RESOLUTION NO. 2022-58
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES
SUBMITTING TO THE VOTERS AT THE GENERAL MUNICIPAL ELECTION TO
BE CONSOLIDATED WITH THE STATEWIDE GENERAL ELECTION HELD ON TUESDAY, NOVEMBER 8, 2022, A MEASURE EXTENDING THE TERM OF THE CITY’S TRANSACTIONS AND USE TAX THROUGH 2064, WITH CONTINUED USE
OF TAX REVENUE ANNUAL AUDITS BY AN INDEPENDENT AUDITOR AND COMMUNITY REVIEW BY CITIZENS’ ADVISORY COMMITTEES
WHEREAS, the voters of the City of Gonzales have previously approved two tax measures, Measure K and Measure X, (known collectively as the “Gonzales Quality of Life Temporary Tax Measure”) setting the City’s current Temporary Transactions and Use Tax (TUT), as codified in Chapter 3.29 in the Gonzales City Code, at one percent (1%). The 1% TUT, administered as Measure X but accounted for as two separate funds, Measure K and Measure X, each of which receives 0.5% of all Measure X tax proceeds and is overseen by a separate oversight committee, has established a sales tax rate in Gonzales at 8.75%, one of the lowest tax rates in Monterey County. With guidance provided by Measure K and Measure X TUT Advisory Committees, TUT revenues in Gonzales have been used for a variety of projects, including but not limited to funding debt service for the Community Pool, youth services and leadership development, park improvements (restrooms, tot lot, playground equipment), preliminary Community Center Complex Project costs, grant programs, senior programs, and internet accessibility for all citizens; and
WHEREAS, after several years of planning and extensive public outreach and input, the City of Gonzales is pursuing the construction of a Community Center Complex Project (“Community Center”) which will include a public library, a Teen Innovation Center, a fitness studio, stand-alone gymnasium, multi-use conference rooms, consulting and counseling rooms, a commercial kitchen, a 3,500 square foot Community Hall to host fitness and recreation classes, competitive sports events, and public and private functions, and extensive outdoor venues that include an exercise area, amphitheater with stage, and meet-and-greet lounge areas.
Once constructed, the Community Center will provide a multitude of recreational, educational and social activities for local and regional residents and will be of significant benefit to the health and the quality of life for City residents of all ages; and WHEREAS, estimated costs for the Community Center are $34.8 million for the base project, and an additional $8 million for a standalone gymnasium requested and supported by community members and the Council, for a total cost estimate for the Community Center Project of $42.8 million dollars; and
WHEREAS, while the City has been and continues to be diligent in seeking and obtaining funding sources for the Project, including significant State and local grants and the recommended and limited use of a portion of the proceeds from the Measure X TUT revenues, Community Center costs have been adversely impacted by the COVID pandemic and the current war between Russia and Ukraine. As a result of these circumstances, the cost of the
Community Center is significantly outpacing available funding sources, thus creating a substantial funding deficit; and
WHEREAS, in light of the above-referenced Community Center funding deficit, when paired with the community and Council desire for the Community Center, the Council adopted Resolution 2022-31 calling for an all-mail ballot election for the City’s electorate to consider adoption of a special one-half percent (0.5%) increase to the City’s TUT. (The Tax Measure has been designated as Measure D.) The new 0.5% tax would be a special tax, requiring a twothirds vote for approval, with use of the tax revenues restricted initially to financing and funding the Community Center, and only upon the completion of such funding, to be used for street maintenance and repair. The term of the special tax has been proposed for 40 years, or until 2064. At the time of the preparation of this resolution, the outcome of the special all-mail election, scheduled for August 30, 2022, is not known; and WHEREAS, the Council now believes it is in the best interest of the City to extend the term of the City’s existing 1% TUT, which runs through 2044, to match the term of the proposed Special 0.5% TUT. Revenues generated by the proposed extension would provide the City with greater financial flexibility to not only maintain essential governmental services and Core Programs on a long-term basis, but to also continue to pursue a number of capital projects and proactive programs, including the Community Center. Even if Measure D is rejected by the City’s voters, extension of the City’s existing 1% TUT will continue to provide the City with a significant financial tool needed to address ongoing challenges in maintaining the abovereferenced services, programs and projects, particularly in the current climate of financial uncertainty in both the state and nation; and
WHEREAS, the City Council has considered the placement of a question on the ballot to seek voter approval of an amendment to the City’s General Transactions and Use Tax, as authorized by Revenue and Taxation Code Section 7285.9; and WHEREAS, after due consideration, the City Council of the City of Gonzales desires to submit to the voters at the November 8, 2022 consolidated general and municipal election a question relating to an extension of the term of the City’s 1.0% TUT by 20 years, from 2044 through 2064, all pursuant to California Constitution Article XIIIC, Section 2, Government Code Section 53724, Elections Code Section 9222, and the Gonzales City Code; and WHEREAS, the extension measure to be submitted to the voters, if approved, would be imposed on retail transactions involving personal property. The extended general tax rate would be one percent (1.0%) of the value of the property; the tax rate would be in effect for an extended period of time until 2064; the tax revenue would be collected by the California Department of Tax and Fee Administration and remitted to the City; the revenues would be audited annually by an independent auditor and a public expenditure report would be issued annually regarding the use of the revenues from the tax; use of the tax revenues would continue to be subject to review and recommendation of the City’s Measure K and Measure X Transactions and Use Tax Advisory Committees; revenues would continue to be devoted to the City of Gonzales and its residents and cannot be taken by the State; and the tax measure extension shall be approved if it receives at least a majority of affirmative votes; and
WHEREAS, the City Council passed Resolution 2022-55 on August 1, 2022, calling a general municipal election for the purpose of electing the mayor and three (3) at large members of the City Council; requesting that the general municipal election be consolidated with the Statewide general election to be held on Tuesday, November 8, 2022; and requesting that the Board of Supervisors of the County of Monterey direct the Registrar of Voters/Election Department to take any and all necessary steps to conduct the consolidated election; and under provisions of the laws relating to cities in the State of California, a General Municipal Election shall be held on November 8, 2022, for the election of the aforesaid municipal officers; and WHEREAS, pursuant to Elections Code Section 10403, whenever an election called by a city for the submission of any question, proposition or office to be filled is to be consolidated with a statewide election, and the question, proposition, or office to be filled is to appear on the same ballot as that provided for that statewide election, the city shall, at least eighty-eight (88) days prior to the date of the election, file with the board of supervisors, with a copy to the elections official, a resolution of its governing board requesting the consolidation, and setting forth the exact form of any question, proposition, or office to be voted upon at the election, as it is to appear on the ballot, and upon such request, the board of supervisors may order the consolidation; and
WHEREAS, in addition to the consolidation of the election of municipal officers with the Statewide general election requested by the City in Resolution 2022-55, the City Council now also desires to consolidate the “Gonzales Enhanced Quality of Life Temporary Tax Extension” Ballot Measure with the Statewide general election to be held on November 8, 2022; and
WHEREAS, based on all of the information presented at the August 1, 2022 regular meeting, both written and oral, including the staff report and other relevant materials, the City Council finds that under California Environmental Quality Act (“CEQA”) Guidelines Sections 15060 (c)(2) and 15378, subdivisions (2) and (4) of subdivision (b), the proposed tax does not constitute a project under CEQA and therefore review under CEQA is not required. Any specific project receiving TUT revenues, will be subject to CEQA analysis prior to revenue allocation.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF GONZALES does hereby resolve, declare, determine and order as follows:
SECTION I. RECITALS AND FINDINGS.
1. All of the foregoing recitals are true and correct and are incorporated herein by reference.
2. The City of Gonzales continues to strive to maintain core city operations and infrastructure, maintain a variety of proactive business initiatives, maintain its award winning G3 recycling, sustainable and environmental program, nurture youth engagement and leadership, and continue its leadership role in regional efforts on gang suppression, economic development, storm water and solid waste issues, and housing needs, all subject to an extremely limited budget.
3. The City’s financial condition continues to be adversely impacted by conservative growth in property taxes, sales tax, and the limited and competitive availability of grant proceeds.
Additionally, the COVID-19 Pandemic, which commenced in March of 2020, has and will continue to have an impact both on City finances and the demand for City services. The City anticipates that it will continue to need to allocate funds to address COVID-19 related issues for a significant period of time. Finally, the recent war between Russia and Ukraine has had a significant impact on both the cost and availability of a variety of goods and services, with a resulting sharp increase in the cost of City operations and estimated project costs.
4. In response to the need for additional revenues, in 2014 the City’s voters adopted Measure K, imposing a Temporary Transactions and Use Tax (“TUT”), known as the “Gonzales Quality of Life Temporary Tax Measure,” in the amount of one-half percent (0.5%) on retail sales or consumption of tangible personal property within the City. The TUT was increased by one-half percent (0.5%) in 2020 when the City’s voters adopted Measure X. Use of the Measure X 1.0% TUT revenues, which are collected by the California Department of Tax and Fee Administration, are subject to annual audit and reporting by an independent auditor, as well as oversight and use recommendations from the City’s Measure K and Measure X Temporary Transactions and Use Tax Advisory Committees, comprised of appointed members of the community. Measure K and Measure X funds are kept in separate accounts, with each account being allocated 0.5% of all tax revenue collected. The tax revenues, which are general taxes, are restricted to use exclusively by the City of Gonzales and its residents and cannot be taken by the state for other purposes. It is estimated that the Gonzales 1.0% TUT will generate approximately $1,500,000 in tax revenues in Fiscal Year 2022-2023.
5. Since the passage of the 1.0% TUT, the City has met all criteria for use of the tax revenues adopted by the voters. A prime example is the establishment of the Measure K and Measure X Transactions and Use Tax Advisory Committees, which since their inception, have been very engaged and proactive, and have effectively represented the community in expressing preferred uses for TUT revenues. To date, all project and program recommendations made by the Advisory Committees to the City Council have been approved. Projects and/or programs have included:
• Funding the debt service for the renovation of the Community Pool • Youth Services and Leadership Development
• New restrooms at Central and Meyer Parks
• Tot Lot at Centennial Park
• Improvements to the City’s Skate Park
• Resurfacing of tennis courts (Cost split with GUSD)
• Gonzales Day Camp
• Limited Community Center Complex Costs
• Successful Community Participation Grants Program
• Expanded After School and Summer Youth Program
• Senior Programs
• Accessibility Improvements to the Council Chambers and City Hall • New playground equipment at Meyer Park
• Internet for All Programs
6. Despite the City’s prudent and fiscally responsible efforts, as well as the collection of the aforesaid TUT, a number of critical projects and areas of operation in the City are currently underfunded or unfunded. For example, based on substantial input from the Community, the City Council has determined that the development, construction and funding of a multi-purpose Community Center is paramount to the “Quality of Life” in Gonzales and will provide facilities necessary to accommodate and enhance a wide variety of activities and services, including but not limited to senior programs, community meetings, health, education, and recreational services, community gatherings and festivals, youth services and programs, child care, and arts and theatre activities. With a current cost estimate of $42.8 million dollars, despite the City’s best efforts to assemble a variety of available funding sources, the Community Center’s costs exceed funding, thus creating a significant cost deficit.
7. In light of the funding deficit for the much desired Community Center, on May 31, 2022, the Council adopted Resolution 2022-31 calling for an all-mail ballot election for the City’s electorate to consider adoption of a special one-half percent (0.5%) increase to the City’s TUT. (The Tax Measure has been designated as Measure D.) The new 0.5% tax would be a special tax, requiring a two-thirds vote for approval, with use of the tax revenues restricted initially to financing and funding the Community Center, and only upon the completion of such funding, to be used for street maintenance and repair. The term of the special tax has been proposed for forty years, a period deemed necessary for project financing, or until 2064. At the time of the preparation of this resolution, the outcome of the special all-mail election, scheduled for August 30, 2022, is not known.
8. The City Council has determined that in order to enhance the City’s financial flexibility, and to ensure that the City’s ability to maintain essential governmental services and core programs and move forward with desired projects is not adversely impacted when the 1.0% TUT sunsets in 2044, the City Council should consider the extension of the term of the 1.0% TUT from 2044 to 2064, the same date that the proposed Measure D Tax will expire. When paired with Measure D Special Tax Funds, the City will have a reliable source of tax revenue for desired services, programs and projects, including but not limited to the Community Center. It is estimated that the 1.0% TUT (without Measure D special tax funds) would generate approximately $1,500,000 per year in general tax funds.
9. The City anticipates that extending the City’s 1.0% TUT will not create a significant financial burden on the City’s heavy sales tax producing businesses since they continue to pay sales tax in other cities and regions with a higher or equal sales tax rate.
SECTION II. CALL FOR ELECTION. PLACEMENT OF MEASURE ON THE BALLOT. Pursuant to California Constitution Article XIIIC, Section 2; Government Code Section 53724; Elections Code Section 9222 and Sections 10400 et seq.; and the Gonzales City Code, the City Council of the City of Gonzales hereby calls an election at which it shall submit to the qualified voters of the City, a question that, if approved, would extend the term of the City’s existing 1% Transactions and Use Tax from 2044 to 2064, as authorized by Revenue and Taxation Code Section 7285.9. This measure shall be designated by letter by the Monterey County Elections Department. Pursuant to Elections Code Section 10400 et seq., the election for
this measure shall be consolidated with the established previously consolidated election to be conducted on November 8, 2022.
SECTION III. PROPOSED ORDINANCE. The ordinance authorizing the general Transaction and Use Tax extension to be approved by the voters pursuant to Section II is as set forth in Exhibit A hereto. The City Council hereby approves the ordinance, the form thereof, and its submission to the voters of the City at the November 8, 2022 consolidated Statewide election, as required by Revenue and Taxation Code Section 7285.9, subject to the approval of a majority of the voters voting on the measure at the election called by the adoption of this resolution. The entire text of the ordinance attached hereto as Exhibit A shall be printed in the voter information portion of the sample ballot. The ordinance specifies that the term of the City’s 1.0% Transactions and Use Tax shall be increased by twenty (20) years, from 2044 to 2064. The California Department of Tax and Fee Administration shall collect the tax from retailers subject to the tax and remit the funds to the City. Provisions in the existing codified ordinance requiring all tax revenues collected by application of the City’s Transactions and Use Tax to be subject to independent audit and subject to the oversight of Citizen’s Transactions and Use Tax Advisory Committee will not be altered by the proposed amendment and will continue in full force and effect.
SECTION IV. BALLOT LANGUAGE. The official ballot to be used at said election shall conform to the laws of the State of California with relation thereto. The proposed Transactions and Use Tax extension shall be submitted to the voters on the ballot at the General Municipal Election to be held and consolidated with the Statewide general election on Tuesday, November 8, 2022, in the form of the following question:
Gonzales Enhanced Quality of Life Temporary Tax Extension Measure. Shall a measure to extend the term of the existing 1.0% Gonzales Temporary Transactions and Use Tax by twenty years, from 2044 to 2064, subject to continued independent audit and citizen’s advisory committee review, with all funds dedicated exclusively to Gonzales programs, projects and initiatives, and that will generate an estimated $1,500,000 annually, be adopted? The words “Yes” and “No” shall be printed on the ballots so the qualified electors may express their choice.
This measure shall be designated by letter by the Monterey County Elections Department.
SECTION V. IMPARTIAL ANALYSIS AND SUBMISSION OF BALLOT
ARGUMENTS. The City Attorney is hereby authorized to prepare an impartial analysis of the proposed measure. The Attorney’s impartial analysis of the ballot measure shall not exceed five hundred (500) words in length showing the effect of the measure on the existing law and the operation of the measure. The City Attorney shall transmit such impartial analysis to the City Clerk by the close of business on August 18, 2022. Written arguments in favor or opposed to the measure may be prepared by the City Council, any member or members of the City Council so authorized by Council action, or any individual voter who is eligible to vote on the measure, or any bona fide association of citizens, or any combination of voters and associations. The City Manager and Staff are hereby authorized to prepare and file a written argument in favor of the
proposed measure not to exceed three hundred (300) words on behalf of the City Council if so directed by the Council. All arguments must be submitted to the City Clerk by 5:00 p.m. on August 18, 2022. No argument shall exceed three hundred (300) words in length. A ballot argument may not be accepted unless accompanied by the printed name and signature or printed names and signatures of the author or authors submitting it, or if submitted on behalf of an organization, the name of the organization and the printed name and signature of at least one of its principal officers who is the author of the argument. No more than five signatures shall appear on any argument. If more than one argument is submitted for or against the measure, the City Clerk shall select the argument for printing and distribution in accordance with the provisions of Elections Code Section 9287. Pursuant to Section 9285 of the California Elections Code, 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 of the argument in favor. Rebuttal arguments may thereafter be prepared in a length not exceeding two hundred and fifty (250) words, and shall be filed with the City Clerk by no later than 5:00 p.m. on August 25, 2022. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument which it seeks to rebut.
SECTION VI. CEQA. The City Council finds that under CEQA Guidelines 15060(c) (2) and 15378, subdivisions (2) and (4) of subdivision (b), this tax extension does not constitute a project under CEQA because it extends a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment, and therefore, review under CEQA is not required.
SECTION VII. REQUEST TO CONSOLIDATE AND CANVAS RETURNS. The City requests and authorizes the Registrar of Voters to consolidate this election with the established election on November 8, 2022 for the ease and convenience of the registered voters and to take advantage of any cost savings possible by such consolidation. The election on the measure set forth in Section IV shall be held and conducted, the votes canvassed and the returns made, and the results ascertained and determined as provided for herein. The election shall be held in accordance with the Elections Code of the State of California. The Board of Supervisors of the County of Monterey is authorized to canvas the returns of that election with respect to the votes cast in the City of Gonzales and to certify the results to the City Council of the City of Gonzales. At the next regular meeting of the City Council occurring after the returns of the election have been canvassed and the certification of the results to the City Council, the City Council shall cause to be entered in its minutes a statement of the results of the election. The City Clerk may request the assistance of the County of Monterey Elections Department in regard to said Consolidated Statewide Primary Election, as the City Clerk deems necessary, and in recognition of the fact that additional costs will be incurred by the County in providing assistance, the City agrees that it shall pay the incurred cost of such assistance pursuant to the “Service Agreement for the Provision of Election Services between the City of Gonzales and the Monterey County Registrar of Voters,” previously approved by the Council. The City Manager is hereby authorized to enter into or modify any written agreement for such services with the County of Monterey Elections Department.
SECTION VIII. PUBLICATION OF MEASURE. In accordance with Section 12111 of the Elections Code and Section 6061 of the Government Code, the City Clerk is hereby authorized and directed to cause notice of the measure to be published once in the Salinas Valley Tribune, a weekly newspaper of general circulation, printed, published, and circulated in the City of Gonzales and hereby designated for that purpose by the Council of Gonzales.
SECTION IX. EFFECTIVE DATE. This Resolution shall become effective immediately upon its passage and forthwith entered upon the minutes of this Council and kept and maintained by the City Clerk of the City of Gonzales.
SECTION X. The City Clerk is hereby authorized and directed to certify the due adoption of this Resolution and to transmit a copy hereof so certified to the Board of Supervisors and the Registrar of Voters of Monterey County.
SECTION XI. The City Clerk and City Attorney are authorized to make any typographical, clerical, non-substantive corrections to this resolution and to the ballot measure as may be deemed necessary by the Monterey County Clerk/Registrar of Voters.
PASSED AND ADOPTED by the City Council of the City of Gonzales at a regular meeting duly held on the 1st day of August, 2022 by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
Jose L. Rios, The Honorable Mayor
ATTEST:
Mary Villegas, Deputy City Clerk