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HomeMy WebLinkAbout7/26/2017 - STAFF REPORTS - 3.C. i01?ALM sp4 iy a '" CITY COUNCIL STAFF REPORT +b.Alt� Cg11FOR %P DATE: JULY 26, 2017 LEGISLATIVE SUBJECT: INTRODUCTION OF AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA IMPOSING A GENERAL TRANSACTIONS AND USE TAX, AND ADOPTION OF A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SUBMITTING A GENERAL TAX MEASURE TO THE ELECTORATE AT THE NOVEMBER 7, 2017 GENERAL MUNICIPAL ELECTION, WITH THE ALTERNATIVE OF INTRODUCTION OF AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA IMPOSING A SPECIAL TRANSACTIONS AND USE TAX, AND ADOPTION OF A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SUBMITTING A SPECIAL TAX MEASURE TO THE ELECTORATE AT THE NOVEMBER 7, 2017 GENERAL MUNICIPAL ELECTION USE FROM: David H. Ready, City Manager BY: Edward Z. Kotkin, City Attorney SUMMARY Pursuant to all applicable authority, including the California Constitution, the California Elections Code, and the City Charter of the City of Palm Springs, the City Council may place either a general or a special tax measure on the ballot for the November 7, 2017, General Municipal Election. Staff has prepared alternative ballot measures, one constituting a general tax ballot measure, and the other constituting a special tax ballot measure for placement on the ballot. Pursuant to State law, if the Council wants to place either measure before the voters, it should adopt the proposed ordinance corresponding to that measure, and approve the resolution corresponding to that measure. Each of the resolutions, if adopted, will submit the Council's preferred ballot measure to voters at the November 7, 2017, regular municipal election. A two-thirds (2/3) vote of the City Council is required to adopt either resolution. A majority vote of the City's qualified voters will be needed to approve the ballot measure and adopt the ordinance if the Council decides to place the general tax on the ballot. A two-thirds (2/3) vote of the City's qualified voters will be needed to approve the ballot measure and adopt the ordinance if the Council decides to place the special tax on the ballot. ITEM NO•. 182188.1 City Council Staff Report July 26, 2017-- Page 2 Transactions and Use Tax RECOMMENDATION: 1) Waive the reading of text in its entirety, read by title only, and introduce for first reading Ordinance No. , "AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA IMPOSING A GENERAL TRANSACTIONS AND USE TAX" (ATTACHMENT A) AND Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SUBMITTING A GENERAL TAX MEASURE TO THE ELECTORATE AT THE NOVEMBER 7, 2017 GENERAL MUNICIPAL ELECTION." (ATTACHMENT B) AND Approve an appropriation of thirty thousand dollars ($30,000) from unappropriated General Fund balance, to be transferred into Fund Acct. 001-1150-43860 (Elections) for expenditure in this matter. OR 2) Waive the reading of text in its entirety, read by title only, and introduce for first reading Ordinance No. "AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA IMPOSING A SPECIAL TRANSACTIONS AND USE TAX" (ATTACHMENT C) AND Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SUBMITTING A SPECIAL TAX MEASURE TO THE ELECTORATE AT THE NOVEMBER 7, 2017 GENERAL MUNICIPAL ELECTION." (ATTACHMENT D) AND Approve an appropriation of thirty thousand dollars ($30,000) from unappropriated General Fund balance, to be transferred into Fund Acct. 001-1150-43860 (Elections) for expenditure in this matter. 02 City Council Staff Report July 26, 2017 -- Page 3 Transactions and Use Tax STAFF ANALYSIS: City staff has prepared a draft ballot measure for a general transactions and use tax to be placed on the ballot for the November 7, 2017, General Municipal Election. SEE ATTACHMENT A. The measure would impose a 1/2-cent sales tax to fund city services and public safety. The anticipated revenue from this general tax would help the City increase firefighters, paramedics and police officers to improve neighborhood and downtown safety, maintain rapid 9-1-1 emergency response times; better address homelessness, and increase affordable housing; enhance street maintenance; and support libraries, parks and recreation. The measure would require audits and public oversight, only allow tax revenue to be used in Palm Springs. City staff has also prepared a draft ballot measure for a special transactions and use tax to be placed on the ballot for the November 7, 2017, General Municipal Election. SEE EXHIBIT C. The measure would impose a 1/2-cent sales tax to fund public safety and emergency response. The anticipated revenue from this special tax would all be dedicated to police, fire and paramedic matters. More specifically, the revenue would help the City add firefighters, paramedics, and police officers to improve neighborhood and downtown safety; maintain rapid 911 emergency response times; improve response to assault, burglaries/other crimes, increase neighborhood/downtown patrols, and improve pedestrian safety. Palm Springs is a tourist destination, and its service population for police and fire protection significantly exceeds its residential population. A transactions and use tax (commonly referred to as a "sales tax") fairly places the tax burden on all who buy products within the City, rather than requiring residents to fund services provided, to a significant degree, to others. Data previously compiled by the City indicated that "...the estimated sales tax generated by non-Palm Springs residents each year is 67 percent during peak season and 48 percent during the off-season, with an average of 55 percent annually..." ALTERNATIVES: Decline to place either ballot measure before the City's qualified voters. 03 i City Council Staff Report July 26, 2017-- Page 4 Transactions and Use Tax FISCAL IMPACT: The City Clerk estimates the cost of placing this matter on the ballot will be between twenty-five and thirty thousand dollars ($25,000-$30,000). These funds will need to be appropriated from unappropriated fund balance, and transferred into General Fund Acct. 001-1150-43860 (Elections) for expenditure in this matter. Staff anticipates that either of the proposed ballot measures will yield approximately seven million dollars ($7,000,000) of annual revenue. Edward Z. Kotkin, David H. Ready, Esq. City Attorney City Manager Attachments: A. AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA IMPOSING A GENERAL TRANSACTIONS AND USE TAX B. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SUBMITTING A GENERAL TAX MEASURE TO THE ELECTORATE AT THE NOVEMBER 7, 2017 GENERAL MUNICIPAL ELECTION C. AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA IMPOSING A SPECIAL TRANSACTIONS AND USE TAX D. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SUBMITTING A SPECIAL TAX MEASURE TO THE ELECTORATE AT THE NOVEMBER 7, 2017 GENERAL MUNICIPAL ELECTION 04 ORDINANCE NO. AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA IMPOSING A GENERAL TRANSACTIONS AND USE TAX The people of the City of Palm Springs do hereby ordain as follows: Section 1. TITLE. This ordinance shall be known as the Palm Springs Transactions and Use Tax Ordinance. The City of Palm Springs hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City. Section 2. OPERATIVE DATE. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below. Section 3. PURPOSE. This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes: A. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose. B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code. C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the State Board of Equalization in administering and collecting the California State Sales and Use Taxes. D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code,minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance. E. To provide transactions and use tax revenue to the City to be used to fund general governmental purposes. l n 181893.1 �/5 Section 4. CONTRACT WITH STATE. Prior to the operative date, the City shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the State Board of Equalization prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. Section 5. TRANSACTIONS TAX RATE. For the privilege of selling tangible personal property at retail,a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 0.5%of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance. Section 6. PLACE OF SALE. For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Board of Equalization. Section 7. USE TAX RATE. An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 0.5% of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made. Section 8. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein. Section 9. LIMITATIONS ON ADOPTION OF STATE LAW AND COLLECTION OF USE TAXES. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code: A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However,the substitution shall not be made when: Z 181893.1 �s 1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Board of Equalization, State Treasury, or the Constitution of the State of California; 2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the State Board of Equalization, in performing the functions incident to the administration or operation of this Ordinance. 3. In those sections, including,but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to: a. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales,storage,use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code. 4. In Sections 6701,6702(except in the last sentence thereof),6711,6715, 6737, 6797 or 6828 of the Revenue and Taxation Code. B. The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203. Section 10. PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance. Section 11. EXEMPTIONS AND EXCLUSIONS. A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Bums Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax. B. There are exempted from the computation of the amount of transactions tax the gross receipts from: 1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State,the United States,or any foreign government. 2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his 3 181893.1 07 agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied: a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and b. With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address. 3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4. A lease of tangible personal property which is a continuing sale of such property,for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance. 5. For the purposes of subparagraphs (3) and(4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property: 1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance. 2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California. 3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance. 4 181893.1 08 5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. 6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property,unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer. 7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City. D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax. Section 12. AMENDMENTS. All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance. Section 13. ENJOINING COLLECTION FORBIDDEN. No injunction or writ of mandate or other legal or equitable process shall issue in any suit,action or proceeding in any court against the State or the City, or against any officer of the State or the City,to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected. Section 14. PUBLIC OVERSIGHT. The City's annual audit is performed by an independent certified public accounting firm with extensive expertise in California municipal finance, compliance with all generally accepted accounting principles of the Governmental Accounting Standards Board, and broad experience in reviewing, analyzing and reporting as to tax revenue. The audit is reported to the City Council at a public meeting, and shall address revenue generated by this ordinance. 5 Qg 181893.1 Section 15. AUDIT AND REVIEW. The proceeds of the tax imposed by this ordinance, as well as the expenditure thereof, shall be audited annually by an independent certified public accounting firm. The City Council shall discuss the results of such audit at a meeting of the City Council that is open to the public. The report of such audit shall be posted on the City's website. Section 16. SEVERABILITY. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby. Section 17. EFFECTIVE DATE. This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately. Section l8. EXECUTION. The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance upon certification by the City Council of the results of the election approving this ordinance. PASSED AND ADOPTED by the City Council of the City of Palm Springs, on by the following vote: AYES: NOES: ABSENT: Robert Moon, Mayor Attest: Kathleen D. Hart, Interim City Clerk 181893.1 6 10 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I hereby certify that this Ordinance was APPROVED by the voters of the City of Palm Springs, State of California, at a general election held on and by the City Council of the City of Palm Springs at a regular meeting of the Council held on Robert Moon, Mayor Attest: Kathleen D. Hart, Interim City Clerk 181893.1 11 RESOLUTION NO._ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA SUBMITTING A GENERAL TAXTO THE VOTERS AT THE NOVEMBER 7, 2017 GENERAL MUNICIPAL ELECTION WHEREAS,Revenue &Taxation Code § 7285.9 authorizes the City Council to levy a transactions and use tax for general purposes, if the ordinance proposing that tax is approved by a two-thirds vote of all members of the City Council and by a majority of the qualified voters of the city voting in an election on the issue; and WHEREAS,the City Council has,by a two-thirds vote of all its members, approved the City of Palm Springs Transactions and Use Tax Ordinance of 2017 (the "Ordinance"), attached as Exhibit A to this resolution and incorporated by reference. All references to the 'Board of Equalization" in the Ordinance shall include any successor organization responsible for administration of the Tax; and WHEREAS, the Ordinance imposes a 0.5% transactions and use tax (the "Tax") to be collected as set forth in the Ordinance; and WHEREAS,the Tax must be approved by the electorate to be effective; and WHEREAS,by Resolution No. 24249, adopted June 21, 2017, this Council has called a general municipal election in the City to be held November 7, 2017 (the "Election"), and WHEREAS,the City Council desires to submit the Tax to the electorate at the Election. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA AS FOLLOWS: 1. The City Clerk is hereby directed to submit the following question (the "Measure") to the qualified voters of the City of Palm Springs at the Election: To maintain and improve city services such as increasing firefighters, paramedics and police officers to improve YES neighborhood and downtown safety; maintaining rapid 9-1-1 emergency response times; better addressing homelessness, and increase affordable housing; enhancing street maintenance; supporting libraries, parks and recreation, shall the City of Palm NO Springs establish a one-half cent ($0.005) sales tax; requiring audits/public oversight, with all funds used in Palm Springs? 182027.1 12 A majority of those casting ballots in favor shall be sufficient to adopt the Measure. 2. The City Clerk shall transmit a copy of the Measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the Measure, not to exceed 500 words in length, showing the effect of the Measure on the existing law and the operation of the measure, and transmit such impartial analysis to the City Clerk within ten (10) days of the adoption of this Resolution. 3. The City Clerk shall certify to the passage and adoption of this Resolution and enter it in the book of original Resolutions. 4. The City Clerk shall file a certified copy of this Resolution with the Registrar of Voters of Riverside County. 5. The City Clerk is further directed to take all other administrative actions necessary to accomplish the orders set forth in this Resolution. PASSED AND ADOPTED by the following vote on July 26, 2017. AYES: NOES: ABSENT: ABSTAIN: Robert Moon,Mayor ATTEST: Kathie Hart, Interim City Clerk APPROVED AS TO FORM: Edward Z. Kotkin, City Attorney 182027.1 13 ORDINANCE NO. AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA IMPOSING A SPECIAL TRANSACTIONS AND USE TAX The people of the City of Palm Springs do hereby ordain as follows: Section 1. TITLE. This ordinance shall be known as the Palm Springs Transactions and Use Tax Ordinance. The City of Palm Springs hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City. Section 2. OPERATIVE DATE. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below. Section 3. PURPOSE. This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes: A. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.91 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if two-thirds of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose. B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code. C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the State Board of Equalization in administering and collecting the California State Sales and Use Taxes. D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code,minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance. E. To provide transactions and use tax revenue to the City to be used to fund fire protection and police service, including but not limited to salaries,benefits, and pension for personnel. 181890.1 ' 14 Section 4. CONTRACT WITH STATE. Prior to the operative date, the City shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the State Board of Equalization prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. Section 5. TRANSACTIONS TAX RATE. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 0.5%of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance. Section 6. PLACE OF SALE. For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business,the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Board of Equalization. Section 7. USE TAX RATE. An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 0.5% of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made. Section 8. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein. Section 9. LIMITATIONS ON ADOPTION OF STATE LAW AND COLLECTION OF USE TAXES. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code: A. Wherever the State of California is named or referred to as the taxing agency,the name of this City shall be substituted therefor. However, the substitution shall not be made when: 1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Board of Equalization, State Treasury, or the Constitution of the State of California; 2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the State Board of 2 15 181890.1 Equalization, in performing the functions incident to the administration or operation of this Ordinance. 3. In those sections, including,but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to: a. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage,use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code. 4. In Sections 6701, 6702(except in the last sentence thereof),6711,6715,6737, 6797 or 6828 of the Revenue and Taxation Code. B. The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203. Section 10. PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance. Section 11. EXEMPTIONS AND EXCLUSIONS. A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax. B. There are exempted from the computation of the amount of transactions tax the gross receipts from: 1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State,the United States,or any foreign government. 2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied: a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle 3 181890.1 16 Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and b. With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under,penalty of perjury,signed by the buyer,that the vehicle will be operated from that address. 3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4. A lease of tangible personal property which is a continuing sale of such property,for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance. 5. For the purposes of subparagraphs (3) and(4) of this section,the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property: 1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance. 2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California. 4 17 181890.1 3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance. 5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice,whether or not such right is exercised. 6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property,unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer. 7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City. D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax. Section 12. AMENDMENTS. All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance. Section 13. ENJOINING COLLECTION FORBIDDEN. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City,to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected. 5 1 $ 181890.1 Section 14. PUBLIC OVERSIGHT. The City's annual audit is performed by an independent certified public accounting firm with extensive expertise in California municipal finance, compliance with all generally accepted accounting principles of the Governmental Accounting Standards Board,and broad experience in reviewing, analyzing and reporting as to tax revenue. The audit is reported to the City Council at a public meeting, and shall address revenue generated by this ordinance. Section 15. AUDIT AND REVIEW. The proceeds of the tax imposed by this ordinance, as well as the expenditure thereof, shall be audited annually by an independent certified public accounting firm. The City Council shall discuss the results of such audit at a meeting of the City Council that is open to the public. The report of such audit shall be posted on the City's website. Section 16. SEVERABILITY. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby. Section 17. EFFECTIVE DATE. This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately. Section 18. EXECUTION. The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance upon certification by the City Council of the results of the election approving this ordinance. PASSED AND ADOPTED by the City Council of the City of Palm Springs, on by the following vote: AYES: NOES: ABSENT: Robert Moon, Mayor Attest: Kathie Hart, Interim City Clerk 6 19 181890.1 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I hereby certify that this Ordinance was APPROVED by the voters of the City of Palm Springs, State of California, at a general election held on and by the City Council of the City of Palm Springs at a regular meeting of the Council held on Robert Moon, Mayor Attest: Kathie Hart, Interim City Clerk 20 181890.1 RESOLUTION NO._ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA SUBMITTING SPECIAL TAX TO THE VOTERS AT THE NOVEMBER 7, 2017 GENERAL MUNICIPAL ELECTION WHEREAS,Revenue &Taxation Code § 7285.91 authorizes the City Council to levy a transactions and use tax for special purposes, if the ordinance proposing that tax is approved by a two-thirds vote of all members of the City Council and two-thirds of the qualified voters of the city voting in an election on the issue; and WHEREAS, the City Council has,by a two-thirds vote of all its members, approved the City of Palm Springs Transactions and Use Tax Ordinance of 2017 (the "Ordinance"), which is attached as Exhibit A and incorporated here by reference. All references in the Ordinance to the 'Board of Equalization" shall include any successor agency responsible for administration of the Tax; and WHEREAS, the Ordinance imposes a 0.5% transactions and use tax to fund police and fire services (the "Tax") to be collected as set forth in the Ordinance; and WHEREAS,the Tax must be approved by two-thirds of the electorate to be effective; and WHEREAS,by Resolution No. 24249, adopted June 21, 2017, this Council has called a general municipal election in the City to be held November 7, 2017 (the "Election"); and WHEREAS,the City Council desires to submit the Tax to the electorate at the Election. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA AS FOLLOWS: 1. The City Clerk is hereby directed to submit the following question (the "Measure") to the qualified voters of the City of Palm Springs at the Election: To keep Palm Springs safe by adding firefighters, paramedics, and police officers to improve neighborhood and downtown YES safety; maintain rapid 911 emergency response times; improve response to assault, burglaries/other crimes, increase neighborhood/downtown patrols and improve pedestrian safety; shall the City of Palm Springs establish a '/Z cent ($0.005) sales tax; requiring audits/public oversight, NO with all funds used for Palm Springs ublic safety? 182035.1 21 The measure will be adopted if approved by two-thirds of voters participating in the election. 2. The City Clerk shall transmit a copy of the Measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the Measure, not to exceed 500 words in length, showing the effect of the Measure on the existing law and the operation of the measure, and transmit such impartial analysis to the City Clerk within 10 days of the adoption of this Resolution. 3. The City Clerk shall certify to the passage and adoption of this Resolution and enter it in the book of original Resolutions. 4. The City Clerk shall file a certified copy of this Resolution with the Registrar of Voters of Riverside County. Y 5. The City Clerk is further directed to take all other administrative actions necessary to accomplish the orders set forth in this Resolution. PASSED AND ADOPTED by the following vote on July 26, 2017. AYES: NOES: ABSENT: ABSTAIN: Robert Moon, Mayor ATTEST: Kathie Hart, Interim City Clerk APPROVED AS TO FORM: Edward Z. Kotkin, City Attorney 22 182035.1 PALM Sp City of Palm Springs Office of the City Attorney * 3200 F.Tahgnitz Canyon Way Palm Springs, California 92262 Tel:760.323.8205 • Fax: 760.322.8332 •TDD 760.864,9527 • www.paimspringsca.gov cQI IF0113 P Palm Springs Essential Services / Public Safety Measure To maintain essential city services, including rapid 911 emergency response, fire/police protection, add paramedic services, keep fire stations open/staffed, address homelessness, repair local streets/potholes, improve rapid response to assault, burglaries/crimes, keep public areas safe/clean, maintain senior services, attract/retain jobs/business, increase water conservation; shall the City of Palm Springs establish a '/2 cent sales tax; requiring annual independent audits/public oversight; all funds used locally? Palm Springs Cannabis Business Taxation Shall Palm Springs update the existing gross receipts tax on medical cannabis collectives and cooperatives to apply to all medical and adult-use cannabis businesses, apart from cultivation businesses, which will be taxed at a rate up to 10 dollars per square foot, with all revenue used in Palm Springs to maintain and improve essential city services, including public safety and youth drug prevention education; requiring annual independent audits and public oversight? p�2.(v�2bt7 � ol� lrlD�/f?L- ��4T�1Ql�t�-s 3G. Post Office Box 2743 • Palm Springs, California 92263.2743 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR FISCAL YEAR 2017-18. WHEREAS, Resolution No. 24238 approving the Budget for the Fiscal Year 2017-2018 was adopted on June 7, 2017; and WHEREAS the City Manager has recommended, and the City Council desires to approve, certain amendments to said budget. NOW THEREFORE THE CITY COUNCIL DETERMINES, RESOLVES AND APPROVES AS FOLLOWS: that the Director of Finance is authorized to record inter- fund cash transfers as required in accordance with this Resolution, and Resolution No. 24238, adopting the Budget for Fiscal Year 2017-18 is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount 001 General Fund 1150 City Clerk 43860 Elections $30,000 Purpose: To cover the City's cost of submitting a transaction and use tax to the electorate at the November 7, 2017 general municipal election. SECTION 2. SOURCE Fund Activity Account Amount 001 General Fund 29301 Fund $ 30,000 Balance ADOPTED THIS 26th DAY OF July, 2017. David H. Ready, City Manager ATTEST: Kathie Hart, Interim City Clerk 1-110- k1 Wkkftk 't`c�aa(tria� Resolution No. Page 2 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, Kathie Hart, Interim City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on by the following vote: AYES: NOES: ABSENT: ABSTAIN: Kathie Hart, Interim City Clerk City of Palm Springs, California