4 | P a g e
Business Tax - Equity of Contribution
The City currently uses employee count to calculate the tax for almost all businesses, although the city does have other categories that use other business activity metrics such as number of rental units, or a flat rate.
Table 1: Current Tax Structures
Business Category Type Total Count Primary Tax Type
General Business (Employee Fees) 1,419 Employee
Apartments/Motels/Hotels/Dwellings 7 Per Unit
Coin Operated Machines 3 Per Unit
Vehicle and Equipment Rentals or Leasing 1 Flat Rate
Storage Warehouse 1 Flat Rate
TOTALS 1,431
As you can see in chart 4a, the City’s current tiered rate employee-based tax results in a regressive tax structure. Since the highest a business will pay is $100 if they have 21 or more employees it is essentially capped at $100. Where the smallest2 businesses pay a proportionally higher tax rate for the business license tax in the City.
Chart 4a: Examples of Current Tax Rate as Percent of Estimated Gross Receipts3 Chart 4b: Distribution of Business by Size within Category 2 Small. Medium, and Large businesses are defined by estimated gross receipts and are split into percentile groupings where the smallest third are categorized as “small”, the middle third are “medium”, and the largest third are “Large”. 3 Estimated gross receipts are based on NAICS industry averages and a more detailed explanation is available on page 14.
0.054%
0.015%
0.002%
0.00% 0.01% 0.02% 0.03% 0.04% 0.05% 0.06%
Small Business
Medium Business
Large Business
0 50
100
150
200
250
300
350
400
Contractor General/Retail Services Professionals Rental Properties Small
Medium
Large
5 | P a g e
City of Carpinteria: Business Tax – Business Type Summary The two tables below show the composition of business licenses issued to businesses inside and outside the city. The composition inside the city is concentrated in the General Retail, Restaurants, and Professional Services categories. In table 2 below are the average number of employees for businesses in the top 10 contributing business types.
Table 2: Average Total Employees
Business Type Average Total Employees
Restaurant - Without Alcohol Sales 11
Retail Sales – General 6
Professional & Semi-Professional 4
Manufacturing 31
Contractor - General 7
Handyman Service 6
Artist & Designer 1
Healthcare & Hospitals 4
Other 9
Retail Sales - With Tobacco 13
$0.00
$5,000.00
$10,000.00
$15,000.00
$20,000.00
$25,000.00
$30,000.00
$35,000.00
$40,000.00
Revenue
Revenue Contribution Composition
Outside Businesses All Other
SERVICE - GENERAL
MANUFACTURING
ARTIST & DESIGNER
OTHER
CONTRACTOR -
ELECTRICAL
RETAIL SALES -
GENERAL
CONTRACTOR -
SPECIALIZED
PROFESSIONAL &
SEMIPROFESSIONAL
HANDYMAN
SERVICE
CONTRACTOR -
GENERAL $0.00
$5,000.00
$10,000.00
$15,000.00
$20,000.00
$25,000.00
Revenue
Revenue Contribution Composition
Inside Businesses All Other
RETAIL SALES - WITH
TOBACCO
OTHER
HEALTHCARE &
HOSPITALS
ARTIST & DESIGNER
HANDYMAN SERVICE
CONTRACTOR - GENERAL
MANUFACTURING
PROFESSIONAL & SEMIPROFESSIONAL
RETAIL SALES - GENERAL
RESTAURANT - WITHOUT
ALCOHOL SALES
6 | P a g e
City of Carpinteria: Comparison to Neighboring Cities
Below you can see the comparison jurisdictions that the City and HdL chose as a baseline. They were chosen because they were: (1) in similar geographic regions, (2) were like the City in median income, and (3) were relatively similar in population density.
As you can see below, the City is right in the middle in terms of estimated median household income and one of the higher cities for population density.
Chart 5: Household Income (Vertical) with Population Density (Horizontal) The table below highlights population, the estimated number of licensed businesses, and estimated annual revenue for quick comparison. Below the table are some key graphics showing how the City compares to other jurisdictions. For purposes of comparison, we use the fiscal year 18-19 data. We do so because that data is pre-COVID and so avoids the ‘noise’ in the data caused by the impact of the pandemic on the City and the comparison jurisdictions.
Carpinteria
Ojai
Half Moon Bay
San Marino
Grass Valley
Arroyo Grande
Grover Beach
Solana Beach
Pismo Beach
Morro Bay
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00
7 | P a g e
Comparison Cities Summary Table (Using FY 18-19 data)
Table 3: Comparison Data
Jurisdiction
Name
Est.
Square
Miles
Est.
Population
Est. Median
Household
Income
Est.
Businesses
Tax
Schedules
Est. Revenue
FY21-22
5-Year State Report
Business Tax Revenue
Morro Bay 5.33 10,779 $80,808 2,680 Base +
Employee $487,955.00
San Marino 3.77 13,352 $174,722 2,330 Employee $406,759.00 Ojai 4.36 7,590 $71,700 1,200 Base +
Employee $386,516.00
Half Moon
Bay 6.24 11,176 $148,702 1,100 Employee $312,608.00
Pismo Beach 3.6 8,036 $94,268 1,510 Gross
Receipts $241,062.00
Solana Beach 3.41 13,933 $113,903 3,100 Flat Rate $231,375.00 Grass Valley 5.25 13,754 $44,906 2,400
Employee
($100.00
Min)
$200,044.00
Grover Beach 2.31 13,533 $77,637 1,100 Base + SqFt $156,970.00 Arroyo
Grande 5.94 18,456 $90,405 1,700 Base + Employee $97,812.00 Carpinteria 2.59 13,680 $78,349 1,431 Employee $76,923.00 As you can see from the above table, the City’s FY19 business tax revenues place it at the bottom amongst this comparison group. One interesting comparison is between the City and Pismo Beach. Both are similar size and similar estimated businesses. Pismo, however, has a gross receipts structure which is leading to higher revenues as it is better capturing the economic activity in the city.
8 | P a g e
Chart 6: Est. Count of Businesses by Jurisdiction
Chart 7: Business Tax Per Capita Comparison
Chart 8: Business Tax per Business Comparison
3,092
2,684
2,404
2,334
1,708
1,510
1,431
1,214
1,100
1,092
0 500 1,000 1,500 2,000 2,500 3,000 3,500
Solana Beach
Morro Bay
Grass Valley
San Marino
Arroyo Grande
Pismo Beach
Carpinteria
Ojai
Half Moon Bay
Grover Beach
$51
$45
$30
$30
$28
$17
$15
$12
$6
$5
$0 $10 $20 $30 $40 $50 $60
Ojai
Morro Bay
San Marino
Pismo Beach
Half Moon Bay
Solana Beach
Grass Valley
Grover Beach
Carpinteria
Arroyo Grande
$318
$284
$182
$174
$160
$144
$83
$75
$57
$54
$0 $50 $100 $150 $200 $250 $300 $350
Ojai
Half Moon Bay
Morro Bay
San Marino
Pismo Beach
Grover Beach
Grass Valley
Solana Beach
Arroyo Grande
Carpinteria
10 | P a g e
SECTION 2 – Category & Tax Analysis
The City requested that HdL conduct an analysis of the current license structures and explore options for modifying the rates and categories. In Section 1, we summarized the current structure of the City’s business tax and compared the City to neighboring jurisdictions to give an idea of how the various tax structures and markets in nearby municipalities are creating different revenue outcomes.
In this section, we provide options for modifying the City's business tax rates and classifications. Using the data compiled in section 1 of this report on current license revenues, we developed models to estimate potential fiscal impacts to the City from the different models. You can find summary charts on pages 17-19 that provide a quick look at each proposed model's impact on the City revenues and the business community.
Tax Model Revenue and Equity Comparison
The three models below illustrate different frameworks the City can adopt to better meet the needs of the city and possibly achieve greater equity in the taxation of the business community. Model one is a straight increase in the current rates and structure of the tax code. It adds substantial additional revenue but does nothing to address any inequities inherent in the current structure of taxation. Model two provides advantages in three areas, it provides equality in the taxation of the whole business community, increases revenue, and simplifies the tax structure making it the easiest to administer and calculate. Model 3’s focus is on maximizing equity by structuring the rates for business industries or categories in a way that considers other revenue contributions to the city like sales tax and property tax. Model 3 allows businesses who contribute in other ways a tax break in the Business License portion of their total city taxation.
Below is an illustration comparing each model’s effect on revenue and equity. Total equity as represented below is a heuristic estimate of the potential additional equity to be expected with the proposed models. Equity is a complex and difficult concept to quantify, so we use an effective tax rate as a proxy for equitability. Th effective tax rate is the ratio or percentage of the total business license tax burden to the total gross receipts. The goal of an equitable tax code is to create a fair and reasonable tax load for all businesses. Equality would be defined as everyone pays exactly the same effective tax rate. However, because certain industries contribute to local revenues in other areas such as sales tax and property tax, allowing them to have a lower tax rate may be fairer (or more equitable) even if it is not “equal”. While a perfectly equitable tax code is in practice an impossibility, modern tax codes try to maximize the total equity in taxation.
Chart 9: Model Revenue to Equity Comparison
Current Tax Structure
Total Tax Code Equity
1 Model Revenue to Equity Comparison
11 | P a g e
Model 1: Existing Categories with Simple Increases
The City may elect to retain the existing structure while modifying the tax amounts for each category. Keeping the current structure in place would eliminate the need to create different categories and allow for a much simpler implementation for the City and the business community.
Table 5: Estimated revenue from a simple percentage increase Number of Businesses Current Revenue Model 1A: 20%
Increase
Model 1A:
40% Increase
1,431 $59,258.81 $69,910.57 $81,562.33
Model 1 – Highlights and Impact Review
As indicated in the model above, a simple increase could keep the existing structures in place while yielding higher revenues to the City. A 20%-40% increase across all sectors of industry is easy to implement but it does nothing to address equity. The drawback of model 1 is that the tax remains regressive.
Composite Businesses Table4 – Model 1
Hypothetical Business Current Model 1A Model 1B
Large Contractor (GR: $667,000 - Employees: 100) $100.00 $120.00 $140.00 Large General/Retail (GR: $8,622,000 - Employees: 100) $100.00 $120.00 $140.00 Large Service (GR: $3,052,000 - Employees: 100) $100.00 $120.00 $140.00 Large Professional (GR: $5,779,000 - Employees: 100) $100.00 $120.00 $140.00 Medium Contractor (GR: $100,000 - Employees: 15) $75.00 $90.00 $105.00 Medium General/Retail (GR: $1,293,000 - Employees: 15) $75.00 $90.00 $105.00 Medium Service (GR: $458,000 - Employees: 15) $75.00 $90.00 $105.00 Medium Professional (GR: $867,000 - Employees: 15) $75.00 $90.00 $105.00 Small Contractor (GR: $13,000 - Employees: 2) $25.00 $30.00 $35.00 Small General/Retail (GR: $172,000 - Employees: 2) $25.00 $30.00 $35.00 Small Service (GR: $61,000 - Employees: 2) $25.00 $30.00 $35.00 Small Professional (GR: $116,000 - Employees: 2) $25.00 $30.00 $35.00 Totals $800.00 $960.00 $1,120.00
4 Please note that the size of the hypothetical business (“small”, “medium”, “large”) is based on employee count and not estimated gross receipts.
12 | P a g e
Models 2 and 3: Gross Receipts Tax
We now turn to consider two models that are additional variations on the theme of a gross-receipts-based tax.
Many California cities use some form of gross receipts tax structure. Many of those cities use a standard rate multiplier to determine the tax amount owed, or by setting the rate for each business category. For example, a city may choose to charge $1 per thousand dollars of gross receipts (0.001 x Gross) for a retail business while charging a rate of $3.00 per thousand dollars of gross receipts (0.003 x Gross) for service or professional businesses.
The benefits of gross receipts-based taxes are the potential equity of their effective tax rate, ease of calculation, and potential for capturing revenue from growth in the economy. The drawback is that it exposes City revenues to the fluctuations of gross receipts in the economy.
Gross Receipts Tax – Estimates
Since we do not have complete information on gross receipts for the City's current businesses, we used multiple assumptions in the options below, which are meant to provide an estimate of the possible impact and should not be relied upon for precise budgeting. We have used NAICS industry averages to estimate the gross receipts of the city. These averages are nationwide averages for businesses in that industry. While they may not perfectly reflect the business activity in Carpinteria specifically, they do give us a reasonable gross receipts estimate of what a typical business with that NAICS code assigned would have. The following information was used as a basis for the tax tables and models in the options below.
Table 6: Key Estimates Used In The Gross Receipts Models Number of Businesses Total Business Taxable Gross
Receipts (Est.)
1,431 $657 Million
Model 2: Gross Receipts Tax – Single Gross Receipts Rate Model 2 reflects the potential revenues for converting the City tax to a single-rate, gross-receipts model. This model is simple to administer—everyone is charged the same rate—but it allows the City to increase revenue. Model 2 also creates an annual minimum rate to a uniform $25, to provide some tax relief for very small businesses from the current structure.
Table 7: Model 2—Potential Tax Structure
Tax Basis Tax Rate
Minimum Tax $25 Minimum (up to $25,000 Gross Receipts)
Gross Receipts Tax $1.25 per thousand dollars of Gross Receipts (0.00125 x Gross Receipts)
Model 2 Estimates Table
The table below indicates the potential revenues from implementing a gross receipts tax with two options, $1.25 per thousand and $0.50 per thousand. Information for the estimates comes from the data in the section above. Please note that this model and model three do not include the actual gross receipts, since this data is not currently collected. These models use estimated gross receipts based on the business classification which may overestimate or underestimate the actual gross receipts in the city. We believe however, it gives a useful representation of the potential impact of the proposed tax structures. While these numbers should not be used for precise budgeting, useful insights are contained in the industry averages for the business classifications.
13 | P a g e
Table 8: Model 2 – Rough Estimates from a simple gross receipts structure Number of Accts Taxable Gross
Receipts
Tax Amount
$1.25/ thousand
Tax Amount
$0.50/ thousand
1,431 $657 Million $813,000* $347,000*
Model 2 – Highlights and Impact Review
The "single rate" method of taxing on gross receipts provides an even distribution of the effective tax rate because all businesses subject to the tax will pay the same rate. Under this method, no cap is put in place, and therefore most of the revenues are received from the highest-grossing businesses. In the case of $1.25 per thousand gross receipts approximately 80% of total revenue is generated by businesses in the large category. Model 2 expands revenue while keeping the tax structure simple and easy to understand for businesses, while asking larger businesses to pay a proportionally equivalent share. It does, however, more than quadruple the tax rate for some businesses and would likely face significant opposition from the business community. In the case of the smallest businesses the base minimum of $25 up to $25,000 in gross receipts places the effective tax rate slightly above equal. This is, however, a small sum of money, and the economic impact of lowering the base rate from the current structure would be most noticeable to the smallest businesses.
Composite Businesses Table – Model 2
Hypothetical Business Current
Revenue Model 2a Model 2b
Large Contractor (GR: $667,000 - Employees: 100) $100.00 $827.50 $346.00 Large General/Retail (GR: $8,622,000 - Employees: 100) $100.00 $10,771.25 $4,323.50 Large Service (GR: $3,052,000 - Employees: 100) $100.00 $3,808.75 $1,538.50 Large Professional (GR: $5,779,000 - Employees: 100) $100.00 $7,217.50 $2,902.00 Medium Contractor (GR: $100,000 - Employees: 15) $75.00 $118.75 $62.50 Medium General/Retail (GR: $1,293,000 - Employees: 15) $75.00 $1,610.00 $659.00 Medium Service (GR: $458,000 - Employees: 15) $75.00 $566.25 $241.50 Medium Professional (GR: $867,000 - Employees: 15) $75.00 $1,077.50 $446.00 Small Contractor (GR: $13,000 - Employees: 2) $25.00 $25.00 $25.00 Small General/Retail (GR: $172,000 - Employees: 2) $25.00 $208.75 $98.50 Small Service (GR: $61,000 - Employees: 2) $25.00 $70.00 $43.00 Small Professional (GR: $116,000 - Employees: 2) $25.00 $138.75 $70.50 Totals $800.00 $26,440.00 $10,756.00
14 | P a g e
Chart 10: Estimated Effective Tax Rates Under A Simple Gross Receipt Model Model 3: Gross Receipts Tax – Classification-Based Rates Model 3, as indicated below, would create different rates for different business classifications. For example, the City might choose to implement a rate for the retail/wholesale/miscellaneous business activities at a base rate of 0.001, recognizing the higher costs of goods sold and lower profit margins for these types of business as well as their contribution to other City revenues such as sales tax. At the same time, the City could consider implementing a higher rate for professionals due to the nature of their business model. This model offers the most flexibility for increasing revenues while accommodating certain business categories.
We have tailored Model 3 to provide a revenue increase and to focus on shifting more of the tax to property rentals and professional services.
License Classification and Rate Types
In Model 3, we use five basic categories of businesses. These are five basic structures that are common across municipalities. The definitions below are general and not meant to be the complete definitions that would appear in a municipal code.
Contractors: These are persons or firms that are carrying on the business of a contractor, subcontractor, or builder particularly the construction or repair of any buildings. Examples include but are not limited to construction, plumbing, HVAC, etc.
General Commerce/Retail: These are retailers, wholesalers, hoteliers, restaurateurs, and manufacturers. All these businesses are likely to contribute to your tax base in other ways (i.e., property tax and sales tax) and often have lower profit margins.
Rental (Commercial & Residential): This category includes any business that leases, rents, or provides use of real property to another individual or entity for compensation. Examples include but are not limited to commercial leasing, residential rental, parcel leasing, etc. This would also be a category where the City could include language and rates for taxing shortterm rentals.
Service: This is the offering of services that require minimal to no higher education training. This is also the default category for any business that is not specifically defined in one of the other five categories. Examples include but are not limited to hair stylists, gardeners, nail salons, etc.
Professional: These businesses offer services that require a rigorous amount of training through any type of higher education, or vocational institutions that exclusively certifies, complete obtainment of skills and the ability to offer such professional services. Examples include but are not limited to a doctors’ office, a law office, a consulting firm, etc.
0.05%
0.05%
0.07%
0.125%
0.123%
0.118%
0.002%
0.015%
0.054%
0.00% 0.02% 0.04% 0.06% 0.08% 0.10% 0.12% 0.14%
Large Business
Medium Business
Small Business
Current vs. Proposed Effective Tax Rates Current Tax
Structure
$1.25 per $1,000
$0.50 per $1,000
15 | P a g e
Please note that in the table below we have excluded the non-profit businesses along with the “revenue” attributable to their fees to give a clearer picture of the tax revenue producing businesses in the City.
Approximate grouping of City's Businesses by the proposed categories Business Category Type Total Count Total Current Taxes
Contractor 454 $17,416.12
General Commerce/Retail 369 $17,076.50
Rental (Commercial & Residential) 18 $864.64
Service 274 $12,408.05
Professional 316 $10,493.50
TOTALS 1,431 $58,258.81
Tax Structure and Estimated Revenue
The structure provided in the table below is just one example of how the City might utilize a gross receipt model to improve the equity of rates and increase revenue. Should the City decide to use a gross receipts model like model 3, HdL will work with City staff to finalize a structure that best serves the City's goals. Categories are defined and summary statistics are available in Appendix B below. It is important to remember that like model 2 these models use estimated gross receipts based on the business classification which may overestimate or underestimate the actual gross receipts in the city. We believe however, it gives a useful representation of the potential impact of the proposed tax structure. While these numbers should not be used for precise budgeting there are useful insights contained in the industry averages for the business classifications.
Table 9: Basic tax structure for classification-based gross receipts Categories Minimum Rate Tax Rate 3A Tax Rate 3B
Contractor
$25 (GR less
than $25,000)
0.002 X Gross 0.001 X Gross
General Commerce/Retail 0.001 X Gross 0.0005 X Gross
Rental (Commercial & Residential) 0.003 X Gross 0.0015 X Gross Service 0.002 X Gross 0.001 X Gross
Professional 0.003 X Gross 0.0015 X Gross
Table 10: Estimated revenue from classification-based gross receipts Business Type Number
of Accts
Est. Taxable Gross
Receipts Current Taxes Model 3A Model 3B
Contractor 454 $113,501,000.00 $17,416.12 $215,651.88 $113,500.94 General Commerce/Retail* 369 $323,657,000.00 $17,076.50 $323,764.36 $166,494.68 Rental (Commercial &
Residential) 18 $6,859,000.00 $864.64 $19,677.79 $10,063.89 Service 274 $87,652,000.00 $12,408.05 $168,454.87 $87,652.44 Professional 316 $125,751,000.00 $10,493.50 $361,452.22 $184,676.11 1,431 $657,421,000.00 $58,258.81 $1,089,001.12 $562,388.06 *These estimates are heavily dependent on the estimated taxable gross receipts being close to the actual gross receipts in the city.
16 | P a g e
Model 3 – Highlights and Impact Review
This option has the benefit of spreading the burden of an increase across multiple business types. This model retains some administrative efficiency by having a simple structure of 5 categories and would increase revenue and, as the City will see in the charts that follow, there would be greater equity in the effective tax rates compared to the current model.
Composite Businesses Table – Model 3
Hypothetical Business Current
Revenue Model 3a Model 3b
Large Contractor (GR: $667,000 - Employees: 100) $100.00 $1,309.00 $667.00 Large General/Retail (GR: $8,622,000 - Employees: 100) $100.00 $8,622.00 $4,323.50 Large Service (GR: $3,052,000 - Employees: 100) $100.00 $6,079.00 $3,052.00 Large Professional (GR: $5,779,000 - Employees: 100) $100.00 $17,287.00 $8,656.00 Medium Contractor (GR: $100,000 - Employees: 15) $75.00 $175.00 $100.00 Medium General/Retail (GR: $1,293,000 - Employees:
15) $75.00 $1,293.00 $659.00
Medium Service (GR: $458,000 - Employees: 15) $75.00 $891.00 $458.00 Medium Professional (GR: $867,000 - Employees: 15) $75.00 $2,551.00 $1,288.00 Small Contractor (GR: $13,000 - Employees: 2) $25.00 $25.00 $25.00 Small General/Retail (GR: $172,000 - Employees: 2) $25.00 $172.00 $98.50 Small Service (GR: $61,000 - Employees: 2) $25.00 $97.00 $61.00 Small Professional (GR: $116,000 - Employees: 2) $25.00 $298.00 $161.50 Totals $800.00 $38,799.00 $19,549.50
17 | P a g e
Model 4: Registration Tax Model
Model 4 as shown below explores the possibility of changing the structure of business license tax to a registration tax. This would require every business to register with the city and pay a small fee to cover the administration costs and potentially provide a small amount of revenue for the city. In table 11 we explore two options for the registration tax rate, $25 per year and $50 per year. A consumer price index (CPI) clause in the tax code would allow this registration tax the ability to increase with inflation to continue to cover the cost of administration in subsequent years.
Table 11: Estimated Revenue from a Registration Tax
Number of Accts Registration Tax $25 Registration Tax $50 1,431 $35,775 $71,550
Model 4 – Highlights and Impact Review
Model 4 has the potential to simplify the tax structure greatly. It is easy for the businesses to know how much they will pay each year because it is not dependent on any business inputs. It also has the advantage that it is more resilient to downturns in the economy. A drawback of model 4 is that it is regressive, where the smaller businesses are proportionally more. However, since the tax is small there is little chance of resistance from the business community.
Composite Businesses – Model 4
Hypothetical Business Current
Revenue Model 4
Large Contractor (GR: $667,000 - Employees: 100) $100.00 $50.00 Large General/Retail (GR: $8,622,000 - Employees: 100) $100.00 $50.00 Large Service (GR: $3,052,000 - Employees: 100) $100.00 $50.00 Large Professional (GR: $5,779,000 - Employees: 100) $100.00 $50.00 Medium Contractor (GR: $100,000 - Employees: 15) $75.00 $50.00 Medium General/Retail (GR: $1,293,000 - Employees: 15) $75.00 $50.00 Medium Service (GR: $458,000 - Employees: 15) $75.00 $50.00 Medium Professional (GR: $867,000 - Employees: 15) $75.00 $50.00 Small Contractor (GR: $13,000 - Employees: 2) $25.00 $50.00 Small General/Retail (GR: $172,000 - Employees: 2) $25.00 $50.00 Small Service (GR: $61,000 - Employees: 2) $25.00 $50.00 Small Professional (GR: $116,000 - Employees: 2) $25.00 $50.00 Totals $800.00 $600.00
18 | P a g e Proposed Rates Comparisons Table 12: Comparing Gross-Receipt Models By Hypothetical Business Type Sample Business Current Rates Model 1a Model 1b Model 2A $1.25/1000 Model 2B $0.50/1000 Model 3A Model 3B Model 4 Large Contractor (GR: $667,000 - Employees: 100) $100.00 $120.00 $140.00 $827.50 $346.00 $1,309.00 $667.00 $50.00 Large General/Retail (GR: $8,622,000 - Employees: 100) $100.00 $120.00 $140.00 $10,771.25 $4,323.50 $8,622.00 $4,323.50 $50.00 Large Service (GR: $3,052,000 - Employees: 100) $100.00 $120.00 $140.00 $3,808.75 $1,538.50 $6,079.00 $3,052.00 $50.00 Large Professional (GR: $5,779,000 - Employees: 100) $100.00 $120.00 $140.00 $7,217.50 $2,902.00 $17,287.00 $8,656.00 $50.00 Medium Contractor (GR: $100,000 - Employees: 15) $75.00 $90.00 $105.00 $118.75 $62.50 $175.00 $100.00 $50.00 Medium General/Retail (GR: $1,293,000 - Employees: 15) $75.00 $90.00 $105.00 $1,610.00 $659.00 $1,293.00 $659.00 $50.00 Medium Service (GR: $458,000 - Employees: 15) $75.00 $90.00 $105.00 $566.25 $241.50 $891.00 $458.00 $50.00 Medium Professional (GR: $867,000 - Employees: 15) $75.00 $90.00 $105.00 $1,077.50 $446.00 $2,551.00 $1,288.00 $50.00 Small Contractor (GR: $13,000 - Employees: 2) $25.00 $30.00 $35.00 $25.00 $25.00 $25.00 $25.00 $50.00 Small General/Retail (GR: $172,000 - Employees: 2) $25.00 $30.00 $35.00 $208.75 $98.50 $172.00 $98.50 $50.00 Small Service (GR: $61,000 - Employees: 2) $25.00 $30.00 $35.00 $70.00 $43.00 $97.00 $61.00 $50.00 Small Professional (GR: $116,000 - Employees: 2) $25.00 $30.00 $35.00 $138.75 $70.50 $298.00 $161.50 $50.00 Estimated Totals $800.00 $960.00 $1,120.00 $26,440.00 $10,756.00 $38,799.00 $19,549.50 $600.00
19 | P a g e
Chart 11: Average Revenue Yield Per Model by Business Category Chart 12: Equity of Models
$-
$150.00
$300.00
$450.00
$600.00
$750.00
$900.00
$1,050.00
$1,200.00
$1,350.00
$1,500.00
Contractors General
Commerce/Retail
Professional Rental (Commercial &
Residential)
Service
Current
Model 2A
Model 3A
0.139%
0.200%
0.169%
0.125%
0.123%
0.118%
0.002%
0.015%
0.054%
0.00% 0.05% 0.10% 0.15% 0.20% 0.25%
Large Business
Medium Business
Small Business
Current vs. Proposed Effective Tax Rates Current Tax Structure Model 2A
Model 3A
Attachment 3- City of Carpinteria Resident vs Non-Resident Analysis
City of Carpinteria
Resident/Non-Resident Analysis
Development Driven by Data
HdL ECONSolutions
120 S. State College Blvd., Ste 200
Brea, CA 92821
www.hdlcompanies.com
www.hdlcompanies.com 714.879.5000
June 2025 City of Carpinteria – RvNR Analysis 1
Overview
Incorporated in 1965, the City of Carpinteria is a picturesque seaside town located along the Pacific Coast in Santa Barbara County. Nestled between the Santa Ynez Mountains and the Pacific Ocean, Carpinteria boasts stunning natural beauty. The city is bordered by Santa Barbara to the west and the unincorporated community of La Conchita and the City of Ventura to the east. It is easily accessible via U.S. Route 101 or the Pacific Coast Highway (PCH).
Carpinteria is a popular destination known for its relaxed atmosphere and beautiful beaches. The city hosts several popular events, including the Surf 'n' Suds Beer Fest, the California Avocado Festival, the Rods & Roses Classic Car Show, and the 4th of July Parade, attracting not only residents but regional visitors.
The Restaurants & Hotels sector generates the highest amount of sales tax revenue for the City of Carpinteria. Visitors can find accommodations at establishments like Western Plus and Holiday Inn Express & Suites. Dining options range from casual, family-owned restaurants such as Teddy's by the Sea, Little Dom’s Seafood, and Rusty's Pizza Parlor, to quick-service options like McDonald’s, Carl’s Jr, Taco Bell, Starbucks, Subway, and Jersey Mike's. These restaurants and hotels provide comfortable lodging and a variety of dining choices, enhancing the overall experience for tourists and visitors to Carpinteria.
Below is a summary of the market analytics, for the City of Carpinteria and trade area within a 15-minute drive.
City of Carpinteria 15-Minute Drive Time
Population 12,771 22,893
Households 4,784 9,074
Average HH Income $154,320 $205,151
Daytime Population 11,698 24,365
There are 590 established businesses in the City of Carpinteria that employ approximately 4,989 employees in specialized industries such as Retail Trade, Arts Entertainment, & Recreation and Accommodation (Source: SiteSeer Demographics). The largest industry category in the City of Carpinteria is Retail Trade providing employment to approximately 20.1% of the total workforce within the city.
Legend
City of Carpinteria
Laguna Beach- Broadway
15-minute drive time
www.hdlcompanies.com 714.879.5000
June 2025 City of Carpinteria – RvNR Analysis 2
Non-Resident Spending Summary
The city has requested an estimate of the approximate amount of sales and use tax revenue generated by residents versus non-residents. Hereafter, individuals and businesses residing and located within the city will collectively be referred to as residents. While individuals and businesses residing and located outside of the city will collectively be referred to as non-residents.
The table below summarizes the results of the analysis based on actual Bradley Bruns 1% Sales Tax revenue and Transactions & Use Tax at 1.25% in 2024 (Calendar Year), it also reflects the percentages of sales tax estimated from non-residents for the seven major industry groups. The 1% Bradley Burns tax is based on where the sale is negotiated or the place where the order is taken, while Transactions and Use Taxes (TUT) are applied in accordance with where purchased goods are delivered or placed into use.
In summary, HdL companies estimates that 39.3 % of the 1% Bradley Burns Sales Tax in 2024 is generated from non-residents, while the percentage of a 1.25% TUT paid by non-residents is estimated at 18.1%.
Economic Segment
Bradley Burns 1%
Sales & Use Tax
Transactions & Use
Tax (TUT)
Autos & Transportation 44.0% 1.3%
Building & Construction 26.3% 5.0%
Business & Industry 57.6% 13.7%
Food & Drugs 34.6% 36.7%
Fuel & Service Stations 35.9% 35.0%
General Consumer Goods 30.5% 8.1%
Restaurants & Hotels 35.4% 34.4%
Estimated Average Non-Resident
Generated Revenue 39.3% 18.1%
Estimated % of Sales Tax Revenue Generated from Non-Residents The figures shown above were obtained utilizing a variety of methodologies customized to each economic segment. These methodologies consider the mix of businesses located in the City, per capita sales within the City of Carpinteria versus the per capita sales across Santa Barbara County, as well as factoring average income population and daytime – population from the designated trade areas previously described as a percentage of those categories within the City. The findings for each economic segment that led to the conclusions are listed below.
www.hdlcompanies.com 714.879.5000
June 2025 City of Carpinteria – RvNR Analysis 3
Autos & Transportation
The Autos & Transportation sector accounted for 1.4% of the Bradley Burns Sales Tax revenue for the City of Carpinteria. When comparing per capita sales in 2024, the City of Carpinteria produced significantly lower level than Santa Barbara County per capita sales level, this is primarily due to the fact the city has few businesses in this segment. This suggests that non-residents are not purchasing vehicles as well as auto-related items in large quantities within the city. This is also supported by a review of the Consumer Demand & Market Supply Assessment as the Autos & Transportation segment reflects that the businesses located within the City of Carpinteria supplied less than consumer demand. The combined information further suggests that car dealerships, automotive services, and automotive retailers located within the city’s limits are not providing for non-residents and are not meeting the consumer demand entirely. An estimated 44% of the sector’s 1% Bradley Bruns Sales Tax revenue is generated from non-residents.
It should be noted that a majority of TUT revenue is generated by residents and local businesses when they purchase and register a vehicle at an address within the City of Carpinteria. In addition, TUT would also be generated from sales of auto supplies, repairs, tires, and auto related items which would include transactions to non-residents. Therefore, the estimated percentage of a TUT revenue in this sector generated by nonresidents is estimated much lower at 1.3%.
Building & Construction (B&C)/ Business& Industry (B&I) The Building & Construction and Business & Industry sectors together generated 23.8% of city’s total 1% Bradley Burns Sales Tax in 2024. Most sales within these sectors rely on Business-to-Business transactions. The methodology used to estimate revenue from non-residents relies on adjustments to both segments’ top sales tax producers, which were used as a relative sampling of sales tax generation within these industry groups. The top 5 businesses in the Building & Construction(B&C) group accounted for 93% of the revenue generated the B&C sector in 2024, while 83% of the revenue generated in the Business & Industry (B&I) group was attributed to its top 10 sales tax producers.
The City of Carpinteria had lower per capita sales in the Building & Construction (B&C) sector compared to Santa Barbara County. However, in the Business & Industry sector, the city produced higher per capita sales than the county. This conclusion is supported by a review of the Consumer Demand & Market Supply Assessment as the Building & Construction segment indicates that establishments within this business group supplied less than the consumer demand, whereas the Business & Industry segment supplied more than the consumer demand. This combined information further suggests that businesses in the Building &Construction sector located within the city limits are not primarily focused on serving non-residents, while businesses in the Business & Industry sector located within the city limits are effectively meeting the demand from nonresidents.
The estimated 1% Bradley Burns Tax for the Building & Construction and Business & Industry sectors generated from non-residents is 26.3% and 57.6% respectively. Applying the same methodology used for the 1% Bradley Burns Sales Tax estimate to Transactions & Use Tax for B&C & B&I sectors, it is estimated that 5% & 13.7% of the revenue would be generated from non-residents, respectively.
www.hdlcompanies.com 714.879.5000
June 2025 City of Carpinteria – RvNR Analysis 4
Food & Drugs
The Food & Drugs sectors accounted for 15.5% of the Bradley Burns Sales Tax revenue for the City of Carpinteria. Analysis of the Food & Drugs segment indicates that the City of Carpinteria produced remarkably higher per capita sales than Santa Barbara County’s per capita sales level at grocery and drug stores. This suggests that non-residents are purchasing grocery related items in Carpinteria to fullfil their needs in Food & Drugs sector in large quantities. This is supported by a review of the Consumer Demand & Market Supply Assessment as the Grocery & Drugs segment reflects that the establishments in this business group within the City of Carpinteria supplied more than consumer demand. The combined information suggests that businesses located within the city limits of Carpinteria are providing for non-residents and are meeting the consumer demand.
It should be noted that generally only about 20% to 30% of grocery store sales are taxable and the receipts in this group are generally very close to 1:1 ratio between the Bradley Burns and Transaction & Use tax. Therefore, an estimated 34.6% of the sector’s revenue is generated from non-residents for the Bradley Burns Sales Tax and the estimated percentage for the Transaction & Use Tax generated from non-residents is 33.7%.
Fuel & Service Stations
The Fuel & Service Station(F&SS) sector generated 23.0% of the Bradley Burns Sales Tax revenue for the City of Carpinteria and the city produced significantly higher per capita sales than Santa Barbara County’s per capita sales level. This suggests that non-residents are purchasing auto fuel in large quantities from the service stations located within the city’s limits. This is supported by reviewing the Consumer Demand & Market Supply Assessment, the Fuel & Service Stations segment reflects that gasoline stations supplied more than 50% of the consumer demand for the city. The combined information suggests that the gas stations within the city’s boundaries are focused on providing for non-residents. The estimated percentage of non-resident sales for the 1% Bradley Burns Sales Tax is 35.9% and the estimated percentage for Transaction & Use Tax from nonresidents is 35%.
General Consumer Goods
The General Consumer Goods sector accounted for 8.7% of the Bradley Burns Sales Tax revenue for the City of Carpinteria and the city produced lower per capita sales than Santa Barbara County’s per capita sales level.
The Electronics/Appliance stores category accounted for 25% of the sector's revenue, while the Specialty Stores category contributed 17%. Sporting Goods/Bike Stores made up 12% of the revenue, and Family Apparel also contributed 12%.
A review from the General Consumer Goods segment of the Consumer Demand & Market Supply Assessment reflects that the businesses located within the city’s boundaries supplied less than consumer demand. The combined information suggests that retailers located within the city limits of Carpinteria are not meeting the consumer demand for residents and non-residents. An estimated 30.5% of the sectors 1% Bradley Burns Sales Tax revenue is generated from non-residents. Applying the same methodology used for the 1% Bradley Burns Sales Tax estimate to Transactions & Use Tax, it is estimated that 8.1% of the revenue would be generated from non-residents from TUT.
www.hdlcompanies.com 714.879.5000
June 2025 City of Carpinteria – RvNR Analysis 5
Restaurants & Hotels
The Restaurants & Hotels sector accounted for 27.5% of the Bradley Burns Sales Tax revenue for the City of Carpinteria. Within this sector, Casual Dining generated a significant 67 of the Bradley Burns Sales Tax revenue for the City of Carpinteria while the Quick Services category contributed 29%.
Analysis of the Restaurants & Hotels sector shows that the city produced slighly higher per capita sales level than Santa Barbara County’s per capita sales level, suggesting that non-residents are dining and staying in the City of Carpinteria. This is supported by a review of the Consumer Demand & Market Supply Assessment as the Restaurants & Hotels segment reflects that the businesses located within the city’s limits supplied the same amount as the consumer demand. The combined information suggests that the restaurants and hotels located within the city's limits are providing for non-residents and are meeting the consumer demand.
An estimated 35.4% of the sectors 1% Bradley Burns Sales Tax revenue is generated from non-residents.
Applying the same methodology used for the 1% Bradley Burns Sales Tax estimate to Transactions & Use Tax, it is estimated that 34.4% of the revenue would be generated from non-residents.
Conclusion
Local tax is the general term for sales and use taxes imposed under the Bradley Burns Uniform Sales and Use Tax Law. Please keep in mind that while per capita sales comparison is one of the methods that is being used to measure the ‘the City vs County’ trends, HdL also uses a methodology that is based on characteristics unique to each economic segment as well as examining the demographic data and the Consumer Demand and Market Supply Assessment for a drive-time trade area.
Non-residents living around the city, visiting, or commuting for work in Carpinteria are producing and generating sales tax revenue in all categories, particularly in Business & Industry, Food & Drugs, Fuel & Service Stations and Restaurants & Hotels where the city’s per capita sales levels are higher than Santa Barbara County’s per capita sales levels. In conclusion, the estimated percentage for sales tax revenue generated by non-residents in the City of Carpinteria is 39.3% for the 1% Bradley Burns that is based on actual sales tax revenue in 2024 and the Transactions & Use Tax generated by non-residents based on actual sales tax revenue in 2024 is estimated at 18.1%.
It is worth noting that several key factors contribute to the lower Transactions & Use tax (TUT) percentage.
One of the factors is the structure of the Business & Industry (B&I) sector, which accounts for 20.3% of the city’s total sales tax revenue. Because the Transactions and Use Tax (TUT) is destination-based, many of these transactions generate tax revenue for the cities where the goods are delivered—often outside the originating city. Combined with high levels of non-resident spending, reducing the local share of TUT revenue.
Other contributing factors are from economic sectors including General Consumer Goods and Autos & Transportation. While the General Consumer Goods sector contributes 8.7% of the city’s total sales tax revenue and draws in non-resident shoppers, analysis suggests that the inflow of non-resident spending may not fully offset the outflow of resident spending at businesses outside the city. This imbalance further contributes to the reduced share of TUT revenue retained by the city. Additionally, the absence of auto dealerships within the city limits impacts the Autos & Transportation sector. Since vehicle purchases are one of the major sources of TUT for this economic sector and are taxed based on the buyer’s residence, residents purchasing vehicles elsewhere contribute to the city’s TUT. With that, making resident spending the primary source of TUT in this sector, lowering the percentages for TUT from non-residents.
ATTACHMENT B
Amendment No 1 to Agreement No. 2025-048 with CliffordMoss
25176991.2
FIRST AMENDMENT TO AGREEMENT FOR CONSULTANT SERVICES
is made and effective as of the 13th of April , 2026 by and between the City of Carpinteria, a municipal corporation and CliffordMoss Consultant . The Agreement between City and Consultant currently provides under Section 4 (Compensation) the the City exercises its option to increase the agreement cost for additional services in the amount of $30,000.00 for a total amended agreement of $130,000.00. The $30,000 in additional services includes an additional one month at $8,000/month for professional services, an additional $16,000 for direct mail/collateral, and an additional $6,000 for online paid PSA packages.
Except as otherwise specifically provided herein, all other provisions of the Original Agreement, as modified by other amendments, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement at the place and as of the date first written above.
"CITY" "CONSULTANT"
City of Carpinteria CliffordMoss
By:_________________________ By:__________________________ Michael Ramirez, City Manager Amanda Clifford, Principal APPROVED AS TO FORM: ATTEST:
City of Carpinteria City of Carpinteria
By:___________________________ By:___________________________ Jena Shoaf Acos, on behalf of Brian C. Barrett, MMC, CPMC Brownstein Hyatt Farber Schreck, LLP City Clerk
Acting as City Attorney of the City of Carpinteria
25176991.2
2 EXHIBIT A
BASIC SERVICES TO BE PERFORMED
25176991.2
3 EXHIBIT B
UPDATED CERTIFICATE OF INSURANCE
ATTACHMENT C
HdL Revenue Enhancement Report Presentation
City of Carpinteria
Revenue Enhancement Opportunities
April 13, 2026
Executive Summary
City of Carpinteria
Revenue Enhancement Opportunities Report
About This Report
The City of Carpinteria retained HdL ECONSolutions to evaluate potential revenue enhancement opportunities to support the City’s long-term fiscal health. This report examines four options, each assessed on its nature, implementation process, revenue potential, and equity considerations.
Four Options Reviewed
• Transactions and Use Tax (TUT)
• Utility Users Tax (UUT)
• Parcel Tax
• Business License Tax
Evaluation of Revenue
Enhancement
Opportunities
Voter Approval Requirements
City of Carpinteria
Each option requires voter approval. The path to the ballot differs depending on whether the tax is designated for general or specific use.
• Require 2/3 majority approval
by City Council
• Require simple majority (50 + 1)
for voter approval of measure
General Use of Funds
• Require simple majority (50 + 1)
approval by City Council
• Require 2/3 majority (66 + 1)
for voter approval of measure
Special Use of Funds
Transactions
and Use Tax
(TUT)
Description
• A sales tax add-on applied where goods are delivered or used, collected alongside the state Bradley-Burns 1% rate
• Carpinteria voters approved a 1.25% TUT in 2018, bringing the City’s combined rate to 9.00%
• The City has room to increase its TUT by up to 0.25% before reaching the state’s 2% cap
Revenue Opportunity
• An additional 0.25% TUT increase is estimated to generate approximately $694,500 in new annual general fund revenue
• Approximately 18% of TUT revenue is paid by non-residents • All seven cities in Santa Barbara County with a TUT range from 8.75% to 9.25%; Carpinteria is already in line with regional peers
• Like all sales taxes, a TUT has a regressive impact; it represents a larger share of income for lower-income households
• Of the four options, TUT has the strongest track record of voter approval in comparable California cities
Utility Users
Tax (UUT)
Description
• A tax on electricity, gas, water, sewer, telecommunications, and cable television • The city can determine which utilities are taxed, at what rates, and whether it applies to residential, commercial, or both
• Carpinteria does not currently have a UUT; 157 California cities do Revenue Opportunity
• Based on per capita analysis of comparable regional cities, a UUT could generate between $597,000 and $1,685,000 annually
• The range reflects significant variation in rate structures and utility scope across cities
Considerations
• UUT revenue is generally stable and grows gradually over time as utility rates increase
• The tax is paid by residents and/or businesses within the city: non-residents do not contribute
• Like other utility-based taxes, it is considered regressive, as lower-income households pay a higher proportion of their income on essential utilities
Parcel Tax
Description
• A flat fee assessed on each parcel of property within the city, regardless of property value • Must be levied for a specific stated purpose: revenue may only be used for that purpose (e.g., public safety, road maintenance, or library services)
• The City sets the rate and can differentiate by land use type, and may exempt certain property classes
Revenue Opportunity
• Carpinteria has 5,158 parcels: 86.7% residential, 3.8% commercial, 1.75% industrial • At $75 per parcel: approximately $354,000 annually
• At $200 per parcel: approximately $945,000 annually
• The County of Santa Barbara administers collection, reducing the City’s administrative burden Considerations
• A tax rate study is required before a measure can be placed on the ballot • The tax falls only on property owners within Carpinteria — non-residents and visitors do not contribute
• Less regressive than a sales tax, but still impacts lower- and fixed-income property owners disproportionately
Business
License Tax
Description
• A tax on businesses within city limits to fund services that support the business community • Carpinteria currently requires all businesses to obtain a license and pay an employee-based tax • Annual revenue has averaged approximately $63,000, with 1,910 businesses licensed in 2024 Current Situation
• Despite growth in licensed businesses — from 1,431 in 2023 to 1,910 in 2024 — total revenue declined
• The current flat, employee-based model does not scale with business size or economic activity • HdL’s 2024 Business License Tax Analysis found Carpinteria’s revenue per business to be among the lowest of comparable peer cities
Path Forward
• A gross receipts model would allow businesses to contribute proportional to their economic activity • Actual gross receipts data collection would be needed before placing a measure on the ballot Considerations
• Voter approval by residents, not business owners, is required; historically, residents have been supportive of business license tax measures
• Some of the tax cost may be passed through to customers in the form of higher prices
Resident vs. Non-Resident Spending Analysis
City of Carpinteria
2024 Sales Tax Non-Resident Revenue Analysis
Non-residents represent 39.3% of Bradley-Burns and 18.1% of TUT revenue. Breakdown by segment:
Economic Segment Bradley-Burns 1% Sales Tax TUT 1.25%
Autos & Transportation 44.0% 1.3%
Building & Construction 26.3% 5.0%
Business & Industry 57.6% 13.7%
Food & Drugs 34.6% 36.7%
Fuel & Service Stations 35.9% 35.0%
General Consumer Goods 30.5% 8.1%
Restaurants & Hotels 35.4% 34.4%
Estimated Average — Non-Resident Generated Revenue 39.3% 18.1%
Conclusion
City of Carpinteria
Each of the four revenue options offers a viable path to strengthening Carpinteria’s fiscal position. The right choice will depend on the City Council’s priorities across four key dimensions HdL is available to support the City Council in evaluating next steps for any of these options.
Administrative Ease:
• TUT carries lowest
setup burden;
• Parcel Tax benefits
from County
collection.
• UUT and Business
License Tax require
more coordination.
Equity:
• All options carry
regressive impact
• TUT: only option
where non-residents
share the burden
(~18% of revenue).
• Parcel Tax is the least
regressive.
Revenue Potential:
• TUT: ~$694,500
• UUT: $597K–$1.68M
• Parcel Tax: $354K–
$945K
• Business License:
TBD
Estimated Admin Costs:
• TUT: ~$3,600/yr
• UUT: higher (utility
coordination +
auditing)
• Parcel Tax: moderate
• Business License:
one-time transition
investment
Questions?
Take Action
Home / Advocacy / Take Action
Cal Cities' advocacy efforts are strongest when joined by the voices of city leaders.
Below is a list of current legislative proposals that local officials should act on to support cities' top legislative priorities, along with sample support or opposition letters.
Oppose Unless Amended SB 866 (Blakespear) Housing Element Mandates:
Homelessness
What the bill does: SB 866 requires all but 14 cities in the state to add extensive and burdensome homelessness reporting requirements to their housing elements. This bill specifically targets cities that do not have direct access to state homelessness funding.
Why SB 866 is bad for cities:
• SB 866 only applies to cities that do not have access to direct state funding from the Homeless Housing Assistance and Prevention (HHAP) grant program, placing extensive new reporting burdens on those with the fewest resources. • SB 866 mandates reporting on metrics that nearly all cities lack the ability to collect. This information could only be collected through regional collaboration with counties, hospitals, jails, and other partners.
• The reporting required in SB 866 does not belong in a long-term housing planning document that, for most cities, is updated every eight years and would quickly become outdated and unresponsive to the evolving needs of unhoused residents.
Additional background: Since 2019, HHAP has provided state funding to the 14 largest cities, all 58 counties, and 44 Continuums of Care — leaving the other 469 cities in California without direct state support. To receive funding, HHAP recipients must submit regional plans that include system performance metrics. SB 866 applies these same metrics as a new housing element requirement only for cities that do not receive HHAP funding.
Agenda Section: Legislative Update
Agenda Item No.: 19
Council Meeting Date: April 13, 2026
What cities need: Amend SB 866 to instead include all cities in the regional planning process. This will provide transparency into the system metrics that SB 866 includes, but through the same regional process already used by California’s largest cities.
Where to send letter: Provide Legislative Portal information to upload letter; [email protected]
Cal Cities opposition letter Sample city opposition letter