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HomeMy WebLinkAboutStaff Report 5.A 10/06/2014(i) IC".1 to TO: Agenda Item October 6, 2014 Honorable Mayor and Members of the City Council through City Manager Eric Danly, City Attorney SUBJECT: Resolution Expressing City Council Support for Measure Q, a One Percent General Transactions and Use Tax Applicable in the City of Petaluma Which Will Be Submitted to the Qualified Electors of the City at the General Municipal Election on Tuesday, November 4, 2014 RECOMMENDATION It is recommended that the City Council receive comments from all interested parties, including proponents and opponents of Measure Q, and following discussion and deliberation by the City Council, adopt the attached Resolution Expressing City Council Support for Measure Q, a One - Percent Transactions and Use Tax Applicable in the City of Petaluma Which Will Be Submitted to the Qualified Electors of the City at the General Municipal Election on Tuesday, November 4, 2014. BACKGROUND At its August 4, 2014 City Council meeting, after a series of workshops on a variety of City needs, and consideration and discussion of the City Council and interested members of the public regarding government funding priorities of Petaluma voters and potential voter interest in supporting a City revenue measure, the City Council adopted Ordinance number 2507 on the subject of a one percent transactions and use tax applicable in the City of Petaluma. The ordinance ordered submission of the transaction and use tax, which has been designated as Measure Q, to qualified electors of the City at the general municipal election to be held on Tuesday, November 4, 2014; approved the ordinance in accordance with Revenue and Taxation Code section 7285.9; requested the Sonoma County Board of Supervisors to consolidate the November 4, 2014 general mtmicipal election with the statewide general election; and provided for submission of ballot arguments and rebuttals. Subsequently, on August 18, 2014, arguments in favor of and against Measure Q and the City Attorney's Impartial Analysis of Measure Q, were filed in the Petaluma City Clerk's Office. Rebuttal arguments to the arguments in favor of and against Measure Q were filed in the Petaluma City Clerk's Office on August 28, 2014. Sections 8314 and 54964 of the California Government Code prohibit expenditure of public funds to campaign for or against a ballot measure. However, case law has developed in California to help preserve the integrity of the electoral process by distinguishing between prohibited expenditures of public funds for materials and activities reasonably characterized as campaign materials. and informational material that ordinarily may be financed by public expenditures. Such cases have recognized that local government agencies may, in an open and public meeting where all perspectives may be shared, adopt a resolution supporting (or opposing) a ballot measure to be offered to the voters. (See, e.g., l7argas v. City of Salinas (2009) 46 Ca1.4`' 1, Choice -Ire -Education League v. Los Angeles Unified School District (1993) 17 Cal.App.4°i 415.) DISCUSSION The purpose of this item is to permit the City Council, if it chooses, to adopt a resolution in support of Measure Q, a one percent general transactions and use tax applicable in the City of Petaluma which will be submitted to the qualified electors of the City at the general municipal election on Tuesday, November 4, 2014. Adoption of such a City Council resolution expressing the Council's position on a measure to be considered by City voters is permitted if it occurs at an open and public meeting where all perspectives on the measure may be shared. To facilitate such a public discussion, attached to this resolution is a copy of the City Attorney's Impartial Analysis of Measure Q. The attached resolution has been prepared consistent with the City Council findings contained in Ordinance 2507 N.C.S. which placed Measure Q on the November 4, 2014 general election ballot. Also on the City Council's October 6, 2014 meeting agenda and related to Measure Q is a resolution for establishing City Council priorities for use of Measure Q proceeds. Another related item on the October 6, 2014 agenda is the proposed purchase of property for development of the Rainier interchange. The Rainier interchange is one of the potential Council priorities that is included in the draft resolution on use of Measure Q proceeds. FINANCIAL IMPACTS The cost of consideration of a City Council resolution supporting Measure Q is limited to the normal cost involved in staff s preparation of agenda materials, inclusion of the item in the October 6 City Council agenda and discussion of the item at the meeting. ATTACHMENTS 1. Resolution 2. City Attorney's Impartial Analysis of Measure Q ATTACHMENT Resolution No. 2014- N.C.S. of the City of Petaluma, California A RESOLUTION EXPRESSING CITY COUNCIL SUPPORT FOR MEASURE "Q," A ONE -PERCENT GENERAL TRANSACTIONS AND USE TAX APPLICABLE IN THE CITY OF PETALUMA WHICH WILL BE SUBMITTED TO THE QUALIFIED ELECTORS OF THE CITY AT THE GENERAL MUNICIPAL ELECTION ON TUESDAY, NOVEMBER 4, 2014 WHEREAS, during the recession beginning in 2007 the City of Petaluma: - experienced sales and property tax revenue losses of approximately $9.7 million - reduced the City workforce by approximately70 positions (about 20% of the workforce) - reduced General Fund spending from $48.2 million to $32.5 million (about a 33% reduction) - lost about $13 million in funding due to elimination of redevelopment agencies; and, WHEREAS, the City eliminated the Community Development department, the Animal Services program, and privatized planning, animal care, custodial, and aquatics program services; and, WHEREAS, the Petaluma Fire Department currently operates at minimum staffing levels; and, WHEREAS, officer staffing in the Petaluma Police Department is at 1995 levels, with 15 fewer officers than in 2007; and, WHEREAS, Street Crimes, Narcotics and School Resources assignments in the Police Department have been eliminated; and, WHEREAS, the cost of providing Police and Fire services in Petaluma currently consumes about 75% of the City's General Fund revenues; and, WHEREAS, the City has deferred maintenance, repair, and capital costs for facilities, roads, sidewalks, and street lights; and, WHEREAS, the City lacks resources to fully fund a storm water facilities/flood protection program; and, WHEREAS, imposition of a I% transactions and use tax in Petaluma would generate approximately $10 million annually: and, WHEREAS, in accordance with Article 133C, Section 2, subdivision (a) of the California Constitution, any tax imposed for general governmental purposes the proceeds of which are placed in the general find and available for expenditure for any and all governmental purposes is a general tax, including where such proceeds are monitored and tracked separately from other tax receipts (see, e.g., Weisblat v. City of San Diego (2009) 176 CA4th 1022); and, WHEREAS, on August 4, 2014, the Petaluma City Council adopted Ordinance No. 2507 N.C.S., An Ordinance of the City Council of the City of Petaluma on the Subject of a I% Transactions and Use Tax Applicable in the City of Petaluma: Ordering the Submission of the Transactions and Use Tax to the Qualified Electors of the City at the General Municipal Election to Be Held on Tuesday, November 4, 2014; Approving the Ordinance in Accordance with Revenue and Taxation Code Section 7285.9; Requesting the Sonoma County Board of Supervisors to Consolidate Said Election with the November 4, 2014 Statewide General Election; and Providing for Submission of Ballot Arguments and Rebuttals; and, WHEREAS, the Sonoma County Registrar of Voters has denominated the measure as Measure "Q"; and, WHEREAS; Measure Q, a One -Percent General Transactions and Use Tax Applicable in the City of Petaluma which Will Be Submitted to the Qualified Electors of the City at the General Municipal Election on Tuesday, November 4, 2014, would provide City general fund proceeds available for expenditure for any and all governmental purposes such as street and sidewalk maintenance and repair, traffic improvements like the Rainier Crosstown Connector/Interchange, flood protection, storm drainage, vehicle replacement, restoring public safety positions, and public facilities improvements, among others; and, WHEREAS, on October 6, 2014, the City Council held a public meeting where all viewpoints were heard regarding City Council priorities for use of proceeds from Measure Q and adopted Resolution No. 2014 - N.C.S., which establishes the City Council's priorities for the use of proceeds if Measure Q is adopted by the voters; and, WHEREAS, if approved by Petaluma voters, Measure Q will include the following accountability measures: Measure Q proceeds and expenditures using Measure Q proceeds must be monitored and trached separately from other tax receipts deposited in the city's General Fund: the City Council must appoint an independent citizen oversight committee of five members to review and report on the use of Measure Q proceeds: the meetings and records of the citizens oversight committee must be open to the public; and the City's Finance Director must oversee preparation of a quarterly report for submission to the oversight committee and publication on the City's website on all Measure Q proceeds and use of the proceeds: and, WHEREAS, local government agencies may, in an open and public meeting where all perspectives may be shared, adopt a resolution supporting (or opposing) a ballot measure to be offered to the voters (see, e.g., Vargas v. Cite of Salinas (2009) 46 Cal.4`h 1, Choice -In -Education League n. Los Angeles Unified School District (1993) 17 Cal.App.41h 415.); and, WHEREAS, this resolution came before the City Council at a public meeting on October 6, 2014, at which members of the public, including proponents and opponents of Measure Q. were free to comment on the measure and this resolution; and, WHEREAS, in accordance with Sections 8314 and 54964 of the California Government Code, and other applicable law, no public resources may be used to campaign for or against Measure "Q". NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PETALUMA DOES HEREBY RESOLVE AS FOLLOWS: 1. The above recitals are hereby declared to be true and correct and findings of the City Council of the City of Petaluma. 2. The City Council supports Measure Q, a One -Percent General Transactions and Use Tax Applicable in the City of Petaluma which Will Be Submitted to the Qualified Electors of the City at the General Municipal Election on Tuesday, November 4, 2014, because Measure Q would allow the City of Petaluma to emerge from the recession with funding needed for: restoring public safety positions; repairing aging roads and sidewalks, relocating, modernizing and expanding fire stations and the police stations, replacing outdated fire engines, ambulances and police cars; completing flood protection projects, and completing the Rainier crosstown connector/interchange. 3. By Resolution no. 2014 - _ N.C.S. adopted October 6, 2014 the City Council has established the priorities for the use of the proceeds from Measure Q, if it is approved by the voters, as follows: a. Street and Sidewalk Maintenance, Repair and Reconstruction b. Constructing the Rainier Crosstown Connector/Interchange Project c. Flood Protection and Storm Drainage d. Vehicle Replacement e. Restoring Police Officer Positions f. Fire/Police Station Upgrades/Replacement & Museum Seismic Retrofit g. Street Lighting - ATTACHMBNT2 City Attorney's Impartial Analysis of Measure Q CCal, Gov. Code §9280) The Petaluma City Council placed Measure Q on the November 4, 2014 general election ballot by ordinance, Measure Q would impose a 1% local transactions and use or sales tax on the sale and use of personal property in Petaluma, subject to specified exceptions. Measure Q is a general tax and requires approval by majority vote of the qualified Petaluma voters voting in the November 4, 2014 election. Measure Q has no expiration date, if approved it would remain in effect unless amended or repealed by Petaluma voters. Measure Q would raise the sales tax in Petaluma from 8.25% to 9,25%. A Sonoma County transactions and use tax of.125% to provide library funding also has been placed on the November 4, 2014 ballot and designated as Measure M. If both measures are approved, and the California Legislature enacts legislation raising the cap on Sonoma County local sales tax by at least.125%, sales tax in Petaluma would increase from 8,25% to 9.375% for the 10 year -period Measure M is in effect. Measure Q requires tracking its proceeds and expenditures separately from all other Petaluma General Fund tax receipts. Measure Q also requires appointment of a 5 - member citizen oversight committee to review and report on use of Measure Q proceeds, and quarterly reports on all proceeds of the tax and their use for submission to the oversight committee and publication on the City's website. The citizen oversight committee would meet annually. Its meetings and records would be subject to the Brown Act and the Public Records Act. Petaluma staff estimate Measure Qwould generate approximately $10 million annually. Staff has recommended priorities for Measure Q proceeds, such as: restoration of public safety positions; repair of roads and sidewalks; relocation, modernization and expansion of fire stations and the police station; replacement of fire engines, ambulances and police cars; completion of flood protection and storm water projects; and completion of the Rainier crosstown connector/interchange. However, all Measure Q proceeds would be placed in the Petaluma General Fund for use for general governmental purposes approved by the City Council, Measure Q proceeds therefore could be used for purposes that are approved by the City Council other than those staff has recommended. Measure Q Impartial Analysis �9 Petaluma would contract with the State Board of Equalization to administer Measure Q. If approved by Petaluma voters, Measure Q will become effective 10 days after the Petaluma City Council declares the results of the November 4, 2014 election. The operative period of State Board of Equalization administration of Measure Q would begin the calendar quarter starting more than 110 days after Measure Q's effective date, or approximately April 1, 2015. The above statement is an impartial analysis of Measure Q. If you desire a copy of the ordinance, please call the office of the Petaluma City ierk at (707) 778-4361 and a copy will be mailed at no cost to you. Dated: August 18, 2014 By: LQ Eric W. Danly Petaluma Cirytrtorney Measure Q Impartial Analysis -1A