Sunnyvale’s finance director outlined a broad menu of local revenue options at a Sept. 9 study session as council members weighed how to fund aging infrastructure, increasing service demands and rising regulatory costs.

“There's some examples there. The fire stations, courtyard, and main library are 3 of the biggest ones,” Finance Director Matt Paul said, describing capital needs in the city’s portfolio. Paul told council the city faces substantial long‑term needs ranging from traffic‑signal replacement (staff estimated costs on the order of $100 million to replace signals citywide over time) to multi‑hundred‑million‑dollar grade separations.

Paul presented the range of local options staff has evaluated: business license and utility fees, development impact and franchise fees, user fees, a real‑property transfer tax (RPTT), transient‑occupancy tax (TOT), additional sales tax, parcel taxes, assessment districts and general‑obligation bonds. He outlined which revenue sources require council action and which require voter approval and noted legal and market constraints that could affect each choice.

Key details presented to council include:
- Existing local revenues and the city’s authority to increase or impose certain fees without voter approval, and which taxes (for example parcel taxes and most bonds) require two‑thirds voter approval.
- A potential parcel‑tax or bond should be timed to align with higher‑turnout elections to improve chances of success for supermajority measures, council members said.
- The city currently lacks a dedicated stormwater fee; general fund covers most stormwater operational costs today (staff estimated roughly $150,000 annually for general‑fund support and $2–3 million for operations in a later council discussion).
- A 1‑percent increase in the TOT would raise an estimated $1.65 million a year at current activity levels.

Council members discussed legal thresholds and political feasibility. Councilmember Mellinger asked staff to confirm whether a general‑purpose parcel tax at a 50% + 1 threshold would be legal; staff said state law generally requires a two‑thirds threshold for special taxes but agreed to research the possibility of citizen‑sponsored initiatives and whether the city could legally partner with resident groups on signature gathering. Council members suggested priorities for new revenue including homelessness services, public safety (paramedics), library and active‑transportation projects.

Members probed specific options. Councilmember Srinivasan asked about unfunded project lists and grant opportunities; staff confirmed the city maintains an unfunded project list within the capital budget. Councilmembers and staff also referenced neighboring jurisdictions’ RPTT structures and the potential business‑community pushback experienced in prior attempts; Mountain View and Palo Alto were cited as recent examples.

Several members suggested the more achievable near‑term measures might be TOT increases or modest parcel or RPTT proposals tailored to local political reality, while acknowledging that major projects such as a sizeable general‑obligation bond would face a two‑thirds hurdle and are more likely to succeed in presidential election years.

The study session ended without formal council direction to place any specific measure on a ballot. Staff said they would follow up with legal research (including the parcel‑tax question), refine voter‑threshold and polling advice and return with options for ordinance language and a proposed timeline if council wished to pursue any specific revenue option.

Ending: The council did not take formal action at the study session. Staff will verify the legal threshold for parcel taxes and return with further analysis and recommended next steps.