ADDENDUM
CITY OF CALIFORNIA
CITY COUNCIL/HOUSING AUTHORITY/SUCCESSOR AGENCY
Tuesday, October 24, 2023
Regular Meeting
CONTINUED BUSINESS
CB 1. Public Services Special Parcel Tax – Victor Pronto, City Attorney Recommendation:
Staff recommends that the City Council provide staff direction on the two major unresolved issues with the draft special parcel tax ordinance, and on any other matter of interest or concern with respect to the draft ordinance.
The following items were added to the City Council agenda after publishing and posting, but less than 72 hours before the meeting. Socorro Chavez, City Clerk
ITEM NO. CB 1.
COUNCIL AGENDA ITEM
OCTOBER 24, 2023
PREPARED BY: Victor Ponto, City Attorney
Robert F. Messinger, Esq.
SUBJECT: Public Services Special Parcel Tax
______________________________________________________________________
BACKGROUND
In 2018, the California City electorate approved the California City Public Safety Only Special Parcel Tax Ordinance of 2018 (the “2018 Tax Ordinance”) by a two-thirds vote.
The proceeds of the tax is divided evenly to fund police services and fire services within the City. The 2018 Tax Ordinance contains a sunset provision and will expire following the 2023-2024 tax year.
If it is the desire of the City Council to place a special tax ordinance before the voters to replace the expiring 2018 Tax Ordinance, the City Council may call a Special Municipal Election to be held on March 5, 2023 for the purpose of submitting to the voters a ballot measure on a special parcel tax. Prior to the holding of an election, the City must adopt two resolutions in relation thereto.
The first resolution calls and gives notice of holding an election, directs the City Attorney to prepare an impartial analysis, and adopts regulations for ballot arguments. Priority for arguments is given to the City Council, or members thereof. The due date for submittal of direct arguments to the City Clerk would be Tuesday, November 28, 2023, by five p.m., followed by a public review period, with rebuttal arguments filed no later than five p.m. on Friday, December 8, 2023.
The second resolution requests the Kern County Board of Supervisors to allow consolidation with the Statewide election being held on the same day and to direct the County Elections Division to render services.
DISCUSSION
The draft vacancy tax ordinance presented with this agenda report reflects the input of the City Council from its meeting of October 10, 2023, with respect to the major issues and options associated with such a tax. As a preliminary matter, a special parcel tax may be enacted only as a special tax requiring a two-thirds vote and the proceeds dedicated to a special purpose. The draft special parcel tax ordinance contains a purpose statement that the tax is solely for the purpose of raising revenue necessary to support and fund essential public services (including law enforcement, fire protection, personnel services, City operations and maintenance, and capital outlays). Revenues raised by the special tax shall not be used for any municipal function funded through an enterprise fund or the housing fund. The two major issues for which direction is needed are (1) the rate of the tax, and (2) whether to include in the ordinance, and the length of, a sunset provision.
Also presented with this staff report for City Council input is draft ballot question language. Ballot question language is limited by statute to 75 words. The draft language presented contains 74 words.
Subject to the City Council adopting the necessary resolutions at its meeting of November 14, 2023, calling the election and placing the ordinance on the ballot, the date of the election on the special parcel tax ordinance will be the statewide presidential primary election to be held on March 5, 2024.
A Resolution calling and giving notice of the special municipal election must be submitted to the County no later than 88 days prior to the election (December 8, 2023).
This resolution is to call the City’s Special Municipal Election to submit to the voters the Special Parcel Tax measure.
A Resolution will be submitted to the County concurrently with the Resolution calling and giving notice of the special municipal election that requests the Board of Supervisors to consolidate the City’s election with other elections on the same date the County will conduct the Statewide Presidential Primary election and to permit the County Elections Division to take any and all steps necessary for the holding of the election. The services to be provided by the County Elections Division include, but are not limited to, the appointment of all required election officers and establishment of polling places; publishing the notice of appointment of election officers, preparing and mailing the official and sample ballots including arguments, process vote by mail ballots; supply all needed materials for polling places; conduct the election, canvass the election returns and certify the results. The City would reimburse the County for the costs of providing the services.
FISCAL IMPACT
The existing special parcel tax generates approximately $6.4 million in revenue. The City’s general fund as set forth in the FY 2022-2023 California City Adopted Budget was $7.6 million.
RECOMMENDATION
Staff recommends that the City Council provide staff direction on the two major unresolved issues with the draft special parcel tax ordinance, and on any other matter of interest or concern with respect to the draft ordinance.
ATTACHMENTS
1. Draft Special Parcel Tax Ordinance
2. Draft Ballot Question Language
ORDINANCE NO. _________
AN ORDINANCE OF THE CITY OF CALIFORNIA CITY, CALIFORNIA
AMENDING THE CALIFORNIA CITY MUNICIPAL CODE BY
REPEALING AND REPLACING DIVISION 5 TO ARTICLE 1 TO
CHAPTER 2 TO TITLE 3 ESTABLISHING A PARCEL TAX TO BE
LEVIED ON ALL PARCELS OF REAL PROPERTY IN THE CITY OF
CALIFORNIA CITY
The people of the City of California City do ordain as follows:
SECTION 1. Title 3, Chapter 2, Article 1 of the California City Municipal Code is hereby amended by repealing and replacing Division 5, Special Parcel Tax, to read as follows:
“DIVISION 5. – SPECIAL PARCEL TAX
SECTION:
Sec. 3-2.1.501. - Short title.
Sec. 3-2.1.502. - Specific Purposes of the Special Tax.
Sec. 3-2.1.503. - Tax levied.
Sec. 3-2.1.504. - Maximum rate.
Sec. 3-2.1.505. - Rate reduction.
Sec. 3-2.1.506. - Annual proceedings.
Sec. 3-2.1.507. - Collection.
Sec. 3-2.1.508. - Accounts for Deposit of Special Tax.
Sec. 3-2.1.509. - Accountability.
Sec. 3-2.1.510. - Duration.
Sec. 3-2.1.511. - Appropriation Limit.
Sec. 3-2.1.512. - Amendment.
Sec. 3-2.1.501. - Short title.
This Division may be referenced to as the California City Public Services Special Parcel Tax Ordinance of 2024.
Sec. 3-2.1.502. - Specific Purposes of the Special Tax.
The taxes imposed under this Ordinance are solely for the purpose of raising revenue necessary to support and fund essential public services (including law enforcement, fire protection, personnel services, City operations and maintenance, and capital outlays). Revenues raised by the special tax shall not be used for any municipal function funded through an enterprise fund or the housing fund. Because the proceeds of the parcel tax will be deposited into a special fund restricted for the services and programs specified in this Ordinance, the tax is a special tax. The tax imposed by this Ordinance is enacted pursuant to Article XIIIA of the California Constitution and Article
3.5 of Chapter 1 of Part 1 of Division 1 of Title 5 of the California Government Code, commencing with Section 50075.
Sec. 3-2.1.503. - Tax levied.
An annual special tax is hereby levied by the City on all lots and parcels within the boundaries of the City other than lots and parcels that (i) are exempt from this tax pursuant to the Constitution or laws of the United States or of the Constitution or laws of the State of California or (ii) are exempt from the ad valorem property tax or have an ad valorem property tax liability of zero.
Sec. 3-2.1.504. - Maximum rate.
The rate of the tax against each lot and parcel in any tax year shall not exceed fifty cents per day, less the daily per parcel rate reduction for that tax year calculated pursuant to Section 3-
2.1.505.
Sec. 3-2.1.505. - Rate reduction.
(a) For each tax year, the Finance Director shall calculate a daily per parcel rate reduction. He or she shall present his or her calculation of the rate reduction to the City Council as part of the budget process.
(b) The daily per parcel rate reduction shall be the amount, calculated on a per parcel per day basis (and rounded down to the nearest cent), that would be necessary to raise an amount of revenue equal to ninety percent of "new revenue." (c) For purposes of this section, "new revenue" means the amount calculated by subtracting the "qualified revenue" collected in Fiscal Year 2017-2018 from the "qualified revenue" collected (or projected by the Finance Director to be collected) during the fiscal year immediately prior to the current tax year. For example, for purposes of calculating the rate reduction applicable to the tax levied in Tax Year 2020-2021, "new revenue" would be calculated by subtracting the "qualified revenue" collected in Fiscal Year 2017-2018 from the "qualified revenue" collected in Fiscal Year2019-2020.
(d) For purposes of this section, "qualified revenue" means all tax receipts from (i) the ad valorem property tax; (ii) the sales and use tax imposed pursuant to the Uniform Local Sales and Use Tax Law of the City of California City; and (iii) the cannabis business tax imposed pursuant to Section3-2.8.050 of this Code.
Sec. 3-2.1.506. - Annual proceedings.
The City Council is authorized to determine for each tax year, by ordinance or resolution, the tax levied against each lot or parcel. The tax for a tax year shall be calculated based on a single flat rate per lot or parcel. The ordinance or resolution shall list each taxed lot or parcel by assessor's parcel number. The ordinance or resolution shall constitute the official record of the assessment of the special tax, and a copy thereof, together with any other pertinent data, shall be transmitted to the appropriate county officials to facilitate collection of the tax.
The tax levied against any lot or parcel pursuant to this section for a tax year shall be no greater than 365 (or 366 if the tax year contains a leap day) times the daily rate permissible pursuant to Section 3-2.1.504.
Sec. 3-2.1.507. - Collection.
The tax shall be collected by the County of Kern in the same manner and subject to the same penalty and procedure as ad valorem property taxes collected by the county. Unpaid taxes shall bear interest at the same rate as the rate for unpaid ad valorem property taxes until paid.
The county may deduct its reasonable costs incurred for the service before remittal of the balance to the city.
Sec. 3-2.1.508. - Accounts for Deposit of Special Tax.
All tax proceeds received shall be deposited into an account that shall be named the “Essential Public Services Special Tax Fund.” Special Tax revenues deposited in the Essential Public Services Special Tax Fund, and earning thereon, shall be used only for city administrative expenses, personnel services, operations and maintenance, equipment, vehicles, supplies, capital outlays, law enforcement, fire protection, emergency medical services, and code enforcement.
Sec. 3-2.1.509. - Accountability.
For so long as proceeds of the tax remain unexpended, and in accordance with Government Code Section 50075.3, the Finance Director of the City shall file an annual report with the City Council stating the amount of taxes collected, the amount expended, and the purpose of the expenditures. Such annual report shall relate to the Fiscal Year most recently ended and may be incorporated into or filed with the annual budget, audit or other appropriate routine report to the City Council.
Sec. 3-2.1.510. - Duration.
The levy of tax shall commence with tax year 2024-25. The final levy of the tax shall be for tax year 20__-20__, unless the tax is extended by a vote of the people.
Sec. 3-2.1.511. – Appropriation Limit.
Pursuant to the California Constitution, article XIIIB, the appropriation limit for the City of California City will be increased by the maximum projected aggregate collection authorized by the levy of this special vacancy tax, as indicated in section 3-2.1.504 of this division, in each of the years covered by this article plus the amount, if any, by which the appropriations limit is decreased by law as a result of the assessment of the special vacancy tax set forth in this article.
Sec. 3-2.1.512. - Amendment.
The City Council may, by ordinance, amend, repeal, renumber or recodify any or all of the provisions of this section; provided, however, that no ordinance extending the tax beyond the dates set forth in Section 3-2.1.510 or increasing the maximum rate of the tax shall be effective unless submitted to, and approved by, the voters of the City as required pursuant to the applicable law at the time of such action.”
SECTION 2. If any section or portion of this Ordinance is found to be invalid by a court of competent jurisdiction, such finding shall not affect the validity of the remainder of the Ordinance, which shall continue in full force and effect, and to that extent, the provisions of this Ordinance are severable.
SECTION 3. The City hereby determines that this Ordinance is not in-and-of-itself a "project" pursuant to the California Environmental Quality Act, Public Resources Code section 21000 et seq., including without limitation CEQA Guidelines 15378(b)(4) and 1506l(b)(3), as it can be seen with certainty that there is no possibility that the adoption of the ordinance itself may have a significant effect on the environment.
SECTION 4. This Ordinance, and all the provisions thereof, shall become effective only upon affirmative passage of two-thirds of the voters voting on the Ordinance. This Ordinance shall be considered adopted on the date that the City declares the results of the election at which it was voted upon and shall be effective ten (10) days thereafter.
ADOPTED ON [date vote declared by the City Council] AND EFFECTIVE ON [10 days after declaration of vote].
DRAFT
Special Parcel Tax Ballot Question Language
Shall the measure to levy an annual special parcel tax on all real property within the City of California City, in the flat amount of $[___], estimated to generate $[_________] annually, expiring in [________] years, solely to fund essential public services (including law enforcement, fire protection, personnel services, operations, maintenance, and capital outlays), and shall not be used for any municipal function funded through an enterprise fund or the housing fund, be adopted?