HomeMy WebLinkAboutOrdinance 2743 N.C.S. 08/03/20201
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EFFECTIVE DATE ORDINANCE NO. 2743 N.C.S.
OF ORDINANCE
August 3, 2020
Introduced by Seconded by
Gabe Kearney Mike Healy
AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA ON THE
SUBJECT OF A ONE -CENT, GENERAL 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 3,2020; 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 3, 2020
STATEWIDE GENERAL ELECTION; AND PROVIDING FOR SUBMISSION OF BALLOT
ARGUMENTS AND REBUTTALS
FINDINGS
WHEREAS, the City of Petaluma has had General Fund budgetary challenges for many years,
at least since the Great Recession approximately a decade ago, and the City's response to the
Great Recession was a multi -faceted approach that attempted to retain the most critical services
while balancing expenditures with available revenues, utilizing. strategies including the following:
• Reductions to, elimination of and contracting -out of various General Fund services;
• Reduction of 26% of General Fund staff positions;
• Negotiation of various concessions with our employee bargaining units; including furloughs,
pension cost-sharing, and no cost -of -living -adjustments for up to 7 consecutive years; and
• Spending down of nearly all the City's General Fund reserves; and
WHEREAS, after the Great Recession, from approximately 2013 to 2018, the City continued to
make the necessary decisions to balance its General Fund each year during a period that saw few
staff compensation increases, and although some key positions were added back to the General
Fund over time; and the City accomplished a slow build-up of reserves, the General Fund budget
was balanced during this time by little -to -no investment in technology, roads, facilities and other key
infrastructure components; and
WHEREAS, the City has not had the benefit of a dedicated, locally -approved revenue
measure to bolster City services and improve infrastructure maintenance and investment; and
WHEREAS, since the beginning of the COVID-19 pandemic, the City has been working to
provide essential City services to residents and businesses and provide additional COVID support
where possible, such as the implementation of a rental assistance program, small business loan
program, and assistance with permitting outdoor dining and other business modifications to support
the economy; nonetheless, due to the sheltering orders and corresponding business shutdowns, the
Ordinance No. 2743 N.C.S.
Page 1
1 City is anticipating a revenue loss of $2.7 million in Fiscal Year 2019/2020 and an additional $2.0
2 million loss in Fiscal Year 2020/2021, with future fiscal years expected to see estimated revenues
3 down approximately $1.3 million annually on an ongoing basis; and
4
5 WHEREAS, since 2019, the City has been engaged in a two-pronged effort to: (1) gather as
6 much community feedback as possible about City services and priorities, including online and
7 paper surveys, in-person workshops, emails and phone calls, and statistically -valid professionally -
8 conducted public opinion research; and (2) to conduct comprehensive analysis and educate the
9 community on the City's long-term fiscal challenges and the level of revenue / investment required
10 by the City's General Fund to maintain quality -of -life services and infrastructure; and
11
12 WHEREAS, the City Council and City staff have employed a multi -faceted community
13 outreach effort to engage the Petaluma community to gather their feedback about City services,
14 projects, goals and priorities, which efforts have taken many forms over the past eighteen months
15 and have included input from thousands of Petaluma residents, businesses and other stakeholders,
16 including:
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18 0 Over 300 participants at City workshops (e.g. Goals and Priorities Workshop, Parks Measure M
19 Workshop, Housing Priorities Workshop, etc.);
20 ® 2,131 respondents to online surveys;
21 0 Over 1,000 respondents to paper mail -in surveys;
22 ® 3,617 unique visitors to the City's www.cityofpetaluma.org/jointheconvo web page;
23 • 800 participants in statistically -valid, professionally conducted public opinion research; and
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25 WHEREAS, the extensive community feedback the City has received makes clear that the
26 community's interests and spending priorities for enhanced locally -controlled funding include:
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28 • Maintaining and preventing cuts to firefighting equipment/fire engines and adequate 24-
29 hour staffing;
30 • Ensuring public health, wildfire, natural disaster emergency preparedness and maintaining
31 911 emergency response times to ensure first responders can respond quickly to calls for
32 services;
33 • Continuing homeless prevention programs and community partnerships while ensuring our
34 local businesses, public areas, and neighborhoods are safe, stable, and secure for everyone;
35 • Maintaining properly trained community based public safety officers, community outreach
36 programs, and ensuring adequate 24-hour staffing;
37 0 Keeping public areas safe and clean; supporting local business and job retention through
38 recovery;
39 0 Enhancing street maintenance, repaving, and pothole repair on Petaluma's 396 miles of
40 streets;
41 • Addressing existing road hazards and improving road safety for drivers, bicyclists, and
42 pedestrians, including maintaining safe routes to schools; and
43 • Improving conditions of local roads by better addressing $141 million in repairs backlog and
44 preventing road ratings from further decreasing per the standard Pavement Condition Index;
45 and
46
47 WHEREAS, staff has been engaged in a Fiscal and Organizational Sustainability ("FOS") effort
48 consisting of significant research and analysis into all facets of the City's General Fund finances as
49 well as a series of informational workshops to present the data and findings on each topic to the
50 City Council and the public to identify options and solutions to ensure that City services, programs
51 and infrastructure are provided and maintained in a sustainable way, with the FOS process
Ordinance No. 2743 N.C.S. Page 2
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analyzing what the City should be investing in order to be sustainable in the long run, and then
identifying the amount of revenue necessary to achieve those goals; and
WHEREAS, per the forecast presented during the Fiscal Year 2020/21 budget process, the City
has an average structural General Fund deficit over the lifetime of the 5 -Year General Fund Forecast
of approximately $6.4 million annually, with an initial projected annual deficit of $5.1 million in Fiscal
Year 2021/2022, increasing to a projected annual deficit of $7.7 million in Fiscal Year 2025/2026,
which means that in order to continue to fund the existing core services, programs and staffing
levels currently funded by the General Fund, given reasonable growth assumptions on revenues and
expenditures, the City would need approximately an additional $6.4 million annually, assuming no
new programs or staff positions are added, or, stated differently, if the City takes no other action to
ameliorate its financial situation, the City will need to cut approximately $6.4 million permanently
from its annual budget to stay balanced; and
WHEREAS, the City of Petaluma maintains a vast array of infrastructure for the benefit of its
constituents, including streets, sidewalks, storm drains, bridges, parks, pathways, islands & medians,
buildings and facilities, but in efforts to balance the annual budget, the City has invested very -little -
to -zero General Fund dollars to maintain this infrastructure over time, which has resulted in hundreds
of millions of dollars in deferred maintenance for these facilities, including:
Petaluma's having the worst roads in the entire nine -county Bay Area; to bring the road
condition up to a pavement condition index of "Good / 70" would require an investment of
more than $100 million;
The City's three antiquated fire stations require nearly $10 million in improvements to seismic,
accessibility and functional adequacy for these important public safety facilities to remain
viable; and
WHEREAS, the Petaluma community has indicated that maintaining public health, wildfire,
and natural disaster emergency preparedness; ensuring firefighters have the equipment they need;
maintaining 911 emergency response times, fire protection services, and well-trained community-
based police officers; supporting local businesses through recovery; repairing roads and fixing
potholes; and keeping public spaces safe and clean are top community priorities; and
WHEREAS, although Petaluma has been spared from recent wild fires, the City needs to
continue to ensure the Petaluma Fire Department has the equipment and adequate staffing it needs
to protect Petaluma effectively in any emergency; and
WHEREAS, Petaluma's 396 miles of roadways are in dire need of maintenance and are rated
the worst in the Bay Area, and the City's roads will only get more expensive to fix the longer they go
without repair, and Petaluma residents deserve safe streets, including for first responders who need to
reach people quickly that need help; and
WHEREAS, as the financial fallout from the COVID-19 pandemic continues, the City needs to
maintain homeless prevention programs that keep our community safe, stable, and secure; and
WHEREAS, calls for emergency response to the Fire Department continue to increase to
record levels, have gone up 95% in the past decade, and as calls for services continue to rise,
emergency response times have also increased; and
WHEREAS, the City must ensure Petaluma is fiscally stable and prepared for any future
wildfire, natural disaster or public health and safety emergency; the City cannot depend on
adequate state or federal funding to address local emergency preparedness and recovery needs;
Ordinance No. 2743 N.C.S.
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and as a result, the City must effectively address its own unique local needs and ensure local control
with funding that cannot be taken by the State; and
WHEREAS, ideally, the City would be able to invest upwards of $10 million annually to
maintain all of its infrastructure categories and take care of the significant backlog of deferred
maintenance; however, as a reasonable middle ground, staff is suggesting an annual investment
target of approximately $4.6 million to significantly reduce existing maintenance needs; and
WHEREAS, the City Manager's Office and City departments have identified a number of
areas that do not appear sustainable without additional staff to continue maintaining community
needs and priorities that City residents expect and deserve; and, although staff identified
approximately 29 new staff positions that would be required to bolster and augment the City's
General Fund operations to ensure they are sustainable, the City Manager recommends 19 new
positions for the General Fund at a cost of approximately $2.2 million annually that would not
provide significant new services to the community but would help to provide resiliency, reliability,
and proactivity to existing services to ensure that they are sustainable; and
WHEREAS, the City's FOS process has identified that the City needs more than $15 million in
additional annual revenue to provide sustainable, high-quality services and ensure that City
infrastructure is reliably maintained, and, accordingly, staff recommends placing a one -cent
general purpose sales tax on the November 3, 2020 ballot, which is estimated to generate
approximately $13.5 million annually to be spent in alignment with the FOS recommendations and
community -identified spending priorities; and
WHEREAS, the measure that has been prepared for placement before Petaluma voters at
the November 3, 2020 general election includes strict transparency and accountability
requirements, including: independent citizen oversight, biannual independent financial audits, all
funds spent locally, and no funding that can be taken by the State; and
WHEREAS, Section 7285.9 of the California Revenue and Taxation Code provides that the
governing body of any city may levy, increase or extend a transactions and use tax for general
purposes at a rate of 0.125 percent or a multiple thereof, if the ordinance proposing that fax is
approved by a two-thirds vote of all members of that governing body and the fax is approved by a
majority vote of the qualified voters of the city voting in an election on the issue, if the transactions
and use tax conforms to the Transactions and Use Tax Law in Part 1.6 (commencing with Section
7251) of the California Revenue and Taxation Code; and
WHEREAS, Section 7251.1 of the California Revenue and Taxation Code provides that the
combined rate of all transactions and use taxes in any county may not exceed 2 percent; and
WHEREAS, current sales fax rates in Sonoma County are as follows:
Cloverdale
8.25%
Cotati
9.25%
Healdsburg
8.75%
Petaluma
8.25%
Rohnert Park
8.75%
Santa Rosa
9.00%
Sebastopol
9.00%
Sonoma
8.75%
Sonoma County
8.25%
Windsor
8.25%; and
Ordinance No. 2743 N.C.S.
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WHEREAS, in accordance with California Revenue and Taxation Code section 7251.1, the
Petaluma voters may adopt a local transactions and use tax of up to 1.0% to be applicable in the
City; and
WHEREAS, imposition of a one cent transactions and use tax in Petaluma would generate
approximately $13.5 million annually; and
WHEREAS, in accordance with Article 13C, Section 2,of the California Constitution, any fax
imposed for general governmental purposes the proceeds of which are placed in the general fund
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 fax receipts (see, e.g.,
Weisblat v. City of San Diego (2009) 176 CA4th 1022); and
WHEREAS, Subdivision (b) of Section 2 of Article XIIIC of the California Constitution requires
that elections to approve a general tax must be consolidated with a regularly -scheduled general
election for members of the governing body of the local Government; and
WHEREAS, November 3, 2020 is the date of the City's next regular municipal election for
members of the City Council; and
WHEREAS, Section 4 of Article III of the Petaluma City Charter provides that except as
otherwise specified in the charter, all regular and special City elections are to be held in
accordance with the California Elections Code, as amended; and
WHEREAS, Section 76 of Article XII of the Petaluma City Charter provides that ordinances
may be enacted by and for the city pursuant to Division 4 of Chapter 3 of Article 1 of the California
Elections Code, as amended; and,
WHEREAS, Sections 9200 - 9226 of the California Elections Code set forth the procedures and
requirements for the submission of municipal measures to the voters and placement of measures on
the ballot, Sections 10400 - 10418 of the California Elections Code set forth the procedures and
requirements for consolidation of municipal and statewide elections, and Sections 9280 - 9287 of the
California Elections Code set forth the procedures and requirements for submission of ballot
arguments, rebuttal arguments and preparation of impartial analysis for municipal measures; and,
WHEREAS, in accordance with Section 76A of Article XII of the Petaluma City Charter and
California Revenue and Taxations Code section 7285.9, if the transactions and use tax measure to
be submitted to Petaluma voters pursuant to this ordinance is approved by a unanimous vote of the
City Council Members present and by a majority vote of qualified City voters, the measure would
impose a one -cent general tax based on the retail sales price of personal property sales and use;
and
WHEREAS, Section 45 of Article VII of the Petaluma City Charter provides that ordinances of
the City Council must be advertised once at least two days before adoption in at least one edition
of the official newspaper of the city; except that on unanimous vote of the council members
present at the meeting when the ordinance is introduced, the advertisement may be done by
posting a copy of the original ordinance on the bulletin board at City Hall, and this ordinance was
posted as required by City Charter; and,
WHEREAS, Section 76A of Article XII of the Petaluma City Charter provides that no ordinance
shall become effective until thirty days after the date of its final passage, except for ordinances
calling or otherwise relating to an election and ordinances for the immediate preservation of the
public peace, health or safety which contain a declaration of and the facts constituting their
Ordinance No. 2743 N.C.S.
Page 5
1 urgency and that are passed by a unanimous vote of the members present at the time of adoption;
2 and,
3
4 WHEREAS, California Government Code Section 36934 provides that urgency ordinances
5 may be passed immediately upon introduction at either a regular or special meeting, and
6
7 WHEREAS, California Government Code Section 36937 provides that certain ordinances take
8 immediate effect, including:
9
10 • ordinances relating to an election,
11 • ordinances for the immediate preservation of the public peace, health or safety,
12 containing a declaration of the facts constituting the urgency, and passed by a four -
13 fifths vote of the city council, and
14 • ordinances relating to taxes for the usual and current expenses of a city; and,
15
16 WHEREAS, in accordance with Section 76A of Article XII of the Petaluma City Charter and
17 California Government Code section 36937, this ordinance will take immediate effect as an
18 ordinance relating to an election, in that it orders submission of a general transactions and use tax
19 to the qualified electors of the City at the general municipal election to be held Tuesday, November
20 3, 2020, requests consolidation of the municipal election with the statewide general election to be
21 held November 3, 2020, and provides for submission of ballot arguments and rebuttals; and
22
23 WHEREAS, in accordance with Section 76A of Article XII of the Petaluma City Charter and
24 California Government Code section 36937, this ordinance will take immediate effect as an
25 ordinance relating to taxes for the usual and current expenses of a city, in that the subject of the
26 ordinance is a one -cent, general transactions and use tax applicable in the City to provide funding
27 that may be spent for general governmental purposes including purposes in alignment with the FOS
28 recommendations and community -identified spending priorities; and
29
30 WHEREAS, in accordance with Section 76A of Article XII of the Petaluma City Charter and
31 California Government Code section 36937, this ordinance will take immediate effect as an urgency
32 ordinance for the immediate preservation of the public peace, health or safety, and the facts
33 constituting its urgency include:
34
35 Although the City of Petaluma maintains a vast array of infrastructure for the benefit of its
36 constituents, including streets, sidewalks, storm drains, bridges, parks, pathways, islands &
37 medians, buildings and facilities, in efforts to balance the annual budget, the City has
38 invested very -little -to -zero General Fund dollars to maintain City infrastructure over time,
39 which has resulted in hundreds of millions of dollars in deferred maintenance for City facilities,
40 including Petaluma's roads being rated as the worst in the entire nine -county Bay Area - to
41 bring the road condition up to a pavement condition index of "Good / 70" would require an
42 investment of more than $100 million; and the City's three antiquated fire stations requiring
43 nearly $10 million in improvements to seismic, accessibility and functional adequacy for
44 these important public safety facilities to remain viable;
45 Per the forecast presented during the Fiscal Year 2020/21 budget process, the City has an
46 average structural General Fund deficit over the lifetime of the 5 -Year General Fund
47 Forecast of approximately $6.4 million annually, (approximately 12% of the average
48 projected annual General Fund revenues over the same period), with an initial projected
49 annual deficit of $5.1 million in Fiscal Year 2021/2022, increasing to a projected annual deficit
50 of $7.7 million in Fiscal Year 2025/2026, which means that if the City takes no other action to
Ordinance No. 2743 N.C.S. Page 6
I ameliorate its financial situation, the City will need to cut approximately $6.4 million
2 permanently from its annual budget to stay balanced, beginning in Fiscal Year 2021/2022;
3 ® If the City is unable to generate the needed revenue to correct its structural deficit it likely
4 will be necessary to cut more than $6.4 million permanently from its annual budget in view of
5 projected annual revenue losses of approximately $1.3 million due to COVID-19;
6 ® If the City is unable to correct its structural deficit prior to the 2021/2022 Fiscal Year, the City
7 will be required to make significant cuts to essential City services, such as the same
8 emergency preparedness and response services, homeless prevention programs, and street
9 maintenance services that the community has identified as priorities, and which are vital to
10 the preservation of the public peace, health and safety of the City and its residents;
11 The proposed measure, which could correct the City's structural deficit, must be approved
12 by the City Council and submitted to City voters by August 7, 2020 to be placed on the
13 November 3, 2020 ballot, the last regularly -scheduled general election for members of the
14 City Council before the commencement of the 2021/2022 Fiscal Year, and the August 3,
15 2020 City Council meeting is the last regular City Council meeting prior to August 7, 2020;
16 and
17
18 WHEREAS, this ordinance and the transactions and use fax measure to be submitted to the
19 voters pursuant to this ordinance are not a project subject to the requirements of the California
20 Environmental Quality Act ("CEQA") or its Guidelines in accordance with paragraph (2) of
21 subdivision (c) of Section 15060 of the CEQA Guidelines, because placement of the measure and
22 the measure itself will not result in a direct or reasonably foreseeable indirect physical change in the
23 environment, and in accordance with paragraph (4) of subdivision (b) of Section 15378 of the CEQA
24 Guidelines, because the ordinance and the measure to be submitted to the voters involve the
25 creation of government funding mechanisms and other government fiscal activities that do not
26 involve any commitment to any specific project that may result in a potentially significant physical
27 impact on the environment;
28
29 NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA AS FOLLOWS:
30
31 Section 1. The above recitals are hereby declared to be true and correct and
32 incorporated into this ordinance as findings adopted by the City Council.
33
34 Section 2. This ordinance and the transactions and use tax measure to be submitted to
35 the voters pursuant to this ordinance are not a project subject to the requirements of CEQA or its
36 Guidelines in accordance with paragraph (2) of subdivision (c) of Section 15060 of the CEQA
37 Guidelines, because placement of the measure and the measure itself will not result in a direct or
38 reasonably foreseeable indirect physical change in the environment, and in accordance with
39 paragraph (4) of subdivision (b) of Section 15378 of the CEQA Guidelines, because the ordinance
40 and the measure to be submitted to the voters involve the creation of government funding
41 mechanisms and other government fiscal activities that do not involve any commitment to any
42 specific project that may result in a potentially significant physical impact on the environment.
43
44 Section 3. Pursuant to the requirements of the City of Petaluma Charter, California
45 Revenue and Taxation Code Section 7285.9, California Elections Code Section 9222 and other
46 applicable law, there is called and ordered to be held in the City of Petaluma, California, on
47 Tuesday, November 3, 2020 an election for the purpose of submitting to the voters a measure that
48 would impose a one -cent, general transactions and use tax.
49
50
Ordinance No. 2743 N.C.S. Page 7
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Section 4. The ballot language for the proposed ordinance shall be as follows:
MEASURE _
City of Petaluma Local Recovery, Emergency Preparedness,
and Essential Services Measure. To maintain emergency
health/wildfire/natural disaster preparedness; rapid 911
emergency response; fire protection services/firefighting
YES
NO
equipment; well-trained community police officers;
streets/pothole repair; clean/safe public areas; support for
local businesses/jobs; and other city services; shall the City
of Petaluma adopt a measure establishing a 10 sales tax,
providing approximately $13,500,000 annually until ended
by voters, requiring audits, citizen oversight, and all funds
spent locally?
Section 5. The measure to be approved by the voters pursuant to Section 4 of this
ordinance is as set forth in Exhibit A attached hereto and made a part hereof.
Section 6. The City Council hereby approves the ordinance set forth in Exhibit A and this
ordinance ordering submission of the measure to City voters in accordance with California Revenue
and Taxation Code Section 7285.9.
Section 7.
(a) An election on the measure set forth in Exhibit A shall be held in conjunction
with the municipal election to be held in the City of Petaluma on Tuesday, November 3, 2020. In
accordance with the Petaluma City Charter and California Elections Code Section 10403, the City
Council requests that the Board of Supervisors of Sonoma County consolidate the election on the
measure with the statewide general election on the same day and issue instructions to the Sonoma
County Election Department to take any and all steps necessary for the holding of the consolidated
election.
(b) The City Council acknowledges that the consolidated election will be held
and conducted in the manner prescribed in California Elections Code Section 10418.
(c) The election on the measure set forth in Exhibit A shall be held and
conducted, the votes canvassed and the returns made, and the results ascertained and
determined as provided for herein and the California Elections Code.
(d) The election for the measure set forth in Exhibit A shall be held in Sonoma
County in the City of Petaluma on November 3, 2020, as required by law, and the Sonoma County
Election Department is authorized to canvas the returns of that election with respect to the votes
cast in the City of Petaluma.
(e) In accordance with and subject to the Petaluma City Charter, at the next
regular meeting of the City Council of the City of Petaluma occurring after the returns of the
election for the measure set forth in Exhibit A have been canvassed and the certification of the
results to the City Council, the City Council shall cause to be entered in its minutes a statement of
the results of the election.
Ordinance No. 2743 N.C.S.
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Section 8.
(a) In accordance with California Elections Code Sections 9282 and 9283,
arguments submitted for or against the measure shall not exceed 300 words in length, and shall be
printed upon the same sheet of paper and mailed to each voter with the sample ballot for the
election and be signed by not more than five persons.
(b) In accordance with California Elections Code Section 9282, the following
headings, as appropriate, shall precede the arguments' wording, but shall not be counted in the
300 word maximum: "Argument In Favor of Measure " or, "Argument Against Measure
" (the blank spaces being filled only with the letter or number, if any, designating the
measure).
(c) In accordance with California Elections Code Section 9283, printed
arguments submitted to voters in accordance with Section 9282 of the Elections Code shall be filed
with the City Clerk, accompanied by the printed name(s) and signature(s) of the authors)
submitting it, or if submitted on behalf of an organization, the name of the organization and the
printed name and signature of at least of one its principal officers who is the author of the
argument. Arguments are due in the office of the City Clerk prior to 5:00 p.m. on Monday, August
17, 2020.
Section 9.
(a) Pursuant to California Elections Code Section 9285, when the City Clerk has
selected arguments for and against the measure that will be printed and distributed to the voters,
the City Clerk shall send copies of the argument in favor of the measure to the authors of the
argument against, and copies of the argument against to the authors of the argument in favor.
Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal
argument shall immediately follow the direct argument that it seeks to rebut.
(b) Rebuttal arguments shall not exceed two hundred fifty words and be signed
by not more than five persons The author or a majority of authors of an argument relating to a City
measure may prepare and submit a rebuttal argument or may authorize in writing any other person
or persons to prepare, submit, or sign the rebuttal argument.
(c) The last day for submission of rebuttal arguments for or against the measure
shall be by 5:00 p.m. on Thursday, August 27, 2020.
(d) All previous resolutions or ordinances providing for the filing of rebuttal
arguments for City of Petaluma measures are repealed. The provisions of this ordinance concerning
rebuttal arguments shall only apply to the election to be held on November 3, 2020, and following
the conclusion of that election are repealed.
Section 10. In accordance with California Elections Code Section 9280, the City Attorney
is directed to file with the City Clerk by Monday, August 17, 2020, an impartial analysis of the
measure, not to exceed five hundred words, showing the effect of the measure.
Section 11. The City of Petaluma recognizes that additional costs may be incurred by the
County by reason of the measure and agrees to reimburse the County for such costs. The City
Manager is hereby authorized and directed to appropriate the necessary funds to pay for the City's
cost of placing the measure on the election ballot.
Ordinance No. 2743 N.C.S.
Page 9
I Section 12.
2
3 (a) The City Clerk is directed to file a certified copy of this ordinance with the
4 Board of Supervisors of Sonoma County and the Sonoma County Elections Department on or before
5 Friday, August 7, 2020. The City Clerk is hereby authorized and directed to take all steps necessary
6 to place the measure on the ballot and to give legal notice of the measure attached as Exhibit A to
7 be published once in a newspaper of general circulation, or any other newspaper designated as
8 the official newspaper of the City of Petaluma, in accordance with California Elections Code
9 Section 121 1 1 and California Government Code Section 6061. A copy of the measure shall be
10 made available to any voter upon request. The City Clerk is authorized and directed to give further
11 additional notice of the measure in time, form and manner as required by law.
12
13 (b) In all particulars not recited in this ordinance, the election shall be held and
14 conducted as provided by law for holding municipal elections.
15
16
17 ADOPTED this 3rd day of August 2020 by the following vote:
18
19 Ayes: Mayor Barrett, Vice Mayor Fischer, Healy, Kearney, King, McDonnell, Miller
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
Noes:
None
Abstain:
None
Absent:
None
ATTEST:
Claire Cooper, CMC, City Clerk
Teresa Barrett, Mayor
APPROVED AS TO FORM:
Q�
Eric Danly, City Attorney
Ordinance No. 2743 N.C.S. Page 10
1 EXHIBIT A
2
3
4 ORDINANCE NO.
5
6 AN ORDINANCE OF THE CITY OF PETALUMA
7 ADDING A NEW CHAPTER 4.18 ENTITLED "TRANSACTIONS AND USE TAX" TO THE
8 PETALUMA MUNICIPAL CODE TO IMPOSE A ONE -CENT, GENERAL
9 TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE CALIFORNIA
10 DEPARTMENT OF TAX AND FEE ADMINISTRATION
11
12 FINDINGS
13
14 WHEREAS, the City of Petaluma has had General Fund budgetary challenges for many
15 years, at least since the Great Recession approximately a decade ago, and the City's response to the
16 Great Recession was a multi -faceted approach that attempted to retain the most critical services
17 while balancing expenditures with available revenues, utilizing. strategies including the following:
18
19 • Reductions to, elimination of and contracting -out of various General Fund services;
20 • Reduction of 26% of General Fund staff positions;
21 • Negotiation of various concessions with our employee bargaining units; including furloughs,
22 pension cost-sharing, and no cost -of -living -adjustments for up to 7 consecutive years; and
23 • Spending down of nearly all the City's General Fund reserves; and
24
25 WHEREAS, after the Great Recession, from approximately 2013 to 2018, the City
26 continued to make the necessary decisions to balance its General Fund each year during a period that
27 saw few staff compensation increases, and although some key positions were added back to the
28 General Fund over time; and the City accomplished a slow build-up of reserves, the General Fund
29 budget was balanced during this time by little -to -no investment in technology, roads, facilities and
30 other key infrastructure components; and
31
32 WHEREAS, the City has not had the benefit of a dedicated, locally -approved revenue
33 measure to bolster City services and improve infrastructure maintenance and investment; and
34
35 WHEREAS, since the beginning of the COVID-19 pandemic, the City has been working to
36 provide essential City services to residents and businesses and provide additional COVID support
37 where possible, such as the implementation of a rental assistance program, small business loan
38 program, and assistance with permitting outdoor dining and other business modifications to support
39 the economy; nonetheless, due to the sheltering orders and corresponding business shutdowns, the
40 City is anticipating a revenue loss of $2.7 million in Fiscal Year 2019/2020 and an additional $2.0
41 million loss in Fiscal Year 2020/2021, with future fiscal years expected to see estimated revenues
42 down approximately $1.3 million annually on an ongoing basis; and
43
44 WHEREAS, since 2019, the City has been engaged in a two-pronged effort to: (1) gather as
45 much community feedback as possible about City services and priorities, including online and paper
46 surveys, in-person workshops, emails and phone calls, and statistically -valid professionally -
47 conducted public opinion research; and (2) to conduct comprehensive analysis and educate the
Ordinance No. 2743 N.C.S. Page 1 1
I community on the City's long-term fiscal challenges and the level of revenue / investment required
2 by the City's General Fund to maintain quality -of -life services and infrastructure; and
3
4 WHEREAS, the City Council and City staff have employed a multi -faceted community
5 outreach effort to engage the Petaluma community to gather their feedback about City services,
6 projects, goals and priorities, which efforts have taken many forms over the past eighteen months
7 and have included input from thousands of Petaluma residents, businesses and other stakeholders,
8 including:
9
10 ® Over 300 participants at City workshops (e.g. Goals and Priorities Workshop, Parks Measure
11 M Workshop, Housing Priorities Workshop, etc.);
12 ® 2,131 respondents to online surveys;
13 ® Over 1,000 respondents to paper mail -in surveys;
14 ® 3,617 unique visitors to the City's www.cityofpetaluma.org/jointheconvo web page;
15 ® 800 participants in statistically -valid, professionally conducted public opinion research; and
16
17 WHEREAS, the extensive community feedback the City has received makes clear that the
18 community's interests and spending priorities for enhanced locally -controlled funding include:
19
20 ® Maintaining and preventing cuts to firefighting equipment/fire engines and adequate 24-hour
21 staffing;
22 • Ensuring public health, wildfire, natural disaster emergency preparedness and maintaining
23 911 emergency response times to ensure first responders can respond quickly to calls for
24 services;
25 • Continuing homeless prevention programs and community partnerships while ensuring our
26 local businesses, public areas, and neighborhoods are safe, stable, and secure for everyone;
27 • Maintaining properly trained community based public safety officers, community outreach
28 programs, and ensuring adequate 24-hour staffing;
29 • Keeping public areas safe and clean; supporting local business and job retention through
30 recovery;
31 • Enhancing street maintenance, repaving, and pothole repair on Petaluma's 396 miles of
32 streets;
33 ® Addressing existing road hazards and improving road safety for drivers, bicyclists, and
34 pedestrians, including maintaining safe routes to schools; and
35 ® Improving conditions of local roads by better addressing $141 million in repairs backlog and
36 preventing road ratings from further decreasing per the standard Pavement Condition Index;
37 and
38
39 WHEREAS, staff has been engaged in a Fiscal and Organizational Sustainability ("FOS")
40 effort consisting of significant research and analysis into all facets of the City's General Fund
41 finances as well as a series of informational workshops to present the data and findings on each topic
42 to the City Council and the public to identify options and solutions to ensure that City services,
43 programs and infrastructure are provided and maintained in a sustainable way, with the FOS process
Ordinance No. 2743 N.C.S. Page 12
1 analyzing what the City should be investing in order to be sustainable in the long run, and then
2 identifying the amount of revenue necessary to achieve those goals; and
3
4 WHEREAS, per the forecast presented during the Fiscal Year 2020/21 budget process, the
5 City has an average structural General Fund deficit over the lifetime of the 5-Year General Fund
6 Forecast of approximately $6.4 million annually, with an initial projected annual deficit of $5.1
7 million in Fiscal Year 2021/2022, increasing to a projected annual deficit of $7.7 million in Fiscal
8 Year 2025/2026, which means that in order to continue to fund the existing core services, programs
9 and staffing levels currently funded by the General Fund, given reasonable growth assumptions on
10 revenues and expenditures, the City would need approximately an additional $6.4 million annually,
11 assuming no new programs or staff positions are added, or, stated differently, if the City takes no
12 other action to ameliorate its financial situation, the City will need to cut approximately $6.4 million
13 permanently from its annual budget to stay balanced; and
14
15 WHEREAS, the City of Petaluma maintains a vast array of infrastructure for the benefit of
16 its constituents, including streets, sidewalks, storm drains, bridges, parks, pathways, islands &
17 medians, buildings and facilities, but in efforts to balance the annual budget, the City has invested
18 very-little-to-zero General Fund dollars to maintain this infrastructure over time, which has resulted
19 in hundreds of millions of dollars in deferred maintenance for these facilities, including:
20
21 • Petaluma's having the worst roads in the entire nine-county Bay Area; to bring the road
22 condition up to a pavement condition index of "Good / 70" would require an investment of
23 more than $100 million;
24 • The City's three antiquated fire stations require nearly $10 million in improvements to
25 seismic, accessibility and functional adequacy for these important public safety facilities to
26 remain viable; and
27
28 WHEREAS, the Petaluma community has indicated that maintaining public health, wildfire,
29 and natural disaster emergency preparedness; ensuring firefighters have the equipment they need;
30 maintaining 911 emergency response times, fire protection services, and well-trained community-
31 based police officers; supporting local businesses through recovery; repairing roads and fixing
32 potholes; and keeping public spaces safe and clean are top community priorities; and
33
34 WHEREAS, although Petaluma has been spared from recent wild fires, the City needs to
35 continue to ensure the Petaluma Fire Department has the equipment and adequate staffing it needs to
36 protect Petaluma effectively in any emergency; and
37
38 WHEREAS, Petaluma's 396 miles of roadways are in dire need of maintenance and are rated
39 the worst in the Bay Area, and the City's roads will only get more expensive to fix the longer they go
40 without repair, and Petaluma residents deserve safe streets, including for first responders who need to
41 reach people quickly that need help; and
42
43 WHEREAS, as the financial fallout from the COVID-19 pandemic continues, the City needs
44 to maintain homeless prevention programs that keep our community safe, stable, and secure; and
45
Ordinance No. 2743 N.C.S. Page 13
1 WHEREAS, calls for emergency response to the Fire Department continue to increase to
2 record levels, have gone up 95% in the past decade, and as calls for services continue to rise,
3 emergency response times have also increased; and
4
5 WHEREAS, the City must ensure Petaluma is fiscally stable and prepared for any future
6 wildfire, natural disaster or public health and safety emergency; the City cannot depend on adequate
7 state or federal funding to address local emergency preparedness and recovery needs; and as a result,
8 the City must effectively address its own unique local needs and ensure local control with funding
9 that cannot be taken by the State; and
10
11 WHEREAS, ideally, the City would be able to invest upwards of $10 million annually to
12 maintain all of its infrastructure categories and take care of the significant backlog of deferred
13 maintenance; however, as a reasonable middle ground, staff is suggesting an annual investment
14 target of approximately $4.6 million to significantly reduce existing maintenance needs; and
15
16 WHEREAS, the City Manager's Office and City departments have identified a number of
17 areas that do not appear sustainable without additional staff to continue maintaining community
18 needs and priorities that City residents expect and deserve; and, although staff identified
19 approximately 29 new staff positions that would be required to bolster and augment the City's
20 General Fund operations to ensure they are sustainable, the City Manager recommends 19 new
21 positions for the General Fund at a cost of approximately $2.2 million annually that would not
22 provide significant new services to the community but would help to provide resiliency, reliability,
23 and proactivity to existing services to ensure that they are sustainable; and
24
25 WHEREAS, the City's FOS process has identified that the City needs more than $15 million
26 in additional annual revenue to provide sustainable, high-quality services and ensure that City
27 infrastructure is reliably maintained, and, accordingly, staff recommends placing a one -cent general
28 purpose sales tax on the November 3, 2020 ballot, which is estimated to generate approximately
29 $13.5 million annually to be spent in alignment with the FOS recommendations and community -
30 identified spending priorities; and
31
32 WHEREAS, the measure that has been prepared for placement before Petaluma voters at the
33 November 3, 2020 general election includes strict transparency and accountability requirements,
34 including: independent citizen oversight, biannual independent financial audits, all funds spent
35 locally, and no funding that can be taken by the State; and
36
37 WHEREAS, Section 7285.9 of the California Revenue and Taxation Code provides that the
38 governing body of any city may levy, increase or extend a transactions and use tax for general
39 purposes at a rate of 0.125 percent or a multiple thereof, if the ordinance proposing that tax is
40 approved by a two-thirds vote of all members of that governing body and the tax is approved by a
41 majority vote of the qualified voters of the city voting in an election on the issue, if the transactions
42 and use tax conforrns to the Transactions and Use ,Tax Law in Part 1.6 (commencing with Section
43 725 1) of the California Revenue and Taxation Code; and
44
45 WHEREAS, Section 7251.1 of the California Revenue and Taxation Code provides that the
46 combined rate of all transactions and use taxes in any county may not exceed 2 percent; and
47
48 WHEREAS, current sales tax rates in Sonoma County are as follows:
Ordinance No. 2743 N.C.S. Page 14
2 Cloverdale 8.25%
3 Cotati 9.25%
4 Healdsburg 8.75%
5 Petaluma 8.25%
6 Rohnert Park 8.75%
7 Santa Rosa 9.00%
8 Sebastopol 9.00%
9 Sonoma 8.75%
10 Sonoma County 8.25%
11 Windsor 8.25%; and
12
13 WHEREAS, in accordance with California Revenue and Taxation Code section 7251.1, the
14 Petaluma voters may adopt a local transactions and use tax of up to 1.0% to be applicable in the
15 City; and
16
17 WHEREAS, imposition of a one-cent transactions and use tax in Petaluma would generate
18 approximately $13.5 million annually; and
19
20 WHEREAS, in accordance with Article 13C, Section 2,of the California Constitution, any
21 tax imposed for general governmental purposes the proceeds of which are placed in the general fund
22 and available for expenditure for any and all governmental purposes is a general tax, including
23 where such proceeds are monitored and tracked separately from other tax receipts (see, e.g., Weisblat
24 v. City of San Diego (2009) 176 CA4th 1022); and
25
26 WHEREAS, Subdivision (b) of Section 2 of Article XIIIC of the California Constitution
27 requires that elections to approve a general tax must be consolidated with a regularly-scheduled
28 general election for members of the governing body of the local Government; and
29
30 WHEREAS, November 3, 2020 is the date of the City's next regular municipal election for
31 members of the City Council; and
32
33 WHEREAS, Section 4 of Article III of the Petaluma City Charter provides that except as
34 otherwise specified in the charter, all regular and special City elections are to be held in accordance
35 with the California Elections Code, as amended; and
36
37 WHEREAS, Section 76 of Article XII of the Petaluma City Charter provides that
38 ordinances may be enacted by and for the city pursuant to Division 4 of Chapter 3 of Article 1 of the
39 California Elections Code, as amended; and,
40
41 WHEREAS, in accordance with Section 76A of Article XII of the Petaluma City Charter
42 and California Revenue and Taxations Code section 7285.9, if the transactions and use tax measure
43 to be submitted to Petaluma voters pursuant to this ordinance is approved by a unanimous vote of the
44 City Council Members present and by a majority vote of qualified City voters, the measure would
45 impose a one-cent general tax based on the retail sales price of personal property sales and use; and
46
47 WHEREAS, this ordinance is not a project subject to the requirements of the California
48 Environmental Quality Act ("CEQA") or its Guidelines in accordance with paragraph (2) of
Ordinance No. 2743 N.C.S. Page 15
1 subdivision (c) of Section 15060 of the CEQA Guidelines, because this ordinance will not result in a
2 direct or reasonably foreseeable indirect physical change in the environment, and in accordance with
3 paragraph (4) of subdivision (b) of Section 15378 of the CEQA Guidelines, because this ordinance
4 involves the creation of government funding mechanisms and other government fiscal activities that
5 do not involve any commitment to any specific project that may result in a potentially significant
6 physical impact on the environment;
7
8 NOW, THEREFORE, THE PEOPLE OF THE CITY OF PETALUMA DO ORDAIN
9 AS FOLLOWS:
10
11 Section 1. Chapter 4.18 entitled "Transactions and Use Tax" is hereby added to Title 4 of
12 the Petaluma Municipal Code, to read as follows:
13
14 4.18.010 TITLE. This chapter is entitled "Transactions and Use Tax" and shall be
15 applicable in the incorporated territory of the city.
16
17 4.18.020 OPERATIVE DATE. "Operative Date" means the first day of the first
18 calendar quarter commencing more than 110 days after the adoption of this chapter, the date of such
19 adoption being as set forth below.
20
21 4.18.030 PURPOSE. This chapter is adopted to achieve the following, among other
22 purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:
23
24 A. To impose a retail transactions and use tax in accordance with the provisions of Part
25 1.6 (commencing with Section 725 1) of Division 2 of the Revenue and Taxation Code and Section
26 7285.9 of Part 1.7 of Division 2 which authorizes the city to adopt this chapter which shall be
27 operative if a majority of the electors voting on the measure vote to approve the imposition of the tax
28 at an election called for that purpose.
29
30 B. To adopt a retail transactions and use tax ordinance that incorporates provisions
31 identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions
32 are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the
33 Revenue and Taxation Code.
34
35 C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a
36 measure therefore that can be administered and collected by the California Department of Tax and
37 Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least
38 possible deviation from, the existing statutory and administrative procedures followed by the
39 California Department of Tax and Fee Administration in administering and collecting the California
40 State Sales and Use Taxes.
41
42 D. To adopt a retail transactions and use tax ordinance that can be administered in a
43 manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of
44 Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and
45 use taxes, and at the same time, minimize the burden of record keeping upon persons subject to
46 taxation under the provisions of this chapter.
47
Ordinance No. 2743 N.C.S. Page 16
1 4.18.040 CONTRACT WITH STATE. Prior to the operative date, the city shall
2 contract with the California Department of Tax and Fee Administration to perform all functions
3 incident to the administration and operation of this chapter; provided, that if the city shall not have
4 contracted with the California Department of Tax and Fee Administration prior to the operative date,
5 it shall nevertheless so contract and in such a case the operative date shall be the first day of the first
6 calendar quarter following the execution of such a contract.
7
8 4.18.050 TRANSACTIONS TAX RATE. For the privilege of selling tangible
9 personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of
10 the city at the rate of 1.0% of the gross receipts of any retailer from the sale of all tangible personal
11 property sold at retail in said territory on and after the operative date of this chapter.
12
13 4.18.060 PLACE OF SALE. For the purposes of this chapter, all retail sales are
14 consummated at the place of business of the retailer unless the tangible personal property sold is
15 delivered by the retailer or his agent to an out-of-state destination or to a common carrier for
16 delivery to an out-of-state destination. The gross receipts from such sales shall include delivery
17 charges, when such charges are subject to the state sales and use tax, regardless of the place to which
18 delivery is made. In the event a retailer has no permanent place of business in the State or has more
19 than one place of business, the place or places at which the retail sales are consummated shall be
20 determined under rules and regulations to be prescribed and adopted by the California Department of
21 Tax and Fee Administration.
22
23 4.18.070 USE TAX RATE. An excise tax is hereby imposed on the storage, use or
24 other consumption in the city of tangible personal property purchased from any retailer on and after
25 the operative date of this chapter for storage, use or other consumption in said territory at the rate of
26 1.0% of the sales price of the property. The sales price shall include delivery charges when such
27 charges are subject to state sales or use tax regardless of the place to which delivery is made.
28
29 4.18.080. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise
30 provided in this chapter and except insofar as they are inconsistent with the provisions of Part 1.6 of
31 Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with
32 Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part
33 of this chapter as though fully set forth herein.
34
35 4.18.090. LIMITATIONS ON ADOPTION OF STATE LAW AND
36 COLLECTION OF USE TAXES. In adopting the provisions of Part 1 of Division 2 of the
37 Revenue and Taxation Code:
38
39 A. Wherever the State of California is named or referred to as the taxing agency, the
40 name of the city shall be substituted therefor. However, the substitution shall not be made when:
41
42 1. The word "State" is used as a part of the title of the State Controller, State
43 Treasurer, State Treasury, or the Constitution of the State of California;
44
45 2. The result of that substitution would require action to be taken by or against the
46 city or any agency, officer, or employee thereof rather than by or against the California Department
47 of Tax and Fee Administration, in performing the functions incident to the administration or
48 operation of this chapter.
Ordinance No. 2743 N.C.S. Page 17
2 3. In those sections, including, but not necessarily limited to sections referring to the
3 exterior boundaries of the State of California, where the result of the substitution would be to:
4
5 a. Provide an exemption from this tax with respect to certain sales, storage,
6 use or other consumption of tangible personal property which would not otherwise be exempt from
7 this tax while such sales, storage, use or other consumption remain subject to tax by the State under
8 the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or;
9
10 b. Impose this tax with respect to certain sales, storage, use or other
11 consumption of tangible personal property which would not be subject to tax by the state under the
12 said provision of that code.
13
14 4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737,
15 6797 or 6828 of the Revenue and Taxation Code.
16
17 B. The word "city" shall be substituted for the word "State" in the phrase "retailer
18 engaged in business in this State" in Section 6203 and in the definition of that phrase in Section
19 6203.
20
21 1. "A retailer engaged in business in the District" shall also include any retailer that,
22 in the preceding calendar year or the current calendar year, has total combined sales of tangible
23 personal property in this state or for delivery in the State by the retailer and all persons related to the
24 retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person
25 is related to another person if both persons are related to each other pursuant to Section 267(b) of
26 Title 26 of the United States Code and the regulations thereunder.
27
28 4.18.100 PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer
29 under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be
30 required by this chapter.
31
32 4.18.110 EXEMPTIONS AND EXCLUSIONS.
33
34 A. There shall be excluded from the measure of the transactions tax and the use tax the
35 amount of any sales tax or use tax imposed by the State of California or by any city, city and county,
36 or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or the amount of
37 any state -administered transactions or use tax.
38
39 B. There are exempted from the computation of the amount of transactions tax the gross
40 receipts from:
41
42 1. Sales of tangible personal property, other than fuel or petroleum products, to
43 operators of aircraft to be used or consumed principally outside the county in which the sale is made
44 and directly and exclusively in the use of such aircraft as common carriers of persons or property
45 under the authority of the laws of this State, the United States, or any foreign government.
46
47 2. Sales of property to be used outside the city which is shipped to a point outside the
48 city, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by
Ordinance No. 2743 N.C.S. Page 18
1 delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of
2 this paragraph, delivery to a point outside the city shall be satisfied:
3
4 a. With respect to vehicles (other than commercial vehicles) subject to
5 registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle
6 Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and
7 undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle
8 Code by registration to an out -of -city address and by a declaration under penalty of perjury, signed
9 by the buyer, stating that such address is, in fact, his or her principal place of residence; and
10
11 b. With respect to commercial vehicles, by registration to a place of business
12 out -of -city and declaration under penalty of perjury, signed by the buyer, that the vehicle will be
13 operated from that address.
14
15 3. The sale of tangible personal property if the seller is obligated to furnish the
16 property for a fixed price pursuant to a contract entered into prior to the operative date of this
17 chapter.
18
19 4. A lease of tangible personal property which is a continuing sale of such property,
20 for any period of time for which the lessor is obligated to lease the property for an amount fixed by
21 the lease prior to the operative date of this chapter.
22
23 5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of
24 tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any
25 period of time for which any party to the contract or lease has the unconditional right to terminate
26 the contract or lease upon notice, whether or not such right is exercised.
27
28 C. There are exempted from the use tax imposed by this chapter, the storage, use or
29 other consumption in the city of tangible personal property:
30
31 1. The gross receipts from the sale of which have been subject to a transactions tax
32 under any state -administered transactions and use tax ordinance.
33
34 2. Other than fuel or petroleum products purchased by operators of aircraft and used
35 or consumed by such operators directly and exclusively in the use of such aircraft as common
36 carriers of persons or property for hire or compensation under a certificate of public convenience and
37 necessity issued pursuant to the laws of this State, the United States, or any foreign government.
38 This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the
39 Revenue and Taxation Code of the State of California.
I
41 3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a
42 contract entered into prior to the operative date of this chapter.
43
44 4. If the possession of, or the exercise of any right or power over, the tangible
45 personal property arises under a lease which is a continuing purchase of such property for any period
46 of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to
47 the operative date of this chapter.
48
Ordinance No. 2743 N.C.S. Page 19
1 5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other
2 consumption, or possession of, or exercise of any right or power over, tangible personal property
3 shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which
4 any party to the contract or lease has the unconditional right to terminate the contract or lease upon
5 notice, whether or not such right is exercised.
6
7 6. Except as provided in subparagraph (7), a retailer engaged in business in the city
8 shall not be required to collect use tax from the purchaser of tangible personal property, unless the
9 retailer ships or delivers the property into the city or participates within the city in making the sale of
10 the property, including, but not limited to, soliciting or receiving the order, either directly or
11 indirectly, at a place of business of the retailer in the city or through any representative, agent,
12 canvasser, solicitor, subsidiary, or person in the city under the authority of the retailer.
13
14 7. "A retailer engaged in business in the city" shall also include any retailer of any of
15 the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section
16 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the
17 Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with
18 Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any
19 purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the city.
20
21 D. Any person subject to use tax under this chapter may credit against that tax any
22 transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for
23 a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect
24 to the sale to the person of the property the storage, use or other consumption of which is subject to
25 the use tax.
26
27 4.18.120 AMENDMENTS. All amendments subsequent to the effective date of this
28 chapter to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and
29 which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation
30 Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code,
31 shall automatically become a part of this chapter, provided however, that no such amendment shall
32 operate so as to affect the rate of tax imposed by this chapter.
33
34 4.18.130 ENJOINING COLLECTION FORBIDDEN. No injunction or writ of
35 mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court
36 against the State or the city, or against any officer of the State or the city, to prevent or enjoin the
37 collection under this chapter, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax
38 or any amount of tax required to be collected.
39
40 4.18.140 USE OF TAX PROCEEDS AND ACCOUNTABILITY MEASURES.
41
42 A. The proceeds of the tax imposed pursuant to this chapter shall be placed in the city's
43 General Fund and available for expenditure for any and all govermnental purposes, including such
44 purposes as: maintaining and preventing cuts to firefighting equipment/fire engines and adequate
45 24-hour staffing; ensuring public health, wildfire, natural disaster emergency preparedness and
46 maintaining 911 emergency response times to ensure first responders can respond quickly to calls for
47 services; continuing homeless prevention programs and community partnerships while ensuring our
48 local businesses, public areas, and neighborhoods are safe, stable, and secure for everyone;
Ordinance No. 2743 N.C.S. Page 20
1 maintaining properly trained community based public safety officers, community outreach programs,
2 and ensuring adequate 24-hour staffing; keeping public areas safe and clean; supporting local
3 business and job retention through recovery; enhancing street maintenance, repaving, and pothole
4 repair on Petaluma's 396 miles of streets; addressing existing road hazards and improving road
5 safety for drivers, bicyclists, and pedestrians, including maintaining safe routes to schools; and
6 improving conditions of local roads by better addressing $141 million in repairs backlog and
7 preventing road ratings from further decreasing per the standard Pavement Condition Index, among
8 other purposes. The proceeds of the tax imposed pursuant to this chapter and expenditures using
9 such proceeds shall be monitored and proceeds tracked separately from other city tax receipts.
10
11 B. The city council shall appoint an independent citizen oversight committee consisting
12 of five members to review and report on the use of proceeds of the tax imposed pursuant to this
13 chapter. The committee members shall be city residents who pay the tax imposed pursuant to this
14 chapter and who are not employees or elected officials of the city or members of any other city body.
15 The city will provide administrative support necessary for the oversight committee to carry out its
16 functions.
17
18 C. The city's finance director will oversee preparation of biannual reports for submission
19 to the oversight committee and publication on the city's website on all tax proceeds collected
20 pursuant to this chapter and use of the proceeds. The citizen oversight committee will meet
21 biannually to review and comment on the reports. The meetings and records of the oversight
22 committee will be open to the public in accordance with Article 1, Section 3, subdivision (b) of the
23 California Constitution, and the requirements of the Ralph M. Brown Act, California Government
24 Code Section 54950 and following, and the California Public Records Act, California Government
25 Code Section 6250 and following, as amended from time to time.
26
27 Section 3. SEVERABILITY. If any provision of this ordinance or the application thereof to
28 any person or circumstance is held invalid, the remainder of the ordinance and the application of
29 such provision to other persons or circumstances shall not be affected thereby.
30
31 Section 4. EFFECTIVE DATE. This ordinance relates to the levying and collecting of city
32 transactions and use taxes and shall take effect immediately.
33
34 Section 5. TERMINATION DATE. The authority to levy the tax imposed by this ordinance
35 shall expire when such authority is suspended or terminated in accordance with applicable law.
36
37
38 PASSED AND ADOPTED by the qualified electors of the City of Petaluma, State of California, on
39 , by the following vote:
40
41 AYES:
42
43 NOES:
44
45 ABSENT:
46
47
Ordinance No. 2743 N.C.S. Page 21
1
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3 Attest:
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Ordinance No. 2743 N.C.S. Page 22