Council Budget and Finance Committee
June 15, 2022

Wednesday, June 15, 2022
5:00 PM

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
Remote Participation
Council Budget and Finance Committee
Agenda

June 15, 2022Council Budget and Finance
Committee
Agenda
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CALL TO ORDER

ROLL CALL
PUBLIC COMMENTS:

Limited Only to Items on the Agenda and Submitted in Writing Prior to the Meeting.

APPROVAL OF MINUTES

June 15, 2022Council Budget and Finance
Committee
Agenda
Review and Approve the Council Budget and Finance
Committee May 18, 2022, Meeting Minutes
ACT 22-0661
Attachments: Attachment I Minutes

REPORTS/ACTION ITEMS
City’s Insurance Program and CoverageRPT 22-0682
Attachments: Attachment I City Attorney's Memorandum
Measure C Debt Analysis and ReviewRPT 22-0543
Attachments: Attachment I Staff Report
Attachment II Measure C Ballot Language
Attachment III City Council Staff Report 03-04-14
Attachment IV Measure C 20-Year Financial Forecast Update 4 FY 2023 Budget Process Debrief (Oral Presentation)

FUTURE AGENDA ITEMS
Review and Approve the FY 2023 Agenda Planning CalendarACT 22-0635 Attachments: Attachment I Agenda Planning Calendar

COMMITTEE MEMBER/STAFF ANNOUNCEMENTS

ADJOURNMENT
Next Meeting - 5:00 p.m. Wednesday, September 21, 2022
The City of Hayward's Open Data Portal was designed to allow the public to explore, visualize, and download publicly accessible data. The Open Data Portal allows a clear view of the City's financial performance. Access to the portal may be found at https://haywardca.opengov.com/

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 22-066
DATE: June 15, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance

SUBJECT
Review and Approve the Council Budget and Finance Committee May 18, 2022, Meeting Minutes

RECOMMENDATION
That the Council Budget and Finance Committee (CBFC) reviews and approves the May 18, 2022, CBFC meeting minutes.

SUMMARY
The CBFC held a meeting on May 18, 2022, and the draft minutes are attached for the CBFC’s review and approval.

ATTACHMENTS
Attachment I 05/18/22 CBFC Meeting Minutes
CITY OF HAYWARD Printed on 6/10/2022Page 1 of 1
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ATTACHMENT I

COUNCIL BUDGET & FINANCE COMMITTEE MEETING
Meeting Minutes of May 18, 2022

Call to Order: 5:00 p.m.

Members Present: Mayor Barbara Halliday, Councilmember Sara Lamnin, Councilmember Wahab

Members Absent: None

Staff: Kelly McAdoo, Dustin Claussen, Nicole Gonzales, Rick Rivera, Nicholas Mullins, Crissy Mello, Nick Tabari

Guests: None

Public Comments: No public comments.

1. Approval of Meeting Minutes from April 20, 2022

Action: Unanimous approval as submitted.

2. Review and Comment on the Annual City Benefit Liabilities and Funding Plan

 Director Claussen provided the Committee with a presentation and overview of the Annual City Benefit Liabilities and Fund Plan.

Action: The Committee received the presentation.

3. Annual Review of City Issued Debt

 Deputy Director Gonzales provided the Committee with a presentation and overview of the City Issued Debt.

Action: The Committee received the presentation.

4. Review and Approve the FY 2022/2023 Agenda Planning Calendar

Action: The Committee reviewed and approved the calendar and provided suggestions for future Agenda topics.

Adjournment: The meeting was adjourned at 5:32pm

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 22-068
DATE: June 15, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance

SUBJECT
City’s Insurance Program and Coverage

RECOMMENDATION
That the Committee receives the report and comments on the City’s insurance program and coverages.

SUMMARY
The City Attorney will make a presentation on the City’s insurance program and coverage. During the Saturday Budget Work Session, on May 14, 2022, the City Attorney provided the Council with updated insurance premium costs for FY 2023. The presentation and discussion will provide the Committee with an overview of historical insurance premium costs, illustrating the dramatic increase over the last seven years, as reflected in the City Attorney’s Memorandum (Attachment I).

ATTACHMENTS
Attachment I City Attorney’s Memorandum
CITY OF HAYWARD Printed on 6/10/2022Page 1 of 1
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MEMORANDUM
DAT
E: June 15, 2022
TO: CI

TY COUNCIL BUDGET & FINANCE COMMITTEE
FR
OM: CITY ATTORNEY
SU
BJECT: CITY’S INSURANCE PROGRAM AND COVERAGES
SU
MMARY
At the June 15, 2022 City Council Budget & Finance Committee meeting, the City Attorney will make a presentation on the City’s insurance program and coverages. The presentation results from the Council’s May 14, 2022 work session on the FY 2023 budget, at which the City Attorney discussed increased premium costs to cover the City’s 45+ programs, activities, facilities and operations. In fact, insurance costs have increased dramatically over the last seven years, as reflected in this table:

ATTACHMENT I
CITY COUNCIL BUDGET & FINANCE COMMITTEE JUNE 15, 2022

Between FY 2015 and FY 2022 (ending June 30, 2022), the overall increase is 179 percent.

The proposed increase for FY 2023 would equate to 273 percent over eight years. The presentation on June 15 will go into detail regarding the reasons for the increases, and the specific areas in which insurance coverages are occurring. Those areas include:

Property (hurricanes, tornadoes, superstorms, wildfires) Cyber risk
Police practices

Notably, the City has not experienced claims or losses in two of the above categories but the costs of property and cyber risk coverages have continued to increase. Claims in the category of police practices have obviously increased, and to some extent claims in California drive up coverage costs. Nationally, police practices claims, settlements, and verdicts have also affected the cost of coverage.

Despite what is happening in the insurance market, the City’s coverages remain excellent across the board. We do not recommend changes at this time. Instead, our focus is on risk avoidance, risk prevention, and risk management.

It is important to point out that there is no earthquake/seismic risk coverage in the City’s program. In part, the City (and many other public agencies) rely on federal disaster relief through FEMA and various state agencies. Recovery funds are often paid months or even years after the disaster, and usually agencies only receive a certain percentage of actual loss valuations. Traditional earthquake coverage is very expensive, with high ‘deductibles’ and low ‘ceilings.’

There is a new earthquake/seismic risk program we will discuss with the committee that differs from traditional insurance coverage.

Respectfully submitted,

City Attorney

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 22-054
DATE: June 15, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance

SUBJECT
Measure C Debt Analysis and Review

RECOMMENDATION
That the Committee receives the report and provides direction to staff on consideration of potential funding of programs and/or projects that meet the promises and priorities of the Measure C ballot initiative.

SUMMARY
In 2014, the voters of the City of Hayward approved a ½ cent District Sales Tax (Measure C), which is a general tax that can pay for any services within the City’s General Fund. However, when the Council placed the measure on the ballot in 2014, they identified several priorities for the use of these funds based on issues identified by the community: police and public safety services; illegal dumping; litter control; street improvements; graffiti abatement; and capital infrastructure projects (Attachment II). The prioritized capital projects included: the construction of the City’s 21st Century Library and Community Learning Center; completion of fire station retrofits and improvements; rehabilitation and expansion of the existing fire training center located at Fire Station 6; as well as extensive street improvements. As of May 2022, the fire station retrofit and street improvement projects have been completed, the 21st Century Library and Community Learning Center project is pending final project acceptance, and the Regional Fire Training Center at Fire Station 6 is well underway with expected completion in Fall 2022.

With several key community projects successfully completed with the use of Measure C funding, this report provides an overview of completed projects, and options for potential future capital infrastructure projects and/or ongoing operational programming. The intent of this report is to solicit feedback and engage the Committee in a discussion for the consideration of future funding of other capital infrastructure projects, and ongoing operational expenses.

ATTACHMENTS
Attachment I Staff Report
CITY OF HAYWARD Printed on 6/10/2022Page 1 of 2
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File #:RPT 22-054
Attachment II Measure C Ballot Language
Attachment III City Council Staff Report 03-04-2014
Attachment IV Measure C 20-Year Financial Forecast Update CITY OF HAYWARD Printed on 6/10/2022Page 2 of 2
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DATE: June 15, 2022

TO: Council Budget and Finance Committee

FROM: Director of Finance

SUBJECT: Measure C Debt Analysis and Review

RECOMMENDATION

That the Committee receives the report and provides direction to staff on consideration of potential funding of programs and/or projects that meet the promises and priorities of the Measure C ballot initiative.

SUMMARY

In 2014, the voters of the City of Hayward approved a ½ cent District Sales Tax (Measure C), which is a general tax that can pay for any services within the City’s General Fund. However, when the Council placed the measure on the ballot in 2014, they identified several priorities for the use of these funds based on issues identified by the community: police and public safety services; illegal dumping; litter control; street improvements; graffiti abatement; and capital infrastructure projects (Attachment II). The prioritized capital projects included: the construction of the City’s 21st Century Library and Community Learning Center; completion of fire station retrofits and improvements; rehabilitation and expansion of the existing fire training center located at Fire Station 6; as well as extensive street improvements. As of May 2022, the fire station retrofit and street improvement projects have been completed, the 21st Century Library and Community Learning Center project is pending final project acceptance, and the Regional Fire Training Center at Fire Station 6 is well underway with expected completion in Fall 2022.

With several key community projects successfully completed with the use of Measure C funding, this report provides an overview of completed projects, and options for potential future capital infrastructure projects and/or ongoing operational programming. The intent of this report is to solicit feedback and engage the Committee in a discussion for the consideration of future funding of other capital infrastructure projects, and ongoing operational expenses.

BACKGROUND

On June 3, 2014, the voters of the City of Hayward passed Measure C to create a District Sales Tax and increase the City’s Sales and Use Tax by half a percent for twenty years. Attachments II and III provide the background information on Measure C and the ballot question posed to

Hayward voters. Since that time, staff has focused on the completion of current and future capital improvement projects funded by Measure C, and has looked for ways to utilize revenues to achieve the promises of Measure C. Using Measure C funds, the City completed its largest road improvement project in history, reduced graffiti around the City, built a state of the art 21st Century Library and Community Learning Center, retrofitted five of the City’s fire stations and is currently in the construction phase to complete a comprehensive Regional Fire Training Center that will be used by agencies and educational institutions from around the western United States.

DISCUSSION

Measure C Performance

With the passing of Measure C, the City developed a 20-Year Financial Forecast to project Measure C revenue over time and develop budgets for capital improvement projects and ongoing operational costs that support the Council’s priorities for Measure C as outlined above. The following graph illustrates the use of Measure C-related funds through FY 2023.

Attachment IV to this report provides the full overview of the Measure C fund revenues and expenditures through 2035 (the expiration of the measure).

Measure C Funded Capital Improvement Projects:

When Measure C was approved by the Hayward-voters, the City had identified several priorities based on the needs of the Hayward community. These priorities included police and public safety services, illegal dumping, litter control, street improvements, graffiti abatement,

and capital infrastructure projects. Early in the process, several capital infrastructure projects were identified, including the construction of the 21st Century Library and Community Learning Center, extensive street/roadway improvements, retro-fitting of several fire stations, and the expansion of Fire Station 6 and Regional Fire Training Center.

Fire Station 6 and Regional Fire Training Center
This project will replace the existing Fire Station 6 with a new fire station and create a regional fire training center that will include: Classroom Buildings; Fire Station 6/Classroom Building; Apparatus Building; Training Tower; Burn Building; Storage Building; Hangar Building; Underground Search and Rescue Structure/BART Structure; Covered Outdoor Classroom; Entry Structure; and Parking Lot. This project included a vital partnership with Chabot-Las Positas Community College District and will serve as a mutual benefit. The Regional Fire Training Center will be a joint center and training program with dedicated classroom space, offices, and shared use of the grounds for City of Hayward fire personnel, as well as Chabot College’s Fire Technology Program. Construction started on August 17, 2020, and it is anticipated that the project will be complete in FY 2023.

21st Century Library and Community Learning Center
The 21st Century Library and Community Learning Center is an invaluable asset to the Hayward community. Work on the 21st Century Library and Community Learning Center began in 2007, and construction began in January 2016. The 21st Century Library and Community Learning Center is a three-story, 58,000-square-foot building. The facility is a LEED-certified rating of Platinum from the U.S. Green Building Council. In addition to its LEED certification, the library houses 50% more library materials, including books and multi-media for all ages, 53 additional computers made available for public use, and a Makerspace featuring 3D printers, robotics, and textiles. It includes multiple community meeting rooms, a Homework Support Center within the Children’s Library, and offers additional services to the Hayward community. The 21st Century Library opened to the public on September 14, 2019.

Heritage Plaza
The Heritage Plaza project is Phase II of the 21st Century Library and Community Learning Center. The Plaza is substantially complete and open to the public as of July 17, 2021. Work for Phase II has included the demolition of the prior Library facility, the construction of an underground rainwater catchment system, and installation of landscaping features.

Demolition of the Main Library structure took place in July 2018. This was followed by the construction of the underground catchment, filtration, and storage system. When complete, this system will recycle rainwater for irrigation and graywater uses in the 21st Century Library and Heritage Plaza and will be a major component of the project’s expected LEED certification. Landscaping features are expected to include an event space, an arboretum housing 40 rare and mature trees, and a Children’s Garden. Final project completion and acceptance is expected in the near future.

Fire Stations 1 through 5 Improvements
This project involved considerable renovations of Fire Stations 1-5. Substantial improvements included seismic retrofits, energy efficient enhancements, and accessibility upgrades. Traffic Pre-Emption systems were installed to speed response times and minimize negative effects of

Code 3 responses on traffic patterns. Energy efficiency improvements were completed at each fire station, including the installation of solar panels on Stations 2-5, which are designed to offset 70% of electricity consumption of the old buildings. Improvements were completed in August 2018. A celebration and thank you to the community were held in October 2018.

Roads / Street Improvements
Measure C funds were used in the FY 2016 Pavement Preventive Maintenance and Resurfacing Project. This was a two-year project that was completed in February 2018. The City leveraged funds from a combination of funding sources (i.e., Gas Tax, Measure B & BB), including $12 million from Measure C to complete the City’s largest road improvement project to date.

The project provided new asphalt surfaces, and both intensive and minor roadway repairs on 312 street segments. These projects also included new and upgraded curb ramps, new striping for lane delineation, crosswalks, and bike lanes. With the completion of this project, the City’s average Pavement Condition Index (PCI) increased from 66 to 70 in two years.

Operational Programing

In addition to capital infrastructure projects, Measure C funds operational expenses related to:
police and public safety services; illegal dumping; litter control; street improvements; and graffiti abatement.

To support these operational needs, there are 23 full-time equivalents (FTE) funded by Measure C. The following table lists the positions that are authorized and budgeted in Measure C fund in FY 2022, as well as the status of each position. The green shading depicts the positions budgeted within the Maintenance Services Department; while the blue shading denotes the positions budgeted in the Police Department.

TABLE 2: FY 2022 MEASURE C FUNDED FTES:

Positions Authorized Budgeted Filled Vacant
Groundskeeper I 5.0 5.0 5.0 0.0
Groundskeeper II 1.0 1.0 1.0 0.0
Maintenance Worker / Laborer 2.0 2.0 2.0 0.0
Maintenance Lead 1.0 1.0 1.0 0.0
Police Officer 3.0 3.0 3.0 0.0
Police Lieutenant 1.0 1.0 1.0 0.0
Crime Analyst 1.0 1.0 1.0 0.0
Certified Latent Print Examiner 1.0 1.0 1.0 0.0
Communications Supervisor 1.0 1.0 1.0 0.0
Communications Operator 7.0 7.0 7.0 0.0
TOTAL FTE 23.0 23.0 23.0 0.0

Potential Future Funding and/or Programming of Measure C Funds:

Over the last several years, the City has successfully completed a number of significant capital infrastructure projects. With the passing of Measure C, the City developed a 20-Year Financial Forecast as a tool to assist with the projection of Measure C revenue over time and develop budgetary needs for capital improvement projects and ongoing operational costs that support the Council’s priorities for Measure C. With the completion of several capital infrastructure projects, staff would like to engage the Committee on potential options for future funding of other capital infrastructure projects, and ongoing operational expenses. The Committee is presented with the following potential options for consideration:

1. Future funding for a new Police Facility/Building

2. Reparation Efforts

3. Future funding for facility improvements at the Hayward Animal Shelter

4. Transferring Measure C funding to the General Fund to sustain positions and level of service in the General Fund beyond Measure C sunset

5. Contribution toward The Stack Center

6. Road/Street Improvements

Staff is soliciting feedback and direction from the Committee on potential options for consideration. Upon direction from the Committee, staff will begin exploring and analyzing fiscal feasibility and long-term funding strategies.

ECONOMIC IMPACT

There is no economic impact associated with this report as it is informational only.

FISCAL IMPACT

With direction from the Committee, staff will work to explore and analyze fiscal feasibility of each of the options supported by the Committee. Upon completion of the analysis, staff will facilitate discussions with the full Council on the fiscal viability of each option for consideration.

STRATEGIC ROADMAP

Measure C funding directly supports the Strategic Priorities of Improve Infrastructure and Support Quality of Life. Specifically, this item relates to the implementation of the following project(s):

Improve Infrastructure, Project 5, Part 5.a: Maintain Pavement Condition Index (PCI) at 70.

Improve Infrastructure, Project 12: Construct the fire station and Fire Training Center.

Support Quality of Life, Project 6: Plan Library operations and hours to leverage the new facility.

Support Quality of Life, Project 13: Evaluate Options for adding bathrooms to Heritage

Plaza for Council consideration.

SUSTAINABILITY FEATURES

The 21st Century Library and Community Learning Center is a net-zero energy facility, which is expected to qualify for LEED Platinum Certification. The Regional Fire Training Center Improvement Project will include the installation of Bay-friendly landscaping, storm water treatment devices, LED lighting, and solar PV panels. The new facilities are planned to achieve LEED Silver, and the habitable buildings are being designed to achieve Net Zero Energy.

Additional energy efficiency improvements, such as LED lighting improvements and energy efficient windows, were completed as part of the retrofits at Fire Stations 1-5.

PUBLIC CONTACT

The agenda for this item was posted in compliance with the California Brown Act.

NEXT STEPS

Staff will continue to prioritize the completion of current and future Capital Improvement Projects, and look for ways to utilize revenues to achieve the promises of Measure C and remain exemplary stewards of the funds available through Measure C.

Prepared by: Nicole Gonzales, Deputy Director of Finance

Recommended by: Dustin Claussen, Director of Finance

Approved by:
____________________________________
Kelly McAdoo, City Manager

CITY ATTORNEY’S IMPARTIAL ANALYSIS OF

MEASURE C
The City Council is submitting to the voters the question of whether to approve an ordinance enacting a temporary sales tax within the City of Hayward to fund City services and facilities, such as improving police protection, updating fire stations, repairing streets and potholes, replacing the City’s main library and other general City services and facilities. The tax rate would be one-half of one percent (0.50%) of the retail sales price ― or one-half of one cent for an item that costs one dollar. The tax would remain in effect for twenty years.

Technically, a “sales tax” is a combination of “sales and use tax” and “transactions and use tax.” Both are levied on the sale or use of tangible personal property sold at retail, with certain limited exceptions. Retailers collect the tax at the time of sale and remit the funds to the State Board of Equalization which administers the tax.

Currently, the tax on retail sales in Hayward is nine percent (9%) of the purchase price. This measure would authorize a 0.50% transactions and use tax, which would increase the total sales tax rate to 9.50%. The tax would automatically terminate twenty years after it becomes operative, unless extended by the voters.

The tax proceeds would be deposited into the City’s general fund and be available to support the full range of municipal services. Because this measure does not legally restrict the use of tax revenue to any specific purposes, it is classified as a “general tax,” not a “special tax.” The tax proceeds may be used for any valid municipal governmental purpose and cannot legally be taken away by the State. The tax
proceeds would be subject to the same independent annual audit requirements as other general fund revenue. The
audit report would be a matter of public record.

This measure authorizes the City to issue bonds not
to exceed the total amount of the anticipated sales tax proceeds. The proceeds from the sale of bonds could only be used for improving or replacing facilities such as the City’s main library.

A “Yes” vote is a vote in favor of the tax. A “No” vote is a vote against the tax. This measure would be approved if it receives a simple majority of “Yes” votes.
s/ MICHAEL S. LAWSON
City Attorney for the City of Hayward
The above statement is an impartial analysis of Measure C, which is printed in full in this sample ballot pamphlet.

If
you desire an additional copy of the measure, please call the Office of the City Clerk at (510) 583-4400 and a copy will be mailed to you at no cost.

You may also access the
full text of the measure on the City of Hayward website at the following address:

www.hayward-ca.gov
HAMC-1
To restore and maintain Hay-
ward city services and facilities,
including firefighting/emergen-
cy medical services; improving police
protection for neighborhoods; replacing the aging li-
brary with a 21st century facility including safe space for after-school homework and tutoring; repairing pot-
holes and streets; updating aging neighborhood fire sta- tions; and other city services; shall the City of Hayward increase the sales tax by ½ percent, for twenty years
only, providing locally controlled funding that cannot be taken by the State?
CITY OF hAYwAR d MEASURE C
C
YES
NO

ATTACHMENT II
ARgUMENT IN FAvOR OF MEASURE C
VOTE YES on Measure C to protect what we all want
for Hayward: safe neighborhoods, help in an emergency,
decent roads, modern learning facilities, economic
prosperity, improved property values, and a VIBRANT
future for our city. This is the goal of Measure C.

The City of Hayward has worked hard in recent years to
be fiscally responsible while maintaining essential city services. But many city facilities have deteriorated after decades of constant use. The recent Great Recession has made it impossible to fund needed repairs or replace aging facilities while still maintaining the city services we need.

Despite these challenges, good things are happening
in Hayward. Measure C will continue the progress by
authorizing a ½ cent sales tax to fund important city
services and needed facilities, such as:
• Providing firefighting and emergency medical response services
• Improving police protection for safer neighborhoods
• Restoring funding for maintenance, including pothole and street repairs
• Upgrading aging fire stations and replacing Hayward’s obsolete fire training facility
• Replacing the Hayward Main Library with a 21st
Century Library and Learning Center, including space
for after-school and early childhood education programs ALL Measure C funds (100%) will stay locally controlled IN Hayward – FOR Hayward. By law, the State CANNOT
take this funding away.

Basic necessities like groceries and prescription
medications WON’T be taxed. Visitors to Hayward will
pay their fair share, so residents won’t shoulder the entire cost.

Measure C lasts 20 years ONLY . It cannot be extended
without a new vote.

Measure C is a smart investment. The longer we wait, the more expensive it will be.

Please join firefighters, police officers, seniors, parents, neighborhood, civic and business leaders and residents
from every Hayward neighborhood in taking this positive step to keep our community moving forward.

Learn more at www.protecthaywardsfuture.com
Please VOTE YES on C.
s/ Charles C. Plummer
Sheriff Emeritus & Hayward Resident
s/ Judy Harrison
President, Friends of the Hayward Public Library
31-year Hayward School Librarian
s/ Robert Sakai
Attorney & 60-year Hayward resident
s/ Doris J. Rodriquez
55-year Resident & Retired City Council Member
s/ Elaine J. Sunday
President Hayward Neighborhood Alert &
Long-Time Hayward Resident
ARgUMENT AgAINST MEASURE C
Why does the City believe it’s entitled to greater relief from the effects of the recession and future inflationary costs than its residents and businesses?
Why does the City contend that it has over half-a-billion dollars in unmet capital needs, yet provides no reference to any document supporting this incredible claim? Why does the City’s Capital Improvement Program list unfunded
capital projects valued at $325M of which more than
half this amount can be attributed to Caltrans interchange projects traditionally funded by federal, state, and regional sources?
Why is the City proposing a $60M library that is 50-percent more costly than even the most expensive new Bay Area
library built within the past decade? How will the City afford to stock, staff, and otherwise operate this proposed three story facility that would be more than twice the size of the existing?
Why does the City believe that it’s managing its finances responsibly when the 20-highest compensated city
employees in 2012 each received a quarter-of-a-million
dollars or more in salary and benefits? Or when the top six received more than $300,000 in compensation—nearly six
times Hayward’ s median household income?
Why hasn’t the city’s existing supplemental taxes (the
emergency facilities tax and the 5.5-percent utility tax) accomplished what they were intended to do? Why is the
City not concerned by the burden that this unprecedented combination of taxes will have on Hayward’s residents
and businesses? Why is the City not concerned that this measure in combination with the possible augmentation of the county transportation sales tax will set Hayward’s sales tax rate at an even 10-percent?
Why does the City believe that its residents and businesses are an endless source of revenue?
Why?
www.HeyHayward.com
s/ Lawrence M. Johmann
Hayward resident, property owner & businessman
HAMC-2

FULL TEXT OF MEASURE C
ORDINANCE NO. ________

AN ORDINANCE OF THE PEOPLE OF THE CITY

OF HAYWARD IMPOSING A TRANSACTIONS

AND USE (SALES) TAX TO BE ADMINISTERED

BY THE STATE BOARD OF EQUALIZATION
WHEREAS, a locally-enacted revenue measure would
protect and maintain Hayward services because the money is legally required to stay in our community and cannot be taken by the State, providing locally controlled funds for local services; and
WHEREAS, at its March 4, 2014 meeting, the City
Council considered calling an election to seek voter
approval of a proposed general transactions and use (sales) tax, as authorized by Revenue and Taxation Code section 7285.9; and
WHEREAS, at that meeting, the City Council concluded
that all of the information presented indicated that, to obtain the revenue necessary to maintain and preserve service
levels, the Council should call an election to ask the voters of the City to approve a twenty year local transactions and use (sales) tax, the revenue from which could be used to support general municipal services; and
WHEREAS, on the basis of the foregoing, the City
Council determined that it was appropriate to place a
measure regarding a general transactions and use (sales) tax before the voters at the June 3, 2014 general election; and
WHEREAS, the tax, if approved, would be imposed on
the sale of tangible personal property and the storage, use, or other consumption of such property. The tax rate would be one-half of one percent (0.50%) (one-half cent for each dollar) of the sales price of the property. The tax revenue would be collected by the State Board of Equalization
and remitted to the City. The tax would be in effect for twenty years, and would then expire automatically, unless extended by the voters. The tax shall be approved if the measure receives at least a simple majority of affirmative votes.

NOW, THEREFORE, THE CITY COUNCIL OF THE
CITY OF HAYWARD ORDAINS AS FOLLOWS:

Section 1. Amendment of Code.

The Hayward Municipal Code is hereby amended
to add a new Chapter 8, Article 19 and shall read as follows:

CHAPTER 8
ARTICLE 19

TRANSACTIONS AND USE (SALES) TAX
SEC. 8-19.100. Title.

This ordinance shall be known as the City of Hayward
Transactions and Use (Sales) Tax Ordinance. The City of Hayward hereinafter shall be called “City.” This ordinance shall be applicable in the incorporated territory of the City.

SEC. 8-19.200 Operative Date.
“Operative Date” means October 1, 2014.

SEC. 8-19.300. Purpose.

This ordinance is adopted to achieve the following,
among other purposes, and directs that the provisions
hereof be interpreted in order to accomplish those purposes. (a) To impose a retail transactions and use (sales) tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and
Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.
(b) To adopt a retail transactions and use (sales) tax
ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of
Division 2 of the Revenue and Taxation Code.
(c) To adopt a retail transactions and use (sales) tax
ordinance that imposes a tax and provides a measure
therefore that can be administered and collected by the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the State Board of Equalization in administering and collecting the California State Sales and Use Taxes.
(d) To adopt a retail transactions and use (sales)
tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the
transactions and use (sales) taxes, and at the same time, minimize the burden of record keeping upon persons
subject to taxation under the provisions of this ordinance.

SEC. 8-19.400. Contract with State.

Prior to the operative date, the City shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of this
transactions and use (sales) tax ordinance; provided, that if the City shall not have contracted with the State Board of Equalization prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.

SEC. 8-19.500. Transactions Tax Rate.

For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 0.50% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.

SEC. 8-19.600. Place of Sale.

For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination.

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The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made.

In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Board of Equalization.

SEC. 8-19.700. Use Tax Rate.

A transactions and use (sales) tax is hereby imposed
on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of

0.50% of the sales price of the property. The sales price shall include delivery charges when such charges are
subject to state sales or use tax regardless of the place to which delivery is made.

SEC. 8-19.800. Adoption of Provisions of State Law.

Except as otherwise provided in this ordinance and
except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation
Code, all of the provisions of Part 1 (commencing with
Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.

SEC. 8-19.900. Limitations on Adoption of State Law
and Collection of Use Taxes.

In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
(a) Wherever the State of California is named or
referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:
(1) The word “State” is used as a part of the title
of the State Controller, State Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the Constitution of the State of California.
(2) The result of that substitution would require
action to be taken by or against this City of any agency, officer, or employee thereof rather than by or against the State Board of Equalization, in performing the functions incident to the administration or operation of this ordinance. (3) In those sections, including, but not necessarily
limited to, sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
(A) Provide an exemption from this tax with
respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or;
(B) Impose this tax with respect to certain
sales, storage, use or other consumption of tangible
personal property which would not be subject to tax by the state under the said provision of that code.
(4) In Sections 6701, 6702 (except in the last
sentence thereof), 6711, 6715, 6737, 6797, or 6828 of the Revenue and Taxation Code.
(b) The word “City” shall be substituted for the word
“State” in the phrase “retailer engaged in business in this State” in Section 6203 and in the definition of that phrase in Section 6203.

SEC. 8-19.1000. Permit Not Required.

If a seller’s permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an
additional transactor’s permit shall not be required by this ordinance.

SEC. 8-19.1100. Exemptions and Exclusions.
(a) There shall be excluded from the measure of the
transactions and use (sales) tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of
any state-administered transactions or use tax.
(b) There are exempted from the computation of the
amount of transactions tax the gross receipts from:
(1) Sales of tangible personal property, other than
fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
(2) Sales of property to be used outside the City
which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
(A) With respect to vehicles (other than
commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division
3 of the Vehicle Code, aircraft licensed in compliance
with Section 21411 of the Public Utilities Code, and
undocumented vessels registered under Division 3.5
(commencing with Section 9840) of the Vehicle Code by
registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that address is, in fact, his or her principal place of residence; and
(B) With respect to commercial vehicles,
by registration to a place of business out-of-City and
declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.
(3) The sale of tangible personal property if the
seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
(4) A lease of tangible personal property which is
a continuing sale of such property, for any period of time HAMC-5
for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.
(5) For the purpose of subparagraphs (3) and (4) of
this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
(c) There are exempted from the use tax imposed by
this ordinance, the storage, use or other consumption in this City of tangible personal property:
(1) The gross receipts from the sale of which
have been subject to a transactions tax under any state- administered transactions and use (sales) tax ordinance. (2) Other than fuel or petroleum products
purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.
(3) If purchaser is obligated to purchase the
property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
(4) If the possession of, or the exercise of any right
or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance.
(5) For the purposes of subparagraphs (3) and
(4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be
obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease had the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
(6) Except as provided in subparagraph (7), a
retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer. (7) “A retailer engaged in business in the City” shall
also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code,
aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of
the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City. (d) Any person subject to use tax under this ordinance
may credit against that tax any transactions tax or
reimbursement for transactions tax paid to a district
imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.

SEC. 8-19.1200. Amendments.

All amendments subsequent to the effective date of
this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments
to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment
shall operate so as to affect the rate of tax imposed by this ordinance.

SEC. 8-19.1300. Enjoining Collection Forbidden.

No injunction or writ of mandate or other legal
or equitable process shall issue in any suit, action or proceeding in any court against the State or City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.

SEC. 8-19.1400. Authorization and Limitation on
Issuance of Bonds.

The City is hereby authorized to issue limited tax bonds, from time to time, provided that the maximum bonded
indebtedness will not exceed the total amount of this retail transactions and use (sales) tax.

SEC. 8-19.1500. Annual Audit
The proceeds resulting from this transactions and use
(sales) tax shall be deposited into the City’s General Fund and become subject to the same independent annual audit requirements as other general fund revenue.

SEC. 8-19.1600. Termination Date.

The authority to levy the tax imposed by this ordinance shall expire on the twentieth anniversary of the last day of the calendar quarter following the operative date.”
Section 2. Environmental Compliance.

The findings for this ordinance in compliance with the
California Environmental Quality Act (“CEQA”) are the
same as those set forth in the City’s Resolution No. 14- 028 calling for an election on this ordinance. The CEQA findings in Resolution No. 14-028 are incorporated herein by reference.

Section 3. Severability.

If any provision of this ordinance or the application
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thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such
provision to other persons or circumstances shall not be affected thereby.

Section 4. Effective Date.

The Ordinance relates to the levying and collecting of
the City transactions and use (sales) taxes and shall take effect immediately.

91 C I T Y O F 6

H AYWARD
E. OT or THE BAY
DATE: March 4, 2014
TO: Mayor and City Council
FROM: City Manager
SUBJECT: Adoption of a Resolution Establishing June 3, 2014 as the Date for a Proposed Ballot Measure Asking Hayward Voters to Approve a One -Half Cent Local Transactions and Use (Sales) Tax Sunsetting after Twenty Years

RECOMMENDATION
That Council takes the following actions to place a sales tax measure, levying a half cent transactions and use (sales) tax on all applicable transactions before the voters of Hayward at the June 3, 2014 election:

1. Adopts the attached Resolution (Attachment 1) approving the proposed ballot question as it will appear on the ballot, and the underlying ordinance to be enacted, and requesting the Alameda County Board of Supervisors authorize the County Clerk and the Registrar of Voters to provide election services and canvass the returns; and

2. Directs the City Attorney to develop an impartial analysis of the proposed measure

BACKGROUND
Since 2008, the City of Hayward has been weathering the effects of the Great Recession like many other cities throughout the state and the country. A series of factors converged to createthe "perfect fiscal storm" and left the City's General Fund budget facing deficits of between $20 -30 million annually over the next ten years, even with the Utility Users Tax measure approved by voters in 2009. The City Council and City staff developed a series of budget balancing measures including employee salary and benefit concessions, organizational downsizing, use of reserves, and other organizational savings to address the widening gap between future revenue growth and escalating costs.

The City Council has been incredibly conscientious in establishing long -term fiscal policies to address the City's unfunded benefit liabilities and the City's capital facility needs. The City has also been working diligently since 2010 to structurally reset the City's General Fund and Enterprise Fund operatingbudgetsin orderto provide asustainablefuture for City operations, protect benefits for employees, andensurecontinuedservicedelivery to the community. This hasbeen accomplished through a combination of flattening the organization to eliminate managerial and 552

ATTACHMENT III
other positions and reducing other costs, with the primary vehicle being the concessions taken by the City's various labor groups. However, the City has significant unfunded needs, including over 500 million in unfunded capital needs. While the economy has improved significantly over the pasttwo years, Hayward, like all otherCalifornia cities, still facesescalationin operatingcosts outside of their control, and which are outpacing revenue growth. This makes it a challenge to continue existing funding levels for critical services to the community and there are no additional funds in the current operating budget to begin addressing the City's large backlog of unfunded capital needs.

In the summerof 2013, the City beganto evaluateoptions for funding someof the more immediate of these capital facilities needs. Staff and the Council Budget & Finance Committee initially explored the option of placing a facility bond measure on an upcoming ballot. However, asthe City embarked on community outreach efforts related to a possible ballot measure, it became clear that the community was interested in a mix of enhanced public services in addition to improvements to capital facilities. As such, the City conducted voter surveys to test the likelihood of either abond measureorasalestaxmeasurebeingsuccessfullyapprovedin anupcomingelection'. Whilea bond measure would be limited to funding specified capital facility projects, a sales tax measure would provide flexibility in funding either capital facilities or desired public services.

The Council askedstaff andcommunity volunteersto engagein a community listening andoutreach effort to more fully understand community funding priorities and whether placing a measure on an upcoming ballot would be a prudent step to take. The results of these efforts were presented to CouncilonFebruary25, 2014andbasedonthisfeedback, theCouncilaskedstafftoreturnat tonight's meeting with the necessary documents to place a sales tax measure on the June 2014 ballot.

DISCUSSION
As mentioned previously, a locally approved sales tax measure would provide the City Council with flexibility to allocate funds to either capital facility improvements or public service enhancements depending on community needs and priorities. The one -half cent sales tax, as proposed, would generateapproximately $10 million in annualrevenue to the City, which would be dedicated to local purposes and could not be taken by the State. It would be applicable to the same goods that are currently subject to sales and use tax, with certain items exempt from the tax, e.g. most groceries, prescription medicines, certain medical devices, and sales of items paid for with food stamps. Attachment II provides a frequently asked questions document about the potential sales tax measure. This document is also available on www. havwardlistens.com the City's website dedicated to providing information to the community about the proposed measure.

Based on the City's current assessmentof needs, a one -half cent sales tax would provide a level of funding sufficient to cover a good portion of the high - priority City facility needs while also Polling Results begin on page73 of the December 17, 2013 Agenda Packet: htti):// www.havward- ca.gov/ CITY- GOVERNMENT/ CITY - COUNCIL - MEETINGS / 2013 / CCAI3PDF / ccal21713full.pdf Agenda Report: http: / /www. hayward- ca.gov /CITY - GOVERNMENT /CITY- COUNCIL- MEETINGS / rp /2014 / cca022514- IRAPA02.pdf
Presentation: http: / /www. havward- ca. eov /CITY - GOVERNMENT / CITY- COUNCIL- MEETINGS / rp /2014 / cca022514- P02. pdf
Resolution Placing Soles TaxMeasure on June 2014 Ballot 2 of March 4, 2014
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providing additional funding for services of a high priority to the community, primarily public safety and street maintenance services. Staff is also proposing a sunset on the salestax of twenty years. This sunset would provide a sufficient window for issuing debt service and constructing capital facilities while also providing accountability to the public on how the funds are spent. If the public is unhappy with how the money is spent, they would have an opportunity to express their opinions if and when a future City Council decides to place the measure on the ballot for possible extension after the sunset.

Staff originally developed a list of the highest priority funding needs for the City that was used during the community outreach process. This list is included as Attachment III to this report and the annual funding totals on that list clearly exceed the amount that would be available if the sales tax measure passes. Following the community outreach process, staff refined this list to fit within the annual available funding and to better match community priorities. While the sales tax measure is proposed as a general tax (meaning that the funds would go into the General Fund and could not be dedicated for specific purposes), the Council can identify possible uses for these additional funds in order to provide the voting public with assurancesthat the funds will be used for identified community priorities. Table 2 below identifies the possible mix of capital projects and public services that could potentially be funded with the additional sales tax revenue.

Resolution Placing Soles TaxMeasure on June 2014 Ballot 3 of March 4, 2014
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Table 2: Possible Funding Priorities for Sales Tax Measure based on $10M in annual revenue)
Capital Projects /Restoration of
Services
ual Debt Service
yntent or AnnualCost
Additional Police Services
2, 000,000Cost per officer: $200,000 /year) annual cost) Library & Community Learning Center 3, 990,000Total unfunded cost: $50, 000,000) annual debt service) Other Fire Station Retrofits / Improvements 798, 000Total cost: $10, 000,000) annual debt service) New Fire Station #6 Training Center 654, 400Total cost: $8, 200,000) annual debt service) StreetRepairs 1, 000,00032 miles of overlay and 4 miles of slurry seal) TBD) Restoring 5 Maintenance Workers 500, 000Cost per worker: $100,000 /year) annual cost) Total Annual Cost 8, 942,400
Contingency 1, 057,600
Total Committed Annual Revenue 10, 000,000
l" Annualdebtservicepaymentbasedon20 -yearamortizationofbondfunding 121Currentannualgastax/ MeasureB fundingforoverlay /slurry seal = $4 million l3Theremaybeefficienciestobegainedbyissuingdebttoallowforalargernumberofstreetstoberepairedinthefirst few years after the revenuemeasurepasses. Staff will evaluatetheseoptions if the measureis approvedby the voters.

Identifying possible funding priorities for the measure provides an important oversight function.

During last week's Council discussion on the revenue measure, the concept of an oversight committee for expenditure of funds coming from the potential measure was raised. While there may be other circumstances where an oversight committee would be beneficial, staff recommends against the formation of an oversight committee related to this revenue measure. The elected City Council is the ultimate oversight committee for the use of these revenues and will be held accountable by the voting public if there is a belief that the funds are not being utilized for community priorities. The annual budget process provides an opportunity for public input and Council direction on spending and for staff to be held accountable on the use of the funds.

Additional oversightof all funds would alsooccurthroughoutthe year atthe Council Budget & Finance Committee meetings, as part of the Mid -Year financial report to Council, and during the Council budget hearings.

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Possible Ballot Language
At last week's Council meeting, staff presented two options for possible ballot language and received feedback from the Council. The ballot language is a key element in placing the measure before the voters. Based on Council's feedback, staff prepared and is recommending athird option for the ballot language. The three options are identified below.

Option A: Language used in Tracking Poll
To protect and restore city services andfacilities, including: increasing neighborhood police patrols; repairing potholes and maintaining streets and sidewalks; updating fire stations to meet neighborhood needs and earthquake standards; replacing the outdated and undersized library with a 21' centurylibrary andcommunitylearningcenter, andothercityservices; shallCityofHayward increase the sales tax by one- halfpercent, for twenty years, providing locally controlled funding that cannot be taken by the State?
Option B: Alternate Language from 2/ 25/2014 Meeting
To restore and maintain Hayward city services/facilities, including firefighting/ emergency medical services; improving police protection for neighborhoods; replacing the aging library with a 21st Century facility including safe spacefor after- school homework/tutoring; repairing potholes, streets and sidewalks; updating aging neighborhoodfire stations; and other city services; shall theCity of Hayward increase the sales tax by'' /z percent, for twenty years only, providing locally controlled funding that cannot be taken away by the State?
Option C: Recommended Ballot Language
To restore and maintain Hayward city services and facilities, including firefighting/ emergency medical services; improving police protection for neighborhoods; replacing the aging library with a 21st century facility including safe spacefor after- school homework and tutoring; repairing potholes and streets; updating aging neighborhood fire stations; and other city services; shall the City ofHayward increasethe salestax by' /z percent, for twentyyears only, providing locally controlledfunding that cannot betaken by theState?
The attached resolution (Attachment 1) is the mechanism by which Council would place this measure on the June 2014 ballot for voter consideration. Any final decisions made at this meeting would be incorporated into the resolution for submission to the County Registrar of Voters. The deadline to submit materials for placing the measure on the June 3, 2014 ballot is Friday; March 7, 2014. Staff recommends that the Council take action tonight to place a one -half cent transactions and use (sales) tax measure on the June 3, 2014 ballot with aproposed twenty -year sunset, no provision for a separate oversight committee, and ballot language Option C from above. If the voters approve the ballot question on June 3, 2014, the Ordinance included in Attachment I would be enacted automatically.

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ECONOMIC AND FISCAL IMPACT
As mentionedpreviously in this report, a one -half centsalestax would provide approximately $10 million in annual funding to the City. All funds generated by the local salestax would be locally controlled and would stay in Hayward to provide essential city services and facility improvements.

By law, the State could not take this funding away.

Currently, the City of San Leandro has a salestax rate of 9. 25% and the Council there is considering a measure on the November 2014 ballot that would raise the rate to 9.5 %. One of Hayward's other neighbors, Union City, also currently has a locally approved sales tax and their rate is 9.5 %. If Hayward voters approved the 1 /2 cent sales tax being proposed, the salestax rate in Hayward would be 9.5 %. Given the restrictions on locally controlled funding, many cities are considering sales tax increases given the flexibility that this revenue source provides to local communities.

The specific impact on local Hayward businesses of this proposed salestax is nuanced. Staff has been discussing projections and implications of the local sales tax with our salestax consultant, MumServices. hi their experiences from other jurisdictions, the small added amount of the local sales tax does not significantly impact buyers' decisions on where to make purchases. Buying decisions are more likely to be based on what retailer can give the consumer a better deal, sale prices, distance traveled, quality customer service and other factors. An example ofthe math is as follows: customer purchases a washer and dryer set for $1, 200. On this purchase, the local district salestax would beequalto anadditional $6. 00, for atotal purchaseprice of $1, 206.

NEXT STEPS
If the Council adopts the resolution tonight placing the measure on the June 3, 2014 ballot, staff will work closely with the City Clerk and City Attorney to submit all of the required documentation to the County Registrar of Voters by the Friday, March 7 and Monday, March 24 deadlines. The City Attorney will also draft the impartial analysis of the measure for submittal.

Below is a schedule of other key dates related to a June 2014 election:

March 7, 2014: Deadline for the ballot measure question, ballot measure full text, City Attorney Impartial Analysis (Election Code 9286)
March 12, 2014: Last day to withdraw a measure from the ballot (EC 9605) March 14, 2014: Last day to file direct arguments (EC 9282, 9286) March 14 — 24, 2014: Public review period for direct arguments (EC 9295) March 21, 2014: Last day to file rebuttal arguments (EC 9285) March 21 — 31, 2014: Public review period for rebuttal arguments (EC 9295) March 24, 2014: Deadline to submit direct arguments and rebuttal arguments to the Registrar of Voters
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Prepared by: Kelly McAdoo, Assistant City Manager
Approved by:

Fran David, City Manager
Attachments:

Attachment L Resolution
Attachment II: Frequently Asked Questions
Attachment III: Preliminary List of Critical City Funding Needs Resolution Placing Sales TaxMeasure on June 2014 Ballot March 4, 2014
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ATTACHMENT

CITY COUNCIL OF THE CITY OF HAYWARD
RESOLUTION NO. 14-
Introduced by Council Member

RESOLUTION OF THE CITY OF HAYWARD ESTABLISHING
JUNE 3, 2014, AS THE DATE FOR AN ELECTION ON A

PROPOSED BALLOT MEASURE SEEKING VOTER APPROVAL

RELATING TO THE ENACTMENT OF A ONE -HALF OF ONE
PERCENT ( 0. 50 %) TRANSACTIONS AND USE (SALES) TAX

FOR TWENTY YEARS AND REQUESTING THE BOARD OF

SUPERVISORS OF ALAMEDA COUNTY TO CONSOLIDATE

SAID ELECTION WITH THE STATEWIDE DIRECT PRIMARY

ELECTION
WHEREAS, a locally- enacted revenue measure would protect and maintain Hayward services because the money is legally required to stay in the City's community and cannot be taken by the State, thereby providing locally controlled funds for local services; and WHEREAS, at its March 4, 2014 meeting, the City Council recognized the need for additional revenue to maintain and preserve the level of services desired by residents of the City; and
WHEREAS, at that meeting, the City Council concluded that all of the information presented indicated that, to obtain the revenue necessary to maintain and preserve service levels, the Council should call an election to ask the voters of the City to approve a 20 year local transactions and use (sales) tax, the revenue from which could be used to support general municipal services; and
WHEREAS, on the basis of the foregoing, the City Council determined that it was appropriate to submit a ballot measure regarding a general transactions and use (sales) tax to the voters of the City of Hayward for their approval and adoption at the general election to be held in the City on June3, 2014; and
WHEREAS, the tax to be submitted to the voters, if approved, would be imposed on the saleof tangible personal property andthe storage, use, or other consumption of such property. The tax rate would be one -half of one percent (0. 50 %) (one -half cent for each dollar) of the sales price of the property. The tax revenue would be collected by the State Board of Equalization and remitted to the City. The tax would be in effect for 20 years, and would then expire automatically, unless extended by the voters. The tax shall be approved if the measure receives at least a simple majority of affirmative votes; and

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ATTACHMENT
WHEREAS, the Hayward City Council is authorized by California Elections Code Section 9222 to place measures before the voters; and WHEREAS, Elections Code Sections 9281through 9287 setforth the procedures for arguments in favor of and in opposition to any City ballot measure and for rebuttal arguments; and
WHEREAS, June3, 2014 is the date of the Statewide Direct Primary Election and it is desirable that the election on the City's ballot measure be consolidated with the Statewide Direct Primary Election to be held on the same date; that within the City, the precincts, polling places and election officers of the two elections be the same; and that the Alameda County Department of Elections canvass the returns of the consolidated election and that the election be held in all respects as if there were only one election; and WHEREAS, based on all of the information presented at the March 4, 2014 meeting, both written and oral, including the staff reports, minutes, and other relevant materials, the City Council finds that under CEQA Guidelines 15060(c)(2) and 15378, subdivisions ( 2) and 4) of subdivision (b), this tax doesnot constitute aproject under CEQA andtherefore review under CEQA is not required.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hayward:

1. Recitals. The foregoing recitals are true and correct and are hereby incorporated by reference.

2. Call Election; Placement of Measure on the Ballot. Pursuant to California Constitution Article XIIIC, Section 2; Government Code Section 53724; and Elections Code Section 9222, the City Council of the City of Hayward hereby calls an election at which it shall submit to the qualified voters of the City, a measure that, if approved, would adopt a temporary general transactions and use (sales) tax, as authorized by Revenue and Taxation Code Section 7285.9. This measure shall be designated by letter by the Alameda County Registrar of Voters.

Pursuant to Election Code Section 10400 et seq., the election for this measure shall be consolidated with the established election to be conducted on June 3, 2014.

3. Ballot Language. The question to be presented to the voters shall be either Ballot Language Alternative ( a), Ballot Language Alternative ( b) or Ballot Language Alternative c) asfollows:

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ATTACHMENT
Ballot Language Alternative ( a)
To protect and restore city services and facilities, including:
increasing neighborhood police patrols; repairing potholes and maintaining streets and sidewalks; updating fire stations to meet YES
neighborhood needsand earthquakestandards; replacing the outdatedandundersizedlibrary with a21 centurylibrary and community learning center; and other city services; shall City of Hayward increase the sales tax by one -half percent, for twenty NO years, providing locally controlled funding that cannot be taken by the State?
Ballot Language Alternative ( b)
To restore andmaintain Hayward city services /facilities, including firefighting / emergency medical services; improving police protection for neighborhoods; replacing the aging library YES
witha21 Centuryfacilityincludingsafespacefor after- school homework/tutoring; repairing potholes, streets and sidewalks; updating aging neighborhood fire stations; and other city services; shall the City of Hayward increase the sales tax by 1/z NO percent, for twenty years only, providing locally controlled funding that cannot be taken away by the State?
Ballot Language Alternative ( c)
To restore and maintain Hayward city services and facilities, including firefighting / emergency medical services; improving police protection for neighborhoods; replacing the aging library YES
with a 21st century facility including safe space for after - school homework and tutoring; repairing potholes and streets; updating aging neighborhood fire stations; and other city services; shall the City of Hayward increasethe salestax by 1 /z percent, for NO twenty years only, providing locally controlled funding that cannot be taken by the State?

4. Proposed Ordinance. The ordinance authorizing the general tax to be approved by the voters pursuantto Sections2 and3 of the Resolution is asset forth in Attachment 1

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hereto. The City Council hereby approves the ordinance, the form thereof, and its submission to the voters of the City at the June 3, 2014 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 Attachment 1, shall be included in the voters pamphlet. The ordinance specifies that the rate of the transactions tax shall be one -half of one percent (0. 50 %) of the gross receipts of any retailer from the sale of all tangible personalproperty sold at retail in the City; it specifies that the rate of the use tax shall be one -half of one percent (0. 50 %) of the sales price of tangible personal property stored, used or otherwise consumed in the City, and that the tax shall be in effect for twenty years. The State Board of Equalization shall collect the tax from retailers subject to the tax and remit the funds to the City.

5. Publication of Measure. The City Clerk is hereby directed to cause notice of the measure to be published once in the official newspaper of the City of Hayward, in accordance with Section 12111 of the Elections Code and Section 6061 of the Government Code.

6. Request to Consolidate and Conduct Election and Canvass Returns. a) Pursuant to the requirement of Section 10403 of the Elections Code, the Board of Supervisors of the County of Alameda is hereby requested to consent and agree to the consolidation of a General Municipal Election with the Statewide Direct Primary Election on Tuesday June 3, 2014, for the purpose of placing the measure set forth in Sections 3 and 4 on the ballot.
b) The County of Alameda Registrar of Voters is authorized to canvass the returns of the municipal election. The election shall be held in all respect as if there were only one election, and only one form of ballot shall be used.
c) The Board of Supervisors is requested to issue instructions to the Alameda County Registrar of Voters to take any and all stepsnecessaryfor the holding of the consolidated election.
d) The City of Hayward recognizes that additional costs will be incurred by the County of Alameda by reason of this consolidation and agrees to reimburse the County for any costs.

Submission of Ballot Argument and Impartial Analysis.
a) The last day for submission of direct argumentsfor or againstthe measureshall be by 5:00 p.m. on March 14, 2014.
b) The last day for submission of rebuttal arguments for or against the measure shall be by 3: 00 p.m. on March 21, 2014.

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c) Direct arguments shall not exceed three hundred (300) words and shall be signed by not more than five persons.
d) Rebuttal arguments shall not exceed two hundred fifty ( 250) words and shall be signed by not more than five persons; those persons may be different persons than the persons who signed the direct arguments.
e) The City Attorney shall prepare an impartial analysis of the measure by March 7, 2014.
f) Pursuant to California Elections Code Section 9285, 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 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.

8. Effective Date. This Resolution shall become effective immediately upon its adoption and the City Clerk is directed to send certified copies of the Resolution to the Alameda County Board of Supervisorsandthe Alameda County Registrar of Voters.

9. CEQA. The approval of this Resolution is exempt from the California Environmental Quality Act (Public Resources Code 21000 et seq., "CEQA," and 14 Cal. Code Reg. 15000 et seq., "CEQA Guidelines "). The transactions and use (sales) tax to be submitted to the voters is a general tax that can be used for any legitimate governmental purpose; it is not a commitment to any particular action. As such, under CEQA Guidelines section 15378(b)(4), the tax is not a project within the meaning of CEQA because it creates 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. If revenue from the tax were used for a purpose that would have either such effect, the city would undertake the required CEQA review for that particular project. Therefore, under CEQA Guidelines section 15060, review under CEQA is not required.

IN COUNCIL, HAYWARD, CALIFORNIA 1 2014
ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

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ATTACHMENT
ABSENT: COUNCIL MEMBERS:

ATTEST:

City Clerk of the City of Hayward
APPROVED AS TO FORM:

City Attorney of the City of Hayward

ATTACHMENT

ORDINANCE NO

AN ORDINANCE OF THE PEOPLE OF THE CITY OF

HAYWARD IMPOSING A TRANSACTIONS AND USE (SALES)

TAX TO BE ADMINISTERED BY THE STATE BOARD OF

EQUALIZATION
WHEREAS, a locally- enacted revenue measure would protect and maintain Hayward services because the money is legally required to stay in our community and cannot be taken by the State, providing locally controlled funds for local services; and WHEREAS, at its March 4, 2014 meeting, the City Council considered calling an election to seek voter approval of a proposed general transactions and use (sales) tax, as authorized by Revenue and Taxation Code section 7285.9; and WHEREAS, at that meeting, the City Council concluded that all of the information presented indicated that, to obtain the revenue necessary to maintain and preserve service levels, the Council should call an election to ask the voters of the City to approve a twenty year local transactions and use (sales) tax, the revenue from which could be used to support general municipal services; and
WHEREAS, on the basis of the foregoing, the City Council determined that it was appropriate to place a measure regarding a general transactions and use (sales) tax before the voters at the June 3, 2014 general election; and

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WHEREAS, the tax, if approved, would be imposed on the sale of tangible personal property and the storage, use, or other consumption of such property. The tax rate would be one -half of one percent (0. 50 %) (one -half cent for each dollar) of the sales price of the property. The tax revenue would be collected by the State Board of Equalization and remitted to the City. The tax would be in effect for twenty years, and would then expire automatically, unless extended by the voters. The tax shall be approved if the measure receives at least a simple majority of affirmative votes.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HAYWARD ORDAINS AS FOLLOWS:

Section 1 . Amendment of Code.

The Hayward Municipal Code is hereby amended to add a new Chapter 8, Article 19 and shall read as follows:

CHAPTER 8
ARTICLE 19

TRANSACTIONS AND USE (SALES) TAX
SEC. 8- 19. 100. Title.

This ordinance shall be known asthe City of Hayward Transactions and Use (Sales) Tax Ordinance. The City of Hayward hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City.

SEC. 8- 19. 200 Operative Date.

Operative Date" means October 1, 2014.

SEC. 8- 19. 300. Purpose.

This ordinance is adoptedto achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes. a) To impose a retail transactions and use (sales) tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenueand Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose. b) To adopt a retail transactions and use (sales) tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as Page7 of Resolution No. 14-
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those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.
c) To adopt a retail transactions and use (sales) tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative proceduresfollowed by the State Board of Equalization in administering and collecting the California State Sales and Use Taxes.
d) To adopt a retail transactions and use (sales) tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use (sales) taxes, and at the sametime, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.

SEC. 8- 19. 400. Contract with State.

Prior to the operative date, the City shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of this transactions and use sales) tax ordinance; provided, that if the City shall not have contracted with the State Board of Equalization prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the fast calendar quarter following the execution of such a contract.

SEC. 8- 19. 500. Transactions Tax Rate.

For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 0. 50% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.

SEC. 8- 19. 600. Place of Sale.

For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out -of -state destination or to a common carrier for delivery to an out -of -state destination. The gross receipts from such sales shall include delivery charges, when such chargesare subjectto the statesalesandusetax, regardlessof the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determinedunderrulesandregulationsto beprescribedandadoptedby the StateBoardof Equalization.

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SEC. 8- 19. 700. Use Tax Rate.

A transactions and use (sales) tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 0. 50% of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

SEC. 8- 19. 800. Adoption of Provisions of State Law.

Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenueand Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.

SEC. 8- 19. 900. Limitations on Adoption of State Law and Collection of Use Taxes.

In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
a) Wherever the State of California is named or referred to as the taxing agency, the nameof this City shall be substitutedtherefor. However, the substitution shall not be made when:
1) The word "State" is used as a part of the title of the State Controller, State Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the Constitution of the State of California
2) The result of that substitution would require action to be taken by or against this City of any agency, officer, or employee thereof rather than by or against the State Board of Equalization, in performing the functions incident to the administration or operation of this ordinance.
3) In those sections, including, but not necessarily limited to, sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:

A) Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; B) Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.

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4) In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797, or 6828 of the Revenue and Taxation Code.
b) The word "City" shall be substitutedfor the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203.

SEC. 8- 19. 1000. Permit Not Required.

If a seller's permit hasbeen issuedto aretailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.

SEC. 8- 19. 1100. Exemptions and Exclusions.
a) There shall be excluded from the measure of the transactions and use (sales) tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or the amount of any state - administered transactions or use tax. b) There are exempted from the computation of the amount of transactions tax the gross receipts from:
1) Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
2) Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposesof this paragraph, delivery to a point outside the City shall be satisfied:

A) With respectto vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensedin compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out -of -City address and by a declaration under penalty of perjury, signed by the buyer, stating that address is, in fact, his or her principal place of residence; and
B) With respect to commercial vehicles, by registration to a place of business out -of -City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.

ATTACHMENT
3) The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
4) A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance. 5) For the purpose of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. c) There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property:
1) The gross receipts from the sale of which have been subject to a transactions tax under any state - administered transactions and use (sales) tax ordinance. 2) Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreigngovernment. Thisexemptionis in additionto the exemptionsprovidedin Sections6366 and 6366.1 of the Revenue and Taxation Code of the State of California. 3) If purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4) If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance. 5) For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease had the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. 6) Except as provided in subparagraph O, a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order,

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either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.
7) " A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumentedvesselsregisteredunder Division 3.5 commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.
d) Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.

SEC. 8- 19.1200. Amendments.

All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affecttherateof tax imposedby this ordinance.

SEC. 8- 19. 1300. Enjoining Collection Forbidden.

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.

SEC. 8- 19. 1400. Authorization and Limitation on Issuance of Bonds.

The City is hereby authorized to issue limited tax bonds, from time to time, provided that the maximum bonded indebtedness will not exceed the total amount of this retail transactions and use (sales) tax.

SEC. 8- 19. 1500. Annual Audit
The proceeds resulting from this transactions and use (sales) tax shall be deposited into the City's General Fund and become subject to the same independent annual audit requirements as other general fund revenue.

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SEC. 8- 19. 1600. Termination Date.

The authority to levy the tax imposed by this ordinance shall expire on the twentieth anniversary of the last day of the calendar quarter following the operative date." Section 2 . Environmental Compliance
The findings for this ordinance in compliance with the California Environmental Quality Act ( "CEQA ") are the same asthose set forth in the City's Resolution No. calling for an election on this ordinance. The CEQA findings in Resolution No. are incorporated herein by reference.

Section 3 . Severability.

If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

Section 4 . Effective Date.

The Ordinance relates to the levying and collecting of the City transactions and use sales) taxes and shall take effect immediately.

APPROVED by the following vote of the People of the City of Hayward on June 3, 2014.

AYES:

NOES:

ADOPTED by Declaration of the vote at the June 3, 2014 election by the City Council of the City of Hayward on the day of , 2014.

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

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ABSENT: COUNCIL MEMBERS
APPROVED AS TO FORM:

City Attorney of the City of Hayward
Mayor of the City of Hayward
City Clerk of the City of Hayward

APPROVED:

DA'
ATTEST:
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ATTACHMENT II
City of Hayward — 2014 Revenue Measure Feasibility Project Frequently Asked Questions (FAQ)
What is this project all about?
It is the City's responsibility to provide public services and facilities that benefit our community — things like police, fire and public safety services and facilities, well- maintained streets and roads, quality libraries, etc. Maintaining these public assets isn't cheap. Hayward city facilities in particular, have grown old, deteriorated and in some cases, unsafe, over many decades of constant use. In particular, the Great Recession over the past few years has impacted the City budget, making it impossible to fund needed repairs and upgrades to aging facilities while still maintaining critical services for the community.

What are the City's critical needs that make this project necessary? Note — needs listed alphabetically below)
Fire: Hayward's fire stations are aging and many need serious upgrades. Most of the City's fire stations were built more than 50 years ago. Some of the City's busiest stations have water damage, cracked foundations, and electrical systems that don't meet current building safety codes.

Library: The main library was built in 1951, when Hayward had a population of 14, 000 people. Today, Hayward is the Bay Area's fifth largest city, with a population of 150,000.

The current library is deteriorating rapidly, and is too small and technologically outdated to meet the needs of our growing community.

Police: Over the past six years, Hayward police have been stretched thin. The department needs increased staffing in several critical areas in order to keep pace with changes in technology and crime patterns.

Road Maintenance: The city currently maintains 659 miles of streets and roads. The pavement condition score currently stands at 69 (fair). To bring the average condition up to 80 (good) would require nearly triple the City's current annual budget for road maintenance.

GOOD FAIR
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ATTACHMENT II
What is the goal of this project?
The City of Hayward has been working for several years investigating options to address its aging infrastructure needs. At the same time, the Great Recession and other conditions have greatly impacted the City budget, making it impossible to fund needed repairs and upgrades to aging facilities while still maintaining critical services for the community. This project is intended to find a solution to that problem in an environment of limited resources. One of the options under consideration is to ask the Hayward community to support establishing a new and stable local funding source to provide funding for critical city services that the State can't take away.

To achieve its goal, the City will need to show how it has been a good steward of the funding it gets now. How is the City managing its finances responsibly NOW? The City has made significant changes to its personnel structure, compensation guidelines and operating strategies in an effort to keep the City financially stable. City employees, executives and elected officials have all made substantial sacrifices to aid in this effort by contributing more towards the costs of benefits, all while maintaining a high level of service to the community.

How much would a new measure cost?
The most promising kind of measure currently under consideration at Hayward City Hall, is a' /2 cent sales tax. Establishing such a measure in the city of Hayward would require a vote of the people — and 50 %+ 1 (simple majority) approval. If approved it would add 50 cents to a $100 purchase made in Hayward.

How much additional funding would a '/2 cent sales tax generate for the City? A' /2 cent sales tax would raise about $10 million per year. This revenue is dependent on the economy and the amount of sales tax generated in Hayward. ALL funds generated by the local sales tax would be locally controlled and would stay in Hayward to provide essential city services and facility improvements. By law, the State could not take this funding away.

What would a sales tax apply to? What's taxed and what isn't? A local sales tax would apply to the same goods and services and be subject to the existing state sales tax on tangible personal property. For example: furniture, cars, giftware, toys, antiques and clothing would be subject to the tax. Items that are exempt from sales tax include sales of certain food products for human consumption ( most groceries), sales to the U.S. government, sales of prescription medicine and certain medical devices, and sales of items paid for with food stamps.

How long would a' /2 cent sales tax last?
The measure under consideration in Hayward would most likely include a 20 -year duration or sunset ". Changes could not be made without a new vote of the people.

Where to go for additional information:

For additional information please contact Assistant City Manager Kelly McAdoo at Kelly. mcadoo( a)hayward- ca. gov
City of Hayward — 2014 Revenue Measure Feasibility Project 574 Page 2 of 2
ATTACHMENT III — Preliminary List of Critical City Funding Needs March 4, 2014
Capital Projects Annual Debt Service
Payment' or AnnualCost
Library & Community Learning Center
Total unfunded cost: $50, 000,000 3, 990,000
New Fire Station # 6 Training Center
Total unfunded cost: $8, 200,000 654, 400
Other Fire Station Retrofits /Improvements
Total unfunded cost: $10, 000,000 798, 000
Street RepairS
2 miles of overlay and 4 miles of slurry seal 1, 000,000 New Police Facility & Jail
Total unfunded cost: $85, 000,000 6, 783,000
Restoration of Services Annual Debt Service
Payment or AnnualCost
Restoring 5 Police Officers
Cost per officer: $200,000 /year 1, 000,000
Restoring 5 Maintenance Workers
Cost per worker: $100,000 /year 500, 000
Maintain Current Services (Closing the
General Fund Budget Deficit for FY2015) 2, 600,000
Annual debt service payment based on 20 -year amortization of bond funding 2Currentannualgastax /Measure Bfundingfor overlay /slurry seal = $4 million 3Annualdebt servicepaymentbasedon 20 -year amortizationof bondfunding

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Measure C
20-Year Financial Forecast Update
Measure C 20-Year Financial Forecast
Year Ref. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Actual Actual Actual Actual Actual Actual Actual Estimated Adopted Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Fiscal Year FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024* FY 2025* FY 2026* FY 2027* FY 2028* FY 2029* FY 2030* FY 2031* FY 2032* FY 2033* FY 2034* 2035* Revenues
Measure C 8,090,470 13,436,227 14,189,607 15,216,260 16,906,772 16,876,487 18,577,214 19,947,072 20,576,000 21,281,728 22,205,780 23,074,746 23,888,626 24,647,817 25,140,773 25,643,589 26,156,461 26,679,590 27,213,182 27,213,182 27,757,445 Bond Issuance 65,789,797
Chabot Commitment 1,837,150 6,127,662 12,035,189
Total Revenues 8,090,470 79,226,024 14,189,607 15,216,260 16,906,772 18,713,637 24,704,876 31,982,261 20,576,000 21,281,728 22,205,780 23,074,746 23,888,626 24,647,817 25,140,773 25,643,589 26,156,461 26,679,590 27,213,182 27,213,182 27,757,445 Expenditures
Capital Expenditures
Library/Learning Center 10,607,338 17,372,241 17,051,095 11,515,077 2,739,353 2,449,125 1,483,026 Fire Facilities Design 930,859 1,285,242 284,537 150,680 35,898 50,250 12,585 Fire Station 1 358,293 618,851 33,618 1,521 1,728
Fire Station 2 587,183 1,571,806 172,704 95,567 3,095 1,728 Fire Station 3 472,826 1,622,186 141,045 66,950 1,269 1,728 Fire Station 4 114,900 1,609,051 297,312 128,458 20,554 1,728 Fire Station 5 75,973 1,207,332 435,506 58,488 1,345 1,728 Fire Station 6 65,762 305,789 720,032 5,298,984 3,911,433 600,000 Fire Training Academy 681,043 2,025,836 752,152 877,108 12,719,734 37,344,127 5,600,000 Street Rehabilitation 490,845 10,554,232 652,521 32,113 - 2,000,000 2,000,000 EBRCS Radios 1,314,719 1,337,437 -
Tennyson Corridor Median Improvement 29,494 392,662 446,979 266,831 221,937 300,000 300,000 150,000 Subtotal - 12,029,043 31,501,932 26,738,471 15,543,377 6,507,791 20,811,187 42,981,748 6,500,000 2,300,000 150,000 - - - - - - 2,000,000 - - - Operating Expenditures
Police Services 569,836 1,793,135 1,935,134 2,956,896 3,097,313 3,290,198 3,115,461 3,246,643 3,473,908 3,717,082 3,977,277 4,255,687 4,553,585 4,872,336 5,213,399 5,578,337 5,968,821 6,386,638 6,386,638 6,833,703 Maintenance Services 205,969 708,249 572,105 610,926 761,784 1,058,980 1,468,931 1,410,360 1,621,965 1,735,503 1,856,988 1,986,977 2,126,065 2,274,890 2,434,132 2,604,521 2,786,838 2,981,916 3,190,651 3,190,651 3,413,996 Other Department Services 73,240 66,116 106,542 223,813 221,777 Subtotal 205,969 1,278,084 2,365,240 2,546,060 3,791,920 4,222,408 4,865,672 4,749,634 5,090,385 5,209,411 5,574,069 5,964,254 6,381,752 6,828,475 7,306,468 7,817,921 8,365,175 8,950,737 9,577,289 9,577,289 10,247,699 Debt Service Expenditures 2,326,436 2,859,637 2,732,875 5,430,063 4,523,594 5,424,438 5,423,063 5,415,313 5,407,938 5,425,488 5,419,188 5,436,938 5,434,838 5,434,063 5,426,800 5,424,913 5,420,657 5,379,350 5,372,350 5,372,350 Total Expenditures 205,969 15,633,563 36,726,809 32,017,406 24,765,360 15,253,793 31,101,296 53,154,445 17,005,698 12,917,348 11,149,557 11,383,442 11,818,689 12,263,312 12,740,530 13,244,721 13,790,087 16,371,394 14,956,639 14,949,639 15,620,049 Annual Cash Flow 7,884,501 63,592,461 (22,537,202) (16,801,146) (7,858,588) 3,459,844 (6,396,420) (21,172,184) 3,570,303 8,364,380 11,056,223 11,691,304 12,069,937 12,384,505 12,400,243 12,398,868 12,366,373 10,308,196 12,256,543 12,263,543 12,137,396 Cumulative Fund Balance 7,884,501 71,476,962 48,939,761 32,138,614 24,280,026 27,739,869 21,343,449 171,265 3,741,568 12,105,947 23,162,171 34,853,475 46,923,412 59,307,916 71,708,160 84,107,028 96,473,401 106,781,597 119,038,140 119,045,140 131,175,536 *The amounts identified for capital projects in future fiscal years of this projection are conceptual only and have not been approved or appropriated. Appropriation and allocation of these funds will occur annually with adoption of the City's Operating and Capital budgets. 6/10/2022

ATTACHMENT IV

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 22-063
DATE: June 15, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance

SUBJECT
Review and Approve the FY 2023 Agenda Planning Calendar

RECOMMENDATION
That the Council Budget and Finance Committee reviews and approves the FY 2023 Agenda Planning Calendar.

SUMMARY
The FY 2023 Agenda Planning Calendar suggests agenda topics for the year for the Committee’s consideration.

ATTACHMENTS
Attachment I FY 2023 Agenda Planning Calendar
CITY OF HAYWARD Printed on 6/10/2022Page 1 of 1
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ATTACHMENT I

COUNCIL BUDGET AND FINANCE COMMITTEE
FY 2023 Agenda Planning Calendar
June 15, 2022
Meeting Location: Remote Participation

Meeting Time: 5:00 p.m.

Meeting Dates: The Council Budget & Finance Committee generally meets monthly on the 3rd Wednesday of the month, except for July and August, due to City Council Break.

Special meetings will be scheduled as determined necessary by the Committee or the City Manager.

DATE SUGGESTED TOPICS (subject to change)
June 15, 2022
Measure C Debt Analysis/Review
City’s Insurance Coverage (JPA ERMAC)
FY 2023 Budget Process Debrief (Oral Presentation)
July 20, 2022 No Meeting – City Council Recess
August 17, 2022 No Meeting – City Council Recess
September 21, 2022
CalPERS Update
Transient Occupancy Tax Review
Hayward Community Foundation Update
October 19, 2022 Measure C Annual Report
FY 2024 Annual Audit Process (Oral Presentation by External Auditor) November 16, 2022 Investment Portfolio Review and FY 2023 Statement of Investment Policy Update (External Investment Manager)
December 21, 2022 Presentation of FY 2022 Annual Audit
FY 2024 Budget Process and Calendar Review
January 18, 2023 Annual Comprehensive Financial Report for the Year Ended June 30, 2022, February 15, 2023 FY 2023 Mid-Year Budget Review and General Fund Long Range Financial Model Update
March 15, 2023 Discussion on Mayor & City Council FY 2024 Budget FY 2024 Budget Process Update
April 19, 2023 FY 2024 Proposed Budget Discussion
May 17, 2023 Annual Review of City Issued Debt
Annual City Benefit Liabilities and Funding Plan Review June 21, 2023 FY 2024 Budget Process Debrief (Oral Presentation)

Non-scheduled future agenda topics:

ATTACHMENT I

(Cont’d on following page)
- Fleet Utilization Study
- Pension Obligation Funds (as Updates Available)
- Additional Payment OPEB Trust
- Public Bank East Bay
- 238 Parcel Sales Update (Timing TBD on Transactions)