Sunnyvale needs money.

During a study session at its most recent meeting, Sept. 8, the Sunnyvale City Council brainstormed ideas to collect more taxes and fees from residents, tourists and businesses.

Matt Paulin, the city’s finance director, told the council that aging infrastructure — including repairs needed at the fire station, corporation yard and library — and regulatory mandates are putting the city in a financial pinch.

“As we all know, there is plenty of demand for both existing and new services, and those demands continue to increase,” Paulin said. “A diversified and stable revenue base helps us deliver services and meet all these needs for Sunnyvale’s residents. The best ones are ones we can control.”

Among the needs are $100 million to replace all the city’s traffic lights, improvements to Stevens Creek Trail and grade separations. One such separation on Lawrence Expressway near Reed Avenue and Monroe Street is estimated to cost $450 million.

To collect more money, Paulin offered some suggestions, including increases to the property transfer tax, transient occupancy tax (TOT), sales tax, parcel tax, general obligation bonds and business licensing fee.

A .25% sales tax increase, the maximum allowable by the state, would generate roughly $6.4 million a year. The sales tax is 9.12%.

A 1% increase in the TOT, which is 12.5%, would generate $1.64 million a year, according to the city. 

“It is always positive to the residents to tax other people,” Mayor Larry Klein said.

While a general obligation bond could generate significant money for the city, a 2024 ballot measure to do just that failed.

Voters need to approve tax hikes, some requiring a 2/3 majority.

The council favored a TOT increase, but many said they were “reluctant” to go out for a sales tax increase or for any tax that the law requires a supermajority to approve.

Council Member Richard Mehlinger said he would like the city to prioritize homeless services. Since a citizen-led ballot initiative to increase taxes only needs to meet a more-than-50% threshold, Mehlinger said he would like the city to explore partnering with a citizen group.

However, City Attorney Rebecca Moon said she was unsure whether such a partnership is legal.

Council Member Alysa Cisneros said what constitutes wasteful spending is “subjective.”

“It is all in the eye of the beholder. One person’s waste is another person’s essential service,” she said.

When asked how much money the city needs to address its unfunded needs, Paulin said his office didn’t pin down a specific figure.

“The needs are always going to outweigh the available resources,” he said.

Housing Complex’s Lack of Parking Ruffles Feathers

The council also had a study session on a below-market-rate housing development.

The 122-apartment complex, located at 295 Mathilda Ave., will offer housing for the poor and homeless. The city used $7.35 million local money earmarked for such projects to purchase the land.

MidPen Housing, a below-market-rate housing nonprofit, is the project’s developer. 

A quarter of the units will be for the homeless. The complex will be between three and six stories and have 66 parking spots.

Trudi Ryan, the city’s housing director, said while, as the property owner, the city has a “lot of cache,” she added that the city wants to be “judicious” to ensure that the development is “something that fits in with the neighborhood.” 

Public comments on the project were divided. Proponents pointed to Sunnyvale’s need for more housing for the poor. Opponents decried the lack of parking and its proximity to other such developments.

To get to a one-to-one parking ratio would cost between $5 million and $10 million, said Mollie Naber, housing development director at MidPen, money that would need to come from the city.

City Manager Tim Kirby said the city is looking into parking permits along Charles Street near the development to mitigate the problem. 

Cisneros said Sunnyvale needs to build “for the future.” She said she was confident the city could find a solution that addresses neighbors’ concerns and still add much-needed housing.

“We have to take bold action … We can’t solve the housing crisis. We have to just address it,” she said. “These concerns are valid. Let’s work it out.”

City Changes Procurement Process

Finally, the council changed how the city goes about securing public works contracts.

David Battaglia, the city’s purchasing officer, told the council that the change was to bring Sunnyvale more inline with neighboring cities. The change, he said, would reduce “administrative burden.”

For contracts between $15,000 and $30,000, city policy specifies that city employees must get three quotes. That process generates more than 1,600 purchase orders annually, something Battaglia said creates a “bottleneck.”

The change shifts the thresholds, allowing contracts up to $50,000 to be handled administratively. Contracts between $50,000 and $100,000 must have three quotes. The process for bigger contracts remains the same, with those up exceeding $100,000 needing three formal bids and those exceeding $250,000 needing council approval.

“This is a very important part of keeping our flow of our requisitions moving forward at a sustainable pace and delivering great service, not only to our external customers but our internal customers as well,” Battaglia said.

Further, the change will transition the city to an e-filing system, PlanetBids, reducing errors and streamlining the bid process, Battaglia said. 

The ordinance will return for a second reading prior to going into effect Oct. 30.

Consent Calendar Spending

The council approved the following spending in one motion via the consent calendar:

• A $400,000 amendment to a contract with Stoel Rives for litigation services pertaining to the litigation of San Francisco Baykeeper v. City of Sunnyvale. The total contract amount is now $800,000.

The next regular meeting of the council is 7 p.m. Tuesday, Sept. 30 in the Council Chambers at City Hall, 456 W. Olive Ave. in Sunnyvale. 

To submit public comments ahead of the meeting, visit http://Sunnyvale.ca.gov/PublicComments; Meeting online link: https://sunnyvale-ca-gov.zoom.us/j/96111580540; meeting call-in telephone number: 833-548-0276, meeting ID: 961 1158 0540 

Contact David Alexander at d.todd.alexander@gmail.com

Previous City Council Meetings:
Sunnyvale Establishes Industrial Development Agency, Proves Its Drinking Water Is Clean
Sunnyvale Imposes Environmental Regulations Likely To Cost Homeowners
Sunnyvale Council Takes Action on Tasman Drive Pedestrian-Bicycle Improvements Study