 2022 Item #1 Page 27 of 70 ConclusionsTrue North Research, Inc. © 2022 8City of Carlsbad . . . . . . . . . . . . . . . . nabis-related businesses to operate in the City, it took the opportunity in this survey to explore residents’ opinions on the topic. The survey results indicate that Carlsbad voters have mixed opinions regarding cannabis businesses, and that their support for allowing can- nabis businesses to operate in the City depends on the type of business being considered. When asked, in general, whether the City should allow cannabis businesses to operate in Carlsbad, 41% of respondents answered in the affirmative, 38% opposed the idea, and 21% were unsure or unwilling to state. Digging deeper revealed that support varied con- siderably based on the type of cannabis business being operated. Whereas the majority of all respondents were in favor of allowing research and testing of cannabis products (59%) and medicinal retail can- nabis dispensaries to operate in the City (54%), they were more evenly split in their opinions regarding businesses that deliver cannabis to pri- vate residences being headquartered in Carlsbad (46% in support vs. 40% opposed) and the manufacturing of cannabis edibles (41% in support vs. 42% opposed). At the other end of the spectrum, less than four-in-ten respondents favored allowing recreational retail cannabis dispensaries (39%) and the indoor cultivation of cannabis on commercial properties (37%) in Carlsbad. Although Carlsbad voters expressed mixed opinions about whether can- nabis business should be allowed to operate in the City, there was far more consensus (74%) on the logic of taxing cannabis-related businesses if the City were to allow them. April 20, 2022 Item #1 Page 28 of 70 Quality of Life & City ServicesTrue North Research, Inc. © 2022 9City of Carlsbad . . . . . . . . . . . . . . . . Q UALITY OF LIFE & CITY SERVICES The opening section of the survey was designed to gauge voters’ opinions regarding the quality of life in Carlsbad, their ideas for how it can be improved, as well as their assessment of the City’s performance in providing municipal services. QUALITY OF LIFE At the outset of the interview, voters were asked to rate the quality of life in the City of Carlsbad using a five-point scale of excellent, good, fair, poor, or very poor. As shown in Figure 1 below, more than nine-in-ten voters shared favorable opinions of the quality of life in Carlsbad, with 53% reporting it is excellent and 42% stating it is good. Approximately 5% of voters surveyed said the quality of life in the City is fair, whereas less than 1% used poor or very poor to describe the quality of life in Carlsbad. Question 2 How would you rate the overall quality of life in Carlsbad? Would you say it is excel- lent, good, fair, poor or very poor? FIGURE 1 QUALITY OF LIFE Figures 2 and 3 show how ratings of the quality of life in the City of Carlsbad varied by length of resi- dence, overall satisfaction with the City’s perfor- mance in providing municipal services, presence of a child in the home, party affiliation, age, home owner- ship, and gender. The most striking pattern in the figures is the consistency with which residents pro- vided high ratings for the quality of life in the City, with more than 90% of respondents in every sub- group rating the quality of life in Carlsbad as excel- lent or good (with the notable exception of those who were dissatisfied with the City’s performance in providing municipal services). FIGURE 2 QUALITY OF LIFE BY YEARS IN CARLSBAD, OVERALL SATISFACTION, CHILD IN HSLD & PARTY Good 41.9 Excellent 52.8 Fair 4.7 Poor 0.2 Prefer not to answer 0.2 Very poor 0.1 57.7 14.6 54.3 52.6 52.8 52.3 53.5 40.0 55.7 39.0 43.1 43.1 40.3 42.2 Excellent 57.5 48.3 51.1 53.1 Good 38.0 40.347.046.9 0 10 20 30 40 50 60 70 80 90 100 Less than 5 5 to 9 10 to 14 15 or more Satisfied Dissatisfied Yes No Democrat Republican Other / DTS Years in Carlsbad (Q1) Overall Satisfaction (Q4) Child in Hsld (Q17) Party% RespondentsApril 20, 2022 Item #1 Page 29 of 70 Quality of Life & City ServicesTrue North Research, Inc. © 2022 10City of Carlsbad . . . . . . . . . . . . . . . . FIGURE 3 QUALITY OF LIFE BY AGE, HOMEOWNER ON VOTER FILE & GENDER CHANGES TO IMPROVE CARLSBAD The next question in this series asked voters to indicate the one thing that city government could change to make Carlsbad a better place to live, now and in the future. Question 3 was posed in an open-ended manner, allowing residents to mention any aspect or attribute that came to mind without being prompted by or restricted to a particular list of options. True North later reviewed the verbatim responses and grouped them into the categories shown in Figure 4 on the next page. Among specific changes desired, limiting growth and development/preserving open space was the most common, mentioned by approximately 16% of voters surveyed, followed by addressing homeless issues (15%), improving public safety (8%), providing more affordable housing (6%), reducing traffic congestion (5%), and improving parking (5%). It is also worth noting that approx- imately one-in-five respondents could not think of a change to Carlsbad that they desired (12%) or indicated that no changes are needed, everything is fine as is (8%). 56.9 57.3 44.5 59.6 46.5 39.0 38.4 48.4 36.2 47.3 52.359.0 45.1Excellent 40.4 53.3 36.0 41.5Good 49.8 0 10 20 30 40 50 60 70 80 90 100 18 to 29 30 to 39 40 to 49 50 to 64 65 or older Yes No Male Female Age Homeowner on Voter File Gender% RespondentsApril 20, 2022 Item #1 Page 30 of 70 Quality of Life & City ServicesTrue North Research, Inc. © 2022 11City of Carlsbad . . . . . . . . . . . . . . . . Question 3 If the city government could change one thing to make Carlsbad a better place to live now and in the future, what change would you like to see? FIGURE 4 CHANGES TO IMPROVE CITY OVERALL PERFORMANCE RATING The final question in this series asked respondents to indicate if, overall, they were satisfied or dissatisfied with the job the City of Carlsbad is doing to provide city services. Because this question does not reference a specific program, facility, or service and requested that the respondent consider the City’s performance in general, the find- ings of this question may be regarded as an overall performance rating for the City. As shown in Figure 5 on the next page, nearly nine-in-ten voters surveyed indicated that they were satisfied with the City of Carlsbad’s efforts to provide municipal services, with 42% saying they were very satisfied and 43% somewhat satisfied. Approximately 10% reported that they were dissatisfied with the City’s overall performance, whereas 4% were unsure or unwilling to state their opinion. For the interested reader, figures 6 and 7 display how the percentage of respon- dents satisfied with the City’s overall performance varied across demographic subgroups. 16.1 15.2 11.8 8.0 7.8 6.1 5.2 4.5 4.1 3.8 3.3 2.8 2.5 2.4 2.4 2.3 2.2 1.9 1.9 1.9 1.7 1.6 3.0 4.0 1.5 0 5 10 15 20 Limit growth, development, preserve open space Address homeless issues Not sure / Cannot think of anything specific No changes needed/Everything is fine Improve public safety Provide more affordable housing Reduce traffic congestion Improve parking Improve environmental efforts Maintain small, beach town feeling Improve, provide more rec facilities, parks Improve, maintain roads, infrastructure Provide more sidewalks, bike lanes Improve public transit Reduce taxes, fees Enforce traffic laws Provide a dog beach Enforce noise ordinance Limit high-rise buildings, view obstructions Reduce utility fees Synchronize traffic lights Beautify city, landscaping, beach Provide, expand trail network Provide more activities, events for all ages More diversity in general % Respondents April 20, 2022 Item #1 Page 31 of 70 Quality of Life & City ServicesTrue North Research, Inc. © 2022 12City of Carlsbad . . . . . . . . . . . . . . . . Question 4 Generally speaking, are you satisfied or dissatisfied with the job the City of Carls- bad is doing to provide city services? FIGURE 5 OVERALL SATISFACTION FIGURE 6 OVERALL SATISFACTION BY YEARS IN CARLSBAD & AGE Not sure 4.4 Very dissatisfied 2.4 Somewhat dissatisfied 7.4 Very satisfied 42.4 Somewhat satisfied 43.4 28.8 41.1 40.8 40.1 50.4 52.9 45.2 45.8 45.4 36.7 Very satisfied 47.3 42.4 33.3 43.2 Smwt satisfied 43.8 39.954.944.2 0 10 20 30 40 50 60 70 80 90 100 Less than 5 5 to 9 10 to 14 15 or more 18 to 29 30 to 39 40 to 49 50 to 64 65 or older Years in Carlsbad (Q1) Age% RespondentsApril 20, 2022 Item #1 Page 32 of 70 Quality of Life & City ServicesTrue North Research, Inc. © 2022 13City of Carlsbad . . . . . . . . . . . . . . . . FIGURE 7 OVERALL SATISFACTION BY HOMEOWNER ON VOTER FILE, GENDER, PARTY & CHILD IN HSLD 46.6 41.2 38.3 38.4 45.3 39.4 45.3 46.7 48.3 41.5 40.344.738.5 Very satisfied 44.5 43.7 43.0 44.5 Smwt satisfied 43.3 0 10 20 30 40 50 60 70 80 90 100 Yes No Male Female Democrat Republican Other / DTS Yes No Homeowner on Voter File Gender Party Child in Hsld (Q17)% RespondentsApril 20, 2022 Item #1 Page 33 of 70 Initial Ballot TestTrue North Research, Inc. © 2022 14City of Carlsbad . . . . . . . . . . . . . . . . I NITIAL BALLOT TEST The primary research objective of this survey was to estimate voters’ support for establishing a one-cent sales tax to provide funding for general city services in the City of Carlsbad, such as fire protection, paramedic, and 911 emergency response, police patrols and crime prevention, main- tenance of streets, parks, open space, beaches, and infrastructure, traffic management, address- ing homelessness, and other city services. To this end, Question 5 was designed to take an early assessment of voters’ support for the proposed measure. The motivation for placing Question 5 near the front of the survey is twofold. First, voter support for a measure can often depend on the amount of information they have about a measure. At this point in the survey, the respondent has not been provided information about the proposed measure beyond what is presented in the ballot language. This situation is analogous to a voter casting a ballot with limited knowledge about the measure, such as what might occur in the absence of an effective campaign. Question 5, also known as the Initial Ballot Test, is thus a good measure of voter support for the proposed measure as it is today, on the natural. Because the Initial Ballot Test provides a gauge of natural support for the measure, it also serves a second purpose in that it provides a useful baseline from which to judge the impact of various informa- tion items conveyed later in the survey on voter support for the measure. Question 5 Later this year, voters in Carlsbad may be asked to vote on a local ballot measure. Let me read you a summary of the measure. To provide funding for general city services in the City of Carlsbad, such as fire protection, paramedic, and 9-1-1 emergency response; police patrols and crime prevention; maintenance of streets, parks, open space, beaches, and infra- structure; traffic management, addressing homelessness, and other city services; shall an ordi- nance establishing a one-cent sales tax be adopted, providing approximately 20 million dollars annually for city services until ended by voters, with independent audits, citizen oversight, and all money locally controlled? If the election were held today, would you vote yes or no on this measure? FIGURE 8 INITIAL BALLOT TEST As shown in Figure 8, 57% of likely November 2022 voters surveyed indicated that they would definitely or probably support the proposed one- cent sales tax, whereas 34% stated that they would oppose the measure and 9% were unsure or unwilling to share their vote choice. For gen- eral taxes in California, the level of support recorded at the Initial Ballot Test is approximately seven percentage points above the simple major- ity (50%+1) required for passage. Probably yes 34.2 Definitely yes 23.0 Probably no 14.2 Definitely no 19.4 Prefer not to answer 0.4Not sure 8.8 April 20, 2022 Item #1 Page 34 of 70 Initial Ballot TestTrue North Research, Inc. © 2022 15City of Carlsbad . . . . . . . . . . . . . . . . SUPPORT BY SUBGROUPS For the interested reader, Table 1 shows how support for the measure at the Initial Ballot Test varied by key demographic traits. The blue column (Approxi- mate % of Universe) indicates the percentage of the likely November 2022 electorate that each subgroup category comprises. Support for the proposed measure was widespread, exceeding a majority in nearly all identified subgroups. When compared to their respective counterparts, sup- port was strongest among respondents who had lived in Carlsbad less than 10 years, those sat- isfied with the City’s overall performance, voters between 40 and 49 years of age, individuals who registered to vote in Carlsbad between June 2006 and June 2012, dual Democrat house- holds, Democrats, and those who rated the City’s fiscal management as excellent or good. TABLE 1 DEMOGRAPHIC BREAKDOWN OF SUPPORT AT INITIAL BALLOT TEST Approximate % of Voter Universe % Probably or Definitely Yes % Not sure Overall 100.0 57.3 8.8 Less than 5 18.5 63.0 4.5 5 to 9 16.9 62.6 9.8 10 to 14 14.2 57.1 12.1 15 or more 50.4 53.5 9.1 Satisfied 89.8 60.3 7.5 Dissatisfied 10.2 40.4 18.9 Yes 32.3 60.1 8.7 No 67.7 57.3 8.1 18 to 29 10.8 57.6 13.5 30 to 39 10.1 54.2 11.6 40 to 49 15.9 63.7 4.2 50 to 64 31.0 55.3 9.3 65 or older 32.2 56.7 8.1 Since Nov '18 7.1 61.8 8.8 Jun '12 to <Nov '18 22.0 57.7 12.1 Jun '06 to <Jun '12 9.9 63.4 3.4 Before Jun '06 61.0 55.6 8.5 Single dem 16.4 63.1 15.9 Dual dem 13.2 72.6 6.0 Single rep 11.2 53.2 10.7 Dual rep 13.7 44.7 4.9 Other 18.2 61.1 10.3 Mixed 27.4 51.7 6.0 Democrat 38.0 66.1 10.7 Republican 33.9 46.4 7.0 Other / DTS 28.1 58.3 8.3 Excellent, good 74.1 64.2 4.7 Fair 21.8 43.3 16.8 Poor, very poor 4.1 18.3 17.6 Yes 65.1 57.1 7.2 No 34.9 57.6 11.7 Yes 79.0 57.5 9.3 No 21.0 56.2 6.7 Yes 81.7 56.4 8.6 No 18.3 61.0 9.4 Male 53.1 57.7 5.5 Female 46.9 59.5 12.1 Homeowner on Voter File Likely to Vote by Mail Likely Jun 2022 Voter Gender Years in Carlsbad (Q1) Party Fiscal Management Rating (Q16) Overall Satisfaction (Q4) Child in Hsld (Q17) Household Party Type Age Registration Year April 20, 2022 Item #1 Page 35 of 70 Initial Ballot TestTrue North Research, Inc. © 2022 16City of Carlsbad . . . . . . . . . . . . . . . . REASONS FOR OPPOSING MEASURE Respondents who opposed the measure (or were unsure) at the Initial Ballot Test were subsequently asked if there was a particular reason for their position. Question 6 was asked in an open-ended manner, allowing respondents to mention any reason that came to mind without being prompted by, or restricted to, a particular list of options. True North later reviewed the verbatim responses and grouped them into the categories shown in Figure 9. Among the specific reasons offered for not supporting the measure, a belief that taxes are already too high (45%) and the perception that city funds have been/will be mismanaged or mis- spent (27%) were the most common, followed by a need for more information (16%) and the belief that the City already has enough money (12%). Question 6 Is there a particular reason why you do not support or are unsure about the mea- sure I just described? FIGURE 9 REASONS FOR NOT SUPPORTING MEASURE 45.3 27.4 16.3 12.3 4.9 2.9 2.4 2.1 2.0 1.3 0 1020304050 Taxes already too high Money is misspent, mismanaged Need more information City has enough money Other ways to be funded City are okay as-is, no need for more money Not sure / No particular reason Mentioned past ballot measure Do not trust City Other higher priorities in community % Respondents Who Do Not Support Measure April 20, 2022 Item #1 Page 36 of 70 Projects & ServicesTrue North Research, Inc. © 2022 17City of Carlsbad . . . . . . . . . . . . . . . . P ROJECTS & SERVICES The ballot language presented in Question 5 indicated that the proposed measure would provide funding for general city services in the City of Carlsbad, such as fire protection, paramedic, and 911 emergency response, police patrols and crime prevention, maintenance of streets, parks, open space, beaches, and infrastructure, traffic management, addressing homelessness, and other city services. The purpose of Question 7 was to provide respondents with a full range of services that may be funded by the proposed measure, as well as identify which of these services voters most favored funding with the proceeds of the measure. After reading each service, respondents were asked if they would favor or oppose spending some of the money on that particular item assuming that the measure passed. Descriptions of the services tested, as well as voters’ responses, are shown in Figure 10 below. The order in which the services were presented to respondents was randomized to avoid a systematic posi- tion bias. Question 7 The measure we've been discussing will provide funding for a variety of services in your community. If the measure passes, would you favor or oppose using some of the money to: _____, or do you not have an opinion? FIGURE 10 PROJECTS & SERVICES Nearly all projects and services tested were quite popular with Carlsbad voters, with at least seven-in-ten respondents indicating they would favor spending measure proceeds on each item tested (with the exception of improving affordable housing options). That said, the services that 51.3 56.1 61.4 49.4 61.6 58.3 47.1 51.4 54.8 49.3 49.9 40.4 34.8 29.4 31.3 36.0 30.8 25.1 36.3 22.9 25.8 36.9 29.8 23.3 28.7 27.2 35.4 39.3 41.9 21.6 0 102030405060708090100 Maintain parks, open spaces, and recreation facilities including courts, fields, playgrounds Maintain local streets and repair potholes Keep trash and pollution out of local waterways and off our beaches Keep public areas, buildings, and restrooms clean and free of graffiti Provide quick responses to 9-1-1 emergencies Provide fire protection and paramedic services Repair, maintain public buildings, infrastructure including sidewalks, curbs, storm drains Make improvements to roads and intersections to better manage traffic congestion on city streets Address homelessness Provide police services, including neighborhood police patrols and investigations Reduce gang activity and drug-related crimes Provide parks and recreation programs for residents of all ages Provide lifeguards at local beaches Provide programs and services to seniors Improve affordable housing optionsQ7gQ7eQ7jQ7hQ7dQ7cQ7fQ7kQ7iQ7aQ7bQ7mQ7nQ7lQ7o % Respondents Strongly favor Somewhat favor April 20, 2022 Item #1 Page 37 of 70 ■ ■ Projects & ServicesTrue North Research, Inc. © 2022 18City of Carlsbad . . . . . . . . . . . . . . . . resonated with the largest percentage of respondents were maintaining parks, open spaces, and recreation facilities including courts, fields, and playgrounds (87% strongly or somewhat favor), maintaining local streets and repairing potholes (87%), keeping trash and pollution out of local waterways and off our beaches (87%), keeping public areas, buildings, and restrooms clean and free of graffiti (86%), providing quick responses to 911 emergencies (85%), and providing fire protection and prevention services (84%). SERVICE RATINGS BY INITIAL SUPPORT Table 2 presents the top five services (show- ing the percentage of respondents who strongly favor each) by position at the Initial Ballot Test. Not surprisingly, individuals who initially opposed the measure were generally less likely to favor spending money on a given service when compared with supporters. Nevertheless, initial sup- porters, opponents, and the undecided did agree on four of the top five priorities for funding. TABLE 2 TOP PROJECTS & SERVICES BY POSITION AT INITIAL BALLOT TEST Position at Initial Ballot Test (Q5) Item Project or Services Summary % Strongly Favor Q7j Keep trash and pollution out of local waterways and off our beaches 75 Q7d Provide quick responses to 9-1-1 emergencies 73 Q7c Provide fire protection and paramedic services 71 Q7i Address homelessness 66 Q7e Maintain local streets and repair potholes 65 Q7e Maintain local streets and repair potholes 46 Q7d Provide quick responses to 9-1-1 emergencies 44 Q7c Provide fire protection and paramedic services 42 Q7j Keep trash and pollution out of local waterways and off our beaches 41 Q7i Address homelessness 39 Q7j Keep trash and pollution out of local waterways and off our beaches 50 Q7d Provide quick responses to 9-1-1 emergencies 50 Q7i Address homelessness 44 Q7c Provide fire protection and paramedic services 40 Q7h Keep public areas, buildings, and restrooms clean and free of graffiti 38 Probably or Definitely Yes (n = 512) Probably or Definitely No (n = 300) Not Sure (n = 78) April 20, 2022 Item #1 Page 38 of 70 Positive ArgumentsTrue North Research, Inc. © 2022 19City of Carlsbad . . . . . . . . . . . . . . . . P OSITIVE ARGUMENTS If the City chooses to place a measure on an upcoming ballot, voters will be exposed to various arguments about the measure in the ensuing months. Proponents of the measure will present arguments to try to persuade voters to support a measure, just as opponents may present argu- ments to achieve the opposite goal. For this study to be a reliable gauge of voter support for the proposed sales tax measure, it is important that the survey simulate the type of discussion and debate that will occur prior to the vote taking place and identify how this information ultimately shapes voters’ opinions about the measure. The objective of Question 8 was thus to present respondents with arguments in favor of the pro- posed measure and identify whether they felt the arguments were convincing reasons to support it. Arguments in opposition to the measure were also presented and are discussed later in this report (see Negative Arguments on page 23). Within each series, specific arguments were admin- istered in random order to avoid a systematic position bias. Question 8 What I'd like to do now is tell you what some people are saying about the measure we've been discussing. Supporters of the measure say: _____. Do you think this is a very convinc- ing, somewhat convincing, or not at all convincing reason to SUPPORT the measure? FIGURE 11 POSITIVE ARGUMENTS Figure 11 presents the truncated positive arguments tested, as well as voters’ reactions to the arguments. The arguments are ranked from most convincing to least convincing based on the percentage of respondents who indicated that the argument was either a ‘very convincing’ or ‘somewhat convincing’ reason to support the sales tax measure. Using this methodology, the 28.0 32.8 29.6 29.9 35.3 28.4 32.5 28.4 31.1 38.9 34.2 34.8 34.1 27.9 32.3 28.0 30.2 26.9 0 102030405060708090100 Funding will allow City to keep up with repairs, maintenance to streets, sidewalks, storm drains, facilities; else more expensive to repair in future Fast response times for 9-1-1 critical for saving lives; measure will ensure we have enough police officers, firefighters, dispatchers, paramedics By keeping city safe, clean, well-maintained, measure will help protect property values, keep Carlsbad a special place to live Measure provides funding to maintain quality of police, fire, 9-1-1, maintenance of streets, parks, beaches, open space; youth, senior programs Nearly all local sales tax goes to the State, County, SANDAG; measure will ensure higher percentage of sales tax dollars stay here in Carlsbad Development fees have paid for infrastructure, maintenance, services; can’t rely on long-term; measure provides stable, locally- controlled funding All money raised by measure will be used to fund essential services, facilities here in Carlsbad; by law, it can’t be taken away by State Substantial amount raised by sales tax will come from people who visit, but don’t live here; measure will make sure they pay their fair share There will be clear system of accountability, independent citizen oversight, annual reports to ensure money spent properlyQ8fQ8eQ8cQ8hQ8gQ8iQ8aQ8dQ8b % Respondents Very convincing Somewhat convincing April 20, 2022 Item #1 Page 39 of 70 ■ ■ Positive ArgumentsTrue North Research, Inc. © 2022 20City of Carlsbad . . . . . . . . . . . . . . . . most compelling positive arguments were: The funding raised by this measure will allow the City to keep up with basic repairs and maintenance to streets, sidewalks, storm drains, and public facilities. If we don't take care of it now, it will be a lot more expensive to repair in the future (67% very or somewhat convincing), Fast emergency response times for 9-1-1 calls are critical for saving lives. This measure will ensure that we have enough police officers, firefighters, dispatch- ers, and paramedics to respond quickly to 9-1-1 emergencies (67%), and By keeping our city safe, clean and well-maintained, this measure will help protect our property values and keep Carlsbad a special place to live (64%). POSITIVE ARGUMENTS BY INITIAL SUPPORT Table 3 lists the top five most convinc- ing positive arguments (showing the percentage of respondents who cited it as very convincing) according to respondents’ vote choice at the Initial Ballot Test. The positive arguments reso- nated with a much higher percentage of voters initially inclined to support the measure com- pared with those who initially opposed the measure or were unsure. Nevertheless, two arguments were ranked among the top five most compelling by all three groups. TABLE 3 TOP POSITIVE ARGUMENTS BY POSITION AT INITIAL BALLOT TEST Position at Initial Ballot Test (Q5) Item Positive Argument Summary % Very Convincing Q8g Nearly all local sales tax goes to the State, County, SANDAG; measure will ensure higher percentage of sales tax dollars stay here in Carlsbad 50 Q8e Fast response times for 9-1-1 critical for saving lives; measure will ensure we have enough police officers, firefighters, dispatchers, paramedics 47 Q8h Measure provides funding to maintain quality of police, fire, 9-1-1, maintenance of streets, parks, beaches, open space; youth, senior programs 46 Q8a All money raised by measure will be used to fund essential services, facilities here in Carlsbad; by law, it can’t be taken away by State 45 Q8c By keeping city safe, clean, well-maintained, measure will help protect property values, keep Carlsbad a special place to live 42 Q8g Nearly all local sales tax goes to the State, County, SANDAG; measure will ensure higher percentage of sales tax dollars stay here in Carlsbad 15 Q8b There will be clear system of accountability, independent citizen oversight, annual reports to ensure money spent properly 15 Q8a All money raised by measure will be used to fund essential services, facilities here in Carlsbad; by law, it can’t be taken away by State 14 Q8d Substantial amount raised by sales tax will come from people who visit, but don’t live here; measure will make sure they pay their fair share 13 Q8c By keeping city safe, clean, well-maintained, measure will help protect property values, keep Carlsbad a special place to live 11 Q8b There will be clear system of accountability, independent citizen oversight, annual reports to ensure money spent properly 24 Q8f Funding will allow City to keep up with repairs, maintenance to streets, sidewalks, storm drains, facilities; else more expensive to repair in future 22 Q8a All money raised by measure will be used to fund essential services, facilities here in Carlsbad; by law, it can’t be taken away by State 20 Q8e Fast response times for 9-1-1 critical for saving lives; measure will ensure we have enough police officers, firefighters, dispatchers, paramedics 19 Q8g Nearly all local sales tax goes to the State, County, SANDAG; measure will ensure higher percentage of sales tax dollars stay here in Carlsbad 18 Probably or Definitely Yes(n = 512) Probably or Definitely No (n = 300) Not Sure (n = 78) April 20, 2022 Item #1 Page 40 of 70 Interim Ballot TestTrue North Research, Inc. © 2022 21City of Carlsbad . . . . . . . . . . . . . . . . I NTERIM BALLOT TEST After exposing respondents to services that could be funded by the measure as well as the types of positive arguments voters may encounter during an election cycle, the survey again presented respondents with the ballot language used previously to gauge how support for the proposed sales tax measure may have changed. As shown in Figure 12, overall support among likely November 2022 voters increased to 61%, with 25% of voters indicating that they would definitely vote yes on the measure. Approximately 32% of respondents opposed the measure at this point in the survey, and an additional 7% were unsure or unwilling to state their vote choice. Question 9 Sometimes people change their mind about a measure once they have more infor- mation about it. Now that you have heard a bit more about the measure, let me read you a sum- mary of it again. To provide funding for general city services in the City of Carlsbad, such as fire protection, paramedic, and 9-1-1 emergency response; police patrols and crime prevention; maintenance of streets, parks, open space, beaches, and infrastructure; traffic management, addressing homelessness, and other city services; shall an ordinance establishing a one-cent sales tax be adopted, providing approximately 20 million dollars annually for city services until ended by voters, with independent audits, citizen oversight, and all money locally controlled? If the election were held today, would you vote yes or no on this measure? FIGURE 12 INTERIM BALLOT TEST SUPPORT BY SUBGROUPS Table 4 on the next page shows how support for the measure at this point in the survey varied by key voter subgroups, as well as the change in subgroup sup- port when compared with the Initial Ballot Test. Positive differences appear in green, whereas negative differences appear in red. As shown in the table, support for the sales tax measure increased or decreased by modest amounts (less than 5 percentage points) between the Initial and Interim Ballot Test for most voter subgroups. Notable exceptions include voters between 18 and 29 years of age (+13%) and 30 to 39 years of age (+8%), those who registered to vote in Carlsbad between June 2012 and November 2018 (+8%), single Democrat households (+11%), and those who rated the City’s fiscal management as poor or very poor (+11%). Not sure 6.6 Prefer not to answer 0.5 Definitely no 18.9 Probably no 12.7 Definitely yes 25.0 Probably yes 36.2 April 20, 2022 Item #1 Page 41 of 70 Interim Ballot TestTrue North Research, Inc. © 2022 22City of Carlsbad . . . . . . . . . . . . . . . . TABLE 4 DEMOGRAPHIC BREAKDOWN OF SUPPORT AT INTERIM BALLOT TEST Approximate % of Voter Universe % Probably or Definitely Yes Change From Initial Ballot Test (Q5) Overall 100.0 61.2 +4.0 Less than 5 18.5 68.2 +5.2 5 to 9 16.9 69.1 +6.4 10 to 14 14.2 57.7 +0.6 15 or more 50.4 57.3 +3.7 Satisfied 89.8 64.5 +4.2 Dissatisfied 10.2 45.2 +4.8 Yes 32.3 64.6 +4.5 No 67.7 61.2 +4.0 18 to 29 10.8 70.5 +12.9 30 to 39 10.1 62.1 +7.8 40 to 49 15.9 63.6 -0.2 50 to 64 31.0 56.8 +1.5 65 or older 32.2 61.0 +4.3 Since Nov '18 7.1 61.8 +0.0 Jun '12 to <Nov '18 22.0 65.6 +7.9 Jun '06 to <Jun '12 9.9 63.8 +0.4 Before Jun '06 61.0 59.2 +3.6 Single dem 16.4 73.7 +10.5 Dual dem 13.2 75.7 +3.1 Single rep 11.2 55.1 +1.8 Dual rep 13.7 48.8 +4.2 Other 18.2 62.6 +1.5 Mixed 27.4 54.7 +3.0 Democrat 38.0 73.1 +7.0 Republican 33.9 49.3 +2.9 Other / DTS 28.1 59.6 +1.3 Excellent, good 74.1 68.9 +4.7 Fair 21.8 44.4 +1.0 Poor, very poor 4.1 29.0 +10.7 Yes 65.1 60.1 +3.0 No 34.9 63.4 +5.8 Yes 79.0 62.2 +4.7 No 21.0 57.7 +1.5 Yes 81.7 60.8 +4.3 No 18.3 63.4 +2.4 Male 53.1 63.3 +5.6 Female 46.9 62.2 +2.6 Homeowner on Voter File Likely to Vote by Mail Likely Jun 2022 Voter Gender Registration Year Household Party Type Party Fiscal Management Rating (Q16) Years in Carlsbad (Q1) Overall Satisfaction (Q4) Child in Hsld (Q17) Age April 20, 2022 Item #1 Page 42 of 70 Negative ArgumentsTrue North Research, Inc. © 2022 23City of Carlsbad . . . . . . . . . . . . . . . . N EGATIVE ARGUMENTS Whereas Question 8 of the survey presented respondents with arguments in favor of the sales tax measure, Question 10 presented respondents with arguments designed to elicit opposition to the measure. In the case of Question 10, however, respondents were asked whether they felt that the argument was a very convincing, somewhat convincing, or not at all convincing reason to oppose the measure. The arguments tested, as well as voters’ opinions about the arguments, are presented below in Figure 13. Question 10 Next, let me tell you what opponents of the measure are saying. Opponents of the measure say: _____. Do you think this is a very convincing, somewhat convincing, or not at all convincing reason to OPPOSE the measure? FIGURE 13 NEGATIVE ARGUMENTS The most compelling negative arguments were: Taxes are already too high - we can't afford another tax increase. This is especially true for seniors and others on fixed-incomes (72% very or somewhat convincing), Local businesses and residents have been hit hard by the pandemic and inflation. Many are struggling to stay afloat. Now is not the time to raise taxes (70%), and There are no guarantees on how funds will be spent, which means the City can divert the money to pet projects. The City government can't be trusted with our tax dollars (64%). NEGATIVE ARGUMENTS BY INITIAL SUPPORT Table 5 on the next page ranks the negative arguments (showing the percentage of respondents who cited each as very convincing) according to respondents’ vote choice at the Initial Ballot Test. 41.1 37.9 31.3 32.9 23.3 30.7 31.9 32.2 27.5 26.6 0 102030405060708090100 Taxes are already too high, we can’t afford another tax increase; this is especially true for seniors, others on fixed-incomes Local businesses, residents have been hit hard by pandemic, inflation; many are struggling to stay afloat; now is not the time to raise taxes No guarantees on how funds will be spent, which means City can divert money to pet projects; City government can’t be trusted with tax dollars This tax will last forever; there is no expiration date City employees making too much money in salary, pensions, benefits; City needs to tighten its belt before asking residents to pay more taxesQ10a1Q10a2Q10cQ10dQ10b % Respondents Very convincing Somewhat convincing April 20, 2022 Item #1 Page 43 of 70 ■ ■ Negative ArgumentsTrue North Research, Inc. © 2022 24City of Carlsbad . . . . . . . . . . . . . . . . TABLE 5 NEGATIVE ARGUMENTS BY POSITION AT INITIAL BALLOT TEST Position at Initial Ballot Test (Q5) Item Negative Argument Summary % Very Convincing Q10a2 Local businesses, residents have been hit hard by pandemic, inflation; many are struggling to stay afloat; now is not the time to raise taxes 26 Q10a1 Taxes are already too high, we can’t afford another tax increase; this is especially true for seniors, others on fixed-incomes 20 Q10c No guarantees on how funds will be spent, which means City can divert money to pet projects; City government can’t be trusted with tax dollars 18 Q10d This tax will last forever; there is no expiration date 14 Q10b City employees making too much money in salary, pensions, benefits; City needs to tighten its belt before asking residents to pay more taxes 12 Q10a1 Taxes are already too high, we can’t afford another tax increase; this is especially true for seniors, others on fixed-incomes 76 Q10d This tax will last forever; there is no expiration date 66 Q10a2 Local businesses, residents have been hit hard by pandemic, inflation; many are struggling to stay afloat; now is not the time to raise taxes 62 Q10c No guarantees on how funds will be spent, which means City can divert money to pet projects; City government can’t be trusted with tax dollars 52 Q10b City employees making too much money in salary, pensions, benefits; City needs to tighten its belt before asking residents to pay more taxes 41 Q10a1 Taxes are already too high, we can’t afford another tax increase; this is especially true for seniors, others on fixed-incomes 46 Q10d This tax will last forever; there is no expiration date 39 Q10c No guarantees on how funds will be spent, which means City can divert money to pet projects; City government can’t be trusted with tax dollars 38 Q10b City employees making too much money in salary, pensions, benefits; City needs to tighten its belt before asking residents to pay more taxes 27 Q10a2 Local businesses, residents have been hit hard by pandemic, inflation; many are struggling to stay afloat; now is not the time to raise taxes 21 Probably or Definitely Yes(n = 512) Probably or Definitely No (n = 300) Not Sure (n = 78) April 20, 2022 Item #1 Page 44 of 70 Final Ballot TestTrue North Research, Inc. © 2022 25City of Carlsbad . . . . . . . . . . . . . . . . F INAL BALLOT TEST Voters’ opinions about ballot measures are often not rigid, especially when the amount of infor- mation presented to the public on a measure has been limited. A goal of the survey was thus to gauge how voters’ opinions about the proposed measure may be affected by the information they could encounter during the course of an election cycle. After providing respondents with the wording of the proposed measure, services that could be funded, and arguments in favor of and against the proposal, the survey again asked voters whether they would vote ‘yes’ or ‘no’ on the proposed sales tax measure. Question 11 Now that you have heard a bit more about the measure, let me read you a sum- mary of it one more time. To provide funding for general city services in the City of Carlsbad, such as fire protection, paramedic, and 9-1-1 emergency response; police patrols and crime pre- vention; maintenance of streets, parks, open space, beaches, and infrastructure; traffic manage- ment, addressing homelessness, and other city services; shall an ordinance establishing a one- cent sales tax be adopted, providing approximately 20 million dollars annually for city services until ended by voters, with independent audits, citizen oversight, and all money locally con- trolled? If the election were held today, would you vote yes or no on this measure? FIGURE 14 FINAL BALLOT TEST At this point in the survey, support for the one-cent sales tax measure was found among 58% of likely November 2022 voters, with 25% indicating that they would definitely support the mea- sure. Approximately 33% of respondents were opposed to the measure at the Final Ballot Test, and 8% were unsure or unwilling to state their vote choice. Probably yes 33.7 Definitely yes 24.7 Probably no 12.8 Definitely no 20.6 Prefer not to answer 1.2Not sure 7.1 April 20, 2022 Item #1 Page 45 of 70 Change in SupportTrue North Research, Inc. © 2022 26City of Carlsbad . . . . . . . . . . . . . . . . C HANGE IN SUPPORT Table 6 provides a closer look at how support for the proposed measure changed over the course of the interview by calculating the difference in support between the Initial, Interim, and Final Ballot tests within various subgroups of voters. The percentage of support for the measure at the Final Ballot Test is shown in the column with the heading % Probably or Definitely Yes. The columns to the right show the difference between the Final and the Initial, and the Final and Interim Ballot Tests. Positive differences appear in green, while negative differences appear in red. TABLE 6 DEMOGRAPHIC BREAKDOWN OF SUPPORT AT FINAL BALLOT TEST As expected, voters generally responded to the negative arguments with a reduction in their sup- port for the sales tax measure when compared with the levels recorded at the Interim Ballot Test. The general trend over the course of the entire survey (Initial to Final Ballot Test), however, was one of increasing support, averaging +1% overall. At the conclusion of the survey, support for Approximate % of Voter Universe % Probably or Definitely Yes Change From Initial Ballot Test (Q5) Change From Interim Ballot Test (Q9) Overall 100.0 58.4 +1.1 -2.9 Less than 5 18.5 64.6 +1.6 -3.75 to 9 16.9 68.8 +6.2 -0.2 10 to 14 14.2 56.1 -1.0 -1.615 or more 50.4 53.4 -0.1 -3.8 Satisfied 89.8 61.9 +1.6 -2.6 Dissatisfied 10.2 38.4 -1.9 -6.8 Yes 32.3 62.6 +2.5 -2.0 No 67.7 57.8 +0.5 -3.4 18 to 29 10.8 63.1 +5.5 -7.4 30 to 39 10.1 57.3 +3.0 -4.8 40 to 49 15.9 63.4 -0.4 -0.2 50 to 64 31.0 54.5 -0.8 -2.3 65 or older 32.2 58.4 +1.6 -2.6 Since Nov '18 7.1 60.8 -1.1 -1.1 Jun '12 to <Nov '18 22.0 63.2 +5.6 -2.3 Jun '06 to <Jun '12 9.9 60.9 -2.4 -2.8 Before Jun '06 61.0 56.0 +0.4 -3.3 Single dem 16.4 66.4 +3.3 -7.2 Dual dem 13.2 74.2 +1.7 -1.4 Single rep 11.2 53.6 +0.4 -1.4 Dual rep 13.7 46.1 +1.4 -2.7 Other 18.2 60.6 -0.5 -2.0 Mixed 27.4 52.5 +0.8 -2.2 Democrat 38.0 68.9 +2.8 -4.1 Republican 33.9 47.7 +1.3 -1.6 Other / DTS 28.1 57.0 -1.3 -2.6 Excellent, good 74.1 66.4 +2.3 -2.4 Fair 21.8 41.3 -2.1 -3.1 Poor, very poor 4.1 14.6 -3.7 -14.4 Yes 65.1 57.3 +0.2 -2.8 No 34.9 60.5 +2.8 -2.9 Yes 79.0 59.4 +1.8 -2.8 No 21.0 54.7 -1.5 -3.0 Yes 81.7 57.5 +1.0 -3.3 No 18.3 62.5 +1.5 -0.9 Male 53.1 61.0 +3.3 -2.3 Female 46.9 58.4 -1.1 -3.7 Homeowner on Voter File Likely to Vote by Mail Likely Jun 2022 Voter Gender Registration Year Household Party Type Party Fiscal Management Rating (Q16) Years in Carlsbad (Q1) Overall Satisfaction (Q4) Child in Hsld (Q17) Age April 20, 2022 Item #1 Page 46 of 70 Change in SupportTrue North Research, Inc. © 2022 27City of Carlsbad . . . . . . . . . . . . . . . . the proposed measure remained 8% above the simple majority required for passage of a general tax. Whereas Table 6 displays change in support for the measure over the course of the interview at the subgroup level, Table 7 displays the individual-level changes that occurred between the Ini- tial and Final Ballot tests for the measure. On the left side of the table is shown each of the response options to the Initial Ballot Test and the percentage of respondents in each group. The cells in the body of the table depict movement within each response group (row) based on the information provided throughout the course of the survey as recorded by the Final Ballot Test. For example, in the first row we see that of the 23.0% of respondents who indicated that they would definitely support the measure at the Initial Ballot Test, 17.6% also indicated they would definitely support the measure at the Final Ballot Test. Approximately 5.1% moved to the proba- bly support group, 0.1% moved to the probably oppose group, 0.1% moved to the definitely oppose group, and 0.3% stated they were now unsure of their vote choice. To ease interpretation of the table, the cells are color coded. Red shaded cells indicate declining support, green shaded cells indicate increasing support, whereas white cells indicate no move- ment. Moreover, within the cells, a white font indicates a fundamental change in the vote: from yes to no, no to yes, or not sure to either yes or no. TABLE 7 MOVEMENT BETWEEN INITIAL & FINAL BALLOT TEST As one might expect, the information conveyed in the survey had the greatest impact on individ- uals who either weren’t sure about how they would vote at the Initial Ballot Test or were tentative in their vote choice (probably yes or probably no). Moreover, Table 7 makes clear that although the information did impact some voters, it did not do so in a consistent way for all respondents. Some respondents found the information conveyed during the course of the interview to be a reason to become more supportive of the measure, whereas a slightly smaller percentage found the same information to be a reason to be less supportive. Despite 12% of respondents making a fundamental3 shift in their opinion about the measure over the course of the interview, the net impact is that support for the measure at the Final Ballot Test was approximately one percentage point higher than support at the Initial Ballot Test. 3. This is, they changed from a position of support, opposition or undecided at the Initial Ballot Test to a differ- ent position at the Final Ballot Test. Definitely support Probably support Probably oppose Definitely oppose Not sure Definitely support 23.0%17.6% 5.1%0.1% 0.1% 0.3% Probably support 34.2%6.4% 25.0%0.9% 0.2% 1.7% Probably oppose 14.2%0.2% 1.7%8.0% 3.4%1.0% Definitely oppose 19.4%0.4% 0.2%2.6% 15.2%0.8% Not sure 9.1%0.1% 1.7% 1.2% 1.7%4.5% Initial Ballot Test (Q5) Final Ballot Test (Q11) April 20, 2022 Item #1 Page 47 of 70 Final Ballot Test at Lower RateTrue North Research, Inc. © 2022 28City of Carlsbad . . . . . . . . . . . . . . . . F INAL BALLOT TEST AT LOWER RATE The ballot language tested throughout the survey indicated that the measure would increase the local sales tax rate by one cent and be used to fund general city services. Voters who did not support the proposed measure at the Final Ballot Test (Question 11) were subsequently asked if they would support the measure if the rate were set at a lower amount: one-half cent. As shown in Figure 15, lowering the tax rate to one-half cent generated a modest amount of additional support for the proposed measure. An additional 6% of voters indicated they would support the measure if the tax rate were lowered to one-half cent, although nearly all of the addi- tional support for the measure was ‘soft’ (probably yes). Question 12 What if the measure I just described raised the sales tax by a lower amount: one- half cent? Would you vote yes or no on the measure? FIGURE 15 FINAL BALLOT TEST AT HALF CENT Prefer not to answer 1.2 Definitely yes 0.9 Def, prob yes @ one cent (Q11) 58.4 Probably yes 5.0 Probably no 10.6 Not sure 6.6 Definitely no 17.4 April 20, 2022 Item #1 Page 48 of 70J CannabisTrue North Research, Inc. © 2022 29City of Carlsbad . . . . . . . . . . . . . . . . C ANNABIS Switching gears, the next section of the survey explored voters’ opinions and preferences related to the operation and regulation of cannabis businesses in the City of Carlsbad. Under California law, it is legal for adults to use cannabis for medical and recreational purposes. The law also allows local cities like Carlsbad to decide whether to allow cannabis businesses to operate within their boundaries, as well as the types of restrictions and regulations to place on cannabis busi- nesses. Currently, Carlsbad does not allow any cannabis-related businesses. OPINION OF ALLOWING CANNABIS BUSINESSES IN CITY After providing respon- dents with the aforementioned legal and background information, Question 13 assessed whether voters feel cannabis businesses should be allowed to operate in Carlsbad. Overall, 41% of respondents indicated that the City of Carlsbad should allow cannabis businesses to operate in the City, 38% opposed the idea, and 21% were unsure or unwilling to state (see Figure 16). Question 13 Now for a different topic. Under California law, it is legal for adults to use canna- bis for medical and recreational purposes. The law also allows local cities like Carlsbad to decide whether to allow cannabis businesses to operate within their boundaries, as well as the types of restrictions and regulations to place on cannabis businesses. In general, do you think the City of Carlsbad should allow a limited number of cannabis businesses to operate in the city - or are you not sure? FIGURE 16 OPINION OF ALLOWING CANNABIS BUSINESSES IN CARLSBAD Figures 17 and 18 on the next page show how respondents’ opinions regarding cannabis busi- nesses operating in the City varied by a number of demographic traits. Although most sub- groups were fairly evenly divided on the topic with the percentage that favored allowing cannabis businesses being similar to the percentage opposed, it is worth noting that Democrats and vot- ers under the age of 40 disproportionately favored allowing cannabis businesses to operate in Carlsbad, while Republicans disproportionately opposed having cannabis businesses in the City. Prefer not to answer 0.8Not sure / Depends 20.2 Yes, should allow 41.0 No, should not allow 38.0 April 20, 2022 Item #1 Page 49 of 70 CannabisTrue North Research, Inc. © 2022 30City of Carlsbad . . . . . . . . . . . . . . . . FIGURE 17 OPINION OF ALLOWING CANNABIS BUSINESSES IN CARLSBAD BY YEARS IN CARLSBAD, CHILD IN HSLD & PARTY FIGURE 18 OPINION OF ALLOWING CANNABIS BUSINESSES IN CARLSBAD BY AGE, HOMEOWNER ON VOTER FILE & GENDER OPINION BY TYPE OF BUSINESS The next question assessed whether opinions of can- nabis businesses vary based on the type of operation (cultivation, manufacturing, research and testing, distribution, and delivery). Figure 19 shows that the majority of all respondents were in favor of allowing research and testing of cannabis products (59%) and medicinal retail cannabis dispensaries to operate in the City (54%). Respondents were more evenly split in their opinion regarding businesses that deliver cannabis to private residences being headquartered in Carls- bad (46% in support vs. 40% opposed) and the manufacturing of cannabis edibles (41% in sup- port vs. 42% opposed). Less than four-in-ten respondents favored allowing recreational retail cannabis dispensaries (39%) and the indoor cultivation of cannabis on commercial properties (37%) in Carlsbad. 39 42 52 27 4440 34 37 39 39 37 27 51 38 44 46 36 40 0 10 20 30 40 50 60 70 80 Less than 5 5 to 9 10 to 14 15 or more Yes No Democrat Republican Other / DTS Years in Carlsbad (Q1) Child in Hsld (Q17) Party% RespondentsYes, should allow No, should not allow 34 39 45 46 37 30 22 38 43 41 39 36 36 41 36 43 62 55 0 10 20 30 40 50 60 70 80 18 to 29 30 to 39 40 to 49 50 to 64 65 or older Yes No Male Female Age Homeowner on Voter File Gender% RespondentsYes, should allow No, should not allow April 20, 2022 Item #1 Page 50 of 70 ■ ■ ■ ■ CannabisTrue North Research, Inc. © 2022 31City of Carlsbad . . . . . . . . . . . . . . . . Question 14 There are different types of cannabis businesses. In your opinion, should the City allow a limited number of: _____ within the city? FIGURE 19 OPINION OF ALLOWING TYPES OF CANNABIS BUSINESSES IN CARLSBAD SUPPORT FOR TAX ON CANNABIS BUSINESSES The final question in this series asked respondents whether—if the cannabis businesses were allowed to operate in Carlsbad— they would support or oppose the City establishing a tax for cannabis-related businesses to help pay for city services and the cost of regulating cannabis businesses. As shown in Figure 20, 74% of voters indicated they would support taxing cannabis-related businesses if the City were to allow them, while 15% opposed such a tax and 11% were unsure or unwilling to state. Figures 21 and 22 show that support for establishing a tax on cannabis-related businesses was widespread, exceeding the two-thirds level in all subgroups with the exception of those who rated the City’s fiscal management as poor or very poor. Question 15 If cannabis businesses were allowed in Carlsbad, would you support or oppose the City establishing a tax for cannabis-related businesses to help pay for city services and the cost of regulating cannabis businesses? FIGURE 20 SUPPORT FOR ESTABLISHING TAX ON CANNABIS-RELATED BUSINESSES 58.8 54.0 45.6 40.8 38.7 37.4 28.9 34.6 40.2 42.4 46.7 46.5 11.2 10.4 13.1 15.8 13.5 15.0 1 1 1 1 1 1 0 102030405060708090100 Research and testing of cannabis products Medicinal retail cannabis dispensaries Business that deliver cannabis to private residences to be headquartered The manufacture of cannabis products including edibles Recreational retail cannabis dispensaries The indoor cultivation of cannabis on commercial propertyQ14fQ14bQ14eQ14dQ14aQ14c % Respondents Yes, allow No, don't allow Not sure Prefer not to answer Oppose 15.0 Support 74.3 Not sure 9.1 Prefer not to answer 1.6 April 20, 2022 Item #1 Page 51 of 70 • • • • -----: -----: -----: CannabisTrue North Research, Inc. © 2022 32City of Carlsbad . . . . . . . . . . . . . . . . FIGURE 21 SUPPORT FOR ESTABLISHING TAX ON CANNABIS-RELATED BUSINESSES BY YEARS IN CARLSBAD, PARTY & FISCAL MANAGEMENT RATING FIGURE 22 SUPPORT FOR ESTABLISHING TAX ON CANNABIS-RELATED BUSINESSES BY AGE, HOMEOWNER ON VOTER FILE, ALLOW CANNABIS BIZ IN CARLSBAD & CHILD IN HSLD 77 71 74 77 69 50 7 12 18 18 12 19 14 14 17 35 74 67 7780 0 10 20 30 40 50 60 70 80 90 100 Less than 5 5 to 9 10 to 14 15 or more Democrat Republican Other / DTS Excellent, good Fair Poor, very poor Years in Carlsbad (Q1) Party Fiscal Management Rating (Q16)% RespondentsSupport Oppose 74 77 70 78 69 78 76 74 20 8 14 17 14 14 18 12 21 11 17 14 76 77 79 71 0 10 20 30 40 50 60 70 80 90 100 18 to 29 30 to 39 40 to 49 50 to 64 65 or older Yes No Yes No Not sure Yes No Age Homeowner on Voter File Allow Cannabis Biz in Carlsbad (Q13) Child in Hsld (Q17)% RespondentsSupport Oppose April 20, 2022 Item #1 Page 52 of 70 ■ ■ ■ ■ Fiscal ManagementTrue North Research, Inc. © 2022 33City of Carlsbad . . . . . . . . . . . . . . . . F ISCAL MANAGEMENTThe final substantive question of the survey asked respondents to rate the job the City of Carls-bad has done in managing its financial resources. Most voters gave the City positive marks, with18% rating the City’s performance as excellent, 44% good, and 18% fair. Less than 4% of respon-dents rated the job the City has done in managing its finances as poor or very poor, while 16%confided they were not sure or preferred to not answer the question (Figure 23). For the inter-ested reader, figures 24 and 25 show how ratings of the City’s performance in managing itsfinances varied across key voter subgroups. Question 16 In your opinion, has the City of Carlsbad done an excellent, good, fair, poor or very poor job of managing its financial resources? FIGURE 23 FISCAL MANAGEMENT RATING FIGURE 24 FISCAL MANAGEMENT RATING BY YEARS IN CARLSBAD, OVERALL SATISFACTION & PARTY Very poor 0.7 Not sure 15.3 Poor 2.8 Fair 18.4 Excellent 18.2 Good 44.3 Prefer not to answer 0.4 20.7 2.7 15.6 19.7 20.1 48.2 20.0 47.0 42.4 42.9 19.717.012.7 Excellent 20.4 47.1 51.5 42.1Good 42.3 0 10 20 30 40 50 60 70 80 90 100 Less than 5 5 to 9 10 to 14 15 or more Satisfied Dissatisfied Democrat Republican Other / DTS Years in Carlsbad (Q1) Overall Satisfaction (Q4) Party% RespondentsApril 20, 2022 Item #1 Page 53 of 70----~ Fiscal ManagementTrue North Research, Inc. © 2022 34City of Carlsbad . . . . . . . . . . . . . . . . FIGURE 25 FISCAL MANAGEMENT RATING AGE, HOMEOWNER ON VOTER FILE & CHILD IN HSLD 25.4 21.7 11.8 15.9 20.3 43.6 44.2 44.5 45.5 45.1 Excellent 3.6 14.4 17.2 17.7 Good 43.1 44.444.247.6 0 10 20 30 40 50 60 70 80 90 100 18 to 29 30 to 39 40 to 49 50 to 64 65 or older Yes No Yes No Age Homeowner on Voter File Child in Hsld (Q17)% RespondentsApril 20, 2022 Item #1 Page 54 of 70 Background & DemographicsTrue North Research, Inc. © 2022 35City of Carlsbad . . . . . . . . . . . . . . . . B ACKGROUND & DEMOGRAPHICS TABLE 8 DEMOGRAPHICS OF SAMPLE In addition to questions directly related to the proposed measure, the study collected basic demographic informa- tion about respondents and their households. Some of this information was gathered during the interview, although much of it was collected from the voter file. The profile of the likely November 2022 voter sample used for this study is shown in Table 8. Total Respondents 894 Years in Carlsbad (Q1) Less than 5 18.4 5 to 9 16.8 10 to 14 14.2 15 or more 50.3 Prefer not to answer 0.3 Child in Hsld (Q17) Yes 31.2 No 65.5 Prefer not to answer 3.3 Gender Male 51.3 Female 45.3 Prefer not to answer 3.4 Party Democrat 38.0 Republican 33.9 Other / DTS 28.1 Age 18 to 29 10.8 30 to 39 10.1 40 to 49 15.9 50 to 64 31.0 65 or older 32.2 Registration Year Since Nov '18 7.1 Jun '12 to <Nov '18 22.0 Jun '06 to <Jun '12 9.9 Before Jun '06 61.0 Household Party Type Single dem 16.4 Dual dem 13.2 Single rep 11.2 Dual rep 13.7 Other 18.2 Mixed 27.4 Homeowner on Voter File Yes 65.1 No 34.9 Likely to Vote by Mail Yes 79.0 No 21.0 Likely Jun 2022 Voter Yes 81.7 No 18.3 April 20, 2022 Item #1 Page 55 of 70 MethodologyTrue North Research, Inc. © 2022 36City of Carlsbad . . . . . . . . . . . . . . . . M ETHODOLOGY The following sections outline the methodology used in the study, as well as the motivation for using certain techniques. QUESTIONNAIRE DEVELOPMENT Dr. McLarney of True North Research worked closely with the City of Carlsbad to develop a questionnaire that covered the topics of interest and avoided possible sources of systematic measurement error, including position-order effects, wording effects, response-category effects, scaling effects, and priming. Several questions included multiple individual items. Because asking items in a set order can lead to a systematic position bias in responses, items were asked in random order for each respondent. Some of the questions asked in this study were presented only to a subset of respondents. For example, only individuals who did not support the sales tax or were unsure at the Initial Ballot Test (Question 5) were asked if there was a particular reason the did not support or were unsure about the measure (Question 6). The questionnaire included with this report (see Questionnaire & Toplines on page 39) identifies the skip patterns that were used during the interview to ensure that each respondent received the appropriate questions. PROGRAMMING, PRE-TEST & TRANSLATION Prior to fielding the survey, the ques- tionnaire was CATI (Computer Assisted Telephone Interviewing) programmed to assist interview- ers when conducting telephone interviews. The CATI program automatically navigates skip patterns, randomizes the appropriate question items, and alerts the interviewer to certain types of keypunching mistakes should they occur. The survey was also programmed into a passcode- protected online survey application to allow online participation for sampled voters. The integ- rity of the questionnaire was pre-tested internally by True North and by dialing into voter house- holds in the City prior to formally beginning the survey. SAMPLE The survey was administered to a stratified and clustered random sample of regis- tered voters in the City of Carlsbad who are likely to participate in the November 2022 election, with a subset who are also likely to participate in the lower turnout June 2022 primary election. Consistent with the profile of this universe, the sample was stratified into clusters, each repre- senting a combination of age, gender, and household party type. Individuals were then randomly selected based on their profile into an appropriate cluster. This method ensures that if a person of a particular profile refuses to participate in the study, they are replaced by an individual who shares their same profile. STATISTICAL MARGIN OF ERROR By using the probability-based sampling design noted above, True North ensured that the final sample was representative of voters in the City who are likely to participate in the November 2022 election. The results of the sample can thus be used to estimate the opinions of all voters likely to participate in the November 2022 elec- tion. Because not all voters participated in the survey, however, the results have what is known as a statistical margin of error due to sampling. The margin of error refers to the difference between what was found in the survey of 894 voters for a particular question and what would have been found if all estimated 63,510 likely November 2022 voters in the City had been sur- veyed. April 20, 2022 Item #1 Page 56 of 70 MethodologyTrue North Research, Inc. © 2022 37City of Carlsbad . . . . . . . . . . . . . . . . Figure 26 provides a graphic plot of the maximum margin of error in this study. The maximum margin of error for a dichotomous percentage result occurs when the answers are evenly split such that 50% provide one response and 50% provide the alternative response. For this survey, the maximum margin of error is ± 3.3% at the 95% confidence level. FIGURE 26 MAXIMUM MARGIN OF ERROR DUE TO SAMPLING Within this report, figures and tables show how responses to certain questions varied by sub- groups such as age, gender, and partisan affiliation. Figure 26 is thus useful for understanding how the maximum margin of error for a percentage estimate will grow as the number of individ- uals asked a question (or in a particular subgroup) shrinks. Because the margin of error grows exponentially as the sample size decreases, the reader should use caution when generalizing and interpreting the results for small subgroups. RECRUITING & DATA COLLECTION The survey followed a mixed-method design that employed multiple recruiting methods (email, text, and telephone) and multiple data collection methods (telephone and online). Telephone interviews averaged 17 minutes in length and were conducted during weekday evenings (5:30PM to 9PM) and on weekends (10AM to 5PM). It is stan- dard practice not to call during the day on weekdays because most working adults are unavail- able and thus calling during those hours would likely bias the sample. Voters recruited via email and text were assigned a unique passcode to ensure that only voters who received an invitation could access the online survey site, and that each voter could com- plete the survey only one time. During the data collection period, an email reminder notice was also sent to encourage participation among those who had yet to take the survey. A total of 894 surveys were completed between March 11 and March 17, 2022. 894 Respondents ± 3.3% 0% 2% 4% 6% 8% 10% 12% 14% 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 Sample Size (Number of Respondents)Margin of ErrorApril 20, 2022 Item #1 Page 57 of 70 -T ---7 ----1----I ---T ---7 ----1 ----1----I ---7 -------1----I ---I ---7 ----1 I ___ I ____ I ____ I ____ I ___ I ____ I ____ I ____ I ___ I _ _ _ _ ___ I ____ I ___ I ___ I ___ _ - - -----1 - - --1-- - -f----- - -+ - - ----! - - --I - - - -I-- - -+ - - ----! - - - - - --1-- - -I-- - --+ - - -----1 - - - -I I I I I I I I I I I I I -1-- - - L - - -.L - - -_j - - --1 - - - -1-- - -.L - - -_j - - -- - -L - - ---1 - - -_J - - --1 I I I I I I I I I I I I I ------------ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ----------------- ' I I I I I I I I I ' I I MethodologyTrue North Research, Inc. © 2022 38City of Carlsbad . . . . . . . . . . . . . . . . DATA PROCESSING Data processing consisted of checking the data for errors or inconsis- tencies, coding and recoding responses, weighting, and preparing frequency analyses and cross- tabulations. ROUNDING Numbers that end in 0.5 or higher are rounded up to the nearest whole num- ber, whereas numbers that end in 0.4 or lower are rounded down to the nearest whole number. These same rounding rules are also applied, when needed, to arrive at numbers that include a decimal place in constructing figures and tables. Occasionally, these rounding rules lead to small discrepancies in the first decimal place when comparing tables and charts for a given question. April 20, 2022 Item #1 Page 58 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 39City of Carlsbad . . . . . . . . . . . . . . . . Q UESTIONNAIRE & TOPLINES True North Research, Inc. © 2022 Page 1 City of Carlsbad Revenue Measure Feasibility Survey Final Toplines (n=894) March 2022 Section 1: Introduction to Study Hi, may I please speak to _____. My name is _____, and Im calling on behalf of TNR, an independent public opinion research firm. Were conducting a survey of voters about important issues in Carlsbad (KARLZ-bad) and Id like to get your opinions. If needed: This is a survey about important issues in your community. Im NOT trying to sell anything and I wont ask for a donation. If needed: The survey should take about 12 minutes to complete. If needed: If now is not a convenient time, can you let me know a better time so I can call back? If the person asks why you need to speak to the listed person or if they ask to participate instead, explain: For statistical purposes, at this time the survey must only be completed by this particular individual. Section 2: Quality of Life & City Services Id like to begin by asking you a few questions about what it is like to live in Carlsbad. Q1 How long have you lived in Carlsbad? 1 Less than 1 year 2% 2 1 to 4 years 17% 3 5 to 9 years 17% 4 10 to 14 years 14% 5 15 years or longer 50% 99 Prefer not to answer 0% Q2 How would you rate the overall quality of life in Carlsbad? Would you say it is excellent, good, fair, poor or very poor? 1 Excellent 53% 2 Good 42% 3 Fair 5% 4 Poor 0% 5 Very Poor 0% 98 Not sure 0% 99 Prefer not to answer 0% April 20, 2022 Item #1 Page 59 of 70 --/4uENORTH 'if RESEARCH Questionnaire & ToplinesTrue North Research, Inc. © 2022 40City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 2 Q3 If the city government could change one thing to make Carlsbad a better place to live now and in the future, what change would you like to see? Verbatim responses recorded and later grouped into categories shown below. Limit growth, development, preserve open space 16% Address homeless issues 15% Not sure / Cannot think of anything specific 12% Improve public safety 8% No changes needed/Everything is fine 8% Provide more affordable housing 6% Reduce traffic congestion 5% Improve parkin 5% Improve environmental efforts 4% Improve, provide more rec facilities, parks 4% Maintain small, beach town feeling 4% Improve, maintain roads, infrastructure 3% Provide more sidewalks, bike lanes 3% Improve public transit 3% Provide a dog beach 2% Enforce noise ordinance 2% Provide more activities, events for all ages 2% Enforce traffic laws 2% Provide, expand trail network 2% More diversity in general 2% Reduce utility fees 2% Beautify city, landscaping, beach 2% Synchronize traffic lights 2% Reduce taxes, fees 2% Limit high-rise buildings, view obstructions 2% Q4 Generally speaking, are you satisfied or dissatisfied with the job the City of Carlsbad is doing to provide city services? Get answer, then ask: Would that be very (satisfied/dissatisfied) or somewhat (satisfied/dissatisfied)? 1 Very satisfied 42% 2 Somewhat satisfied 43% 3 Somewhat dissatisfied 7% 4 Very dissatisfied 2% 98 Not sure 4% 99 Prefer not to answer 0% April 20, 2022 Item #1 Page 60 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 41City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 3 Section 3: Initial Ballot Test Later this year, voters in Carlsbad may be asked to vote on a local ballot measure. Let me read you a summary of the measure. Q5 To provide funding for general city services in the City of Carlsbad, such as: Fire protection, paramedic, and 9-1-1 emergency response Police patrols and crime prevention Maintenance of streets, parks, open space, beaches, and infrastructure Traffic management, addressing homelessness, and other city services shall an ordinance establishing a one-cent sales tax be adopted, providing approximately 20 million dollars annually for city services until ended by voters, with independent audits, citizen oversight, and all money locally controlled? If the election were held today, would you vote yes or no on this measure? Get answer, then ask: Would that be definitely (yes/no) or probably (yes/no)? 1 Definitely yes 23% Skip to Q7 2 Probably yes 34% Skip to Q7 3 Probably no 14% Ask Q6 4 Definitely no 19% Ask Q6 98 Not sure 9% Ask Q6 99 Prefer not to answer 0% Skip to Q7 Q6 Is there a particular reason why you do not support or are unsure about the measure I just described? If yes, ask: Please briefly describe your reason. Verbatim responses recorded and later grouped into categories shown below. Taxes already too high 45% Money is misspent, mismanaged 27% Need more information 16% City has enough money 12% Other ways to be funded 5% City are okay as-is, no need for more money 3% Mentioned past ballot measure 2% Do not trust City 2% Not sure / No particular reason 2% Other higher priorities in community 1% April 20, 2022 Item #1 Page 61 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 42City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 4 Section 4: Projects & Services Q7 The measure weve been discussing will provide funding for a variety of services in your community. If the measure passes, would you favor or oppose using some of the money to: _____, or do you not have an opinion? Get answer, if favor or oppose, then ask: Would that be strongly (favor/oppose) or somewhat (favor/oppose)? Randomize Strongly Favor Somewhat Favor Somewhat Oppose Strongly Oppose Not sure Prefer not to answer A Provide police services, including neighborhood police patrols and investigations 49% 29% 8% 8% 4% 2% B Reduce gang activity and drug-related crimes 50% 27% 7% 7% 7% 2% C Provide fire protection and paramedic services 58% 26% 5% 4% 5% 2% D Provide quick responses to 9-1-1 emergencies 62% 23% 5% 3% 5% 2% E Maintain local streets and repair potholes 56% 31% 3% 4% 4% 2% F Repair and maintain public buildings and infrastructure including sidewalks, curbs and storm drains 47% 37% 6% 5% 4% 2% G Maintain parks, open spaces, and recreation facilities including courts, fields, and playgrounds 51% 36% 4% 4% 3% 2% H Keep public areas, buildings, and restrooms clean and free of graffiti 49% 36% 4% 5% 3% 2% I Address homelessness 55% 23% 6% 8% 6% 2% J Keep trash and pollution out of local waterways and off our beaches 61% 25% 4% 4% 3% 2% K Make improvements to roads and intersections to better manage traffic congestion on city streets 51% 30% 7% 5% 4% 2% L Provide programs and services to seniors 29% 42% 12% 7% 7% 2% M Provide parks and recreation programs for residents of all ages 40% 35% 10% 5% 7% 2% N Provide lifeguards at local beaches 35% 39% 11% 6% 7% 2% O Improve affordable housing options 31% 22% 15% 21% 8% 3% April 20, 2022 Item #1 Page 62 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 43City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 5 Section 5: Positive Arguments What Id like to do now is tell you what some people are saying about the measure weve been discussing. Q8 Supporters of the measure say: _____. Do you think this is a very convincing, somewhat convincing, or not at all convincing reason to SUPPORT the measure? Randomize Very Convincing Somewhat Convincing Not At All Convincing Don t Believe Not Sure Prefer not to answer A All money raised by the measure will be used to fund essential services and facilities here in Carlsbad. By law, it cant be taken away by the State. 32% 28% 18% 14% 4% 4% B There will be a clear system of accountability including independent citizen oversight and annual reports to the community to ensure that the money is spent properly. 31% 27% 18% 17% 4% 3% C By keeping our city safe, clean and well- maintained, this measure will help protect our property values and keep Carlsbad a special place to live. 30% 35% 19% 10% 3% 3% D A substantial amount of the money raised by the sales tax will come from people who visit our community, but dont live here. This measure will make sure they pay their fair share for the facilities and services they use while in our city. 28% 30% 18% 17% 4% 3% E Fast emergency response times for 9-1-1 calls are critical for saving lives. This measure will ensure that we have enough police officers, firefighters, dispatchers, and paramedics to respond quickly to 9-1-1 emergencies. 33% 34% 16% 11% 4% 3% F The funding raised by this measure will allow the City to keep up with basic repairs and maintenance to streets, sidewalks, storm drains, and public facilities. If we dont take care of it now, it will be a lot more expensive to repair in the future. 28% 39% 18% 9% 3% 3% G Currently, nearly all of the sales tax generated locally goes to the State of California, the County of San Diego, or SANDAG (SAN-dag). This measure will ensure that a higher percentage of our sales tax dollars stay here in Carlsbad. 35% 28% 16% 12% 5% 3% April 20, 2022 Item #1 Page 63 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 44City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 6 H This measure will provide the funding needed to maintain the quality of city services including police, fire protection, 9-1-1 emergency response times, the maintenance of streets, parks, beaches and open space, as well as programs for youth and seniors. 30% 34% 18% 11% 4% 4% I Carlsbad has long been one of the most fiscally conservative cities in the region. Fees on new developments have paid for needed infrastructure and maintenance, and helped sustain the quality of city services for all residents. We cant rely on development fees our long-term fiscal stability. This measure will provide a stable source of locally- controlled funding that will help sustain our quality of life and city services. 28% 32% 17% 14% 4% 4% Section 6: Interim Ballot Test Sometimes people change their mind about a measure once they have more information about it. Now that you have heard a bit more about the measure, let me read you a summary of it again. Q9 To provide funding for general city services in the City of Carlsbad, such as: Fire protection, paramedic, and 9-1-1 emergency response Police patrols, gang, drug and crime prevention Maintenance of streets, parks, beaches, and infrastructure Traffic management, addressing homelessness, and other city services shall an ordinance establishing a one-cent sales tax be adopted, providing approximately 20 million dollars annually for city services until ended by voters, with independent audits, citizen oversight, and all money locally controlled? If the election were held today, would you vote yes or no on this measure? Get answer, then ask: Would that be definitely (yes/no) or probably (yes/no)? 1 Definitely yes 25% 2 Probably yes 36% 3 Probably no 13% 4 Definitely no 19% 98 Not sure 7% 99 Prefer not to answer 1% April 20, 2022 Item #1 Page 64 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 45City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 7 Section 7: Negative Arguments Next, let me tell you what opponents of the measure are saying. Q10 Opponents of the measure say: _____. Do you think this is a very convincing, somewhat convincing, or not at all convincing reason to OPPOSE the measure? Randomize. Split Sample A1/A2 Very Convincing Somewhat Convincing Not At All Convincing Don t Believe Not Sure Prefer not to answer A1 Taxes are already too high we cant afford another tax increase. This is especially true for seniors and others on fixed-incomes. 41% 31% 17% 7% 3% 1% A2 Local businesses and residents have been hit hard by the pandemic and inflation. Many are struggling to stay afloat. Now is not the time to raise taxes. 38% 32% 16% 10% 2% 2% B City employees are making too much money in salary, pensions and benefits thats the problem. The City needs to tighten its belt before asking residents to pay more taxes. 23% 27% 25% 16% 7% 2% C There are no guarantees on how funds will be spent, which means the City can divert the money to pet projects. The City government cant be trusted with our tax dollars. 31% 32% 19% 12% 4% 2% Only odd clusters receive item D. D This tax will last forever. There is no expiration date. 33% 28% 25% 8% 4% 2% April 20, 2022 Item #1 Page 65 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 46City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 8 Section 8: Final Ballot Test Now that you have heard a bit more about the measure, let me read you a summary of it one more time. Q11 To provide funding for general city services in the City of Carlsbad, such as: Fire protection, paramedic, and 9-1-1 emergency response Police patrols, gang, drug and crime prevention Maintenance of streets, parks, beaches, and infrastructure Traffic management, addressing homelessness, and other city services shall an ordinance establishing a one-cent sales tax be adopted, providing approximately 20 million dollars annually for city services until ended by voters, with independent audits, citizen oversight, and all money locally controlled? If the election were held today, would you vote yes or no on this measure? Get answer, then ask: Would that be definitely (yes/no) or probably (yes/no)? 1 Definitely yes 25% Skip to Q13 2 Probably yes 34% Skip to Q13 3 Probably no 13% Ask Q12 4 Definitely no 21% Ask Q12 98 Not sure 7% Ask Q12 99 Prefer not to answer 1% Skip to Q13 Q12 What if the measure I just described raised the sales tax by a lower amount: one-half cent? Would you vote yes or no on the measure? Get answer, then ask: Would that be definitely (yes/no) or probably (yes/no)? Def, prob yes @ one cent (Q11) 58% 1 Definitely yes 1% 2 Probably yes 5% 3 Probably no 11% 4 Definitely no 17% 98 Not sure 7% 99 Prefer not to answer 1% April 20, 2022 Item #1 Page 66 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 47City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 9 Section 9: Cannabis Q13 Now for a different topic. Under California law, it is legal for adults to use cannabis for medical and recreational purposes. The law also allows local cities like Carlsbad to decide whether to allow cannabis businesses to operate within their boundaries, as well as the types of restrictions and regulations to place on cannabis businesses. In general, do you think the City of Carlsbad should allow a limited number of cannabis businesses to operate in the city or are you not sure? 1 Yes, should allow 41% 2 No, should not allow 38% 98 Not sure / Depends 20% 99 Prefer not to answer 1% Q14 There are different types of cannabis businesses. In your opinion, should the City allow a limited number of: _____ within the city? Randomize Yes, allow No, don t allow Not sure Prefer not to answer A Recreational retail cannabis dispensaries 39% 47% 13% 1% B Medicinal retail cannabis dispensaries 54% 35% 10% 1% C The indoor cultivation of cannabis on commercial property 37% 47% 15% 1% D The manufacture of cannabis products including edibles 41% 42% 16% 1% E Business that deliver cannabis to private residences to be headquartered 46% 40% 13% 1% F Research and testing of cannabis products 59% 29% 11% 1% Q15 If cannabis businesses were allowed in Carlsbad, would you support or oppose the City establishing a tax for cannabis-related businesses to help pay for city services and the cost of regulating cannabis businesses? 1 Support 74% 2 Oppose 15% 98 Not sure 9% 99 Prefer not to answer 2% April 20, 2022 Item #1 Page 67 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 48City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 10 Section 10: Background & Demographics Thank you so much for your participation. I have just two background questions for statistical purposes. Q16 In your opinion, has the City of Carlsbad done an excellent, good, fair, poor or very poor job of managing its financial resources? 1 Excellent 18% 2 Good 44% 3 Fair 18% 4 Poor 3% 5 Very poor 1% 98 Not sure 15% 99 Prefer not to answer 0% Q17 Do you have children under the age of 18 living in your household? 1 Yes 31% 2 No 66% 99 Prefer not to answer 3% Those are all of the questions that I have for you. Thanks so much for participating in this important survey. Post-Interview & Sample Items S1 Gender 1 Male 51% 2 Female 45% 99 Prefer not to answer 3% S2 Party 1 Democrat 38% 2 Republican 34% 3 Other 6% 4 DTS 22% April 20, 2022 Item #1 Page 68 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 49City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 11 S3 Age on Voter File 1 18 to 29 11% 2 30 to 39 10% 3 40 to 49 16% 4 50 to 64 31% 5 65 or older 32% S4 Registration Date 1 Since Nov 2018 7% 2 Jun 2012 to before Nov 2018 22% 3 Jun 2006 to before Jun 2012 10% 4 Before June 2006 61% S5 Household Party Type 1 Single Dem 16% 2 Dual Dem 13% 3 Single Rep 11% 4 Dual Rep 14% 5 Single Other 12% 6 Dual Other 6% 7 Dem & Rep 6% 8 Dem & Other 10% 9 Rep & Other 8% 0 Mixed (Dem + Rep + Other) 3% S6 Homeowner on Voter File 1 Yes 65% 2 No 35% S7 Likely to Vote by Mail 1 Yes 79% 2 No 21% April 20, 2022 Item #1 Page 69 of 70 Questionnaire & ToplinesTrue North Research, Inc. © 2022 50City of Carlsbad . . . . . . . . . . . . . . . . City of Carlsbad Survey March 2022 True North Research, Inc. © 2022 Page 12 S8 Likely June 2022 Voter 1 Yes 82% 2 No 18% S9 Likely November 2022 Voter 1 Yes 100% 2 No 0% April 20, 2022 Item #1 Page 70 of 70 I I I I I I I I Tammy Cloud-McMinn From: Sent: To: Cc: Subject: Attachments: Dear City clerk and Council, Please see attached document. Thank you, Lennie A <lenarkans@gmail.com> Tuesday, April 19, 2022 2:53 PM City Clerk Teresa Acosta City Council Special Meeting, Wed. April 20 9am-Agenda #1 April 20 Special Meeting Tax lncreases.pdf All Receive -Agenda Item# _j_ For the Information of the: pTYCOUNCIL Date~CA /CC __::::: CM ✓ACM ::::::=DCM (3) .::::::: Ellie Arkans-Constituent of District 4 CAUTION: Do not o en attachments or click on links unless ou recognize the sender and know the content i 1 April 20, 2022-Special Meeting at 9am 1635 Faraday Building Dear Representative Acosta and City Council members and Staff, NO NEW TAXES FOR THE CITIZEN'S OF CARLSBAD!!! Increasing a sales tax from 7.75% to 8.75% on Carlsbad residents to support and supplement irresponsible city spending, is not the solution to increasing revenue for the city of Carlsbad. Why you ask? The Country is suffering from a 40-year record high inflation rate of 8.5% for the month of March from February's inflation rate of 7.9%. This was the result of irresponsible spending at the Federal levels. The Biden administration is mismanaging and recklessly spending monies we do not have! Why would you want to consider tax hikes and burdening the citizens of Carlsbad when all costs of living are currently inflated? What you need to be focusing on is what ACTIONS you can take to lessen the burdens of the people on fixed incomes, and the low-income residents struggling to put food and gasoline into their vehicles to make ends meet. Do not talk about another social program or hand out either. Your policies and ideas have destroyed livelihoods and have driven the hard working, tax paying middle- class, the struggling families and individuals away from California. This is personal with me, and to many families that I know who have moved away from CA because of the high costs of living! You have mismanaged the city coffers and behave like privileged children with mom and dad's unlimited credit cards! Shame on the entire council and staff! You continue to create problems for yourselves and the city that are preventable. STOP SPENDING TAXPAYER DOLLARS ON UNNECESSARY PROJECTS AND GOVERNMENT HIRES AND BEGIN TRIMMING THE FAT OFF OUR CITY GOVERNMENT! DO NOT RAISE TAXES ON CITIZENS!!! SOLUTIONS: • Stop spending beyond your means! • Stop mismanaging/spending taxpayer money on future projects: ie New City Hall; • eliminate governmental agencies and put a freeze on increasing water rates, department hires and staff raises until they're affordable, sustainable: ie. DEi consultants, Homeless Outreach Team, Parks and Recreation, Planning Commissions, Mobile Library(?) • Remove/decrease the current and new positions that are not efficiently performing, but are adding to the cost of the city. SUGGESTIONS: • Offer a 0-4% tax on a couple of holiday weekends: ie "Fourth of July, Labor Day, Presidents Day, Carlsbad Resident Sales weekend" to incentivize spending for visitors and Carlsbad residents. • Raise Occupancy Tax on visitors • Keep sales tax below the neighboring cities to incentivize spending$$ in Carlsbad. Raising taxes on residents have never helped economies thrive especially during inflation, an upcoming election, while the Country is experiencing financial hardships???! What are you thinking??? Plus, why would I trust you with more money that you have proven to mismanage in just 2 years? Why would I think you will irresponsibly run through these new revenues if you show no change in your spending habits? NO ON SALES TAX INCREASES. Do not put this on the November ballot for vote!!! Respectfully, Ellie Arkans-District 4 Constituent Tammy Cloud-McMinn From: Sent: To: Cc: Subject: Tony Bona <tonybonafide@gmail.com> Tuesday, April 19, 2022 3:34 PM Lennie A City Clerk; Teresa Acosta Re: City Council Special Meeting, Wed. April 20 9am-Agenda #1 Thank you. The third option is gutting silly positions like DEi and housing services. Start making cuts now please Mr. Mayor. On Tue, Apr 19, 2022 at 2:53 PM Lennie A <lenarkans@gmail.com> wrote: Dear City clerk and Council, Please see attached document. Thank you, Ellie Arkans-Constituent of District 4 Thank you, CAUTION: Do not open attachments or click on links unless you recognize the sender and know the content i safe. 1 Tammy Cloud-McMinn From: Sent: To: Cc: Subject: Councilman Norby, Teri Jacobs <tjacobs86@pacbell.net> Tuesday, April 19, 2022 4:05 PM Peder Norby City Clerk April 20 Special Meeting Hope you are feeling better very soon. On to Wednesday's agenda. A one percentage point or one cent increase is actually a 13% increase to the current rate. To put that in perspective a $40,000 car will now cost Carlsbad tax payers and additional $400 (currently at 7.75% they are paying $3,100). That is quite a bit of money. I remember the council meeting when staff was instructed to look at revenue options. Big red flag went up. Revenue equals taxes. Semantics can't change that. A consultant was hired (don't get me started with the costs of all these consultants we hire) to look at revenues. Why wasn't a directive given to also look at possible ways to cut expenses or creative ways to help the situation we are finding ourselves in. Would it not be interesting to have a consultant look at our city and all of its expenditures and do a real honest evaluation since one was hired to look at revenue. Even though I am not a fan of consultants .. .fair is fair. Governance has to be more than just looking at ways to tax constituents. All three ideas given are taxes ... sales tax, cannabis tax, and TOT. Yes, staff is looking at a 2% cut across all departments but I couldn't find what that amount equates to if in fact it is done. Another issue is unfunded state mandates. If we are going to let the state dictate to us then why do we need a council and city staff? Why not get creative and really look at ways to get things done. Hire more interns, create job opportunities for those experiencing homelessness, look for more grants, make sure that we are getting our fair share of federal, state, and county funds. Use our talented staff rather than hire expensive consultants. I am sure there are all kinds of things that we could do if we really put our heads together. Our current economy is suffering. We are coming out of a pandemic and most likely entering a recession. SAN DAG wants to raise taxes, I am sure the county, state, and federal governments wa11t to do the same. What happens in a couple of years when we are again at a similar point and taxes need to be raised. Now we are talking almost 10%. I am extremely vocal in my concern regarding homelessness, safety, and a cleaner Village. I get it. All those things have a price tag attached to them. I realize that you just might have to say no. Most Americans are doing that right now as they are trying to stretch their dollars. Maybe one or all of the recommendations will be put on the ballot. Maybe they have to be. I am hoping that isn't the case ... Regards, Teri Jacobs 1