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HomeMy WebLinkAbout7/20/2011 - STAFF REPORTS - 4.A. Page 1 of 1 Jay Thompson From: Ginny Foat Sent: Tuesday, July 19, 2011 5:30 PM To: Jay Thompson Subject: FW: Proposed Sales Tax Increase From: russschnepf@aol.com [mailto:russschnepf@aol.com] Sent: Tuesday, July 19, 2011 4:55 PM To: Ginny Foat Subject: Proposed Sales Tax Increase Councilwoman Foat, We are unable to attend tomorrow night's council meeting but would like to comment on the proposed sales tax increase to help finance downtown redevelopment. We would be supportive of the plan if it had a sunset provision of five years. Based on the projections quoted in today's paper, that would raise approx. $60 million which should more than cover the estimated $43 million city contribution to the redevelopment project. A permanent sales tax increase is not acceptable and feel that city staff, by recommending the tax be permanent, are exploiting the desperation of city residents to get the project moving. We're all for the city's participation in the project but the tax increase should be for this specific purpose only. If city staff feel we need to increase taxes to fund other city services, it should be proposed separately from the redevelopment project. To reiterate, without a sunset provision, we will vote no on any tax increases. Respectfully, Russell Schnepf& Ed Hall 866 E. Louise Dr. 01/ ZOIzO1 : -reM 4 •A 7/19/2011 Page 1 of 1 Jay Thompson RECEIVED From: Ginny Foat Sent: Wednesday, July 20, 2011 2:29 PM 2011 JUL 20 PM 2* 44 To: Ginny Foat; Jay Thompson JAMES 1HOMPSu3 CITY CLERK Subject: FW: Desert Fashion Plaza From: Ralph Raya [mailto:mrcraya@aol.com] Sent: Wednesday, July 20, 2011 10:44 AM To: Steve Pougnet; Lee Weigel; Ginny Foat; Chris Mills; Rick Hutcheson; Citymanager- Mail Login; Jennifer Nelson; rraya@mrc-e.com Subject: Desert Fashion Plaza To all, I would like to express my support of Desert Fashion Plaza and to support the city's decision to increase the sale tax in an effort to move the project forward. Since the late 80's, the Desert fashion Plaza has been the white elephant of downtown along with most downtown properties. The main problem has always been the lack of property owners to re-invest in there buildings so that they would attract viable retail businesses and not just tee shirt shops and trinket stores. Most of the building have antiquated electrical voltages, poor air conditioning systems, very low ceiling spaces and little or no building insulation. As you can imagine your major retailers would not even consider opening business in buildings with these types of problems. Your actions on the Desert fashion Plaza will be a major step forward in establishing a foundation for the future success of downtown Palm Springs. While considering the actions before you tonight, I also encourage you to consider what is going to encourage the rest of the property owners in downtown to begin re-investing in there properties to fix the existing problems and also attract better retail businesses. I support increasing the sales tax and the Desert Fashion Plaza but I hope that you also consider in the future how to encourage the rest of the property owners to begin re- investing in there building. Thank you for your consideration and reading my email. Ralph Raya 760-902-9048 7/20/2011 IT y PtLHEG,Y Michael G Briski 2D11 JUL 20 AM 11: 04 3417 Andreas Hills Drive 1AMES THGf1pSC ; Palm Springs, CA 92264 CITY CLERK Tel 760-864 -7145 Email: mbriski@dc.rr.com July 20,2011 Clerk of the City Redevelopment Agency of the City of Palm Springs 3200 E Tahquitz Canyon Way Palm Springs CA 92262 Dear Clerk of the Agency Enclosed please find the original and five copies of a communication addressed to the Agency pertaining to items 4 A, B and C on the agenda for the meeting on this date. Please retain the original for your file and deliver the copies of the communication to each of the Council Members sitting as the Agency for their consideration at the meeting. Thank you, ,w Michael G. Briski TO: THE CITY COUNCIL COMMUNITY REDEVELOPMENT AGENCY CITY OF PALM SPRINGS, CALIFORNIA. I present this communication in opposition to the financial agreement between the City and Palm Springs Promenade, LLC for the redevelopment of the property known as the Desert Fashion Plaza development project on the Council's agenda for consideration on the 20th of June 2011. My objection is based on three considerations: 1. The nature of the development based upon the history and demographics; 2. The economics of the project based upon the current times; 3. The developer and the role of private industry. THE NATURE OF THE DEVELOPMENT BASED UPON THE HISTORY AND DEMOGRAPHICS History of the site The staff has set forth the history of the site going back to 1966 when the property known as the Desert Inn was sold and the initial center developed. At the outset it appears that there was no a consideration of the demographics of the then development. The reference to the Desert Inn refers to the property as an internationally renowned resort and one time center for treatment of tuberculosis. Rather than maintain this character the resort was destroyed and a different use, a retail center, was developed; however, it is submitted that the demographics combined with the apparent failure of the owners to change with the times, and make necessary concessions with rent rates, led to the failure of the project. In 1984 the City, apparently in a redevelopment project with Edward J DeBartolo, undertook the redevelopment of the site. However,the cost to the City is not reflected in the history prepared by the staff. Reference is made to the competition from East Valley retailing as a motivating factor. However, that was the time that a consideration of the demographics of the area should have been undertake before a City assisted project; apparently such was not made. In 1996, the project went into default of$51,698,096.00 of loans. The property was sold for $13,500,000.00 to AZ Partners for a loss of $39,698,096.00 From 1998 until 2001 Excel Legacy Corporation, successor to AZ Partners, considered renovating the property, but decided against it apparently in consideration of the demographics that renovation was not an economically viable course of action. After asking $25,000,000.00 as a sale price is was sold it to Wessman Development Company for $17,000,000.00 for a gain of $3,950,000.00 on their initial investment of $13,500,000.00 concluding that development as a retail site was not feasible, which indeed was a correct decision. Current Development and Demoamphics John Wessman has not been able to sell or develop the property, to or with another a private individual or entity, and is currently proposing a mixed use development with the City. The development would include a movie theater; five to eight restaurants, and up to 1 30 stores. Keyser Marston Associates, Inc in their justification of the project refer to other areas where mixed used developments have been undertaken, referring to The Grove in Los Angles and the Oakland Fox Theatre developments as providing indirect economic benefit. However, these analogies fail to recognize the demographics of those areas. The population of Los Angeles County, where the Grove is located is 9,808,605. The population of the Bay Area where Oakland is located is 6,783,760. In looking at the demographics of Riverside County, the population is 2,189,641, of which Coachella Valley constitutes 600,000, of which Palm Springs constitutes 44,552 according to the 1010 census. Thus in looking at the demographics of this site for this development, any comparison to the Grove and the Fox Theater as justification of indirect economic benefit is spurious. Looking back to 1966 a similar dissimilarity existed, and as for Palm Springs, it surely was more acute at that time, thus showing that the population basis as a support for the construction of the original development, and especially in 1984 the time of the first redevelopment would dictate failure. The influx of tourism, a fluctuating factor, especially in a down economy, cannot be used as the sole consideration in any development. It is necessary to consider the normal population demographic in considering the feasibility of a development; i.e. witness the inability of the past developments and the existing development to succeed. THE ECONOMICS OF THE PROJECT BASED UPON THE CURRENT TIMES The financial calamity that struck the nation in 2008 is hardly over and there is no clear sign when stability will return, not only to our nation, but also to the world. Thus, this factor alone mitigates against the City participating in this redevelopment project given the acute uncertainty. Unemployment is still in excess of 9%and people are cutting back on spending,thus profits and sales tax receipts are down and will continue to be down. A recent financial article, advanced in the New York Times, asserts that the growth of the nation in the last 20 years has primarily been on consumer spending. This bubble has burst and will not return any time soon, and economic planning should reflect this fact. Given the fact that the success of this project is based on retail spending and the resulting sales tax revenue generated, logic dictates that this project should not go forward at this time. The expenditure of$43,000,000.00 by the City and raising sales tax to recover the expenditure is folly. The demographics as shown above support the conclusion that they alone establish that the project, the type and size as initiated and expanded was due to fail and if reconstructed will fail. 2 THE DEVELOPER AND THE ROLE OF PRIVATE INDUSTRY IN THE ECONOMY. Mr. Wessman, unfortunately made a mistake when he purchased this property for $17,000,000.00 when his predecessor in title only paid 13,500,000.00. His predecessor considered redeveloping the property in its then from, but concluded such was not economically feasible and abandoned the redevelopment of the property as a private enterprise. Mr. Wessman did not recognize either that the property was not suited for private development on its then existing scale or was relying on the City to eventually bail him out as a redevelopment project as it did for DeBartolo. The very experts the City has hired to evaluate the project substantiate the non-feasibility of the project as a private enterprise. The conclusion of Keyser Marston Associates, Inc is"the Project is not financially feasible without significant public assistance". Our economy is based on the concept of capitalism. The existence of private enterprise is the motivating force for the success of our nation. Given this fact,private enterprise must suffer the consequences of a bad decisions as well as reaping the benefits of profits. Taxpayers should not have to pay for the avoidable mistakes of private enterprise in a local retail development. CONCLUSION The City Council should decline the redevelopment at 123 North Palm Canyon Drive as proposed by Palm Springs Promenade LLC. If the Council desires to act upon the property it should proceed with the sales tax proposal to support a condemnation action and acquire the property when its market value is depressed, thus purchasing it at a figure that would allow a subsequent developer to purchase it and will allow for a more prudent economic development. Re s p ec tfully submitted, Michael G. nski 3 > eepLMSAR iy c V N Cq<IFRO It CITY COUNCIL STAFF REPORT DATE: JULY 20, 2011 UNFINISHED BUSINESS SUBJECT: CONSIDER A MEASURE FOR SUBMISSION TO THE VOTERS AT THE NOVEMBER 8, 2011, GENERAL MUNICIPAL ELECTION, REGARDING A ONE PERCENT TRANSACTIONS, SALES, AND USE TAX. FROM: David H. Ready, City Manager BY: James Thompson, City Clerk SUMMARY Pursuant to California Elections Code the City Council may add a measure to the November 8, 2011, General Municipal Election. Staff has prepared a general tax ballot measure for placement on the ballot. The attached resolution submits the measure to voters at the November 8, 2011, regular municipal election. A majority vote of the City's qualified voters will be needed to adopt the ordinance. Additionally, the recommended action includes the adoption of procedures for the submission of arguments and rebuttal arguments to be printed in the sample ballot. RECOMMENDATION: 1. Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ORDERING THE SUBMISSION TO THE QUALIFIED ELECTORS OF THE CITY A MEASURE APPROVING AND IMPLEMENTING A ONE PERCENT (1%) TRANSACTIONS, SALES, AND USE TAX, AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 8, 2011, AS CALLED BY RESOLUTION NO. 22957." 2. Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS AND PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS REGARDING A CITY MEASURE AT THE NOVEMBER 8, 2011, GENERAL MUNICIPAL ELECTION, AND DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS." ITEM NO. City Council Staff Report July 20, 2011 -- Page 2 Election Ballot Measure STAFF ANALYSIS City staff has prepared a draft ballot measure for a general tax measure to be placed on the November 8, 2011, General Municipal Election. The measure requests the voters approve and implement a one percent (1%) sales and use tax to be deposited into the City's general fund, and includes a provision for an independent audit of the proceeds. The general tax measure requires a majority of votes cast for adoption. City staff and financial advisors have prepared the attached Finance Terms and Alternatives Memorandum for a comprehensive discussion on the proposed tax, along with alternatives. FISCAL IMPACT: Minimal ancillary costs to add the measure to the ballot, fully budgeted in City Clerk Dept. General Fund Acct. 001-1150-43860 (Elections). The attached Finance Terms and Alternatives Memorandum discuss the fiscal impact of the measure. ES THOMPSON, CITY CLERK DAVID H. READY, CIT7 MANAGER Attachments: Finance Terms and Alternatives Memorandum Resolution Adding the Measure Resolution Arguments Proposed Text of the Measure 02 A. .y qjkLM S.. V N � °eroeeho` . Cg41FORN�P CITY COUNCIL STAFF REPORT DATE: JULY 20, 2011 UNFINISHED BUSINESS SUBJECT: SALES TAX FINANCE TERMS AND ALTERNATIVES MEMORANDUM FROM: David H. Ready, City Manager BY: Geoffrey S. Kiehl, Director of Finance and Treasurer SUMMARY This memo provides information on the City's existing sales tax and amounts that could be generated by an additional sales tax rate if approved by voters. STAFF ANALYSIS The City's sales tax history is shown below. The City's share of the current overall sales tax rate is 1%. Fiscal Year Sales June 30 Tax 1 2006 $8,842,715 2007 9,798,032 2008 9,138,355 2009 8,796,538 2010 8,221,763 2011 8,540,000 Estimated 2012 9,025,000 Budgeted (1) Property taxes paid in lieu of sales tax under the "Triple Flip" are included in the sales tax figures. It is expected that the swap of sales taxes for property taxes would terminate once the State's 2002-2003 and 2003-2004 deficit financing bonds were repaid, which is currently expected to occur in approximately 10 years. 03 City Council Staff Report July 20, 2011 -- Page 2 Finance Terms and Alternatives Staff and the City's financial advisor estimate that a 1% City of Palm Springs sales tax would annually generate approximately $8,000,000. The increased sales tax generated may be used by the City for a variety of general governmental purposes, including capital improvements. These improvements may include: • Street Resurfacing, Repair and Reconstruction • Curbs, Gutters and Sidewalks • Public Parking • Police and Fire Safety Vehicle and Emergency Equipment Replacement • Traffic Light and Street Lighting Improvements • Public Building Repairs • Park Safety and Improvements • Bridge, Interchange and Roadway Widening • Library Renovation • Capital Improvements related to the implementation of the Museum Market Specific Plan The City could use these funds on a pay-as-you-go basis for the improvements described above, or, alternatively, the City could use the increased revenue to support payments on a financing that provided an up-front lump sum for such projects. The maximum net proceeds of such a financing, as well as any remaining balance for continuing pay-as-you-go projects is shown below. These figures assume that the City would only issue debt with a 20 year maturity, based on 90% of available increased sales tax revenue. A sales tax of 1% could support a bond with net proceeds of $84,000,000. Geoffrey S. Kiehl, Director of Finance and Treasurer Attachment: Sales Tax Estimates — Max Capacity over 20 Years; Balance for Other Purposes 04 City of Palm Springs Sales Tax Estimates-Max Capacity over 20 Years; Balance for Other Purposes Based on 1%Sales Tax=$8M in FY 2009-10; 2010-11 estimates would be slightly higher Sales Tax Tax Rate 1% Tax Rate Debt Balance Years 1.00% Service Available 1 8,000,000 7,275,000 725,000 2 8,000,000 7,275,000 725,000 3 8,000,000 7,275,000 725,000 4 8,000,000 7,275,000 725,000 5 8,000,000 7,275,000 725,000 6 8,000,000 7,275,000 725,000 7 8,000,000 7,275,000 725,000 8 8,000,000 7,275,000 725,000 9 8,000,000 7,275,000 725,000 10 8,000,000 7,275,000 725,000 11 8,000,000 7,275,000 725,000 12 8,000,000 7,275,000 725,000 13 8,000,000 7,275,000 725,000 14 8,000,000 7,275,000 725,000 15 8,000,000 7,275,000 725,000 16 8,000,000 7,275,000 725,000 17 8,000,000 7,275,000 725,000 18 8,000,000 7,275,000 725,000 19 8,000,000 7,275,000 725,000 20 8,000,000 - 8,000,000 Total Sales Tax 160,000,000 Par Amount of Bonds 93,000,000 Net Proceeds (less costs and reserves) 84,000,000 Total Debt Payments 138,225,000 Available Sales Tax 21,775,000 * Final Debt Service Payment Paid from Bond Reserve Fund 05 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ORDERING THE SUBMISSION TO THE QUALIFIED ELECTORS OF THE CITY A MEASURE APPROVING AND IMPLEMENTING A ONE PERCENT (1%) TRANSACTIONS, SALES, AND USE TAX, AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 8, 2011, AS CALLED BY RESOLUTION NO. 22957. WHEREAS, pursuant to the Charter of the City of Palm Springs, Palm Springs Municipal Code Section 2.040.080, and the laws of the State of California, the City Council called the General Municipal Election on Tuesday, November 8, 2011, by Resolution No. 22957, adopted on June 15, 2011; and WHEREAS, the City Council also desires to submit to the voters at the election a measure relating to a one percent (1%)transactions, sales, and use tax. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The City Council, pursuant Article XIIIC of the Constitution of the State of California, and Sections 200 and 201 of the Charter of the City of Palm Springs, and its right and authority, does order submitted to the voters at the General Municipal Election the following measure and question: Shall an ordinance to provide funding that cannot be taken by the YES State and help protect and stabilize Palm Springs' city services and programs, including without limitation police, fire, library, parks, city streets/pothole repair, and acquisition and development of garages and parking facilities, and installation and maintenance of improvements and facilities in conjunction with the implementation of the Museum Market Plaza Specific Plan, by NO enacting a City of Palm Springs one percent (1%) sales and use tax, subject to independent annual audits, be adopted? SECTION 2. The complete text of the measure/ordinance submitted to the voters is attached as Exhibit A. SECTION 3. The measure submitted to the voters pursuant to Section 1 of this resolution shall require a majority of votes cast for adoption. 06 Resolution No. Page 2 SECTION 4. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections. SECTION 5. Notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law. SECTION 6. The City Clerk shall certify to the adoption of this Resolution and submit such to the Registrar of Voters for the County of Riverside. PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 20TH DAY OF JULY, 2011. DAVID H. READY, CITY MANAGER ATTEST: JAMES THOMPSON, CITY CLERK CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, 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 this 20t' day of July, 2011, by the following vote: AYES: NOES: ABSENT: ABSTAIN: JAMES THOMPSON, CITY CLERK City of Palm Springs, California 07 EXHIBIT A ORDINANCE NO. AN ORDINANCE OF THE PEOPLE OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADDING CHAPTER 3.22 TO THE PALM SPRINGS MUNICIPAL CODE, APPROVING AND IMPLEMENTING A ONE PERCENT (1%) TRANSACTIONS, SALES, AND USE TAX. THE PEOPLE OF THE CITY OF PALM SPRINGS HEREBY ORDAIN AS FOLLOWS: SECTION 1. Chapter 3.22 is hereby added to Division I of Title 3 of the Palm Springs Municipal Code to read: SALES AND USE TAX 3.22.010 Title. 3.22.020 Purpose. 3.22.030 Operative Date. 3.22.040 Contract with State. 3.22.050 Transactions and Sales Tax Rate. 3.22.060 Place of Sale. 3.22.070 Use tax rate. 3.22.080 Adoption of Provisions of State Law. 3.22.090 Limitation on Adoption of State Law. 3.22.100 Permit not Required. 3.22.110 Exemptions and Exclusions. 3.22.120 Amendments. 3.22.130 Enjoining Collection Forbidden. 3.22.140 Independent Annual Audit. 3.22.010 Title. This Chapter shall be known as the City of Palm Springs Local Sales and Use Tax Code. This Chapter shall be applicable in the incorporated territory of the City of Palm Springs hereinafter referred to as the "City." 3.22.020 Purpose. This Chapter 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 to be applied throughout the entire territory of the City to the fullest extent permitted by law and in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue 08 Ordinance No. Page 2 and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 of the Revenue and Taxation Code, which authorizes the City to adopt this Chapter 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, sales, 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, sales, and use tax ordinance that imposes a tax and provides a measure therefor 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, sales, 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 Chapter. (e) To provide transactions, sales, and use tax revenue to the City to be used for the general governmental purposes of the City and with any transactions, sales, and use tax revenue received being placed into the City's general fund. 3.22.030 Operative Date. This Chapter shall be operative on the first day of the first calendar quarter commencing at least thirty days after the City Council certifies the results of the election. 3.22.040 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, sales 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 contract. 3.22.050 Transactions and Sales 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 one 09 Ordinance No. Page 3 percent (1%) of the gross receipts of any retailers for the sale of all tangible personal property sold at retail in said territory on and after the operative date of this Chapter. 3.22.060 Place of Sale. For the purposes of this Chapter, 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 or her 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. 3.22.070 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 Chapter for storage, use, or other consumption in said territory at the rate of one percent 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. 3.22.080 Adoption of provisions of State Law. Except as otherwise provided in this Chapter 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 Chapter as though fully set forth herein. 3.22.090 Limitation on Adoption of State Law. 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. The substitution, however, 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 Control, State Board of Equalization, State Treasury, or the Constitution of the State of California. 10 Ordinance No. Page 4 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 Chapter. 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. 3.22.100 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 sellers permit shall not be required by this Chapter. 3.22.110 Exemptions and Exclusions. (a) There shall be excluded from the measure of the transactions and sales 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 ZI Ordinance No. Page 5 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 or her 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 the ordinance codified in this Chapter. 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 the ordinance codified in this Chapter. 5. For the purposes of subsections (b)(3) and (b)(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 Chapter, 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 12 Ordinance No. Page 6 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 Chapter. 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 this Chapter. 5. For the purposes of subsections (c)(3) and (c)(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 subsection (c)(7) of this Section, 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 Chapter 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. (e) Nothing in this Chapter shall be construed as imposing a tax upon any person or service when the imposition of such tax upon such person or service would be in violation of a federal or state statute, the Constitution of the United States or the Constitution of the State of California. 13 Ordinance No._ Page 7 3.22.120 Amendments. All amendments subsequent to the effective date of this Chapter 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 Chapter, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this Chapter. 3.22.130 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 Chapter, 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. 3.22.140 Independent Annual Audit. The proceeds resulting from this transactions, sales, and use tax shall be deposited into the City's general fund and become subject to the same independent annual audit requirements as other general fund revenue. The independent auditor's report, which shall include an accounting of the revenues received and expenditures made from the transactions and use tax, will be presented annually to the City Council and made available for public review. SECTION 2. This Ordinance shall become effective upon adoption by a majority of the voters casting votes at the general municipal election on November 8, 2011. PASSED, APPROVED, AND ADOPTED BY THE PEOPLE OF THE CITY OF PALM SPRINGS AT THE REGULAR MUNICIPAL ELECTION HELD THE 8T" DAY OF NOVEMBER, 2011. STEPHEN P. POUGNET, MAYOR ATTEST: JAMES THOMPSON, CITY CLERK 14 Ordinance No. Page 8 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, California, do hereby certify that Ordinance No. is a full, true, and correct copy, and was adopted by a majority vote of the People of the City of Palm Springs, at the Regular Municipal Election held the 8th day of November, 2011, as appears by the official returns of said election, and the Statement of Votes Cast as declared by the City Council, Resolution No. , adopted the 7th day of December, 2011. JAMES THOMPSON, CITY CLERK City of Palm Springs, California 15 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS AND PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS REGARDING A CITY MEASURE AT THE NOVEMBER 8, 2011, GENERAL MUNICIPAL ELECTION, AND DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS. WHEREAS, a General Municipal Election is to be held in the City of Palm Springs, California on November 8, 2011, at which there will be submitted to the voters the following question and measure: Shall an ordinance to provide funding that cannot be taken by the YES State and help protect and stabilize Palm Springs' city services and programs, including without limitation police, fire, library, parks, city streets/pothole repair, and acquisition and development of garages and parking facilities, and installation and maintenance of improvements and facilities in conjunction with the implementation of the Museum Market Plaza Specific Plan, by NO enacting a City of Palm Springs one percent (1%) sales and use tax,subject to independent annual audits,be adopted? WHEREAS Article 4, Chapter 3, Division 9 of the California Elections Code provides for the filing of written arguments and rebuttal arguments for City measures submitted at municipal elections. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council authorizes any and all members of the City Council to file a written argument in Favor OR Against the City Measure, accompanied by the printed name(s) and signature(s) of the person(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California, and to change the argument until and including the date fixed by the City Clerk, after which no arguments for or against the City measure may be submitted to the City Clerk. .No argument shall exceed 300 words in length. 16 Resolution No. Page 2 SECTION 2. Pursuant to Section 9285 of the Elections Code of the State of California, when the City Clerk has selected the arguments for and against the measure which 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 in favor. The authors may prepare and submit rebuttal arguments not exceeding 250 words. The rebuttal arguments shall be filed with the City Clerk, accompanied by the printed name(s) and signature(s) of the person(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10-days after the final date for filing direct arguments. Each rebuttal argument shall immediately follow the direct argument which it seeks to rebut. SECTION 3. Any written argument or rebuttal argument filed with the City Clerk shall be accompanied by the Statement of the Author Form required by Section 9600 of the California Elections Code. The City Clerk shall provide such form upon request. SECTION 4. The City Council directs the City Clerk to 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, showing the effect of the measure on the existing law and the operation of the measure. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments. SECTION 5. The City Clerk shall print, or cause to be printed, in the Official Sample Ballot, the entire text of the arguments for or against the measure, and the rebuttal arguments, in uniform type, style and spacing. PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 20TH DAY OF JULY, 2011. DAVID H. READY, CITY MANAGER ATTEST: JAMES THOMPSON, CITY CLERK 17 Resolution No. Page 3 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, 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 July 20, 2011, by the following vote: AYES: NOES: ABSENT: ABSTAIN: JAMES THOMPSON, CITY CLERK City of Palm Springs, California 18