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HomeMy WebLinkAbout2024-06-11; City Council; ; Proposed Ballot Measure Options for Proposition H Amendments or ExemptionsCA Review CKM Meeting Date: June 11, 2024 To: Mayor and City Council From: Scott Chadwick, City Manager Cindie McMahon, City Attorney Staff Contact: Cindie McMahon, City Attorney cindie.mcmahon@carlsbadca.gov, 442-339-2891 Zach Korach, Finance Director zach.korach@carlsbadca.gov, 442-339-2127 Subject: Proposed Ballot Measure Options for Proposition H Amendments or Exemptions Districts: All Recommended Action Receive a report on proposed ballot measure options for Proposition H amendments or exemptions and provide direction to staff. Executive Summary Proposition H, adopted by the voters in 1982, prohibits the city from spending more than $1 million in city funds to acquire or improve real property unless the acquisition or improvements are first approved by the voters. The provisions of Proposition H are contained in Carlsbad Municipal Code Chapter 1.24. The Proposition H expenditure limit is also referenced in Article 4, Section 400 of the city’s charter, which the voters adopted in 2008. The expenditure limit does not include an inflation index. June 11, 2024 Item #15 Page 1 of 8June 11, 2024 Item #15 Page 1 of 8 Since Proposition H was passed in 1982, six measures related to projects exceeding $1 million have been passed by Carlsbad voters. The measures, projects and total costs are: Year Proposition Projects Resulting expenditures 1983 Proposition E Police & Fire Administration Building, Vehicle Maintenance Building, and Fire Station No. 5 $12,052,189 1987 Proposition A Purchase of Hosp Grove for parkland $6,555,000 1989 Proposition G Purchase and construction of The Crossings at Carlsbad Golf Course $63,334,117 2002 Proposition C Joint First Responders Training Facility, Alga Norte Park and Aquatic Center, open space purchase, Lake Calavera Trails, trail connectivity to Tamarack State Beach, South Shore Agua Hedionda Lagoon trail improvements, Arroyo Vista Trail extension $28,023,167 2016 Measure O Fire Station 2 $14,218,662 2022 Proposition J Monroe Street Pool renovation $22,000,000- $24,000,000* *Estimated project costs The city's Capital Improvement Program maps out major projects and how they will be funded. Each year, the City Council approves this plan along with the city budget. The costs for most planned Capital Improvement Program projects using funding sources subject to Proposition H are expected to exceed the $1 million expenditure limit and require voter approval. In July 2023, the Carlsbad Tomorrow: Growth Management Citizens Committee recommended the City Council consider a ballot measure to increase Proposition H’s $1 million expenditure limit and add an inflation index to allow the amount to increase over time. The committee was concerned Proposition H has become a hurdle, making it more difficult and time-consuming for the city to pursue projects to maintain Carlsbad’s quality of life. The City Council received a report and presentation on May 14, 2024, discussing the history of Proposition H and its implementing regulations, previous Proposition H-related ballot measures, the committee’s recommendation, and potential future options, including a ballot measure to amend or repeal Proposition H (Exhibit 3). June 11, 2024 Item #15 Page 2 of 8June 11, 2024 Item #15 Page 2 of 8 At the conclusion of the presentation, the City Council directed staff to return on June 11, 2024, with potential ballot measure language amending Proposition H to: 1) Increase the expenditure limit and add an inflation index and/or 2) Exempt public safety facilities from Proposition H Options, Explanation & Analysis Amend Proposition H to increase expenditure limit and add an inflation index The City Council requested city staff propose an expenditure limit and an inflation index. For inflation adjustments to most development related services fees, the city uses the Western Region Urban Consumer Price Index, which is published by the Bureau of Labor Statistics. For inflation adjustments to development impact fees, the city uses the Los Angeles Engineering News Record Construction Cost Index, which is published by the Engineering News Record. Had the $1 million dollar expenditure limit included an annual adjustment based on the Consumer Price Index, the limit would be $3.76 million as of December 2023. Applying the historical average Consumer Price Index of 3.3% to the limit over the next 15 years, the limit would increase to $6.12 million by 2038. Had the $1 million dollar expenditure limit included an annual adjustment based on the Construction Cost Index, the limit would be $3.09 million as of December 2023. City staff recommend using this index because it more closely reflects the effect of inflation on construction project costs over time. Applying the historical average Construction Cost Index of 2.8% to the limit over the next 15 years, the limit would increase to $4.70 million by 2038. Amending Proposition H to increase the expenditure limit to $3.09 million and adjust the limit annually by the Construction Cost Index would update the limit to today’s dollars and keep the limit current going forward. Sample ballot measure language for this option is provided in Exhibit 1. From a purchasing power perspective, this amendment would allow the expenditure limit to remain consistent with the voters’ intent in 1982. However, the amendment will not appreciably reduce the number of projects requiring voter approval before they may proceed as most future planned construction projects are expected to exceed the increased amount and, therefore, would still require voter approval under Proposition H. These projects include Fire Station 7, the Grand Avenue Promenade, Orion Complex Energy Storage, Robertson Ranch Park, Zone 5 Park and Cannon Lake Park. The costs for most of these projects will exceed $10 million. To appreciably reduce the number of projects needing a Proposition H vote, the projects would either need to be funded from sources not subject to Proposition H, such as public facility fees, park-in-lieu fees or special assessments, which may not be available in sufficient amounts, or the expenditure limit would need to be increased to substantially beyond the inflation adjusted amount. June 11, 2024 Item #15 Page 3 of 8June 11, 2024 Item #15 Page 3 of 8 Amend Proposition H to exempt public safety facilities from the expenditure limit The City Council also requested city staff propose an amendment to exempt public safety facilities from the expenditure limit. Sample ballot measure language for this option is provided in Exhibit 2. For the purposes of this proposed exemption, “public safety facilities” includes facilities for law enforcement services, fire rescue and prevention services, lifeguard services, emergency medical services and emergency operations, and training for staff providing these services. Other options The City Council could provide direction for staff to combine the above two ballot measure options or develop other ballot measure options for consideration. The City Council could also take no further action on the recommendation from the Carlsbad Tomorrow: Growth Management Citizens Committee. Future real property acquisition and improvement projects that require expenditures of greater than $1 million from funding sources subject to Proposition H would continue to require voter approval. Fiscal Analysis The cost for placing a measure on the November 2024 General Election ballot is estimated to be between $135,000 and $170,000. Next Steps If the City Council chooses to propose a ballot measure to amend Proposition H to increase the expenditure limit and add an inflation index, and/or to exempt public safety facilities from the limit, staff will return to the City Council on June 18, 2024, with the resolutions and other documents needed to implement this direction. The deadline to place an item on the ballot for the November 2024 General Election is Aug. 9, 2024. Environmental Evaluation The City Planner has determined that this action is exempt from the requirements of the California Environmental Quality Act in accordance with Guidelines Section 15378(b)(5), in that receiving a report and providing direction to staff does not meet the definition of a project. The action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. Exhibits 1. Proposed ballot measure - Increase expenditure limit and add inflation index 2. Proposed ballot measure - Exempt public safety facilities 3. May 14, 2024, staff report on Proposition H (On file in the Office of the City Clerk) June 11, 2024 Item #15 Page 4 of 8June 11, 2024 Item #15 Page 4 of 8 Exhibit 1 Ballot Question Full Text of Ballot Measure Ordinance No. ______ AN INITIATIVE ORDINANCE OF THE CITY OF CARLSBAD, CALIFORNIA, AMENDING ARTICLE 4, SECTION 400, OF THE CHARTER FOR THE CITY OF CARLSBAD AND CHAPTER 1.24, SECTION 1.24.030, OF THE CARLSBAD MUNICIPAL CODE TO INCREASE THE EXPENDITURE LIMIT AND ADD AN INFLATION INDEX FOR USING CITY FUNDS TO ACQUIRE OR IMPROVE REAL PROPERTY The people of the City of Carlsbad, California, do ordain as follows: SECTION 1. Article 4, Section 400, of the Charter for the City of Carlsbad is amended to read as follows: Section 400 Economic and Community Development. Subject to the expenditure limitation established by the citizens of Carlsbad in Proposition H, in 1982as it may be amended from time to time, the City shall have the power to utilize revenues from the general fund to encourage, support and promote economic development in the City. SECTION 2. Chapter 1.24, Section 1.24.030, of the Carlsbad Municipal Code is amended to read as follows: The city shall make no real property acquisition and/or no improvement to real property the cost of which exceeds one $3.09 million dollars in city funds, adjusted MEASURE ___. INCREASE EXPENDITURE LIMIT AND ADD AN INFLATION INDEX FOR USING CITY FUNDS TO ACQUIRE OR IMPROVE REAL PROPERTY Shall the voters of the City of Carlsbad adopt the measure amending the city charter and municipal code to increase the expenditure limit for using city funds to acquire or improve real property from $1 million (the limit established by voters in 1982) to $3.09 million (the 1982 limit in 2024 dollars), adjusted annually on January 1 by the percentage increase in the regional construction cost index? YES NO June 11, 2024 Item #15 Page 5 of 8June 11, 2024 Item #15 Page 5 of 8 annually on January 1 by the percentage increase in the regional construction cost index, unless the proposed acquisition and/or improvement project and the cost in city funds is first placed upon the ballot and approved by a majority of the voters voting thereon at an election. A project may not be separated into parts or phases so as to avoid the effects of this chapter. SECTION 3. This ordinance shall take effect as provided in California Elections Code Section 9217. SECTION 4. The City Clerk’s Office shall publish this ordinance according to law. June 11, 2024 Item #15 Page 6 of 8June 11, 2024 Item #15 Page 6 of 8 Exhibit 2 Ballot Question Full Text of Ballot Measure Ordinance No. ______ AN INITIATIVE ORDINANCE OF THE CITY OF CARLSBAD, CALIFORNIA, AMENDING ARTICLE 4, SECTION 400, OF THE CHARTER FOR THE CITY OF CARLSBAD AND CHAPTER 1.24, SECTION 1.24.060, OF THE CARLSBAD MUNICIPAL CODE TO EXEMPT PUBLIC SAFETY FACILITIES FROM THE EXPENDITURE LIMIT FOR USING CITY FUNDS TO ACQUIRE OR IMPROVE REAL PROPERTY The people of the City of Carlsbad, California, do ordain as follows: SECTION 1. Article 4, Section 400, of the Charter for the City of Carlsbad is amended to read as follows: Section 400 Economic and Community Development. Subject to the expenditure limitation established by the citizens of Carlsbad in Proposition H, in 1982as it may be amended from time to time, the City shall have the power to utilize revenues from the general fund to encourage, support and promote economic development in the City. MEASURE ___. EXEMPT PUBLIC SAFETY FACILITIES FROM THE $1 MILLION EXPENDITURE LIMIT FOR USING CITY FUNDS TO ACQUIRE OR IMPROVE REAL PROPERTY Shall the voters of the City of Carlsbad adopt the measure amending the city charter and municipal code to exempt public safety facilities, including facilities for law enforcement services, fire rescue and prevention services, lifeguard services, emergency medical services and emergency operations, and training for staff providing these services, from the $1 million expenditure limit for using city funds to acquire or improve real property? YES NO June 11, 2024 Item #15 Page 7 of 8June 11, 2024 Item #15 Page 7 of 8 SECTION 2. Chapter 1.24, Section 1.24.060, of the Carlsbad Municipal Code is amended to read as follows: A. This chapter shall not apply to any real property acquisition or improvement to real property used for public safety facilities. “Public safety facilities” includes facilities for law enforcement services, fire rescue and prevention services, lifeguard services, emergency medical services and emergency operations, and training for staff providing these services. B. This chapter shall not apply to any real property acquisition or improvement to real property which has obtained a vested right as of the effective date of the ordinance codified in this chapter. For purposes of this chapter, a "vested right" shall have been obtained if each of the following is met: A1. The proposed project has received its final discretionary approval; and B2. Substantial expenditures have been made in good faith reliance on the final discretionary approval; and C3. Substantial construction has been commenced in good faith reliance on the final discretionary approval, where construction is contemplated. Whether or not a vested right has been obtained in a particular case is a question of fact to be determined on a case-by-case basis by the City Council following notice and public hearing. SECTION 3. This ordinance shall take effect as provided in California Elections Code Section 9217. SECTION 4. The City Clerk’s Office shall publish this ordinance according to law. June 11, 2024 Item #15 Page 8 of 8June 11, 2024 Item #15 Page 8 of 8 Tammy Cloud-McMinn From: Council Internet Email Sent: Tuesday, June 11, 2024 8:09 AM To: City Clerk I,( Subject: FW: Agenda item JA" Proposition H proposed changes -question and concern From: Bradford Robbins <bradfordrobbins@gmail.com> Sent: Monday, June 10, 2024 8:13 PM To: Council Internet Email <council@carlsbadca.gov> Cc: Lori Robbins <silentmeowing@gmail.com> Subject: Agenda item 14 Proposition H proposed changes -question and concern Dear Carlsbad City Council Members, I hope this message finds you well. I am writing to express my thoughts and seek clarification on the proposed changes to Proposition H that will be discussed in the upcoming meeting. While I appreciate the efforts to update and refine the proposition, I have specific concerns regarding two proposed changes with questions bolded below. 1. Increase the amount requiring public vote from $1 M to $3.1 M with annual inflation adjustments: This adjustment seems reasonable and aligns with the increase in construction costs since 1982. It ensures that the threshold remains relevant in today's economic context. 2. The change in wording to allow amendments "from time to time": The proposed wording change to allow the proposition to be amended "from time_to time" raises a concern. My primary worry is the potential for this change to enable amendments without a public vote. If this is the intent, it would undermine the original purpose of Proposition H, which is to ensure public participation in large capital spending decisions. It is crucial that any changes to Proposition H maintain the requirement for a public vote on large capital expenditures to preserve its integrity and public trust. Could you please clarify what "amended" means in this context? 3. Exempt Public Safety spending from Proposition H: This exemption seems unreasonable, as large public safety projects should still be subject to public vote. Given that many of these projects exceed $1 OM, the cost and effort required for a public vote ($170,000) is relatively minor. Moreover, large projects typically have a sufficient planning horizon to accommodate the time needed for public voting. Exempting public safety spending could lead to significant expenditures without adequate public involvement. I believe it is vital to maintain the requirement for a public vote on such large-scale projects to ensure transparency and public accountability. Why exclude these long time horizon, large capital spending decisions? Thank you for considering my perspective. I look forward to your response. 1