Hermosa Beach City Council
July 26, 2022

FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF HERMOSA BEACH AND LEW EDWARDS GROUP

TO PROVIDE BALLOT MEASURE DEVELOPMENT AND COMMUNICATION SERVICES This First Amendment to the Agreement for Ballot Measure Development and Communication Services ("First Amendment") is entered into by and between the City of Hermosa Beach, a municipal corporation ("CITY") and LEW EDWARDS GROUP ("CONSULTANT") as of August 1, 2022.

R E C I T A L S
A. The City and Consultant are parties to an Agreement dated March 10, 2022 (the "Agreement") by which City engaged Consultant to provide ballot measure preparation/communication services at a rate of $5,950/month from March 2022 through July 2022, not to exceed $30,000.

B. The City and Consultant now desire to amend the Agreement through November 2022 at a rate of $6,000/month, not to exceed $24,000, for services and activities set forth in the SCOPE OF SERVICE attached hereto as Exhibit A and incorporated herein by reference.

NOW, THEREFORE, in consideration of the foregoing, the Agreement is amended as follows:

Section 1 is amended by increasing the monthly fee from $5,950 to $6,000 from August 1, 2022 through November 30, 2022 for a total not to exceed contract amount of $54,000.

Section 7 is amended to extend the term of the Agreement from July 31, 2022 to November 30, 2022.

Exhibit A to the Agreement replaced in its entirety and superseded by the Exhibit A SCOPE OF SERVICE attached hereto and incorporated herein by this reference. 1036
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Except as above modified, in all other respects the Agreement is hereby reaffirmed in full force and effect.

CITY OF HERMOSA BEACH CONSULTANT
Suja Lowenthal, City Manager Catherine Lew, Principal & Co-Founder ATTEST: APPROVED AS TO FORM:

Myra Maravilla, City Clerk Michael Jenkins, City Attorney 1037

EXHIBIT A

SCOPE OF SERVICES AND COMPENSATION
Consultant services for the City of Hermosa Beach will include the following Ballot Measure Development and Communications Services:
• Provide lead project management and regular project structure/planning • Recommend 2022 ballot measure components
• Update project timeline
• Continue to monitor media coverage in the public arena • Develop Municipal Election Communications Platform
• Develop text copy for collaterals or paid digital media • Provide rapid response support as needed (Consultant does not function as a paid spokesperson)
Legal advice is not within Consultant’s scope of services and no partisan activities are to be provided through Consultant’s scope of work.

Consultant's fees and expenses for these services shall not exceed Twenty-Four Thousand Dollars ($24,000) payable in increments of Six Thousand Dollars ($6,000) per payment due and payable on the last business day of each month commencing August 30, 2022 and ending on November 30, 2022.

Graphic design, direct mail production costs (postage, printing, etc.) and paid digital media are also not included in this Agreement and should be budgeted for separately by the City using its own vendors.
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City of Hermosa Beach
Civic Center, 1315 Valley Drive, Hermosa Beach, CA 90254-3885

CONTRACT FOR PROFESSIONAL SERVICES

BETWEEN THE CITY OF HERMOSA BEACH AND LEW EDWARDS GROUP

TO PROVIDE BALLOT MEASURE PREPARATION/COMMUNICATION SERVICES This AGREEMENT is entered into this 10th day of March, 2021, by and between the CITY OF HERMOSA BEACH, a California general law city and municipal corporation (“CITY”) and LEW EDWARDS GROUP (“CONSULTANT”).

R E C I T A L S
A. The City desires services for ballot measure preparation/communication services.

B. The City does not have the personnel able and/or available to perform the services required under this agreement and therefore, the City desires to contract for consulting services to accomplish this work.

C. The Consultant warrants to the City that it has the qualifications, experience and facilities to perform properly and timely the services under this Agreement.

D. The City desires to contract with the Consultant to perform the services as described in Exhibit A and Exhibit B of this Agreement.

NOW, THEREFORE, based on the foregoing recitals, the City and the Consultant agree as follows:

CONSIDERATION AND COMPENSATION As partial consideration, CONSULTANT agrees to perform the work listed in the SCOPE OF SERVICES, attached as EXHIBIT A.

As additional consideration, CONSULTANT and CITY agree to abide by the terms and conditions contained in this Agreement.

As additional consideration, CITY agrees to pay CONSULTANT a not-to-exceed amount of $30,000 in five monthly payments of $5,950 for CONSULTANT’s services, unless otherwise specified by written amendment to this Agreement.

No additional compensation shall be paid for any other expenses incurred, unless first approved by the City Manager or his/her designee.

CONSULTANT shall submit to CITY, by not later than the 10th day of each month, its invoice for services itemizing the fees and costs incurred during the previous month.

CITY shall pay CONSULTANT all uncontested amounts set forth in CONSULTANT’s invoice within 30 days after it is received.

SCOPE OF SERVICES. CONSULTANT will perform the services and activities set forth in the SCOPE OF SERVICE attached hereto as Exhibit A and incorporated herein by this reference.

Except as herein otherwise expressly specified to be furnished by CITY, CONSULTANT will, in a professional manner, furnish all of the labor, technical, administrative, professional and other 1039
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personnel, all supplies and materials, equipment, printing, vehicles, transportation, office space, and facilities necessary or proper to perform and complete the work and provide the professional services required of CONSULTANT by this Agreement.

PAYMENTS. For CITY to pay CONSULTANT as specified by this Agreement, CONSULTANT must submit an invoice to CITY which lists the reimbursable costs, the specific tasks performed, and, for work that includes deliverables, the percentage of the task completed during the billing period in accordance with the schedule of compensation incorporated in “Exhibit B.” TIME OF PERFORMANCE. The services of the CONTRACTOR are to commence upon receipt of a notice to proceed from the CITY and shall continue until all authorized work is completed to the CITY’s reasonable satisfaction, in accordance with the schedule incorporated in “Exhibit B,” unless extended in writing by the CITY.

FAMILIARITY WITH WORK. By executing this Agreement, CONSULTANT represents that CONSULTANT has (a) thoroughly investigated and considered the scope of services to be performed; (b) carefully considered how the services should be performed; and (c) understands the facilities, difficulties, and restrictions attending performance of the services under this Agreement.

KEY PERSONNEL. CONSULTANT’s key person assigned to perform work under this Agreement is Catherine Lew. CONSULTANT shall not assign another person to be in charge of the work contemplated by this Agreement without the prior written authorization of the City.

TERM OF AGREEMENT. The term of this Agreement shall commence upon execution by both parties and shall expire on July 31, 2022, unless earlier termination occurs under Section 11 of this Agreement, or this Agreement is extended in writing in advance by both parties.

CHANGES. CITY may order changes in the services within the general scope of this Agreement, consisting of additions, deletions, or other revisions, and the contract sum and the contract time will be adjusted accordingly. All such changes must be authorized in writing, executed by CONSULTANT and CITY. The cost or credit to CITY resulting from changes in the services will be determined in accordance with written agreement between the parties.

TAXPAYER IDENTIFICATION NUMBER. CONSULTANT will provide CITY with a Taxpayer Identification Number.

PERMITS AND LICENSES. CONTRACTOR will obtain and maintain during the term of this Agreement all necessary permits, licenses, and certificates that may be required in connection with the performance of services under this Agreement.

TERMINATION. Except as otherwise provided, CITY may terminate this Agreement at any time with or without cause. Notice of termination shall be in writing.

CONSULTANT may terminate this Agreement. Notice will be in writing at least 30 days before the effective termination date.

In the event of such termination, the CONTRACTOR shall cease services as of the date of termination, and all finished or unfinished documents, data, drawings, maps, and other materials prepared by CONSULTANT shall, at CITY’s option, become CITY’s property, and CONSULTANT will receive just and equitable compensation for any work satisfactorily completed up to the effective date of notice of termination.

Should the Agreement be terminated pursuant to this Section, CITY may procure on its own terms services similar to those terminated.
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INDEMNIFICATION. CONSULTANT shall indemnify, defend with counsel approved by CITY, and hold harmless CITY, its officers, officials, employees and volunteers from and against all liability, loss, damage, expense, and cost (including without limitation reasonable attorneys fees, expert fees and all other costs and fees of litigation) of every nature arising out of or in connection with CONSULTANT's performance of work hereunder or its failure to comply with any of its obligations contained in this AGREEMENT, regardless of CITY’S passive negligence, but excepting such loss or damage which is caused by the sole active negligence or willful misconduct of the CITY. Should CITY in its sole discretion find CONSULTANT’S legal counsel unacceptable, then CONSULTANT shall reimburse the CITY its costs of defense, including without limitation reasonable attorneys fees, expert fees and all other costs and fees of litigation. The CONSULTANT shall promptly pay any final judgment rendered against the CITY (and its officers, officials, employees and volunteers) covered by this indemnity obligation. It is expressly understood and agreed that the foregoing provisions are intended to be as broad and inclusive as is permitted by the law of the State of California and will survive termination of this Agreement.

The requirements as to the types and limits of insurance coverage to be maintained by CONSULTANT as required by Section 17, and any approval of said insurance by CITY, are not intended to and will not in any manner limit or qualify the liabilities and obligations otherwise assumed by CONSULTANT pursuant to this Agreement, including, without limitation, to the provisions concerning indemnification.

ASSIGNABILITY. This Agreement is for CONSULTANT’s professional services. CONSULTANT’s attempts to assign the benefits or burdens of this Agreement without CITY’s written approval are prohibited and will be null and void.

INDEPENDENT CONTRACTOR. CITY and CONSULTANT agree that CONSULTANT will act as an independent contractor and will have control of all work and the manner in which is it performed. CONSULTANT will be free to contract for similar service to be performed for other employers while under contract with CITY. CONSULTANT is not an agent or employee of CITY and is not entitled to participate in any pension plan, insurance, bonus or similar benefits CITY provides for its employees. Any provision in this Agreement that may appear to give CITY the right to direct CONSULTANT as to the details of doing the work or to exercise a measure of control over the work means that CONSULTANT will follow the direction of the CITY as to end results of the work only.

AUDIT OF RECORDS. CONSULTANT agrees that CITY, or designee, has the right to review, obtain, and copy all records pertaining to the performance of this Agreement. CONSULTANT agrees to provide CITY, or designee, with any relevant information requested and will permit CITY, or designee, access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation for the purpose of determining compliance with this Agreement. CONSULTANT further agrees to maintain such records for a period of three (3) years following final payment under this Agreement.

CONSULTANT will keep all books, records, accounts and documents pertaining to this Agreement separate from other activities unrelated to this Agreement.

CORRECTIVE MEASURES. CONSULTANT will promptly implement any corrective measures required by CITY regarding the requirements and obligations of this Agreement. CONSULTANT will be given a reasonable amount of time as determined by the City to implement said 1041
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corrective measures. Failure of CONSULTANT to implement required corrective measures shall result in immediate termination of this Agreement.

INSURANCE REQUIREMENTS.

A. The CONSULTANT, at the CONSULTANT’s own cost and expense, shall procure and maintain, for the duration of the contract, the following insurance policies:

1. Workers Compensation Insurance as required by law. The Consultant shall require all subcontractors similarly to provide such compensation insurance for their respective employees. Any notice of cancellation or non-renewal of all Workers’ Compensation policies must be received by the CITY at least thirty (30) days prior to such change. The insurer shall agree to waive all rights of subrogation against the CITY, its officers, agents, employees, and volunteers for losses arising from work performed by the CONTRACTOR for City.

2. General Liability Coverage. The CONSULTANT shall maintain commercial general liability insurance in an amount of not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury, and property damage. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit.

3. Automobile Liability Coverage. The CONSULTANT shall maintain automobile liability insurance covering bodily injury and property damage for all activities of the CONSULTANT arising out of or in connection with the work to be performed under this Agreement, including coverage for owned, hired, and non-owned vehicles, in an amount of not less than one million dollars ($1,000,000) combined single limit for each occurrence.

4. Professional Liability Coverage. The CONSULTANT shall maintain professional errors and omissions liability insurance for protection against claims alleging negligent acts, errors, or omissions which may arise from the CONSULTANT’S operations under this Agreement, whether such operations be by the CONSULTANT or by its employees, subcontractors, or subconsultants. The amount of this insurance shall not be less than one million dollars ($1,000,000) on a claims-made annual aggregate basis, or a combined single-limit-peroccurrence basis. When coverage is provided on a “claims made basis,” CONSULTANT will continue to renew the insurance for a period of three (3) years after this Agreement expires or is terminated. Such insurance will have the same coverage and limits as the policy that was in effect during the term of this Agreement, and will cover CONSULTANT for all claims made by CITY arising out of any errors or omissions of CONSULTANT, or its officers, employees or agents during the time this Agreement was in effect.

B. Endorsements. Each general liability, automobile liability and professional liability insurance policy shall be issued by a financially responsible insurance company or companies admitted and authorized to do business in the State of California, or which is approved in writing by City, and shall be endorsed as follows. CONSULTANT also agrees to require all contractors, and subcontractors to do likewise.

1. “The CITY, its elected or appointed officers, officials, employees, agents, and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the CONSULTANT, including materials, parts, or equipment furnished in connection with such work or operations.”

2. This policy shall be considered primary insurance as respects the CITY, its elected or appointed officers, officials, employees, agents, and volunteers. Any insurance 1042
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maintained by the CITY, including any self-insured retention the CITY may have, shall be considered excess insurance only and shall not contribute with this policy.

3. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company.

4. The insurer waives all rights of subrogation against the CITY, its elected or appointed officers, officials, employees, or agents.

5. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its elected or appointed officers, officials, employees, agents, or volunteers.

6. The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits except after thirty (30) days written notice has been received by the CITY.

C. CONSULTANT agrees to provide immediate notice to CITY of any claim or loss against Contractor arising out of the work performed under this agreement. CITY assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve CITY.

D. Any deductibles or self-insured retentions must be declared to and approved by the CITY.

At the CITY’s option, the CONSULTANT shall demonstrate financial capability for payment of such deductibles or self-insured retentions.

E. The CONSULTANT shall provide certificates of insurance with original endorsements to the CITY as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the CITY on or before commencement of performance of this Agreement. Current certification of insurance shall be kept on file with the CITY at all times during the term of this Agreement.

F. Failure on the part of the CONSULTANT to procure or maintain required insurance shall constitute a material breach of contract under which the CITY may terminate this Agreement pursuant to Section 11 above.

G. The commercial general and automobile liability policies required by this Agreement shall allow City, as additional insured, to satisfy the self-insured retention (“SIR”) and/or deductible of the policy in lieu of the Consultant (as the named insured) should Consultant fail to pay the SIR or deductible requirements. The amount of the SIR or deductible shall be subject to the approval of the City Attorney and the Finance Director. Consultant understands and agrees that satisfaction of this requirement is an express condition precedent to the effectiveness of this Agreement. Failure by Consultant as primary insured to pay its SIR or deductible constitutes a material breach of this Agreement. Should City pay the SIR or deductible on Consultant’s behalf upon the Consultant’s failure or refusal to do so in order to secure defense and indemnification as an additional insured under the policy, City may include such amounts as damages in any action against Consultant for breach of this Agreement in addition to any other damages incurred by City due to the breach.

USE OF OTHER CONSULTANTS. CONSULTANT must obtain CITY’s prior written approval to use any sub-consultants while performing any portion of this Agreement. Such approval must include approval of the proposed consultant and the terms of compensation.

FINAL PAYMENT ACCEPTANCE CONSTITUTES RELEASE. The acceptance by the CONSULTANT of the final payment made under this Agreement shall operate as and be a release of the CITY from all claims and liabilities for compensation to the CONSULTANT for anything done, 1043
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furnished or relating to the CONSULTANT’S work or services. Acceptance of payment shall be any negotiation of the CITY’S check or the failure to make a written extra compensation claim within ten (10) calendar days of the receipt of that check. However, approval or payment by the CITY shall not constitute, nor be deemed, a release of the responsibility and liability of the CONSULTANT, its employees, sub-consultants and agents for the accuracy and competency of the information provided and/or work performed; nor shall such approval or payment be deemed to be an assumption of such responsibility or liability by the CITY for any defect or error in the work prepared by the Consultant, its employees, sub-consultants and agents.

CORRECTIONS. In addition to the above indemnification obligations, the CONSULTANT shall correct, at its expense, all errors in the work which may be disclosed during the City’s review of the Consultant’s report or plans. Should the Consultant fail to make such correction in a reasonably timely manner, such correction shall be made by the CITY, and the cost thereof shall be charged to the CONSULTANT. In addition to all other available remedies, the City may deduct the cost of such correction from any retention amount held by the City or may withhold payment otherwise owed CONSULTANT under this Agreement up to the amount of the cost of correction.

NON-APPROPRIATION OF FUNDS. Payments to be made to CONSULTANT by CITY for services preformed within the current fiscal year are within the current fiscal budget and within an available, unexhausted fund. In the event that CITY does not appropriate sufficient funds for payment of CONSULTANT’S services beyond the current fiscal year, the Agreement shall cover payment for CONSULTANT’S services only to the conclusion of the last fiscal year in which CITY appropriates sufficient funds and shall automatically terminate at the conclusion of such fiscal year.

NOTICES. All communications to either party by the other party will be deemed made when received by such party at its respective name and address as follows:

CITY CONSULTANT
City of Hermosa Beach
1315 Valley Drive
Hermosa Beach, CA 90254
ATTN: Suja Lowenthal, City Manager
Via Email: [email protected]
Lew Edwards Group
5454 Broadway, 2nd Floor
Oakland, CA 94618
ATTN: Catherine Lew, Principal & Co-Founder
Via Email: [email protected]
Any such written communications by mail will be conclusively deemed to have been received by the addressee upon deposit thereof in the United States Mail, postage prepaid and properly addressed as noted above. In all other instances, notices will be deemed given at the time of actual delivery. Changes may be made in the names or addresses of persons to whom notices are to be given by giving notice in the manner prescribed in this paragraph.

Courtesy copies of notices may be sent via electronic mail, provided that the original notice is deposited in the U.S. mail or personally delivered as specified in this Section.

A. SOLICITATION. CONSULTANT maintains and warrants that it has not employed nor retained any company or person, other than CONSULTANT’s bona fide employee, to solicit or secure this Agreement. Further, CONSULTANT warrants that it has not paid nor has it agreed to pay any company or person, other than CONSULTANT’s bona fide employee, any fee, commission, percentage, brokerage fee, gift or other consideration contingent 1044
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upon or resulting from the award or making of this Agreement. Should CONSULTANT breach or violate this warranty, CITY may rescind this Agreement without liability.

B. THIRD PARTY BENEFICIARIES. This Agreement and every provision herein is generally for the exclusive benefit of CONSULTANT and CITY and not for the benefit of any other party.

There will be no incidental or other beneficiaries of any of CONSULTANT’s or CITY’s obligations under this Agreement.

C. INTERPRETATION. This Agreement was drafted in, and will be construed in accordance with the laws of the State of California, and exclusive venue for any action involving this agreement will be in Los Angeles County.

D. ENTIRE AGREEMENT. This Agreement, and its Attachments, sets forth the entire understanding of the parties. There are no other understandings, terms or other agreements expressed or implied, oral or written.

E. RULES OF CONSTRUCTION. Each Party had the opportunity to independently review this Agreement with legal counsel. Accordingly, this Agreement will be construed simply, as a whole, and in accordance with its fair meaning; it will not be interpreted strictly for or against either Party.

F. AUTHORITY/MODIFICATION. The Parties represent and warrant that all necessary action has been taken by the Parties to authorize the undersigned to execute this Agreement and to engage in the actions described herein. This Agreement may be modified by written amendment with signatures of all parties to this Agreement. CITY’s city manager, or designee, may execute any such amendment on behalf of CITY.

ACCEPTANCE OF FACSIMILE OR ELECTRONIC SIGNATURES. The Parties agree that this Contract, agreements ancillary to this Contract, and related documents to be entered into in connection with this Contract will be considered signed when the signature of a party is delivered by facsimile transmission or scanned and delivered via electronic mail. Such facsimile or electronic mail copies will be treated in all respects as having the same effect as an original signature.

FORCE MAJEURE. Should performance of this Agreement be impossible due to fire, flood, explosion, war, embargo, government action, civil or military authority, the natural elements, or other similar causes beyond the Parties’ control, then the Agreement will immediately terminate without obligation of either party to the other.

TIME IS OF ESSENCE. Time is of the essence to comply with dates and schedules to be provided.

ATTORNEY’S FEES. The parties hereto acknowledge and agree that each will bear his or its own costs, expenses and attorneys' fees arising out of and/or connected with the negotiation, drafting and execution of the Agreement, and all matters arising out of or connected therewith except that, in the event any action is brought by any party hereto to enforce this Agreement, the prevailing party in such action shall be entitled to reasonable attorneys' fees and costs in addition to all other relief to which that party or those parties may be entitled.

STATEMENT OF EXPERIENCE. By executing this Agreement, CONSULTANT represents that it has demonstrated trustworthiness and possesses the quality, fitness and capacity to perform the 1045
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EXHIBIT "A"
TASK 1 SCOPE OF SERVICES
• Review institutional planning and archival information on past City-Consultant projects • Update the City on Best Practices in other cities for similar projects • Review current demographic information, City budget materials and planning • Facilitate and continuously update a coordinated strategy and timeline for Project • Assist with/add value to City’s Opinion Research
• Independently analyze research, provide strategic recommendations • Draft Public Messaging Platform
• Draft text copy for selected communications collaterals such as FAQs, web content, mailings, utility inserts, digital/online vehicles, and other materials (paid digital costs are not included within this Agreement; City to design/print/mail using its own vendors and budget outside of this Agreement)
• Conduct Message Training
• Recommend to staff methods of informing constituents about Project in City communications vehicles, including newsletters, guest columns, website, digital/online • Assist with rapid response needs from media or the community as necessary to correct misinformation or clarify confusing information
• Add value to staff reports and ballot measure components The parties expressly acknowledge and agree that legal services or advice are not within Consultant’s scope of services.
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EXHIBIT B

SCHEDULE OF TASK ONE COMPENSATION RATES
Not to Exceed Thirty Thousand Dollars ($30,000) for professional fees in five (5) monthly payments of Five Thousand, Nine Hundred and Fifty Dollars ($5,950) due and payable on the last business day of each month commencing March 31st 2022 and ending on July 31, 2022 unless extended by the parties.

Professional fees do not include other hard project costs such as graphic design, printing, bulk postage, mail house processing fees, or digital media buys, which will be budgeted for separately by the City throughout the project.
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Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Staff Report
REPORT 22-0472
Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of July 26, 2022

ADOPTION OF AN ORDINANCE OF THE CITY OF HERMOSA BEACH, CALIFORNIA, AMENDING SECTIONS 13.12.010 OF THE HERMOSA BEACH MUNICIPAL CODE RELATING TO

THE ANNUAL SEWER SERVICE CHARGE
(City Clerk Myra Maravilla)
Recommended Action:

Staff recommends City Council:

1. Waive the full second reading and adopt by title an Ordinance of the City of Hermosa Beach, California, amending sections 13.12.010 of the Hermosa Beach Municipal Code relating to annual sewer service charge (Attachment 1); and

2. Direct staff to print and publish the summary ordinance in a newspaper of general circulation within 15 days following adoption and post it on the city’s bulletin for 30 days.

Executive Summary:

At its July 12, 2022 meeting, the City Council introduced and waived first reading of an ordinance, amending sections 13.12.010 of the Hermosa Beach Municipal Code relating to the annual sewer service charge. The proposed text would reestablish the CPI increase for the sewer service charge for Fiscal Year 2022-23 and future years.

Background:

At its June 23, 2015 meeting, City Council adopted the first annual sewer service charge to fund maintenance, operations, servicing, and improvements to the City’s sewer collection system. The sewer service charge for each parcel is based on the direct cost of providing maintenance, operation, servicing, and improvements to the sewer collections system and by water consumption for nonresidential users. The fees, collected from parcels, fund sewer services provided by the City.

At its July 14, 2015 meeting, City Council waived full reading and adopted by title Ordinance No. 15- 1355 (Attachment 2), adding a new chapter 13.12 to the Hermosa Beach Municipal Code regarding sewer service charges. As stated in Ordinance 15-1335, the City could increase the sewer service charge each year by the annual increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers in the Los Angeles-Riverside-Orange County, CA area (CPI-W), not to exceed two City of Hermosa Beach Page 1 of 6 Printed on 5/25/2023
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percent per year for up to five years.

As per the originating sewer charge resolution and state law, annual increases can only be authorized for a five-year period. A new Proposition 218 hearing is required to increase the charge after the initial five-year period. In Fiscal Year 2021-22, the City was outside of the initial five-year window and therefore did not adjust the sewer service charge by the annual CPI increase. Ordinance 15-1335 states that to continue to increase the sewer service charge, the City must conduct another majority protest hearing to authorize inflation increases for an additional period not to exceed five years.

At its April 26, 2022 meeting, City Council adopted a resolution to conduct a majority protest hearing on July 12, 2022. Notice of the public hearing was published in the Easy Reader on May 4, 2022 and mailed out with a protest form to residents of the City (Attachment 3).

Past Council Actions
Meeting Date Description
June 23, 2015 City Council approved a resolution adopting the first annual sewer service charge to fund maintenance, operations,
servicing, and improvements to the City’s sewer collection system.

July 14, 2015 City Council waived full reading and adopt by title Ordinance No. 15-1355
April 26, 2022 City Council adopted a resolution accepting the Preliminary Engineer’s Report and setting the majority protest public hearing for July 12, 2022.

July 12, 2022 A protest public hearing was conducted. The City received written protests for 36 properties prior to the protest hearing and an additional 0 written protests were received at the public hearing. A total of 36 written protests were received before the close of the July 12, 2022 hearing. The number of written protests received was not sufficient to constitute a majority protest under Proposition 218. The City Clerk has certified the tabulation of written protests.

Analysis:

For Fiscal Year 2022-23, staff recommends adding a five percent CPI increase to the sewer fee as suggested and justified by the Engineer’s Report and capping it at a five percent annual increase through July 1, 2026. The proposed CPI value is based on the percentage change in CPI since the sewer fee inception. By having capped the CPI at two percent, the City has lost the revenue City of Hermosa Beach Page 2 of 6 Printed on 5/25/2023
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sewer fee inception. By having capped the CPI at two percent, the City has lost the revenue necessary to maintain the City’s sewer system and complete necessary repairs as recommended in the Sewer Master Plan.

Table 1 below shows the annual increases in CPI and the actual increase added to the City sewer fee since its inception.

TABLE 1. Actual Sewer Fee Increase versus Consumer Price Index CONSUMER PRICE INDEX Los Angeles Urban Wage Earners and Clerical Workers (CPI-W)
Year Ending Percent Change Actual Increase
March 2016 1.7 1.7
February 2017 2.5 2
January 2018 3.7 2
January 2019 2.9 2
January 2020 3.5 2
January 2021 1.1 0
January 2022 7.6
Single-family residential units are charged at 1.0 equivalent service units (ESU) per parcel. Multifamily residential units are charged at 0.6 ESU per parcel and condominiums at 1.0 ESU per parcel, as they are similar to single-family residents in use. Vacant parcels of any use are charged 0.5 ESU.

For FY 2022-2023 the proposed charge, with a proposed five percent CPI increase, is $132.93 per

1.0 ESU.

Table 2 below compares the resulting sewer service charge rates for residential parcels between FY 2021-22 and FY 2022-23, and the net increase.

Table 2. Residential Parcel Sewer Charges
Land Use 2021-22 Annual
Charge (per unit)
2022-23 Annual
Charge (per unit)
Amount of Annual
Increase
Single Family $126.60 $132.93 $6.33
Condominiums $126.60 $132.93 $6.33
Multi Family (Charge
is per unit)
$75.96 $79.76 $3.80
Vacant Parcels $63.30 $66.47 $3.17
A summary of ESUs for residential land-uses can be found on page 10 of the Engineer’s Report City of Hermosa Beach Page 3 of 6 Printed on 5/25/2023
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A summary of ESUs for residential land-uses can be found on page 10 of the Engineer’s Report (Attachment 4). For non-residential parcels, the ESU is a function of whether they used more or less water than last year. The ESU for various non-residential land uses is calculated per the following equation:

ESU = commercial water consumption gallons per day (GPD)/260 GPD per single family residential unit (SFRU)
The Engineer’s Report contains detailed information about the annual charge and the charge to be applied to the parcels. Also included in the report is information about the use of revenue, annual increases, and Proposition 218 considerations. Every parcel in the City is subject to the sewer service charge. Per Section 13.12.050 of the Municipal Code, the City does provide the opportunity for a full annual rebate of the sewer service charge paid per year for the dwelling unit in which the owner resides, provided that the individual meets certain eligibility requirements.

This public hearing provides an opportunity for the City Council to hear and consider all protests to the annual levy and increase of the sewer service charge. In the absence of a majority protest by property owners within the City of Hermosa Beach, City Council may authorize the rate increase and order implementation of City sewer service charge as proposed on the attached Engineer’s Report.

Similarly, if Council finds that protest is made by the property owners of a majority of separate parcels of property described in the Engineer’s Report, then the increase in CPI shall not be adopted.

If these proposed rates are adopted, the new rates would be applied this year. For inflation increases, the City would be required in future years to notify each property owner in writing of the CPI-W increase at least 30 days before the effective date of the adjustment per State law. Another majority protest Proposition 218 hearing will not be required for another five years.

Staff recommends City Council hold a public hearing to: (1) make a finding that there is no majority protest by property owners within the City; (2) adopt the enclosed Resolution, with attached Engineer’s Report, and place the annual sewer service charge on the annual County of Los Angeles Tax Roll; and (3) introduce the enclosed Ordinance of the City Council of the City of Hermosa Beach amending sections 13.12.010 of the Hermosa Beach Municipal Code relating to annual sewer service charge.

Update on Sewer Repair Projects
The collected sewer funds are used for the City’s routine sewer cleaning, planned repairs and rehabilitation, and emergency repairs. The City collects an average of $1,100,000 annually from the sewer service charge. Since 2015, the City has spent approximately $415,000 on average for operations/maintenance-including emergency repairs, contracted services for cleaning and video inspections, and personnel. The remainder of the funds are then primarily used to advance design City of Hermosa Beach Page 4 of 6 Printed on 5/25/2023
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Staff Report
REPORT 22-0472
and construction of the recommendations outlined in the Sewer Master Plan.

In FY 2021-22, the City completed Phase 1 of Capital Improvement Program (CIP) Project 421 (sewer lining & point repairs) at an estimated cost of $478,535. In FY 2022-23, the City will complete Phase 2, which will include 0.8 miles of sewer repair and other point repairs at an estimated cost of approximately $2.5 million and will bring completion up to approximately 39 percent of the recommended improvements per the 2017 Sewer Master Plan.

General Plan Consistency:

This report and associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:

Infrastructure Element
Goal 4. The sewer system infrastructure is modernized and resilient.

Policies:
· 4.1 Sewer system master plan. Ensure that the Sanitary Sewer Master Plan contains an effective and proactive maintenance program that reduces future operation costs. · 4.3 Service fees. Ensure that allocation of the Sewer Service Charge is efficient and transparent to the public.

Fiscal Impact:

The FY 2022-2023 anticipated total revenue from the sewer service charge is approximately $1,102,000. The CPI increase of 5 percent for 2022-23 would generate approximately $55,100 in additional revenue.

Attachments:

1. Ordinance No. 22-1448

2. Ordinance No. 15-1355

3. Public Notice and Protest

4. Engineer’s Report

5. Link to June 23, 2015 Staff Report

6. Link to July 14, 2015 Staff Report

7. Link to April 26, 2022 Staff Report

8. Link to July 12, 2022 Staff Report

9. Link to Municipal Code Chapter 13.12.050 Rebate
City of Hermosa Beach Page 5 of 6 Printed on 5/25/2023
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REPORT 22-0472
Respectfully Submitted by: Myra Maravilla, City Clerk
Concur: Joe SanClemente, Public Works Director
Legal Review: Mike Jenkins, City Attorney
Approved: Suja Lowenthal, City Manager
City of Hermosa Beach Page 6 of 6 Printed on 5/25/2023
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CITY OF HERMOSA BEACH
ORDINANCE NO. 22-1448

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH AMENDING SECTIONS 13.12.010 OF THE HERMOSA BEACH

MUNICIPAL CODE RELATING TO ANNUAL SEWER SERVICE CHARGE

THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DOES ORDAIN AS FOLLOWS:

Section 1. Findings
A. On July 12, 2022, the City Council of the City of Hermosa Beach held a public hearing on the annual levy of and proposed increase to the Sewer Service Charge that is used to fund maintenance, operation, servicing and improvements to the City’s sewer collection system;
B. The 2017 Sewer Master Plan estimated that $14.4 million worth of capital improvements to the sever system would be needed over the next ten years. The improvements also include rehabilitation and reconstructing pipes and manholes;
C. The levy and increase to the Sewer Service Charge is necessary and appropriate to pay for capital improvements and reserves for the sewer system;
D. The Sewer Service Charge is also needed to cover annual operation and maintenance costs. Direct costs of providing the service include staff, rent, utility, and other costs;
E. For purposes of comparing various land uses for lots and parcels, 260 gallons per day is designated as the Equivalent Sewer Unit (ESU); and F. The proposed Sewer Service Charge is in accordance with Article XIIID of the California Constitution (Proposition 218) and as it is codified in the Hermosa Beach Municipal Code, the Code must be updated when the amount of the charge is changed.

Section 2. Section 13.12.010 of Chapter 13.12 of Title 13 of the Hermosa Beach Municipal Code is amended to read as follows:

13.12.010 Charges levied.
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An annual sewer service charge is levied upon each parcel of real property in the city of Hermosa Beach for the overall operation, maintenance and servicing of the city-owned sewer system as well as the funds deemed appropriate and necessary to pay for capital improvements and reserves. The charge was adopted in accordance with Article XIIID of the California Constitution (Proposition 218). Beginning July 1, 2015, the amount of the charge for each parcel shall be computed by multiplying one hundred fifteen dollars ($115.00) by the number of equivalent sewage units ("ESUs") for the current land use of the parcel as shown in Section 13.12.030. Beginning July 1, 2016, and each July 1st through July 1, 2020, the sewer service charge shall be increased for inflation by the annual increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers in the Los Angeles-Riverside-Orange County, CA Area (CPI), including all items as published by the U.S. Bureau of Labor Statistics as of March 1st of each year, not to exceed two (2) percent per year. Beginning July 1, 2022, the amount of the charge for each parcel shall be computed by multiplying one hundred thirty two dollars and ninety three cents ($132.93 ) by the number of equivalent sewage units ("ESUs") for the current land use of the parcel as shown in Section 13.12.030. Beginning July 1, 2023, and each July 1st through July 1, 2026, the sewer service charge shall be increased for inflation by the annual increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers in the Los Angeles-Riverside-Orange County, CA Area (CPI), including all items as published by the US Bureau of Labor Statistics as of January 1 of each year, not to exceed five percent (5%) per year.

Section 3. Pursuant to 14 CCR Section 15061(b)(3) this activity is not subject to the California Environmental Quality Act because it can be seen with certainty there is no possibility this activity may have a significant effect on the environment.

This is an amendment to the amount of sewer service charge, the revenue from which will fund maintenance, operation, servicing and improvements to the City’s sever collection system
Section 4. Pursuant to California Government Code section 36937, this ordinance shall take effect thirty (30) days after its final passage.

Section 5. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Hermosa Beach’s book of original ordinances; make a note of the passage and adoption in the records of this meeting; and cause it to be published or posted in accordance with California law.

PASSED, APPROVED and ADOPTED this 26th day of July, 2022 by the following vote:
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AYES:

NOES:

ABSTAIN:

ABSENT:

PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:
_____________ _____________
Myra Maravilla Michael Jenkins
City Clerk City Attorney
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1 April 28, 2022
Dear Property Owner,
NOTICE IS HEREBY GIVEN that the City Council of the City of Hermosa Beach will hold a public hearing at 6:30 p.m. or soon thereafter on July 12, 2022 to take public testimony and receive any written protests on the annual levy of the Sewer Service Charge that will be used to fund maintenance, operation, servicing and improvements to the City’s sewer collection system, and a proposed increase to the Sewer Service Charge.

The Public Hearing Meeting will be a hybrid virtual/in-person meetings held pursuant to AB361. State and local officials recommend measures to promote social distancing.

IN-PERSON: Council Chambers, 1315 Valley Drive, Hermosa Beach VIRTUAL: Information to join the meeting virtually will be on the City Council’s Agenda posted at the following link. https://www.hermosabeach.gov/our-community/agendas-minutes-video In addition to levying the annual sewer service charge on the property tax rolls, the City of Hermosa Beach proposes to increase the annual Sewer Service Charge to cover the expenses for the overall operation, maintenance, and servicing of the city-owned sewer system as well as the funds deemed appropriate and necessary to pay for capital improvements and reserves for the sewer system. The 2017 Sewer Master Plan estimated that $14.4 worth of capital improvements to the sewer system would be needed over the next ten years (including rehabilitation and reconstructing pipes and maintenance access holes). The charge also covers annual operation and maintenance costs for the sewer system. The direct cost of providing the service, include staff, rent, utilities, and other costs. The baseline for calculating the charge per parcel is a single-family residential lot. The proposed sewer service charge increase is based on the Consumer Price Index (CPI) increase, which this year is 7.6%. The City proposes to cap the Sewer Charge increase at 5% per year. If approved, the proposed charge will appear on your annual property tax bill.

The rate per ESU for 2022/2023 of $132.93 will multiplied by the ESUs for each residential parcel and by water consumption for non-residential to determine the charge for each parcel.

For residential parcels, the ESU and charge is calculated as follows :

CITY OF HERMOSA BEACH – NOTICE OF PUBLIC HEARING ON ANNUAL LEVY OF SEWER

SERVICE CHARGE AND PROPOSED INCREASE TO THE CHARGE TO FUND

MAINTENANCE, OPERATION, SERVICING, AND IMPROVEMENTS
TO THE CITY’S SEWER COLLECTION SYSTEM AND PUBLIC PROTEST HEARING 1063
2 Land Use 2021-2022 Annual
Charge (per unit)
Proposed 2022-2023
Annual Charge (per unit)
Amount of
Annual Increase
Single Family $126.60 $132.93 $6.33
Condominiums $126.60 $132.93 $6.33
Multi Family
(Charge is per unit) $75.96 $79.76 $3.80
Vacant Parcels $63.30 $66.47 $3.17

For non‐residential parcels, the ESU is calculated by the following equation:

ESU= [Commercial Water Consumption GPD]/260 GPD (the same GPD as a single-family residential lot).

Commercial Water Consumption information can be found on your water bill. Thus, the ESU will be different for each non‐residential parcel.

Due to the number of parcels in the City of Hermosa Beach that will be subject to the Sewer Service Charge, the charge per parcel cannot be provided in this notice. The actual Parcel Charges (a listing of the Assessor's Parcel Numbers and the amount to be levied on each parcel) is available in the Hermosa Beach City Clerk’s Office in an electronic format.

The list is available for public inspection during normal business office hours (1315 Valley Drive Hermosa Beach, CA 90254).

Because the costs of providing the sewer service may increase over time, beginning July 1, 2022 and each July thereafter for a period of five years, the rate per ESU established for 2022/2023 shall be increased for inflation by the annual increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers in the Los AngelesRiverside-Orange County, CA Area (CPI), including all items as published by the US Bureau of Labor Statistics as of January 1 of each year, not to exceed five percent (5%) per year. For future years, an annual notice will be provided before an annual inflation increase will be applied. After the five-year period, the City may conduct another majority protest hearing to authorize inflation increases for an additional period not to exceed five years.

Any property owner or tenant may file a written protest against the proposed sewer charge or the proposed increase with the City Clerk at any time before the end of the public hearing. The protest must identify the (a) address or Assessor Parcel Number(s) of the property (listed on your Los Angeles County Tax Bill or at https://maps.assessor.lacounty.gov/m/ or contact City staff as indicated below), (b) name and signature of protester, and (c) a clear statement protesting the charge pursuant to this Notice. Only one written protest per parcel will be counted. Written protests must be received by the City Clerk prior to or during the public hearing on July 12, 2022.

Written protests received after the close of the public hearing and protests submitted by telephone, facsimile, email, or other electronic form will NOT be accepted or counted. Postmarks are NOT acceptable. A protest form is included below for convenience.

This protest hearing is being conducted in accordance with Article XIIID of the California Constitution (also referred to as Proposition 218) and other applicable laws. The City’s Engineer has prepared and filed a written report containing a description of each parcel of real property within the City to which the Sewer Service Charges are applicable (the "Identified Parcels") and the amount of the Charges for each such Identified Parcel for fiscal year 2022-2023. A copy of the report is available at Hermosa Beach City Hall. Following the public hearing, the City Council will consider whether to adopt the report and to approve the annual levy and collection of the proposed charge for fiscal year 2022-2023 on the property tax rolls. The City Council will not implement the increased sewer charge if it receives written protests against the proposed increased charge from a majority of the properties subject to the proposed charge by the close of the public hearing. Please note that a protest proceeding is not an election. To ensure transparency and accountability in the protest tabulation, protests shall constitute disclosable public records from and after the time they are received. For additional information about the proposed sewer charge or your Assessor’s Parcel Number, please contact the Public Works Department at (310) 318-0214. 1064
3 Questions about filing a protest should be directed to the City Clerk at (310) 318-0203, City of Hermosa Beach, Civic Center, 1315 Valley Drive, Hermosa Beach, California 90254. Office hours are Monday through Thursday, 7:00 a.m. to 6:00 p.m.

Sewer Service Charge Senior Rebate Program.

Per City Ordinance 17-1374, a Rebate program is available for qualified residents. Qualified resident means any Hermosa Beach resident that (1) is at least 65 years of age or is permanently disabled as the result of a physical or mental impairment that substantially limits one or more of the major life activities; and (2) has an Annual Household Gross Income which is $75,000 or under, (3) has paid the charge; and (4) has resided in the dwelling unit for which the rebate is sought. Please visit the City’s website for more information regarding this rebate at https://www.hermosabeach.gov/our-government/finance-department or call with questions at (310) 318-0225.

Myra Maravilla, City Clerk
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CITY OF HERMOSA BEACH SEWER SERVICE CHARGE PROTEST FORM IF YOU DO NOT OBJECT TO THE ANNUAL SEWER CHARGE, NO ACTION IS REQUIRED.

To protest the proposed Sewer Service Charge or increase in the Charge , you may complete this Protest Form, detach it, and mail or deliver it to the City Clerk, City of Hermosa Beach, Civic Center, 1315 Valley Drive, Hermosa Beach, CA 90254. In order for this form to be counted as a valid protest against the proposed sewer charge, this form must be signed by the property owner and received by the City Clerk no later than the end of the public hearing on July 12, 2022. You may also appear at the public hearing and submit a written protest at the hearing. Only one protest is allowed per property.

Assessor’s Parcel No.:

CHECK THE APPLICABLE REASON FOR PROTEST
I protest the proposed annual Sewer Service Charge.

I protest the increase in the annual Sewer Service Charge.

I hereby declare under penalty of perjury that I am the owner or tenant of the above listed property and I am authorized to submit this protest.

Place signature here:

Print property owner name here:

Additional information on the rate changes may be obtained from the Public Works Department (310) 318‐0214. Questions about filing a protest should be directed to the City Clerk at (310) 318­0203, City of Hermosa Beach, Civic Center, 1315 Valley Drive, Hermosa Beach, California 90254. Office hours are Monday through Thursday, 7:00 a.m. to 6:00 p.m.
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CITY OF HERMOSA BEACH
Sewer Service Charges
Commencing Fiscal Year 2022/2023
ENGINEER’S REPORT
Submitted by: NV5
April 26, 2022
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Engineer’s Report
Commencing Fiscal Year 2022/2023

TABLE OF CONTENTS
Section Page No.

Introduction 1
Part A – Plans and Specifications 3
City Sewer Improvements 3
Operations, Maintenance and Services 3
Part B – Estimated cost of the Improvements 6
Part C – Charge Calculations and Proposed Charges 7
Part D – Boundary Diagram 12
This report has been prepared and submitted by Jeffrey M. Cooper, NV5.

Jeffrey M. Cooper, RCE 31572
April 26, 2022
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INTRODUCTION
In order to effectively establish a capital improvement program to implement the needed wastewater system improvements, an equitable method of prioritizing projects must be established. In general, sewer facilities having the greatest degree of defects and deterioration at the present time will receive higher priority than those which are in better conditions.

In 1994, an Infrastructure Management Project Report, prepared by ITX, analyzed the City’s sewer network and also recommended a rehabilitation program to address the immediate needs of the sewer network.

In 2008, considering the City’s 85 years old sewer network of concrete and clay pipes, City embarked on the implementation of a Sanitary Sewer Master Plan that updated the Sewer portion of the Infrastructure Management Project Report prepared by ITX in 1994. Building on the work the City had completed through the undertaking of previous studies and projects, the Sewer Master Plan was prepared based upon newly collected data from the 2008 Closed Circuit TV (CCTV) inspection of the entire sewer system. This Sewer Master Plan, dated April 2009 and revised March 2011, listed the existing defects and deficiencies and identified projects for improvements for a 10 year program. At the end of a ten-year rehabilitation program, CCTV inspection of the entire sewer system is typically recommended for monitoring any remaining or newly developed physical deterioration and maintenance problems.

This would allow the City to continue with development and implementation of a cost effective rehabilitation program that will insure the long-term integrity of the sewer system and service to the community.

The City considered bonding for needed sewer improvements, however has decided to adopt a pay-as-you-go method to pay for addressing major repairs and rehabilitation of the sewer system based on the priority set in the Sewer Master plan. In support of this endeavor, the City updated their Sewer Master Plan in 2017.

The 2017 Sewer Master Plan identified 9.76 miles of sewer (out of 37 miles total) that were in need of improvements at that time – with an estimated cost of $14.4 million (in 2017 dollars). At the current pace, the City is on track to complete the remaining sewer improvements within approximately 10 years. This timeline is a function of Public Works staffing and funding levels and has allowed staff to address priority repairs.

It is common for sewer master plans to be updated every 10 years or so, as the system continues to age and deteriorate independent of repair schedule. Staff intends to submit a new CIP request in FY 2026/27 to update the master plan, which is estimated to cost approximately $300,000 and is expected to result in a revised list of priorities.

SUMMARY AND RECOMMENDATIONS
As was previously stated, the City has undertaken rehabilitation work of its sewer system based on programs outlined in previous studies that recommended the City to plan for the eventual replacement of the entire sanitary sewer system. City is estimated to currently have 194,000 lineal feet of sanitary sewer pipes, 880 sewer manholes, one (1) main wastewater pump station and three (3) small beach restroom pumps.

In 2008, Closed Circuit TV (CCTV) inspection of the entire sewer system, that was accessible, was completed and prioritized for repair in the 2009 Sewer Master Plan. Of the 194,000 lineal feet of sanitary sewer pipes in the system, 38,000 lineal feet of sewer pipes were not accessible by CCTV due to obstructions. These pipes are likely to be badly deteriorated considering their age and limited accessibility for routine maintenance. Therefore, these pipes are considered a priority for rehabilitation and repair.
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Again in 2016-2017, CCTV was conducted for the entire sewer system in conjunction with the latest 2017 Master Plan.

The current Master Plan recommends over $14.4 million in improvements over the next ten years.

This Engineer’s Report (“Report”) has been prepared for the City of Hermosa Beach commencing in Fiscal Year 2015/2016 and consists for four (4) parts:

PART A – PLANS AND SPECIFICATIONS
Contains a summary of the improvements within the City to be maintained and the proposed services and activities to be funded by the sewer services charges.

PART B – ESTIMATE OF COST
Identifies the estimated cost of the services and/or maintenance to be provided by the City, including annual service and maintenance expenses; debt service for capital outlays, repairs, rehabilitation or replacement of equipment or facilities; as well as operational and incidental costs and expenses in connection therewith.

PART C – CHARGE CALCULATION AND PROPOSED CHARGES
Outlines the basis on which the annual charges will be calculated for each parcel within the City.

PART D – BOUNDARY DIAGRAM
Contains a Diagram showing the exterior boundaries of the territory within the City of Hermosa Beach subject to annual sewer services charges, which is coterminous with the boundaries of the City of Hermosa Beach. Parcel identification, the lines and dimensions of each lot, parcel and subdivision of land within proposed sewer services boundary described herein are identified and correspond to the Los Angeles County Assessor's Parcel Maps for said parcels as they existed at the time this Report was prepared and shall include all subsequent subdivisions, lot-line adjustments or parcel changes therein. Reference is hereby made to the Los Angeles County Assessor's maps for a detailed description of the lines and dimensions of each lot and parcel of land within the City of Hermosa Beach and subject to the proposed annual sewer services charges to be levied on behalf of the City. 1070
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PART A – PLANS AND SPECIFICATIONS
CITY SEWER IMPROVEMENTS1
The sewer improvements within the City of Hermosa Beach for which the City proposes to be responsible for maintenance and operation of the sewer system as well as levy and collect charges to maintain such improvements, includes, but is not limited to, and may be generally described as follows:
 Approximately 194,000 feet of main sewer lines consisting of thefollowing:
o 28,868 linear feet (LF) of 6" sewerlines;
o 149,993 linear feet (LF) of 8" sewerlines;
o 4,204 linear feet (LF) of 10" sewer lines;
o 5,071 linear feet (LF) of 12" sewerlines;
o 1,254 linear feet (LF) of 15" sewerlines;
o 1,150 linear feet (LF) of 18" sewerlines;
o 805 linear feet (LF) of 21” sewer lines; and
o 2,655 linear feet (LF) of 24” sewer lines.
 880 Sewer Manholes
 Four Lift/Pump station: 394 – 21 inch and 2,629 – 24 inch o Three (3) Beach restroom pumps
o The Strand - 34th
The historical plans and specifications for the city-owned sewer improvements are incorporated and contained in the sewer construction plans and specifications for the various sewer segments of the sewer system within the City of Hermosa Beach. These plans and specifications are voluminous and are not bound in this report but by this reference are incorporated and made a part of this report. The specific plans and specifications for the city-owned sewer improvements are on file in Public Works at the City.

OPERATIONS, MAINTENANCE AND SERVICES
The City of Hermosa Beach proposes to collect funds to cover the expenses for the overall operation, maintenance and servicing of the city-owned sewer system as well as funds that may be necessary to pay for capital outlay expenditures including repairs, rehabilitation or replacement of equipment or facilities. The following is a summary of the services and activities associated with the maintenance, operation, servicing and capital outlay expenditures for the City's sewer system. The frequency, extent and/or level of the services and activities identified below may be modified based on available funding and priorities as determined by the City:

Preventive Maintenance
One of the City's primary objectives for assuming responsibility and management of the operation and maintenance of the City's sewer system is to provide a cost-effective and efficient program that will ensure the integrity and long term stability of the sewer system. This is best accomplished by implementing a preventive maintenance program that addresses the entire sewer system. This preventive maintenance should include, but is not limited to, regular inspection of the sewer manholes, pipes, siphons, pump stations and related facilities as well as regular cleaning, repair, and related activities as warranted. These activities are intended to detect and correct potential problems

1 Information from the City of Hermosa Beach Master Plan. 1071
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before they develop into major problems. The following is a general summary of those preventive maintenance activities.
 Sewer Line and Manhole Inspection - The interior and exterior of manholes to be inspected (at least once a year) for any structural defects, sewage flow condition, presence of vermin or rodents, deleterious industrial waste, odors, and any signs of unusual settlement around or evidence of debris within the manholes and along sewer alignments.
 Sewer Line Cleaning - Sewer lines will be videoed and cleaned by hydro jet or rodding as needed based on a scheduled that ensures each sewer line is addressed at least every three-five years. The actual frequency of cleaning may vary based on inspection records. Sewer lines known to cumulate grease, garbage grinds, or sand may be addressed more frequency with possible monthly, quarterly, or semi-annual cleaning schedule.

Those areas prone to root growth may be periodically rodded or chemically treated.  Sewage Pump Stations - All pump stations are equipped with telemetry/alarm systems and will be inspected at least once a week. Pumps and motors will be inspected and lubricated, control mechanisms and valves will be checked and adjusted as necessary. Pump station equipment will be repaired or modified as required.
 Gas Trap Manholes and Siphons - Inspected and cleared of any stoppages or flow restrictions on a monthly basis.
 Drop Manholes - Inspected and cleared of stoppages and flow restrictions on variable frequencies based on prior inspection records.
 Vermin and Rodent Control - On an as-needed basis, sewers infested by insects will be chemically treated, and those infested by rodents will be baited.

Capital Outlay, Rehabilitation and Replacement
The City has adopted a pay-as-you-go method to pay for addressing major repairs and rehabilitation of the sewer system on a priority basis. However, in addition the City plans to develop and implement a long-term replacement and refurbishment program that will ensure not only the short term integrity of the sewer system, but also the longterm integrity and continue service to the community. As the city's sewer collection system ages, the risk of failure will ultimately increase due to deterioration, collapse, blockage, excessive inflow and infiltration, overflow, and other potential service interruptions. Therefore, while the scheduling of major repairs, rehabilitation projects and replacement projects will ultimately be implemented based on available funding, highest priority will be given to structural deficiency. However, by developing a long-term replacement and refurbishment program with the goal of eventually addressing the entire system, the City may also address hydraulic deficiency in addition to the structural deficiency.

Sewer System Management
 Mapping - As-built plans of the sewer facilities will be maintained by the City. Data on the plans, such as system locations and alignment, pipe material, size, etc., will be maintained and stored electronically by the City. These maps will be available and utilized by the field crews for work scheduling and responding to emergencies, and will be updated to reflect any changes in the system. 1072
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 Work Scheduling - Field crew activities will be recorded and tracked by the City utilizing various forms including, but not limited to service requests, cleaning reports, sewer maintenance daily reports, overflow reports forms, project work orders, etc.

Revenue and Expenditures
The City collects an average of approximately $1.1 million annually from the sewer fee. Since 2015, the City has spent approximately $415,000 on average for operations/maintenance – including emergency repairs, contracted services for cleaning and video inspections, and personnel. The remainder of the funds are then primarily used to advance design/construction of the recommendations outlined in the Sewer Master Plan.

In fiscal year (FY) 2021-22, the City is completing Phase 1 of CIP 421 (sewer lining and point repairs) at an estimated cost of $478,535. In FY 2022-23, the City will complete Phase 2, which will include 0.8 miles of sewer repair and other point repairs at an estimated cost of approximately $2.5 million, and will bring completion up to approximately 39% of the recommended improvements per the 2017 Master Plan. 1073
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PART B – ESTIMATED COST OF THE IMPROVEMENTS
The net amount to be charged on the lots or parcels within the City is based on an initial estimate of the annual cost and expenses for the maintenance, operation, servicing of the City's existing sewer system improvements as well as the funding deemed appropriate and necessary for future capital improvements and reserves (Replacement funding). It was originally estimated that sewer capital improvements are needed at $14.4 million for the current planning period.

USE OF REVENUE
O & M/year
(range)
$375,000 - $500,000
Available for Improvement
Financing / Year $675,000 - $800,000
$ Charge/1 ESU
(Single Family Resident)
$132.93/year
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PART C –CHARGE CALCULATION AND PROPOSED CHARGES
The sewer service charge for 2022/2023 is being reestablished by the City. The charge multiplied by the Equivalent Sewer Units assigned to each parcel will be the charge for each parcel. The Equivalent Sewer Unit (ESU) determination for each parcel is described below.

LAND USE ESU
Single Family 1.0
Condominiums 1.0
Multi Family 0.6
Sewage Generation Factors
The City of Hermosa Beach updated their sanitary sewer master plan in April 2009, March 2011, and again in June 2017.

A numeric relationship between the various lots and parcels is necessary for the allocation of the costs of sewer maintenance among the lots and parcels. It is customary to relate the various land uses to the single family residential lot which is established as one Equivalent Sewage Unit (ESU), and all other lots and parcels are related proportionally to the single family residential lot. Based on sewage generation rates, a typical single family lot generates 260 gallons per day in Los Angeles County2. Therefore, for purposes of comparison of the various land uses for lots and parcels, 260 gallons per day is designated as the equivalent of 1 ESU.

Non-residential Land Uses
The ESU for various non-residential land uses is calculated by the following equation:

ESU = [Commercial Water Consumption GPD]/260 GPD per SFRU Single family residential units will be charge at 1.0 ESU per parcel, the multi-family residential units will be charged at 0.6 ESU per parcel and condominiums at 1.0 ESU per parcel as they are similar to single family residents in use.

For the non-residential, it was allocated by water consumption values for all of Hermosa Beach from information provided by California Water Services Company annually. Vacant parcels of any use are charged 0.5 ESU. 2West Hollywood Sewer Charge Report.
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City of Hermosa Beach – Sewer Services Charge
Engineer’s Report
Commencing Fiscal Year 2022/2023 | 8
Government Facilities and Parcels
There are several parcels that receive sewer service that are owned and operated by local government. Proposition 218 requires that each parcel not pay more than the proportional cost of providing the service. Therefore, because these government parcels use the sewer service, they are included in the computation of the charge and are charged.

CALCULATION OF THE CHARGE
The sewer service charge is based on the direct cost of providing the service. These costs include staff, rent, utilities, and other costs as needed for sewer repair and improvements as described earlier in this report.

The following table shows the percentage increase of the sewer service charge each year since inception:

For fiscal year 2022-2023, it is proposed that a not-to-exceed CPI increase of 5% be approved. The new charge for fiscal year 2022-2023 is $132.93/ESU.

Due to the pandemic, staff did not move forward with reinstating the five-year term for applying the CPI to the fee in FY 2021-22. The attached table details the CPI since 2016, and the annual increases that have been applied each year. With the exception of 2016, the annual increase has lagged behind actual CPI, but has helped the sewer fee keep up with corresponding rises in construction cost due to inflation and supply chain disruptions. This year’s CPI is significant at 7.6% - hopefully this is short-term and inflation subsides in the coming months.

ANNUAL INCREASES
Because the costs of providing the sewer service may increase over time, beginning July 1, 2023 and each July thereafter, the charge per ESU established in 2022-2023 shall be increased by the annual increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers in the Los Angeles-Long Beach-Anaheim (this used to be referred to as Los Angeles-Riverside-Orange County, it is a continuous index linked to the previous index), CA Area (CPI), including all items as published by the US Bureau of Labor Statistics as of January 1 of each year, not to exceed five percent (5%) per year. The annual increases can only be authorized for a five year period. To increase the charge after the initial five year period, would require a new Proposition 218 hearing. 1076
City of Hermosa Beach – Sewer Services Charge
Engineer’s Report
Commencing Fiscal Year 2022/2023 | 9
PROPOSITION 218 CONSIDERATIONS
Proposition 218, which the voters of the State of California passed on November 5, 1996, contains requirements for the imposition of a fee or charge for property related services. Requirements for fees and charges are contained in Section 6 of Article XIII D.

Paragraph (b) describes the requirements for new, existing, or increased fees and charges, as:
(1) Revenues shall not exceed the funds required to provide the service. (2) Revenues shall not be used for any other purpose.
(3) The amount of the fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to theparcel. (4) No fee or charge may be imposed unless the services is actually used by or immediately available to the owner of the property in question.
(5) No fee or charge shall be imposed for general governmental services, i.e., police, ambulance, library, where the service is available to the public at large in substantially the same manner as it is to theproperty owners.

This report and recommended charges complies with all five of these requirements.

1. Revenues generated by this charge will not exceed funds required to provide sewer services and shall not be used for any other purpose, besides what has been describedherein.

2. The sewer charge is the proportional cost of provided service to the parcels in the City and the charge is for actual use or is immediately available to the property in question.

Due to the number of parcels in the City of Hermosa Beach that will be subject to the Sewer Service Charge, the Parcel Charges (a listing of the Assessor's Parcel Numbers to be levied the proposed charge amounts) is not contained in this Report, but will be filed with the City Clerk in an electronic format prior to the public hearing regarding the levy and collection of the charges for Fiscal 2022/2023. The proposed Parcel Charge Roll, after being filed with the City Clerk, shall be available for public inspection in the City Clerk's Office during normal business office hours. However, the following tables provide a summary of the estimated ESUs by land use anticipated for Fiscal Year 2022/2023, per the County's assigned land use classification of each parcel within the City that was available at the time this Report was prepared.
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City of Hermosa Beach – Sewer Services Charge
Engineer’s Report
Commencing Fiscal Year 2022/2023 | 10
Parcel Code Land Use Description Total Parcels Total ESU's 0100 1 Unit 2880 2880
0101 1 Unit, Pool 78 78
0103 1 Unit, Pool and Misc. 31 31
0104 1 Unit, Therapy Pool 165 165
0106 1 Unit 2 2
0107 1 Unit 1 1
0108 1 Unit 9 9
0109 1 Unit, Other Improvements 9 9
010C 1 Unit, Condominium 1566 1566
010D 1 Unit, Planned Community 102 102
010E 1 Unit, Condo Conversion 103 103
010V Vacant Residential 61 30.5
0110 High Value Residence 46 46
0111 High Value Residence with Pool 5 5
0113 High Value Residence with Pool and misc 2 2
0114 High Value Residence with Therapy Pool (spa) 2 2
0120 1 Unit, Townhouse 1 1
012C Condominium - Townhouse 29 29
01DC 1 Unit, Condominium 65 65
0200 2 Units, 1-4 Stories 823 1181.8
0201 2 Units, 1-4 Stories, Pool 6 8
0202 2 Units, 1-4 Stories, Pool 1 2
0203 2 Units, Therapy Pool 1 2
020C 1-4 Units, Condominium 1 2
020V 2 Units, Vacant 1 0.5
0300 3 Units, 1-4 Stories 150 267.6
0400 4 Units, 1-4 Stories 152 364.8
0500 5+ Units, 1-4 Stories 160 790.8
0501 5+ Units, 1-4 Stories, Pool 7 379.8
0900 Mobile Home Park 3 48.6
Total Parcels 6,462
Total ESU's 8,174.4
Residential Parcel Breakdown by Land Use
EXAMPLES OF ESUs BY LAND USE - Residential
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City of Hermosa Beach – Sewer Services Charge
Engineer’s Report
Commencing Fiscal Year 2022/2023 | 11
Parcel Code Land Use Description Total Parcels Total ESU's 100V COMMERCIAL 22 5.3
1100 STORES 85 130.5
1102 STORES 2 15.7
1200 STORE COMBINATION 18 42.1
1210 STORE COMBINATION 30 39.5
1212 STORE COMBINATION 2 11.9
1340 DEPARTMENT STORES 1 0.1
1400 SUPERMARKETS 1 32.8
1420 SUPERMARKETS 2 1.2
1500 SHOPPING CENTERS (NEIGHBORHOOD, COMMUNITY) 10 73.3 1700 OFFICE BUILDINGS 58 11.5
1702 OFFICE BUILDINGS 4 2.7
1703 OFFICE BUILDINGS 5 6.0
170C OFFICE BUILDINGS 69 3.2
17T0 OFFICE BUILDINGS 1 2.1
1810 HOTELS & MOTELS 1 24.3
181C HOTELS & MOTELS 102 28.9
1820 HOTELS & MOTELS 2 6.5
1830 HOTELS & MOTELS 3 66.1
1900 PROFESSIONAL BUILDINGS 3 2.6
1902 PROFESSIONAL BUILDINGS 1 2.7
1910 PROFESSIONAL BUILDINGS 3 1.6
1920 PROFESSIONAL BUILDINGS 1 1.5
2100 RESTAURANTS, COCKTAIL LOUNGES 26 86.2
2102 RESTAURANTS, COCKTAIL LOUNGES 1 11.6
2110 RESTAURANTS, COCKTAIL LOUNGES 2 7.1
2120 RESTAURANTS, COCKTAIL LOUNGES 1 2.2
2300 BANKS SAVINGS & LOAN 4 20.6
2500 SERVICE STATIONS 2 0.7
2600 AUTO, RECREATION EQPT, CONSTRUCTION EQPT, SALES & SERVICE 26 10.9 2630 AUTO, RECREATION EQPT, CONSTRUCTION EQPT, SALES & SERVICE 1 16.7 2670 AUTO, RECREATION EQPT, CONSTRUCTION EQPT, SALES & SERVICE 1 0.6 2700 PARKING LOTS 47 6.1
300V INDUSTRIAL 5 4.5
3100 LGT MANF.SM.EQPT.MANUF SM.SHPS INSTR. PRNT PLNTS 24 6.4 3300 WAREHOUSING DISTRIBUTION, STORAGE 2 0.3
6400 CLUBS, LODGE HALLS, FRATERNAL ORGANIZATIONS 2 0.5
7100 CHURCHES 8 13.8
7200 SCHOOLS (PRIVATE) 4 3.9
7400 HOSPITALS 2 17.4
7500 HOMES FOR AGED & OTHERS 1 0.6
8100 UTILITY COMMERCIAL AND MUTUAL: PUMPING PLANTS STATE ASSESSED PR 14 115.8 8800 GOVERNMENT PARCEL 39 60.4
8833 GOVERNMENT PARCEL 1 23.6
8841 GOVERNMENT PARCEL 19 11.2
Total Parcels 679.0
Total ESU's 933.3
Non-Residential Parcel Breakdown by Land Use
EXAMPLES OF ESUs BY LAND USE - Non-Residential
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City of Hermosa Beach – Sewer Services Charge
Engineer’s Report
Commencing Fiscal Year 2022/2023 | 12
PART D – BOUNDARY DIAGRAM
The parcels within the Sewer Service Charge Area consist of all lots, parcels and subdivisions of land within the City of Hermosa Beach. A copy of the Boundary Diagram is provided below.

CITY OF HERMOSA BEACH BOUNDARY DIAGRAM
1080
NV5
NV5
163 Technology Drive, Suite 100
Irvine, CA 92618
(949) 585-0477
www.nv5.com
Jeffrey M. Cooper, PE
Vice President, NV5
(949) 585-0477
[email protected]
1081
City Council Adjourned Regular Hybrid Meeting (Closed Session - 4:00 PM and Open Session - 6:00 PM)
07-26-22 16:00
Agenda Name Comments Support Oppose Neutral
m) REPORT 22-0472 ADOPTION OF AN ORDINANCE OF THE CITY

OF HERMOSA BEACH, CALIFORNIA, AMENDING SECTIONS

13.12.010 OF THE HERMOSA BEACH MUNICIPAL CODE RELATING

TO THE ANNUAL SEWER SERVICE CHARGE
(City Clerk Myra Maravilla)
2 0 1 0
Sentiments for All Agenda Items
The following graphs display sentiments for comments that have location data. Only locations of users who have commented will be shown.

Overall Sentiment
Agenda Item: eComments for m) REPORT 22-0472 ADOPTION OF AN ORDINANCE OF THE CITY OF HERMOSA BEACH, CALIFORNIA, AMENDING SECTIONS 13.12.010 OF THE HERMOSA BEACH MUNICIPAL CODE RELATING TO THE ANNUAL

SEWER SERVICE CHARGE
(City Clerk Myra Maravilla)
Overall Sentiment
Dean Francois
Location: 90254, Hermosa Beach
Submitted At: 2:06am 07-26-22
Several members of the public have mentioned to me that this item was not on the original agenda and was added past the 72-hour rule. If that's the case then this item cannot be acted on this evening and should be tabled.

Howard L
Location:

Submitted At: 9:20pm 07-25-22
1082
City Council / Myra,
Daily you seem to be doing whatever City Manager Suja hands you.

This is regrettable. Who told you to remove date and time stamps of changes to the agenda, and when agendas are duly posted?
You first revised the City Council Closed Session of 2/26/2022 after having officially posting that agenda, but you didn't place a date and time with the revision, that I can see. Please return to placing dates and times of all revisions and additions, and perhaps do so in RED.

Then you revised the City Council Regular Session agenda 2/26/2022, evidently and again without a date and time stamp, I believe today 2/25/2022? Did you send out a press release regarding any of these changes. I've gotten no email and I'm on all the e-lists from the city.

Does this latest change adding an ordinance to the Consent Calendar even meet the 72-hour agenda posting notice requirement for ordinances. I am certain if you review this with the Brown Act specialist, Contract City Attorney Jenkins, (Excuse me, specialist at avoiding the intention of the Brown Act, imv) he will give you some smoke and mirrors verbiage to add to make what you are doing a little more legitimate.

Geez, absolutely anything goes these days. ROTTEN FILTHY HERMOSA BEACH GOVERNMENT. THE WORST. WHY ARE YOU A PARTICIPANT?
Also kindly return to indicating on the agenda when it has been "duly posted", i.e. "properly posted".

All changes and additions should have a date/time stamp indicating when your office received the change/addition, and when you actually posted it.

Try to improve transparency. It's very easy to remove transparency. Better to improve it. That's what the former City Clerk, who got fed up with City Manager Suja and left the city, did imv so much better, and of course before both of you Ann Yang was the best before City Manager Suja poisoned even her, imv..

Also while I am posting this as an e-Comment for Consent Item M, I wanted to post it with the Closed Session but there's no place to even place an e-Comment with the Closed Session. WHY IS THAT? Sincerely
Howard L.
1083
City of Hermosa Beach
Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Staff Report
REPORT 22-0310
Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of July 26, 2022

AWARD A CONTRACT FOR CROSSING GUARD
SERVICES TO ALL CITY MANAGEMENT SERVICES, INC.
(Police Chief Paul LeBaron)
Recommended Action:

Staff recommends City Council:

1. Award a contract for crossing guard services to All City Management Services, Inc. at an hourly rate of $29.91 per hour for a term of one year beginning June 26, 2022 and ending June 30, 2023 with an option to extend for two additional one-year periods;

2. Appropriate an additional $20,000 from the Proposition C Fund to cover the estimated contract cost for the 2022-23 school year; and

3. Authorize the Mayor to execute and the City Clerk to attest the proposed agreement subject to approval by the City Attorney.

Executive Summary:

Following a competitive bid process, staff recommends City Council award the crossing guard services contract to All City Management Services, Inc., dba The Crossing Guard Company, at an hourly rate of $29.91 per hour for a term of one year beginning June 26, 2022 and ending June 30, 2023 with an option to extend for two additional one-year periods. The previous contractor declined to continue providing services and staff recommends award of a crossing guard services contract to ensure continued services.

Background:

The City has historically contracted for crossing guard services to assist the Hermosa Beach City School District (HBCSD) and ensure that children travel safely to and from HBCSD schools.

American Guard Services has provided services to the City since 2017, but decided to eliminate its crossing guard business line and notified the City that it would terminate services on the last day of the 2021-22 school year.

The schedule adjustments that HBCSD was required to undertake during the pandemic made budgeting difficult. The HBCSD was required to operate with staggered arrival and departure times to ensure social distancing and that required crossing guards to be on duty longer than a traditional City of Hermosa Beach Page 1 of 4 Printed on 7/21/2022
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REPORT 22-0310
ensure social distancing and that required crossing guards to be on duty longer than a traditional schedule. Further complicating the budget planning process in the last year was the State’s requirement that an additional shift differential payment be provided to the crossing guards when they work three separate shifts in a day, and the state’s minimum wage laws that are tied to inflation.

The City allocates funds for a total of 14 crossing guard positions. The per hour crossing guard rate paid under the previous contract was $28.99 per hour. In Fiscal Year 2021-22, the City appropriated $220,000 for crossing guard services and was invoiced for services totaling $216,729.

Analysis:

On April 14, 2022, the City invited crossing guard services contractors to submit proposals through a competitive process. The Request for Proposals (RFP) was advertised in in the Easy Reader, City website, and on the City’s online bidding platform PlanetBids. A total of five proposals were received in response to the RFP. On May 16, 2022, the City Clerk received, publicly opened, and read aloud the results of the submitted proposals.

Two of the submitted proposals were deemed non-responsive as they provided little to no information for the evaluation team to review or provided irrelevant information. The three remaining proposal amounts are summarized below:

Proposer Proposal Amount (Crossing Guard/Crossing
Guard Supervisor)
All City Management Services, Inc $29.91 per hour/$29.91 per hour ParkInc. $31.31 per hour/$40.51 per hour
United Security Services $33.95 per hour/$39.45 per hour The crossing guard services provider is responsible for ensuring the safety of the City’s most vulnerable residents. The primary consideration in evaluating the RFP proposals was not cost, but the totality of qualifications, experience, and service quality that the proposer would provide to the City.

In addition to cost, the crossing guard services proposals were evaluated on the following factors:
· Experience, qualifications, and references;
· Financial stability;
· Quality of services offered (based upon the proposer's description); · Key personnel of the organization;
· Orientation and training of crossing guards;
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· Drug and alcohol use policies; and
· Equipment provided to crossing guards.

Based on a review of the submitted proposals and a check of references, staff recommends City Council award a contract to the most qualified and cost-effective bidder, All City Management Services, Inc. dba The Crossing Guard Company.

The recommended proposer’s per hour rate was verified for accuracy and identified as the lowest allinclusive rate. All City Management Services, Inc. is headquartered in Santa Fe Springs and has extensive experience providing crossing guard services throughout Los Angeles County. They previously provided crossing guard services to the City of Hermosa Beach from 2011 to 2017.

All City Management Services, Inc. estimates the total cost of the contract for the 2022-23 school year would be approximately $270,000, representing an approximate $20,000 increase over the City budget appropriation of $250,000 for Fiscal Year 2022-23. Staff recommends City Council appropriate an additional $20,000 from the Proposition C Fund to cover the estimated cost of crossing guard services for the 2022-23 school year.

General Plan Consistency:

This report and associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:

Mobility Element
Goal 3. Public rights-of-way supporting a multimodal and people-oriented transportation system that provides diversity and flexibility on how users choose to be mobile.

Policies:
· 3.1 Enhance public right-of-way. Where right-of-way clearance allows, enhance public rightof-way to improve connectivity for pedestrians, bicyclists, disabled persons, and public transit stops.
· 3.2 Complete pedestrian network. Prioritize investment in designated priority sidewalks to ensure a complete network of sidewalks and pedestrian-friendly amenities that enhances pedestrian safety, access opportunities and connectivity to destinations.

Fiscal Impact:

The Fiscal Year 2022-23 Budget for crossing guard services is $250,000 from the Proposition C Fund. The proposed agreement with All City Management Services, Inc for Fiscal Year 2022-23 is approximately $270,000. Staff recommends City Council appropriate an additional $20,000 from the Proposition C Fund to cover the estimated cost of crossing guard services for the 2022-23 school City of Hermosa Beach Page 3 of 4 Printed on 7/21/2022
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year.

Agreement Request
Request Amount FY 2022-2023 Budget Dept.

Account #
Total Contract Amount
$270,000 146-2102-4201 $270,000
Attachments:

1. Draft Agreement - All City Management Services, Inc.

Respectfully Submitted by: Peter Ahlstrom, Community Services Division Manager Concur: Paul LeBaron, Chief of Police
Noted for Fiscal Impact: Viki Copeland, Finance Director Approved: Suja Lowenthal, City Manager
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1 AGREEMENT BETWEEN THE CITY OF HERMOSA BEACH
AND ALL CITY MANAGEMENT SERVICES, INC. FOR CROSSING GUARD SERVICES This Agreement for Crossing Guard Services (“Agreement”) is made and entered into this ____ day of July, 2022 by and between the CITY OF HERMOSA BEACH, a municipal corporation ("CITY") and All City Management Services, Inc. dba The Crossing Guard Company, a California corporation ("CONTRACTOR").

R E C I T A L S
A. CITY desires to engage the services of CONTRACTOR to provide crossing guard services at specified intersections and times during weekdays.

B. CITY does not have the personnel qualified and/or available to perform the services required under this Agreement and therefore, the CITY desires to contract with an independent contractor to perform this work.

C. CONTRACTOR warrants to CITY that it has the qualifications, experience, and facilities to perform properly and timely the services under this Agreement.

D. CITY desires to contract with the CONTRACTOR to perform the services as described in Exhibit A of this Agreement.

NOW, THEREFORE, based on the foregoing recitals and the promises herein contained, CITY and CONTRACTOR agree as follows:

1. TERM OF AGREEMENT. The term of this Agreement shall commence upon execution by both parties for a term of one (1) year and shall expire on June 30, 2023, unless earlier termination occurs under Section 8 of this Agreement, or this Agreement is extended in writing in advance by both parties. City may in its discretion extend this Agreement for two additional one-year terms.

2. SCOPE OF SERVICES. CONTRACTOR will perform the services and activities set forth in Exhibit A, incorporated here by reference, and as set forth below:

2.1 CONTRACTOR shall provide personnel properly trained as herein specified for the performance of duties as crossing guards. In the performance of their duties, the CONTRACTOR and employees of the CONTRACTOR shall conduct themselves in accordance with the conditions of this Agreement and the laws and codes of the State of California and the City of Hermosa Beach. CONTRACTOR shall perform offender background checks on every crossing guard it assigns to the CITY and include DOJ Live Scan and clearance through Megan’s Law.

2.2 CONTRACTOR shall provide supervisory personnel to see that guard activities are taking place at the required places and times, and in accordance with all items of this Agreement.

Supervisory personnel will be available to meet as needed with designated representatives of each school and the CITY to coordinate schedules, review changes, and receive feedback on the program and its operations.
1088
2 2.3 The hours and locations when and where guards shall by furnished by the CONTRACTOR is set forth in Exhibit A. CONTRACTOR may notify the CITY of any recommended changes in hours of work or locations. CITY has sole discretion to add to, delete from, or revise the work schedule/locations at any time. Crossing guard services shall be provided by the CONTRACTOR at the designated locations and at the designated hours on all days on which the designated schools in the City of Hermosa Beach are in session.

2.4 CONTRACTOR shall train, schedule, provide, and supervise personnel in accordance with this Agreement and the rules and regulations of the City of Hermosa Beach. Crossing guards shall perform their duties as trained and within the CITY's rules for such guards.

2.5 CONTRACTOR shall maintain adequate reserve personnel to be able to furnish alternate guards in the event that any person fails to report for work at the assigned time and location.

2.6 Persons provided by the CONTRACTOR as crossing guards shall be trained in the laws and codes of the State of California and the City of Hermosa Beach pertaining to general pedestrian safety and school crossing areas.

2.7 CONTRACTOR shall provide all crossing guards with apparel by which they are readily visible and easily recognized as crossing guards. Such apparel shall be uniform for all persons performing the duties of crossing guards and shall be worn at all times while performing said duties. This apparel must be appropriate for weather conditions. CONTRACTOR shall also provide all crossing guards with safety equipment to include, at a minimum, a handheld stop paddle, reflectorized safety vest, whistle, traffic cone(s), and an identification badge. Apparel and equipment shall be subject to advance approval by the City Manager or the designee.

2.8 Crossing guards employed by CONTRACTOR shall:
(a) Be a minimum of 18 years old.
(b) Have the ability to read, write and speak English with sufficient proficiency such that they can communicate quickly and accurately with children, adults, and emergency services personnel.
(c) Have successfully completed a background check prior to deployment that complies with all federal and state employment laws. Crossing guards must be found to have no criminal conviction that renders them unsuitable for the position. The determination regarding the suitability of any crossing guard assignment at a CITY location shall be based on guidance provided by the U.S. Equal Opportunity Commission regarding the use of criminal conviction history in employment decisions which requires a weighing of the nature and gravity of offense; the time that has passed since the offense, or the completion of any sentence given as a result of the offense; and the nature of the job held or sought. (d) Have successfully completed a drug screening test.
(e) Possess, at a minimum, the following traits sufficient to ensure the safety of the children they will assist: reasonable physical ability, mental alertness, and understanding of the importance of their role; visual and hearing acuity; dependability; familiarity with traffic 1089
3 rules and regulations; and, good judgement.

2.9 Except as herein otherwise expressly specified to be furnished by CITY, CONTRACTOR will, in a professional manner, furnish all of the labor, technical, administrative, professional and other personnel, all supplies and materials, equipment, vehicles, transportation, office space, and facilities necessary or proper to perform and complete the work and provide the services required of CONTRACTOR by this Agreement.

3. COMPENSATION. The CITY agrees to pay CONTRACTOR for the services rendered pursuant to this Agreement the sum of $29.91 per hour of guard services provided. CONTRACTOR shall submit to CITY, by not later than the 10th day of each month, its invoice for services itemizing the fees incurred during the previous month. CITY shall pay CONTRACTOR all uncontested amounts set forth in CONTRACTOR’s invoice within 30 days after it is received.

4. INSURANCE.

4.1 CONTRACTOR shall at all times provide workers compensation insurance covering its employees in compliance with the California Labor Code.

4.2 CONTRACTOR shall provide and maintain liability insurance covering its crossing guard activities. Such insurance shall include commercial general liability with a combined single limit of not less than $5,000,000.00 per occurrence and in aggregate for property damage and bodily injury. Such insurance shall be primary with respect to any insurance maintained by the CITY and shall not call on the CITY's insurance for contribution. Such insurance shall not be cancelled, reduced in coverage or limits or non-renewed except after thirty (30) days written notice by Certified Mail, Return Receipt Requested has been given to the City Attorney, City Manager, or designee for the City of Hermosa Beach.

4.3 Endorsements. Each general liability insurance policy shall be issued by a financially responsible insurance company or companies admitted and authorized to do business in the State of California, or which is approved in writing by City, and shall be endorsed as follows.

CONTRACTOR also agrees to require all contractors, and subcontractors to do likewise. (a) The CITY, its elected or appointed officers, officials, employees, agents, and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the CONTRACTOR, including materials, parts, or equipment furnished in connection with such work or operations.
(b) This policy shall be considered primary insurance as respects the CITY, its elected or appointed officers, officials, employees, agents, and volunteers. Any insurance maintained by the CITY, including any self-insured retention the CITY may have shall be considered excess insurance only and shall not contribute with this policy. (c) This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company.
(d) The insurer waives all rights of subrogation against the CITY, its elected or appointed 1090
4 officers, officials, employees, or agents.

4.4 Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the CITY, its elected or appointed officers, officials, employees, agents, or volunteers.

4.5 CONTRACTOR agrees to provide immediate notice to CITY of any claim or loss against Contractor arising out of the work performed under this agreement. CITY assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve CITY.

4.6 Any deductibles or self-insured retentions must be declared to and approved by the CITY. At the CITY’s option, the CONTRACTOR shall demonstrate financial capability for payment of such deductibles or self-insured retentions.

4.7 CONTRACTOR shall provide certificates of insurance with original endorsements to the CITY as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the CITY on or before commencement of performance of this Agreement.

Current certification of insurance shall be kept on file with the CITY at all times during the term of this Agreement.

4.8 Failure on the part of the CONTRACTOR to procure or maintain required insurance shall constitute a material breach of contract under which the CITY may terminate this Agreement pursuant to Section 8 below.

4.9 The commercial general and automobile liability policies required by this Agreement shall allow CITY, as additional insured, to satisfy the self-insured retention (“SIR”) and/or deductible of the policy in lieu of CONTRACTOR (as the named insured) should CONTRACTOR fail to pay the SIR or deductible requirements. The amount of the SIR or deductible shall be subject to the approval of the City Attorney and the Finance Director.

CONTRACTOR understands and agrees that satisfaction of this requirement is an express condition precedent to the effectiveness of this Agreement. Failure by CONTRACTOR as primary insured to pay its SIR or deductible constitutes a material breach of this Agreement.

Should CITY pay the SIR or deductible on CONTRACTOR’s behalf upon the CONTRACTOR’s failure or refusal to do so in order to secure defense and indemnification as an additional insured under the policy, CITY may include such amounts as damages in any action against CONTRACTOR for breach of this Agreement in addition to any other damages incurred by CITY due to the breach.

5. INDEMNITY. CONTRACTOR shall indemnify, defend with counsel reasonably acceptable to CITY, and hold harmless CITY, its officers, officials, employees and volunteers (the “INDEMNIFIED PARTIES”) from and against all liability, loss, damage, expense, and cost (including without limitation reasonable attorney fees, expert fees and all other costs and fees of litigation) of every nature arising out of or in connection with CONTRACTOR's performance of services hereunder or its failure to comply with any of its obligations contained in this AGREEMENT (each, a “LOSS”). Should CITY in its reasonable business judgment find CONTRACTOR’S legal counsel unacceptable, then CONTRACTOR shall reimburse the CITY its costs of defense, including without limitation reasonable 1091
5 attorney fees, expert fees and all other costs and fees of litigation. The CONTRACTOR shall promptly pay any final judgment rendered against the CITY (and its officers, officials, employees, and volunteers) covered by this indemnity obligation.

Notwithstanding the foregoing, however, in the event that a court or jury determines that liability with respect to any LOSS was caused or contributed to by the negligent act, error, omission or willful misconduct of the CITY, liability will be apportioned between CONTRACTOR on the one hand and the CITY on the other hand with regard to such LOSS based upon the parties’ respective degrees of culpability, as determined by the court or jury, and CONTRACTOR’s duty to indemnify the INDEMNIFIED PARTIES will be limited accordingly. It is expressly understood and agreed that the foregoing provisions are intended to be as broad and inclusive as is permitted by the law of the State of California and will survive termination of this Agreement.

The requirements as to the types and limits of insurance coverage to be maintained by CONTRACTOR as required by Section 4, and any approval of said insurance by CITY, are not intended to and will not in any manner limit or qualify the liabilities and obligations otherwise assumed by CONTRACTOR pursuant to this Agreement, including, without limitation, to the provisions concerning indemnification.

6. PARTIES’ REPRESENTATIVES. The CITY's representative in dealing with CONTRACTOR shall be the City Manager or such person as the City Manager may designate. CONTRACTOR shall designate a representative with authority to bind CONTRACTOR.

7. INDEPENDENT CONTRACTOR. CITY and CONTRACTOR agree that CONTRACTOR will act as an independent contractor and will have control of all work and the manner in which is it performed.

CONTRACTOR will be free to contract for similar service to be performed for other clients while under contract with CITY. CONTRACTOR is not an agent or employee of CITY and is not entitled to participate in any pension plan, insurance, bonus or similar benefits CITY provides for its employees. Any provision in this Agreement that may appear to give CITY the right to direct CONTRACTOR as to the details of doing the work or to exercise a measure of control over the work means that CONTRACTOR will follow the direction of the CITY as to end results of the work only.

The crossing guards to be furnished by CONTRACTOR shall at all times be its employees and not those of the CITY.

8. TERMINATION. Both parties hereto may terminate this Agreement, with or without cause, at any time by giving ninety (90) days written notice to the other. In the event of termination by CITY, CONTRACTOR shall cease services as of the date of termination and CONTRACTOR will receive just and equitable compensation for any work satisfactorily completed up to the effective date of notice of termination.

9. ASSIGNMENT. The Contractor shall not assign this Contract or delegate or subcontract its duties or obligations hereunder to any other person or firm except with the advance written consent of the City.

10. FAMILIARITY WITH WORK. By executing this Agreement, CONTRACTOR represents that CONTRACTOR has (a) thoroughly investigated and considered the scope of services to be performed; (b) carefully considered how the services should be performed; and (c) understands the facilities, difficulties, and restrictions attending performance of the services under this 1092
6 Agreement.

11. TAXPAYER IDENTIFICATION NUMBER. CONTRACTOR will provide CITY with a Taxpayer Identification Number.

12. PERMITS AND LICENSES. CONTRACTOR will obtain and maintain during the term of this Agreement all necessary permits, licenses, and certificates that may be required in connection with the performance of services under this Agreement.

13. CORRECTIVE MEASURES. CONTRACTOR will promptly implement any corrective measures required by CITY regarding the requirements and obligations of this Agreement. CONTRACTOR will be given a reasonable amount of time as determined by the City to implement said corrective measures. Failure of CONTRACTOR to implement required corrective measures shall result in immediate termination of this Agreement.

14. NOTICES. All communications to either party by the other party will be deemed made when received by such party at its respective name and address as follows:

CITY CONTRACTOR
City of Hermosa Beach
1315 Valley Drive
Hermosa Beach, CA 90254
ATTN: City Clerk
All City Management Services, Inc.
10440 Pioneer Blvd., Ste. 5
Santa Fe Springs, CA 90670
ATTN: Contract Manager
Any such written communications by mail will be conclusively deemed to have been received by the addressee upon deposit thereof in the United States Mail, postage prepaid and properly addressed as noted above. In all other instances, notices will be deemed given at the time of actual delivery. Changes may be made in the names or addresses of persons to whom notices are to be given by giving notice in the manner prescribed in this paragraph. Courtesy copies of notices may be sent via electronic mail, provided that the original notice is deposited in the U.S. mail or personally delivered as specified in this Section.

15. THIRD PARTY BENEFICIARIES. This Agreement and every provision herein are generally for the exclusive benefit of CONTRACTOR and CITY and not for the benefit of any other party. There will be no incidental or other beneficiaries of any of CONTRACTOR’s or CITY’s obligations under this Agreement.

16. INTERPRETATION. This Agreement was drafted in, and will be construed in accordance with the laws of the State of California, and exclusive venue for any action involving this Agreement will be in Los Angeles County.
1093
7 17. ENTIRE AGREEMENT. This Agreement, and its Attachments, sets forth the entire understanding of the parties. There are no other understandings, terms or other agreements expressed or implied, oral or written.

18. RULES OF CONSTRUCTION. Each party had the opportunity to independently review this Agreement with legal counsel. Accordingly, this Agreement will be construed simply, as a whole, and in accordance with its fair meaning; it will not be interpreted strictly for or against either party.

19. AUTHORITY/MODIFICATION. The parties represent and warrant that all necessary action has been taken by the Parties to authorize the undersigned to execute this Agreement and to engage in the actions described herein. This Agreement may be modified by written amendment with signatures of all parties to this Agreement. CITY’s City Manager, or designee, may execute any such amendment on behalf of CITY.

20. ACCEPTANCE OF FACSIMILE OR ELECTRONIC SIGNATURES. The parties agree that this Agreement, agreements ancillary to this Agreement, and related documents to be entered into in connection with this Agreement will be considered signed when the signature of a party is delivered by facsimile transmission or scanned and delivered via electronic mail. Such facsimile or electronic mail copies will be treated in all respects as having the same effect as an original signature.

21. FORCE MAJEURE. Should performance of this Agreement be impossible due to fire, flood, explosion, war, embargo, government action, civil or military authority, the natural elements, or other similar causes beyond the parties’ control, then the Agreement will immediately terminate without obligation of either party to the other.

22. ATTORNEY FEES. The parties hereto acknowledge and agree that each will bear his or its own costs, expenses and attorney fees arising out of and/or connected with the negotiation, drafting and execution of the Agreement, and all matters arising out of or connected therewith except that, in the event any action is brought by any party hereto to enforce this Agreement, the prevailing party in such action shall be entitled to reasonable attorney fees and costs in addition to all other relief to which that party or those parties may be entitled.

23. STATEMENT OF EXPERIENCE. By executing this Agreement, CONTRACTOR represents that it has demonstrated trustworthiness and possesses the quality, fitness and capacity to perform the Agreement in a manner satisfactory to CITY. CONTRACTOR represents that its financial resources, surety and insurance experience, service experience, completion ability, personnel, current workload, and experience in dealing with public agencies render it capable of performing the proposed services and has a demonstrated capacity to deal fairly and effectively with and to satisfy a public agency.

24. CONFIDENTIALITY. It is understood and agreed that information acquired by CITY pertaining to individual employees of CONTRACTOR in the performance of the services, including the results of background checks, shall be confidential and shall not be disclosed to any person. 1094
8 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.

CITY OF HERMOSA BEACH ALL CITY MANAGEMENT SERVICES, INC.

By By__________________________
Suja Lowenthal, CITY MANAGER D. Farwell, CORPORATE SECRETARY

APPROVED AS TO FORM ATTEST
By By_____________________________
Michael Jenkins, CITY ATTORNEY Myra Maravilla, CITY CLERK 1095
9 Exhibit A
SERVICE DESCRIPTION:
 CONTRACTOR shall provide crossing guard services to the CITY.

SERVICE PERIOD:
 Service start date will coincide with the first date of instruction for the CITY’S schools and is anticipated to be the first week of September 2022. The school year is anticipated to end by June 30, 2023.  CONTRACTOR shall coordinate deployment with the CITY in anticipation of the service start date. 1096
10 TENTATIVE CROSSING GUARD DEPLOYMENT SCHEDULE:

LOCATION MON TUE WED THU FRI
Pacific Coast
Hwy./Pier Avenue
(South)
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.

Pacific Coast
Hwy./8th St.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.

Valley Dr./Pier
Ave.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.

Ardmore/Pier
Ave.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
16th St./Ardmore 7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.

Valley Dr./Pier
Ave./Hermosa
Valley School
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.

Valley Dr./Gould
Ave.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.

Ardmore/
Gould Ave.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.

Pacific Coast
Hwy./16th St.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
27th St./
Morningside
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
7:15 – 8:30 A.M.
2:30 – 3:45 P.M.
25th St./
Myrtle/
Hermosa Vista
School
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
21st St./Pacific
Coast Hwy.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.
7:30 – 8:45 A.M.
1:55 – 3:25 P.M.

Prospect
Ave./Aviation
Blvd.
7:30 – 8:45 A.M.
2:00 – 3:30 P.M.
7:30 – 8:45 A.M.
2:00 – 3:30 P.M.
7:30 – 8:45 A.M.
2:00 – 3:30 P.M.
7:30 – 8:45 A.M.
2:00 – 3:30 P.M.
7:30 – 8:45 A.M.
2:00 – 3:30 P.M.

Prospect
Ave./Massey Ave.
7:15 – 8:30 A.M.
2:15 – 3:45 P.M.
7:15 – 8:30 A.M.
2:15 – 3:45 P.M.
7:15 – 8:30 A.M.
2:15 – 3:45 P.M.
7:15 – 8:30 A.M.
2:15 – 3:45 P.M.
7:15 – 8:30 A.M.
2:15 – 3:45 P.M.

Note: Assignment start/end times may change due to school schedule changes. Assignment locations may change due to construction projects, signal failures, traffic collisions, or other unanticipated events. 1097
City of Hermosa Beach
Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Staff Report
REPORT 22-0426
Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of July 26, 2022

CONSIDERATION OF PLACING A LOCAL CONTROL CITY
SERVICES MEASURE ON THE NOVEMBER 8, 2022 GENERAL

MUNICIPAL ELECTION BALLOT ASKING THE VOTERS TO

APPROVE A GENERAL TRANSACTIONS AND USE TAX (SALES
TAX or TUT) AT THE RATE OF THREE QUARTER CENT (3/4¢)
(City Manager Suja Lowenthal)
Recommended Action:

Staff recommends City Council:

1. Consider adding a measure to approve a general Transactions and Use Tax (Sales Tax or TUT) at the rate of three-quarter cent (3/4¢) to the November 8, 2022 General Municipal Election ballot and select one or more argument writer(s) in favor of this measure should a determination be made to submit this measure to the voters;

2. Adopt Resolution for the placement of a locally controlled general tax measure on the ballot for the November 8, 2022 General Municipal Election for the submission to the qualified voters of an ordinance to enact a General Transactions and Use Tax (Sales Tax or TUT) at the rate of three quarter cent (3/4¢) and requesting the Board of Supervisors render the election consolidation services adopted in Resolution No. 22-7317 for this measure (Attachment 1); and

3. Adopt Resolution setting priorities for filing a written Argument and Rebuttal Argument regarding an ordinance to enact a general Transactions and Use Tax (Sales Tax or TUT) at the rate of three-quarter cent (3/4¢) to be submitted to voters at the General Municipal Election to be held on Tuesday, November 8, 2022, and directing the City Attorney to prepare the impartial analysis (Attachment 2).

The Resolution to place the general Transactions and Use Tax (Sales Tax or TUT) measure on the ballot must be approved by a two-thirds (2/3) vote of the membership of the City Council (4 affirmative votes) to pass.

Executive Summary:

At its March 3, 2022 meeting, City Council held a Revenue Study Session to review revenue sources with the intention to update or make changes. City Council directed staff to return with information City of Hermosa Beach Page 1 of 7 Printed on 7/26/2022
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REPORT 22-0426
with the intention to update or make changes. City Council directed staff to return with information and an item to consider placement of a general Transactions and Use Tax (Sales Tax or TUT) at the rate of three quarters of one cent (3/4¢) on the November 8, 2022 General Municipal Election ballot.

During the Revenue Study Session, the City’s sales tax consultant presented information regarding the tax including an estimate of $3,000,000 in additional annual General Fund revenue.

Background:

At its March 3, 2022 meeting, City Council held a Revenue Study Session. The purpose of the study session was to review revenue sources with the intention to update or make recommendations for changes where necessary. Revenue sources including taxes; property-related revenue; parking fees and fines; and other service charges were reviewed. Staff provided oral reports regarding its progress updating some sources and recommendations for possible future updates on others. These updates are designed and intended to maintain strong, up-to-date, revenue streams to support the quality programs that residents want and deserve.

At the end of the study session, an adjourned meeting was held wherein the City Council directed staff to bring back an item regarding placement of a general Transactions and Use Tax (Sales Tax or TUT) at the rate of three quarters of one cent (3/4¢) on the November 8, 2022 General Municipal Election ballot.

Attachment 5 provides a link to the Revenue Study Session staff report and time markers to the presentation made at the study session by the City’s sales tax consultant and to other comments or discussion about the transactions use tax (TUT). The time markers and items are also provided in the table below.

Past Council Actions
Meeting Date Description
March 3, 2022 Revenue Study Session. The following bullet points note the times during the meeting that pertain to the TUT.
 1:06:36 to 1:45:14—Presentation by Bobby Young,
Client Services Director – Sales Tax, HdL
Companies.
 2:15:15—Councilmember Armato’s comments
begin
 2:18:63—Mayor Pro Temp Jackson’s comments
begin
 2:26:00—Councilmember Armato makes the motion
to place the TUT on the November 2022 ballot.

Mayor Detoy seconds the motion.
 Motion carries—4-0
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Past Council Actions
Meeting Date Description
March 3, 2022 Revenue Study Session. The following bullet points note the times during the meeting that pertain to the TUT.
 1:06:36 to 1:45:14—Presentation by Bobby Young,
Client Services Director – Sales Tax, HdL
Companies.
 2:15:15—Councilmember Armato’s comments
begin
 2:18:63—Mayor Pro Temp Jackson’s comments
begin
 2:26:00—Councilmember Armato makes the motion
to place the TUT on the November 2022 ballot.

Mayor Detoy seconds the motion.
 Motion carries—4-0
Discussion:

Residents have recently prioritized City services they would like additional local funding for including:
preventing thefts and property crimes; supporting public safety and 911 emergency response; recruiting and retaining well-trained police officers; protecting coastal waters and beaches from pollution; supporting safe schools; and keeping parks and public areas safe and clean.

A sizeable portion of sales tax dollars collected in Hermosa Beach comes from tourists and visitors from surrounding areas. This measure would help make sure they are paying their fair share for police; for keeping our beach, Pier Plaza, and other public areas clean and safe; and for maintaining our roads and other community resources and infrastructure, such as our iconic Pier, in good condition and not left to be paid exclusively by City residents.

Hermosa Beach currently has a 9.50 percent sales tax on all purchases made in the City. Of that,

8.50 percent goes to the state and Los Angeles County agencies with 1 percent returning to Hermosa Beach to be spent locally.

Every year Los Angeles County collects five million dollars from Hermosa Beach from the last three county sales taxes alone, but only 13 cents on the dollar is returned to Hermosa Beach. By law, all funds raised by this measure are legally required to be used in Hermosa Beach, ensuring local control of Hermosa Beach tax dollars and a guaranteed source of funding for essential City services.

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Residents also continue to prioritize public safety services and in 2021 alone, there were almost 600 thefts and burglaries reported, including 100 thefts from motor vehicles in the 1.2 square miles of the City. Funding from this measure could provide the Hermosa Beach Police Department additional resources to make neighborhoods and streets safer, increase police patrols, reduce response times, and increase crime prevention programs.

California has a sales tax rate of 7.25 percent. Los Angeles County, cities, and special districts within the County may increase the sales tax by a cap of 3 percent or to a combined rate of 10.25 percent.

The County has already utilized 2.25 percent of the allowable 3 percent threshold, so 0.75 percent remains that may be added. A 0.75 percent TUT in Hermosa Beach is estimated to add $3 million in revenue to be spent locally.

State General Fund 3.9375%
City/County General Fund (Bradley-Burns) 1.0000% Current Sales Tax Received County Public Safety (Prop 172) 0.5000%
County Realignment (Mental Health/Welfare/Public Safety) 1.5625% Countywide Transportation Fund 0.2500%
Los Angeles County Transportation Commission (LACT) 0.5000% Los Angeles County Transportation Commission (LACT) 0.5000% Los Angeles County Metro Transportation Authority (LAMT) 0.5000% Los Angeles County Traffic Improvement Plan (LAMA) 0.5000% Los Angeles County Homeless Services Tax (LACH) 0.2500% Total Rate 9.5000%
TUT increasing cap = 1%
TUT applied against cap = 1.25%
Breakdown of 9.5% Sales Tax Rate Effective October 1, 2017 Leaves 0.75% available for local TUT
Presenting a balanced budget has been particularly challenging with the last two budgets and the budget for 2022-23 due to the pandemic and now with the additional effect of world events. The City maintained its Contingency Funds according to financial policies at 16 percent of operating expenses but has found it necessary to use one-time funds to bridge the gaps in revenue, even with freezing of positions and reducing expenditures. In order to maintain the level of service expected by residents, ensure long-term fiscal sustainability, and to make progress toward funding of deferred capital needs, additional funds are necessary.

Advantages of adopting a TUT measure include:
 the tax is paid regionally, not entirely by residents;  revenue generated in Hermosa Beach stays in Hermosa Beach; City of Hermosa Beach Page 4 of 7 Printed on 7/26/2022
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 the tax has a statutory cap;
 revenue from autos purchased by residents comes to the City rather than going to the City where the auto was purchased; and
 revenue from deliveries to the City for building supplies, equipment and bulk fuel also comes to the City.

The City’s sales tax consultant indicates that they have not seen any measurable impact of the TUT on consumer buying habits because consumers are typically focused on the base cost of the item being purchased.

According to the California Department of Tax and Fee Administration, 52 cities out of 88 in Los Angeles County have a TUT. Two cities, Torrance and Susanville, added the tax through ballot measures in June 2022 that brings the total to 54 cities.

Hermosa Beach should take advantage of the additional 0.75 percent tax that is available to ensure long-term fiscal sustainability.

Arguments in Favor and Against
The City Clerk will accept arguments in favor and against the proposed measure by Tuesday, August 9, 2022, at 6 p.m. Each argument is limited to 300 words and will be titled “Argument In Favor of Measure __” and “Argument Against Measure __” in the Official Sample Ballot Booklet submitted to voters. Please email [email protected] <mailto:[email protected]> or submit a hard copy (Attachment 3) by the deadline.

Per California Elections Code Section 9282 and 9287, the City Council has priority to and may authorize one or two members of the City Council to author the Argument in Favor. Should the City Council choose not to authorize one or two members of the City Council to author the Argument in Favor and more than one argument is submitted (in favor or against) to the Elections Official, the Elections Official will select an argument in accordance with California Elections Code Section 9287.

Rebuttals to Argument in Favor and Against
When the arguments are submitted, the Elections Official shall send a copy of the Argument in Favor to the authors of the Argument Against and the Argument Against to the authors of the Argument n Favor, along with a copy of the impartial analysis. An argument author may authorize another person to sign the rebuttal to the opposing argument using the form provided by the Elections Official (Attachment 4) and in accordance with California Elections Code Section 9285. Rebuttals to the Arguments in Favor and Against are due by Tuesday, August 23, 2022, at 6 p.m. and are limited to 250 words.

Consolidation with Los Angeles County
At its July 14, 2022 meeting, the City Council approved Resolution No. 22-7317 to consolidate the City of Hermosa Beach General Municipal Election with the Statewide General Election to be held on November 8, 2022. Approving the staff recommendation will allow Los Angeles County to carry out all City of Hermosa Beach Page 5 of 7 Printed on 7/26/2022
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REPORT 22-0426
consolidation services outlined in Resolution No. 22-7317 for this measure.

General Plan Consistency:

This report and associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:

Governance Element
Goal 1. A high degree of transparency and integrity in the decision-making process.

Policies:
 1.1 Open Meetings. Maintain the community’s trust by holding meeting in which decisions are being made, that are open and available for all community members to attend, participate, or view remotely.
 1.6 Long-term considerations. Prioritize decisions that provide long-term community benefit and discourage decisions that provide short-term community benefit but reduce long-term opportunities.

Goal 2. The Community is active and engaged in decision-making processes.

Policy:
 2.3 Public participation guidelines. Establish parameters and guidelines to ensure public participation in promoted through diverse methods.

Goal 5. Small beach town character is reflected throughout Hermosa Beach.

Policies:
 5.5 Community benefits. Consider incentives for new development that provides a substantial economic benefit to the community such as retail sales taxes, transient occupancy taxes or higher-paying jobs. Prohibit the provision of incentives that outweigh the direct benefits from the use.
 5.7 Visitor and resident balance. Recognize the desire and need to balance visitor-serving and local-serving uses as a key to preserving character and the economic vitality of the community.

Goal 6. A broad-based and long-term economic development strategy for Hermosa Beach that supports existing businesses while attracting new business and tourism.

Policy:
 6.1 Long-term economic development. Support the development and implementation of longterm economic development strategies that seek to establish and keep new businesses and a strong middle class in Hermosa Beach over the decades to come.

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Fiscal Impact:

Fiscal impacts associated with adding pages in the Official Sample Ballot pertaining to all measures being considered by the Council have been included in the budgeted total cost of the upcoming November 8, 2022 General Municipal Election of $110,000 in FY 2022-23. No additional cost to the budgeted total is expected from including this measure on the ballot.

If approved, the General Transactions and Use Tax (Sales Tax or TUT) is estimated to generate approximately $3,000,000 in additional annual General Fund revenue.

Attachments:

1. Resolution (Sales Tax)-Add to Ballot & Consolidate

2. Resolution (Sales Tax)-Arguments, Rebuttals & Impartial Analysis

3. Argument & Rebuttal Form

4. Authorization for Another Person to Sign Rebuttal Argument Form

5. Link to March 3, 2022 Revenue Study Session Staff Report discussion of placing the transaction use tax measure on the ballot
Respectfully Submitted by: Viki Copeland, Finance Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Mike Jenkins, City Attorney
Approved: Suja Lowenthal, City Manager
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CITY OF HERMOSA BEACH
RESOLUTION NO. 22-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA

BEACH, CALIFORNIA CALLING FOR THE PLACEMENT OF A GENERAL TAX MEASURE ON THE BALLOT FOR THE NOVEMBER 8, 2022 GENERAL

MUNICIPAL ELECTION FOR THE SUBMISSION TO THE QUALIFIED VOTERS

OF A LOCALLY CONTROLLED ORDINANCE TO ENACT A GENERAL
TRANSACTIONS AND USE TAX (SALES TAX) AT THE RATE OF THREEQUARTER CENT (¾ ¢) AND REQUESTING THE BOARD OF SUPERVISORS

RENDER THE ELECTION CONSOLIDATION SERVICES ADOPTED IN
RESOLUTION NO. 22-7317 FOR THIS MEASURE
WHEREAS, the City Council of the City of Hermosa Beach (“City”) is authorized to levy a Transactions and Use Tax (“sales tax”) for general purposes pursuant to California Revenue and Taxation Code section 7285.9, subject to approval by a majority vote of the electorate pursuant to Article XIII C, section 2 of the California Constitution (“Proposition 218”); and
WHEREAS, pursuant to California Elections Code section 9222, the City Council has authority to place local measures on the ballot to be considered at a Municipal Election; and
WHEREAS, the City Council would like to submit to the voters at the November 8, 2022 General Municipal Election a measure enacting a general sales tax at a rate of three quarter cent (3/4¢) on the sale and/or use of all tangible personal property sold at retail in the City until it is ended by voters, as more specifically set forth in the attached proposed ordinance adding Chapter 3.44 to Title 3 of the City’s Municipal Code; and
WHEREAS, the ¾ cent sales tax is a general tax, the revenue of which will be placed in the City’s general fund and will be used to pay for important general City services; and
WHEREAS, on November 6, 1996, the voters of the State of California approved Proposition 218, an amendment to the State Constitution which requires that all general taxes which are imposed, extended or increased must be submitted to the electorate and approved by a majority vote of the qualified electors voting in the election; and
WHEREAS, pursuant to Proposition 218 (California Constitution, Article XIII C, § 2(b)), the general rule is that any local election for the approval of an increase 1105
to a general tax must be consolidated with a regularly scheduled general election for members of the governing body of the local government; and WHEREAS, the next regularly scheduled general election at which City Council members are to be elected is November 8, 2022; and WHEREAS, pursuant to Government Code section 53724 (“Proposition 62”) and Revenue and Taxation Code section 7285.9, a two-thirds (2/3) vote of all members of the City Council is required to place the Measure on the November 8, 2022 ballot; and
WHEREAS, the ordinance to be considered by the qualified voters and the terms of approval, collection and use of the general sales tax are described and provided for in the ordinance/measure attached hereto as Exhibit “B” (the “Measure”) and by this reference made an operative part hereof, in accordance with all applicable laws.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH:

SECTION 1. Incorporation of Recitals. The foregoing recitals are true and correct and are hereby incorporated and made an operative part of this Resolution.

SECTION 2. Submission of Ballot Measure. Pursuant to California Elections Code section 9222, Government Code section 53724, Revenue and Taxation Code section 7285.9 and any other applicable requirements of the laws of the State of California relating to the City, the City Council, by a two-thirds (2/3) vote of all members, hereby orders the Measure to be submitted to the voters of the City at the General Municipal Election to be held on Tuesday, November 8, 2022.

SECTION 3. Ballot Measure. The City Council, pursuant to California Elections Code section 9222, hereby orders that the Measure shall be presented and printed upon the ballot submitted to the qualified voters in the manner and form set forth in this Section 3. On the ballot to be submitted to the qualified voters at the General Municipal Election to be held on Tuesday, November 8, 2022, in addition to any other matters required by law, there shall be printed substantially the following ballot question:
1106
To maintain Hermosa Beach’s long-term financial stability with locally controlled funds, to be used for programs such as public safety/911 response, enforcement against
theft/property crime; street/pothole repair; protection of beach and coastal waters; support for school safety;
cleaning of public areas; retention/attraction of local businesses; homeless services and for general
governmental use; shall an ordinance be adopted
establishing a ¾¢ sales tax requiring public spending
disclosure/independent audits, generating approximately $3,000,000 annually until ended by voters?
YES
NO
SECTION 4. Conduct of Election. The City Clerk is authorized, instructed, and directed to procure and furnish any and all official ballots, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 5. Notice of the Election. Notice of the election is hereby given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law.

SECTION 6. Placement on the Ballot. The full text of the Measure shall not be printed in the Sample Ballot Booklet, and a statement shall be printed on the ballot pursuant to Elections Code section 9223 advising voters that they may obtain a copy of this Resolution and the Measure, at no cost, upon request made to the City Clerk.

SECTION 7. Consolidation with Los Angeles County. The City of Hermosa Beach respectfully requests that the election consolidation services, outlined in Resolution No. 22-7317, attached hereto as “Exhibit A,” include this measure.

SECTION 8. Filing with County. The City Clerk shall, not later than the 88th day prior to the General Municipal Election to be held on Tuesday, November 8, 2022, file with the Los Angeles Registrar-Recorder/County Clerk a certified copy of this Resolution and enter it into the book of original resolutions, including the Ordinance/Measure attached hereto as “Exhibit B.”
SECTION 9. Public Examination. Pursuant to Elections Code section 9295, this Measure will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the voter information guide. 1107
The City Clerk shall post notice in the Clerk’s office of the specific dates that the examination period will run.

SECTION 10. CEQA. The City Council hereby finds and determines that the Measure relates to organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment, and therefore is not a project within the meaning of the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines, section 15378(b)(5).

SECTION 11. Severability. The provisions of this Resolution are severable and if any provision of this Resolution is held invalid, that provision shall be severed from the Resolution and the remainder of this Resolution shall continue in full force and effect, and not be affected by such invalidity.

SECTION 12. Effective Date of Resolution. This Resolution shall become effective upon its adoption.

SECTION 13. The City Clerk shall certify to the adoption of this Resolution.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Hermosa Beach, California, at a regular meeting held on this 26th day of July, 2022.
__________________________________________________________________________ Michael Detoy
PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:
____________________________________ ___________________________________ Myra Maravilla Michael Jenkins
City Clerk City Attorney
1108
Exhibit “A”
Resolution No. 7317 - Requesting Consolidation Services From Los Angeles County
[attached behind this page]
1109

CITY OF HERMOSA BEACH
RESOLUTION 22-7317

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,

CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY

OF LOS ANGELES TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2022 WITH THE STATEWIDE GENERAL ELECTION TO BE HELD IN THE COUNTY OF LOS ANGELES THE SAME DAY;

TO AUTHORIZE THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS

ANGELES TO CANVASS THE RETURNS OF SAID GENERAL MUNICIPAL ELECTION; AND TO REQUEST THAT THE REGISTRAR-RECORDER/COUNTY

CLERK OF SAID COUNTY BE PERMITTED TO RENDER FULL SERVICES TO THE

CITY OF HERMOSA BEACH RELATING TO THE CONDUCT OF SAID

GENERAL MUNICIPAL ELECTION PURSUANT TO CALIFORNIA ELECTIONS CODE SECTION 10403
WHEREAS, a General Municipal Election has been called by the City of Hermosa Beach to be held in the City of Hermosa Beach on November 8, 2022; and,
WHEREAS, a Statewide General Election to be held in the County of Los Angeles has been or will be called to be held on November 8, 2022; and, WHEREAS, it is desired, pursuant to the authority found in California Elections Code section 10403, to consolidate said General Municipal Election with said Statewide General Election to be held in the County of Los Angeles; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hermosa Beach as follows:

SECTION 1: The Board of Supervisors of the County of Los Angeles is hereby respectfully requested to order the consolidation of said General Municipal Election to be held on November 8, 2022, with the Statewide General Election to be held in the County of Los Angeles on November 8, 2022.

SECTION 2: The Board of Supervisors of the County of Los Angeles is hereby further respectfully requested to place upon the same ballot as that provided DocuSign Envelope ID: 0489BBA2-28BA-4F25-AAF2-5733D7D521E3 1110

for said Statewide General Election to be held in the County of Los Angeles on November 8, 2022, the names of the candidates for the offices of Councilmember, Full Term
Councilmember, Full Term
Councilmember, Full Term
to be submitted to the electors of the City of Hermosa Beach at said General Municipal Election.

SECTION 3: The City of Hermosa Beach acknowledges that the consolidated election will be held and conducted in the manner prescribed in Section 10418 of the California Elections Code.

SECTION 4: The Registrar-Recorder/County Clerk of the County of Los Angele acknowledges that an estimate was given to the City of Hermosa Beach on the costs of the consolidated election. Should the costs exceed twenty percent of the estimation, the Registrar-Recorder/County Clerk of the County of Los Angele will notify the City of Hermosa Beach in writing.

SECTION 5: The Board of Supervisors of the County of Los Angeles is hereby authorized and respectfully requested to canvass the returns of said General Municipal Election.

SECTION 6: The Board of Supervisors of the County of Los Angeles is hereby authorized and respectfully requested to authorize and permit the RegistrarRecorder/County Clerk of the County of Los Angeles to:
a) Print and supply ballots for said City of Hermosa Beach General Municipal Election;
b) Mail the City’s sample ballots and candidate statements of qualifications to the electors of the City of Hermosa Beach as part of the same material that will be mailed to the voters of the Statewide General Election to be held in the County of Los Angeles;
c) Perform such other services as may be required for the consolidation and conduct of said City of Hermosa Beach General Municipal Election with said Statewide General Election to be held in the County of Los Angeles.

DocuSign Envelope ID: 0489BBA2-28BA-4F25-AAF2-5733D7D521E3 1111

SECTION 7: The vote centers for the election shall be open as required during the identified voting period pursuant to California Elections Code sections 4007 and 14401.

SECTION 8: The City shall reimburse the County of Los Angeles in full for the services performed on behalf of the City upon the presentation of a bill by the County.

SECTION 9: The City Clerk is hereby directed to deliver a certified copy of this resolution to the Board of Supervisors of the County of Los Angeles and to transmit an electronic copy to the Board of Supervisors and the RegistrarRecorder/County Clerk of the County of Los Angeles.

PASSED, APPROVED and ADOPTED this 14th day of June 2022. __________________________________________________________________________ PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:

Myra Maravilla Michael Jenkins
City Clerk City Attorney
DocuSign Envelope ID: 0489BBA2-28BA-4F25-AAF2-5733D7D521E3 1112
State of California )
County of Los Angeles ) ss
City of Hermosa Beach )
June 16, 2022
Certification of Council Action
RESOLUTION NO. 22-7317

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,

CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY

OF LOS ANGELES TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2022 WITH THE STATEWIDE GENERAL ELECTION TO BE HELD IN THE COUNTY OF LOS ANGELES THE SAME DAY;

TO AUTHORIZE THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS

ANGELES TO CANVASS THE RETURNS OF SAID GENERAL MUNICIPAL ELECTION; AND TO REQUEST THAT THE REGISTRAR-RECORDER/COUNTY

CLERK OF SAID COUNTY BE PERMITTED TO RENDER FULL SERVICES TO THE

CITY OF HERMOSA BEACH RELATING TO THE CONDUCT OF SAID

GENERAL MUNICIPAL ELECTION PURSUANT TO CALIFORNIA ELECTIONS CODE SECTION 10403
I, Myra Maravilla, City Clerk of the City of Hermosa Beach do hereby certify that the above and foregoing Resolution 22-7317 was duly approved and adopted by the City Council of said City at its regular meeting thereof held on the 14th day of June, 2022 and passed by the following vote:

AYES: MAYOR DETOY, MAYOR PRO TEMPORE JACKSON, COUNCILMEMBERS

ARMATO, CAMPBELL, MASSEY
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
________________________________
Myra Maravilla
City Clerk
DocuSign Envelope ID: 0489BBA2-28BA-4F25-AAF2-5733D7D521E3 1113
Exhibit “B” Transactions and Use Tax Ordinance
[attached behind this page]
1114

CITY OF HERMOSA BEACH
ORDINANCE NO. 22-

AN ORDINANCE OF THE PEOPLE OF THE CITY OF HERMOSA BEACH, CALIFORNIA, ADDING CHAPTER 3.44 TO TITLE 3 OF THE HERMOSA BEACH MUNICIPAL CODE TO ENACT A THREE-QUARTER CENT (3/4¢)

GENERAL TRANSACTIONS AND USE TAX (SALES TAX) TO BE

ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE

ADMINISTRATION
WHEREAS, pursuant to California Revenue and Taxation Code section 7285.9 the City of Hermosa Beach (“City”) is authorized to levy a Transactions and Use Tax for general purposes, subject to majority voter approval; and WHEREAS, the People of the City desire to levy a Transactions and Use Tax for general purposes until repealed to fund important general City services, at a rate of three quarter cent (3/4 ¢); and
WHEREAS, if approved by the City Council and Hermosa Beach voters, the Transactions and Use Tax Ordinance will be incorporated into Chapter 3.44 of Title 3 of the Hermosa Beach Municipal Code.

NOW, THEREFORE, THE PEOPLE OF THE CITY OF HERMOSA BEACH DO HEREBY ORDAIN AS FOLLOWS:

Section 1. Title and Text. This Ordinance shall be known as the Hermosa Beach Transactions and Use Tax Ordinance, the full text of which is set forth in Attachment “1”, attached hereto and incorporated herein by reference.

Section 2. Approval by the City Council. Pursuant to California Government Code section 53724 and Revenue and Taxation Code section 7285.9, this Ordinance was duly approved for placement on the ballot by a minimum twothirds (2/3) supermajority of all members of the City Council on July 26, 2022.

Section 3. Approval by the Voters. Pursuant to California Elections Code section 9217, this Ordinance shall be deemed adopted and take effect only if approved by a majority of the eligible voters of the City of Hermosa Beach voting at the General Municipal Election of November 8, 2022. It shall be deemed adopted when the City Council has certified the results of that election by resolution and shall take effect ten (10) days thereafter.

Section 4. Operative Date. “Operative Date” for the Transactions and Use Tax means the first day of the first calendar quarter commencing more than 110 days after the date this Ordinance is adopted, as set forth in Section 3 above.

Section 5. Severability. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the 1115
Ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

I hereby certify that the Hermosa Beach Transactions and Use Tax Ordinance was PASSED, APPROVED, AND ADOPTED by the People of the City of Hermosa Beach on the 8th day of November, 2022.

CITY OF HERMOSA BEACH

MICHAEL DETOY, MAYOR
ATTEST:
_________________________________

MYRA MARAVILLA

CITY CLERK
Attachment 1
Chapter 3.44 - Transactions and Use Tax
1116
Sections:

3.44.010 - Purpose.

3.44.020 - Contract With State.

3.44.030 - Transactions Tax Rate.

3.44.040 - Place of Sale.

3.44.050 - Use Tax Rate.

3.44.060 - Adoption of Provisions of State Law.

3.44.070 - Limitations on Adoption of State Law and Collection of Use Taxes.

3.44.080 - Permit Not Required.

3.44.090 - Exemptions and Exclusions.

3.44.100 - Amendments.

3.44.110 - Enjoining Collection Forbidden.

3.44.120 - Duration of Tax
Sections:

3.44.010 - 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 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 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 tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration 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 California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.

D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use 1117
taxes, and at the same time, minimize the burden of record-keeping upon persons subject to taxation under the provisions of this ordinance.

3.44.020 - Contract With State.

Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration 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.

3.44.030- 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 three quarters of one percent (3/4 %) 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.

3.44.040 - 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 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 California Department of Tax and Fee Administration.

3.44.050 - Use Tax Rate.

An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of three quarters of one percent (3/4 %) of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

3.44.060 - 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 1118
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.

3.44.070 - 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, California Victim Compensation Board, California Department of Tax and Fee Administration, 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 or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, 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 reference to 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 of the Revenue and Taxation Code and in the definition of that phrase in Section 6203. 1119

1. “A retailer engaged in business in the District” shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.

3.44.080 - 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.

3.44.090 - Exemptions and Exclusions.

A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any stateadministered 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, 1120
stating that such address is, in fact, his or her principal place of residence; and
b. With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.

3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of 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 purposes of subparagraphs (3) and (4) of this subsection, 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 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 the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this 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.
1121

5. For the purposes of subparagraphs (3) and (4) of this subsection, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

6. Except as provided in 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.

3.44.100 - 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.

3.44.110 - Enjoining Collection Forbidden.

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection 1122
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.

3.44.120 – Duration of Tax.

The tax imposed by this chapter shall continue until this ordinance is repealed. 1123

CITY OF HERMOSA BEACH
RESOLUTION NO. 22-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA

BEACH, CALIFORNIA, SETTING PRIORITIES FOR FILING A WRITTEN

ARGUMENT AND REBUTTAL ARGUMENT REGARDING A LOCALLY

CONTROLLED ORDINANCE TO ENACT A GENERAL TRANSACTIONS
AND USE TAX (SALES TAX) AT THE RATE OF THREE-QUARTER CENT ( ¾ ¢) TO BE SUBMITTED TO VOTERS AT THE GENERAL MUNICIPAL ELECTION TO BE HELD TUESDAY, NOVEMBER 8, 2022, AND DIRECTING THE CITY

ATTORNEY TO PREPARE THE IMPARTIAL ANALYSIS
WHEREAS, a General Municipal Election will be held in the City of Hermosa Beach, California, on Tuesday, November 8, 2022, at which there will be submitted to the voters the following question:

To maintain Hermosa Beach’s long-term financial stability with locally controlled funds, to be used for programs
such as public safety/911 response, enforcement against theft/property crime; street/pothole repair; protection of beach and coastal waters; support for school safety;
cleaning of public areas; retention/attraction of local businesses; homeless services and for general
governmental use; shall an ordinance be adopted
establishing a ¾¢ sales tax requiring public spending
disclosure/independent audits, generating approximately $3,000,000 annually until ended by voters?
YES
NO
WHEREAS, every year Los Angeles County collects five million dollars from Hermosa Beach from the last three county sales taxes alone, but only 13 cents on the dollar is returned to Hermosa Beach; and
WHEREAS, by law all funds from this measure are legally required to be used in Hermosa Beach, ensuring local control of our tax dollars and a guaranteed sources of funding for essential City services; and WHEREAS, a sizeable portion of sales tax dollars collected in Hermosa Beach come from tourists and visitors, this measure will help make sure they pay their fair share for police, to keep our beach, Pier Plaza and other public areas clean and safe and our roads and other community resources are maintained and not left to be paid exclusively by City residents; and 1124

WHEREAS, in 2021 alone, there were almost 600 thefts and burglaries reported, including 100 thefts from motor vehicles in the 1.2 square miles of the City; this measure could provide funding for the Hermosa Beach Police Department to have additional resources to make neighborhoods safer, increase police patrols, reduce response times and increase crime prevention programs; and
WHEREAS, this measure will help pay for the City services residents have prioritized including preventing thefts and property crimes, supporting public safety and 911 emergency response, recruiting and retaining well-trained police officers, protecting coastal waters and beaches from pollution, supporting safe schools and keeping parks and public areas safe and clean; and WHEREAS, this measure includes tough accountability provisions including independent audits and public review of expenditures; and WHEREAS, the State of California Elections Code section 9282 and 9287 contains the following priority provision for written arguments:
(b) For measures placed on the ballot by the legislative body, the legislative body, or a member or members of the legislative body authorized by that body, or an individual voter who is eligible to vote on the measure, or bona fide association of citizens, or a combination of voters and associations, may file a written argument for or against any city measure.

WHEREAS, if more than one argument for or against any measure is submitted, the State of California Elections Code Section 9287 authorizes the elections official (City Clerk) to select the argument for printing and distributing to the voters, giving preference and priority as specified by law.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,

CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. Argument Writer(s). That the Hermosa Beach City Council hereby authorizes to prepare and file a written argument in favor of the measure placed by the legislative body to enact a general transactions and use tax (sales tax) at the rate of three-quarter cent ( ¾ cent).

SECTION 2. Arguments. That arguments for the measures specified above shall not exceed 300 words and must be accompanied by the printed name(s) 1125

and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, and Division 9 of the Elections Code of the State of California.

Arguments may be changed or withdrawn until and including the date fixed by the City Clerk (6:00 p.m., Tuesday, August 9, 2022), after which no arguments for or against the measures may be submitted to the City Clerk.

Arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting them or, if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. Arguments shall be accompanied by a “Form of Statement To Be Filed By Author(s) of Arguments.”
SECTION 3. Impartial Analysis. Pursuant to Elections Code section 9280, the City Council hereby directs the City Clerk to transmit a copy of the Measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the Measure, not to exceed 500 words in length, showing the effect of the Measure on the existing law and the operation of the Measure, and transmit such impartial analysis to the City Clerk not later than the deadline for submittal of primary arguments for or against the Measure.

The impartial analysis shall include a statement indicating whether the Measure was placed on the ballot by a petition signed by the requisite number of voters or by the City Council. The full text of the Measure shall not be printed in the Sample Ballot Booklet. Printed immediately below the impartial analysis, in no less than 10-font bold type, will be: “The above statement is an impartial analysis of Ordinance or Measure ____. If you desire a copy of the ordinance or measure, please contact the Office of the City Clerk at (310) 318-0204 or at [email protected] and a copy will be mailed at no cost to you.” The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments (6:00 p.m., Tuesday, August 9, 2022).

SECTION 4. Rebuttal Arguments. That pursuant to Sections 9285 of the Elections Code of the State of California, when the City Clerk has selected the arguments for and against the measure which will be printed and distributed to the voters, the City Clerk shall immediately send a copy of the argument in favor of the measure to the author(s) of the argument against the measure, and a copy of the argument against the measure to the author(s) of the argument in favor of the measure.
1126

The author or a majority of the authors of an argument relating to a City measure may prepare and submit a rebuttal argument not exceeding 250 words, or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument.

A rebuttal argument may not be signed by more than five authors. Each rebuttal argument shall be accompanied by a “Form of Statement To Be Filed By Author(s) of Argument.”
The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting them or, if submitted on behalf of an organization, the name of the organization and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The deadline for filing rebuttal arguments will be 6:00 p.m., Tuesday, August 23, 2022, in order to meet the deadline of August 29, 2022 set forth by the County of Los Angeles for inclusion in the Official Sample Ballot.

Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut.

SECTION 5. That all previous resolutions providing for the filing of rebuttal arguments for City measures are repealed.

SECTION 6. That the provisions of Section 1 shall apply only to the election to be held on November 8, 2022, and shall then be repealed.

SECTION 7. That the City Clerk shall certify to the passage and adoption of this Resolution; shall enter it into the book of original Resolutions, and shall make a minute of the passage and adoption thereof in the minutes of the meeting at which the Resolution is adopted.

PASSED, APPROVED and ADOPTED on this 26th day of July, 2022. __________________________________________________________________________ Mayor Michael Detoy
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PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:
____________________________________ ___________________________________ Myra Maravilla Michael Jenkins
City Clerk City Attorney
1128

ARGUMENT AND REBUTTAL FORM
ELECTION DATE: ________________________________________ MEASURE I.D. (if any): ____________________ JURISDICTION: ________________________________________________________________________________ (Please mark (x) in the appropriate box)
 Argument in Favor
 Rebuttal to Argument Against
 Argument Against
 Rebuttal to Argument in Favor
Statements will be printed in uniform type, style and spacing according to the County’s system requirements. When preparing your statement, please use block paragraphs and single space format. Text submitted indented or centered will be typeset in block paragraph form. Entire statements in all capital letters, bold and italics (or any combination of enhancements) are not acceptable. Indentations cannot be accommodated. Words to be printed in boldface type, underscored and/or CAPITALIZED are to be clearly indicated. All statements should be checked by the authors for spelling and punctuation as the elections official is not permitted to edit any material contained therein. NOTE: Rebuttal arguments are not direct arguments. For example, a rebuttal to a direct argument in favor of a measure is NOT a direct argument against a measure. Please also note that rebuttal arguments are allowed only when both a direct argument for AND against a measure are filed.

ALL AUTHORS MUST SIGN ON THE REVERSE SIDE
Please attach typed statement to this form. Statements should be typed in upper and lower case letters. Statement will be typeset in the Official Sample Ballot Booklet using a standard font and size determined by the County. However, statements can be submitted using any standard font.
1129

LOS ANGELES COUNTY ELECTION PLANNING SECTION
REGISTRAR-RECORDER/COUNTY CLERK (562) 462-2317

DECLARATION BY AUTHOR(S) OF ARGUMENTS OR REBUTTALS
(Elections Code Section 9600)
All arguments concerning measures filed pursuant to Division 9 of the Elections Code shall be accompanied by the following declaration to be signed by each author of the argument/rebuttal. Names and titles listed will be printed in the Voter Information portion of the Official Sample Ballot Booklet in the order provided below.

The undersigned author(s) of the:
of ballot measure ___________________________________________ at the ____________________________________ (name and/or letter) (title of election)
election for the ___________________________________________________________________________ to be held on _____________________________________________________hereby state that such argument is true and correct to the (date)
best of his/her/their knowledge and belief.

1. Printed Name Signature
Title to Appear on Argument Date

2. Printed Name Signature
Title to Appear on Argument Date

3. Printed Name Signature
Title to Appear on Argument Date

4. Printed Name Signature
Title to Appear on Argument Date

5. Printed Name Signature
Title to Appear on Argument Date
IMPORTANT FILING INFORMATION: I, _______________________________________________________ am the designated filer of the above titled argument/rebuttal. Please notify me of any questions pertaining to this filing. Below is my contact information.

Mailing Address: ________________________________________________ E-Mail Address: _______________________ Contact Numbers: __________________________ _________________________ _________________________ Daytime Evening Fax
OFFICE USE ONLY Time Stamp
Word Counts
NUMBER OF WORDS:

PROJECT CODE NUMBER:

ELECTION DEPUTY:

RF53 A&R.April2021
 Argument in Favor
 Argument Against
 Rebuttal to Argument Against
 Rebuttal to Argument in Favor
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COUNTY OF LOS ANGELES ELECTION PLANNING SECTION

REGISTRAR-RECORDER/COUNTY CLERK

AUTHORIZATION FOR ANOTHER PERSON TO SIGN

REBUTTAL ARGUMENT
(Elections Code Sections 9167, 9317 & 9504)
I, authorize the person listed below to
(Print name of AUTHOR of the Argument
sign the rebuttal to the argument  in favor  against Measure (Check one) (Letter)
for the election to be
(Jurisdiction)
held on .
(Date)
Any Author of the Argument may be replaced with another author to sign the Rebuttal. (Print name of Rebuttal Author)
(Signature of Rebuttal Author)
(Title to appear on Rebuttal)
Signature of Argument Author: Date:

Attach this form to the “Declaration by Authors Form” submitted with the Rebuttal Argument. 1131
City Council Adjourned Regular Hybrid Meeting (Closed Session - 4:00 PM and Open Session - 6:00 PM)
07-26-22 16:00
Agenda Name Comments Support Oppose Neutral
b) REPORT 22-0426 CONSIDERATION OF PLACING A LOCAL
CONTROL CITY SERVICES MEASURE ON THE NOVEMBER 8, 2022

GENERAL MUNICIPAL ELECTION BALLOT ASKING THE VOTERS TO

APPROVE A GENERAL TRANSACTIONS AND USE TAX (SALES TAX
or TUT) AT THE RATE OF THREE QUARTER CENT (3/4¢)
(City Manager Suja Lowenthal)
9 0 9 0
Sentiments for All Agenda Items
The following graphs display sentiments for comments that have location data. Only locations of users who have commented will be shown.

Overall Sentiment
Agenda Item: eComments for b) REPORT 22-0426 CONSIDERATION OF PLACING A LOCAL CONTROL CITY SERVICES MEASURE ON THE NOVEMBER 8, 2022 GENERAL MUNICIPAL ELECTION BALLOT ASKING THE VOTERS TO APPROVE A GENERAL TRANSACTIONS AND USE TAX (SALES TAX or TUT) AT THE RATE OF THREE QUARTER CENT (3/4¢) (City Manager Suja Lowenthal)
Overall Sentiment
Matt McCool
Location:

Submitted At: 12:49pm 07-26-22
I strongly oppose this proposed tax! However, I strongly encourage the three City Councilmembers up for reelection this November to vote, "YES," on this tonight.

Tracy H
Location:

Submitted At: 10:41am 07-26-22
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OPPOSED
Dean Francois
Location: 90254, Hermosa Beach
Submitted At: 2:21am 07-26-22
The proposal to place this tax increase on the November ballot should be voted down.

While the staff report is carefully written to attempt to justify why this is needed, The report has two errors in it that need clarification. The report leads the reader to think that revenue generated in hermosa stays in Hermosa.

This is incorrect. The report is actually saying ...raise the tax so the city can get the money. The other error in the report is.... Revenue from autos purchased by residents comes to the city rather than going to the city where the auto was purchased. This is incorrect.

We should not waste the cost of even printing to put this on the ballot. If this tax were to pass, commerce would be redirected to our neighboring cities and we could have a revenue loss. Most successful cities in Los Angeles county do not rely on this extra tax increase and we should not either. There are many different ways we can reduce our costs to balance our budget and cut wasteful spending. I have previously spoken at many council meetings regarding specific actions that have been wasteful spending.

Vote NO on this tax increase. Vote YES Dean Francois for City council!!! Howard L
Location:

Submitted At: 8:02pm 07-25-22
Top quality cities don’t increase the sales tax. This is mostly seen in the poorer per capita cities of Los Angeles County. Even Los Angeles has not increased the Sales Tax from the State and County total of 9.5%. Hermosa Beach has been receiving a windfall of property tax revenue through the pandemic due to having the highest Residential Property values per square foot in perhaps the entire country.

You Council is the most wasteful Hermosa Council in history with the least having been accomplished. Your council has a City Manager operation that is completely out of control.

Hire a real City Manager and get rid the top-heavy bureaucratic management your contract employee City Manager Suja Lowenthal has created, at primarily Justin Massey and Stacey Armato’s direction. Cut all these absurd costly consultant studies which will NEVER BE USED. Everyone knows there is a planet global warming problem. This tiny city must take care of itself first before it takes on saving the entire planet. That Justin Massey and a tiny group of self-obsessed others are using this city’s treasury for their own career building agendas is nothing less than criminal.

I also do not support doing as Inglewood, Hawthorne, Hawaiian Gardens and Long Beach have done. Hermosa Beach if it gets to the point of needing even more tax money would best negotiate with Redondo Beach and/or Manhattan Beach to become a district of one or the other of those two cities. This city has become little more than a costly bloated incompetent bureaucracy, accomplishing just about nothing of substance.

Should any of the three incumbents consider running for council (a clear sign of their own ignorance, in and of itself) and do support raising a single tax, then I highly recommend that they contact former two-term councilman Michael Keegan who was defeated in a 3rd term attempt by a gentleman named Roger Bacon. Roger Bacon used three simple words, as I recall, to accomplish the defeat of Michael Keegan who himself was orders of magnitude better a councilmember than anyone presently on the Hermosa Beach City Council. “NO TAXMAN KEEGAN” were the three words that defeated Michael Keegan. Were any of you around when that took place? Btw should you be so lame AND IN FACT DUMB as to place a costly (doomed to failure) local Sales Tax Measure on the ballot, be sure to include an exclusion for low income Seniors of the same form as that of the Sewer Fee, for seniors to be able to file for a rebate of the city portion of the sales tax they will have to pay on any vehicle purchase they make of over $10,000.
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ENOUGH WITH MODELING THIS CITY AFTER HAWTHORNE, INGLEWOOD, LONG BEACH, AND HAWAIAN GARDENS. Best ask Suja if she’s lobbying her own city of Rancho Palos Verdes to increase their sales tax from

9.5%, 10%, or 10.25%.

As one candidate for the City Council (who has already filed his nomination papers) indicated, this sales tax idea should be DEAD ON ARRIVAL. You’ve wasted enough money already having staff work it up.

Megg Sulzinger
Location: 90254, Hermosa Beach
Submitted At: 2:08pm 07-25-22
Council & Staff,
I am greatly opposed to this agenda item: CONSIDERATION OF PLACING A LOCAL CONTROL CITY SERVICES MEASURE ON THE NOVEMBER 8, 2022 GENERAL MUNICIPAL ELECTION BALLOT ASKING THE VOTERS TO APPROVE A GENERAL TRANSACTIONS AND USE TAX (SALES TAX or TUT) AT THE RATE OF THREE QUARTER CENT (3/4¢)
We should absolutely not consider increasing the tax rate in Hermosa from $9.50 to $10.25. This increase would only discourage people to shop at businesses and eat out at our beautiful restaurants. With inflation at a record high and gas prices over $5 most regular people are still struggling. It will 100% cause people to consider going to other beach cities rather than Hermosa if our tax rate is higher than our neighboring beach towns. Neither our neighbors in Redondo or Manhattan are considering this and they are significantly larger than us. This will have an impact on our little beach town more than help. I do not believe it is a good idea to "punish" non-residents to pay their fair share when they are an extremely small % of people who spend money in this town. Personally I eat out at our restaurants a minimum of 5 times a week and shop at our local retail shops once a week as well. I will not be able to afford to do this while inflation is still astronomical, gas prices at the current rate and rent being increased across the city if you consider putting this on the ballot. This is going to hurt residents more than anyone in addition to our small businesses who are STILL trying to recover from being closed during covid.

Please show the residents that you actually care about our well-being and do not consider putting this on the ballot in the fall. Thank you.

Raymond Dussault
Location: 90254, Hermosa Beach
Submitted At: 11:45am 07-25-22
Dear Council & Staff:

I am absolutely opposed to placing a sales tax increase on the November ballot.

First, the staff report claiming this will mainly impact visitors is laughable. Residents, unlike staff, live here year round, visiting local businesses multiple times/week if not more. The tax increase will impact the residents disproportionately. That the staff is oblivious to this is inexplicable.

Second, Manhattan Beach, Redondo Beach, Torrance and El Segundo will all remain at 9.5% sales tax while ours soars to 10.25%, rendering our small local businesses uncompetitive.

Third, why would we want to drive visitors away? While residents spend more over the year, visitors still have a beneficial impact on our economy.

Fourth, this is a time of historic high inflation, gas and housing costs. Many people struggle to live here. Any tax increase will make it even more difficult on those that want to continue living in and contributing to our community.

Fifth and finally, our budget is bloated and out of control. We have zero fiduciary oversight and support a City Manager's office that spends money far out of proportion to surrounding communities. Hermosa's City Manager budget is multiple times larger than either Manhattan Beach (twice our size) or Redondo Beach (four times our size).. Redondo's City Manager takes up 1.1% of the budget, Manhattan's is 1.9% of theirs, while Suja's is a 1134
whopping 3.1% of the Hermosa City Budget. This is before she was approved for a new executive position.

A City Manager manages the city but Council should act as a fiduciary backstop, not a rubber stamp.

Please vote NO on this terrible idea.
--
Raymond Dussault33 North Ventures, Inc.Hermosa Beach, CA 90254Phone: (916) 205-1844 Ira Ellman
Location:

Submitted At: 3:51pm 07-24-22
I am against the proposed 1% increase in sales tax. Although there are always theoretical good uses for additional tax dollars, taxes should not be increased unless getting such funds are crucial. Earlier this month, the City Council did not make any reductions or changes to the multi-million-dollar 2022-2023 budget (manpower, salaries, consulting, expense, etc.). This lack of scrutiny did not display any financial urgency that I think would be required to increase taxes on residents and visitors.

Carolyn Petty
Location: 90254, Hermosa Beach
Submitted At: 3:46pm 07-24-22
Prior City Councils showed respect for the fiduciary responsibility granted to them by the Hermosa Beach residents. When times were tough, the city cut back. But now spending has spiraled out of control:
1) The current budget includes nearly $2,000,000 in nice-to-have and unnecessary studies. 2) The City Attorney’s budget has spiraled out of control to the point where now his salary is split between two different budget line items, as a way of obfuscating his total cost to the city. 3) The city inappropriately and illegally shut down CrossFit on Cypress. Total cost to the residents: over $1.2M, but most likely other associated costs were hidden in other budget line items. 4) The City pays a Public Relations consultant nearly $90,000 annually. She was originally hired during the oil ballot measure, her need is long since gone, but she is still on the payroll. What does she do? Among other things, she ensures the local papers do not print anything negative about the City. She uses the leverage of city advertising to ensure there is a quid pro quo.
5) In the past 9 months, the city has paid at least $200,000 to climate change consultants. 6) The City Council approved a new position of Assistant City Manager position that enjoys total compensation approaching $250,000.
7) The city paid $27,000 for an unnecessary community survey. 8) In the past 13 months, the city has paid over $125,000 to respond to public records requests. This could be reduced with more transparency - but this City Council/City Manager denies there is a problem. 9) The unnecessary bathroom park project at Fort Lots of Fun has now cost taxpayers $410k, with the cost sure to rise. It is not completed and towers over the play structure. This serves the neighborhood and is not needed. 10) This City Council is even moving forward with a “test” hardscaping project on the greenbelt, at a cost of hundreds of thousands of dollars, while knowing that this is not only illegal given the current land restrictions, but while also being advised by the City Attorney that once the process begins of making ADA improvements at any point on the greenbelt, the city opens the door to an obligation of extending this across the entire greenbelt.

Again, not only is this “test” project illegal, and opens the city up to lawsuits, being forced to retrofit the entire greenbelt will cost the taxpayers millions of dollars in ADA related costs. None of this is a concern to the council, with Councilmember Armato chastising the staff that this “test” was not happening fast enough.

The TOT was actually raised twice in the past 6 years – now at 14%. How was that not enough money? Wasn’t the community sold these new taxes under the guise that this would be sufficient? The bottom line is that this sales tax will only serve to feed the beast of excessive and unnecessary spending.

Costs need to be reined in, and the focus needs to return to infrastructure and safety. This sales tax increase should not be put on the ballot.

Daniel Godwin
Location:
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Submitted At: 9:24am 07-24-22
This proposition should be considered dead on arrival. California is already one of the most expensive states with respect to cost of living. While we choose to pay a premium to live in Hermosa, it is unfair to levy any additional tax on its residents. Considering the current state of inflation, it is incredible that the city would even propose such a thing. The city needs to alter its perspective of taxing its way out of poor decision making with respect to our budget. Lets be wiser and not take the easy way out. Please do NOT pass this proposition for an increased sales tax.
1136
From: Raymond Dussault
To: Myra Maravilla; Suja Lowenthal; City Council
Subject: Tax Increase on Hermosa Residents
Date: Monday, July 25, 2022 11:36:10 AM
Attn: Myra
Please add this to the council agenda.

Dear Council & Staff:

I am absolutely opposed to placing a sales tax increase on the November ballot. Item XIV.

Municipal Matters (B) on tomorrow night's agenda.

First, the staff report claiming this will mainly impact visitors is laughable. Residents, unlike staff, live here year round, visiting local businesses multiple times/week if not more. The tax increase will impact the residents disproportionately. That the staff is oblivious to this is inexplicable.

Second, Manhattan Beach, Redondo Beach, Torrance and El Segundo will all remain at

9.5% sales tax while ours soars to 10.25%, rendering our small local businesses uncompetitive.

Third, why would we want to drive visitors away? While residents spend more over the year, visitors still have a beneficial impact on our economy.

Fourth, this is a time of historic high inflation, gas and housing costs. Many people struggle to live here. Any tax increase will make it even more difficult on those that want to continue living in and contributing to our community.

Fifth and finally, our budget is bloated and out of control. We have zero fiduciary oversight and support a City Manager's office that spends money far out of proportion to surrounding communities. Hermosa's City Manager budget is multiple times larger than either Manhattan Beach (twice our size) or Redondo Beach (four times our size).. Redondo's City Manager takes up 1.1% of the budget, Manhattan's is 1.9% of theirs, while Suja's is a whopping 3.1% of the Hermosa City Budget. This is before she was approved for a new executive position.

A City Manager manages the city but Council should act as a fiduciary backstop, not a rubber stamp.

Please vote NO on this terrible idea.
--
Raymond Dussault
33 North Ventures, Inc.

Hermosa Beach, CA 90254
Phone: (916) 205-1844
1137
City of Hermosa Beach
Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Staff Report
REPORT 22-0443
Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of July 26, 2022

ADOPT RESOLUTIONS PLACING THE CANNABIS INITIATIVE,

SUBMITTED BY INITIATIVE PETITION, TO
REPEAL THE CITY’S BAN ON CANNABIS BUSINESSES

AND ALLOWS BY CITY-APPROVED PERMIT

UP TO TWO CANNABIS RETAIL STOREFRONT BUSINESSES,

INCLUDING HOME DELIVERY FROM THOSE STORES ON THE
NOVEMBER 8, 2022 GENERAL MUNICIPAL ELECTION BALLOT
(City Clerk Myra Maravilla)
Recommended Action:

Staff recommends City Council:

1. As required by State Law, add the initiative measure to repeal the City’s ban on cannabis businesses and allows by City-approved permit up to two cannabis retail storefront businesses, including home delivery from those stores to the November 8, 2022, General Municipal Election ballot and select one or more members of City Council to author the Argument Against this measure;

2. Adopt a resolution calling for the placement of a measure, submitted by initiative petition, on the ballot for the November 8, 2022 General Municipal Election for the submission to the qualified voters of an ordinance to repeal the City’s ban on cannabis businesses and allows by City-approved permit up to two cannabis retail storefront businesses including home delivery from those stores and requesting the Board of Supervisors render the election consolidation services adopted in Resolution No. 22-7317 for this measure (Attachment 1); and

3. Adopt a resolution setting priorities for filing a written argument and rebuttal argument regarding the cannabis initiative to repeal the City’s existing ban on cannabis businesses and allows by City-approved permit up to two cannabis retail storefront businesses including home delivery from those stores to be submitted to voters at the General Municipal Election to be held Tuesday, November 8, 2022 and directing City Attorney to prepare the impartial analysis (Attachment 2).

Executive Summary:

On November 17, 2021, the Hermosa Beach City Clerk received a petition from the cannabis industry City of Hermosa Beach Page 1 of 5 Printed on 7/21/2022
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Staff Report
REPORT 22-0443
On November 17, 2021, the Hermosa Beach City Clerk received a petition from the cannabis industry for the purposes of adopting an initiative that would repeal Hermosa Beach’s existing ban on all commercial cannabis business operations and allow commercial cannabis operations in the City.

Given the substantial engagement process and the diversity of viewpoints on this policy matter, City Council voted to oppose the industry-sponsored initiative.

Having obtained the signatures of 10 percent of registered voters, the industry-sponsored initiative will be submitted, without alteration, to the voters on the November 8, 2022 General Municipal Election ballot. The attached resolutions are presented to Council pursuant to the Elections Code.

Background:

On November 17, 2021, the Hermosa Beach City Clerk received a petition from the cannabis industry for the purposes of adopting an initiative that would repeal Hermosa Beach’s existing ban on all commercial cannabis business operations and allow commercial cannabis operations in the City (Attachment 5). At City Council’s regular meeting on November 23, 2021, Mayor Detoy requested, and a unanimous vote of the City Council supported, directing staff to place on the next regular session agenda an item addressing the City’s options.

The ballot title and summary prepared by the City Attorney were provided to the proponent on December 2, 2021. The notice was published in the Easy Reader on December 16, 2021, and the petition was then circulated for signatures of registered voters. The signed petition was submitted to the City Clerk’s office on March 3, 2022 and was sent to the Los Angeles County Registrar of Voters for signature verification on the same day, based on the City Clerk’s determination that the submitted number of signatures, prima facie, exceeded the minimum number required. The Los Angeles County Registrar of Voters verified and completed the verification on March 4, 2022 and received confirmation on March 15, 2022 (Attachment 6).

At its March 22, 2022 meeting, City Council received and filed the Certificate of Sufficiency representing that the initiative obtained 10 percent of registered voters required to qualify to be placed on the ballot (Attachment 7). At its May 24, 2022 meeting, City Council opted not to adopt the cannabis industry initiative by ordinance and instead submit the ordinance, without alteration, to the voters in the November 8, 2022 General Municipal Election.

Council also directed staff to bring to Council for its consideration an ordinance allowing delivery of cannabis from outside the City and a measure that would impose a tax on cannabis businesses, should they be permitted in the City.

Past Council Actions
Meeting Date Description
November 23, 2021
(Regular Meeting)
Under Future Agenda Items, Mayor Detoy requested City
Council consider directing staff to place on the December 14, 2021 agenda an item addressing the City’s options in light of the cannabis industry initiative filed with the City City of Hermosa Beach Page 2 of 5 Printed on 7/21/2022
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Staff Report
REPORT 22-0443 Meeting Date Description
November 23, 2021
(Regular Meeting)
Under Future Agenda Items, Mayor Detoy requested City
Council consider directing staff to place on the December 14, 2021 agenda an item addressing the City’s options in light of the cannabis industry initiative filed with the City Clerk. The request was supported by a unanimous vote of the City Council.

December 14, 2021
(Regular Meeting)
City Council directed the City Manager to form an Advisory Group, subject to the Brown Act, to explore policy issues and provide City Council with input on whether the City’s current ban on cannabis business operations should be
modified.

March 22, 2022
(Regular Meeting)
City Council opted not to adopt the cannabis industry
initiative by ordinance and instead submit the ordinance, without alteration, to the voters in the November 8, 2022 Municipal Election.

April 12, 2022 (Regular
Meeting)
City Council received and discussed the final report and recommendations of the Cannabis Advisory Group.

May 24, 2022 (Regular
Meeting)
City Council action to oppose the cannabis industry
sponsored initiative filed with the City Clerk on November 17, 2021. Council also directed staff to bring to Council for its consideration an ordinance allowing delivery of cannabis from outside the City and a measure that would impose a tax on cannabis businesses, should they be permitted in the City.

Discussion:

For measures placed on the ballot by petition, Elections Code Section 9287 gives priority to the measure’s proponent to file an argument in favor of the ordinance and priority to the City Council to submit an argument against the ordinance. Should the City Council wish to file the argument against the measure, Council should authorize one or more members to write the argument.

If the City Council opts to not authorize one or more of its members to prepare and file a written argument against the ordinance, State law requires the City Clerk to select if more than one argument is submitted, based on the priorities established in Elections Code § 9287. It has been traditional in the past to allow for rebuttal arguments. Attachment 2 sets priorities for filing a written argument and rebuttal argument.

Given that City Council opted not to adopt the cannabis industry initiative by ordinance and instead submit the ordinance, without alteration, to the voters in the November 8, 2022 Municipal Election, City of Hermosa Beach Page 3 of 5 Printed on 7/21/2022
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Staff Report
REPORT 22-0443
submit the ordinance, without alteration, to the voters in the November 8, 2022 Municipal Election, Attachment 1 calls for the placement of the measure on the ballot and requests the Board of Supervisors include this measure when rendering the election consolidation services adopted in Resolution 22-7317.

Argument in Favor and Against
The City Clerk will accept arguments in favor and against the proposed measure until Tuesday, August 9, 2022, at 6 p.m. Each argument is limited to 300 words and will be titled “Argument in Favor of Measure __” and “Argument Against Measure ___” in the Official Sample Ballot Booklet submitted to voters. Please email [email protected] <mailto:[email protected]> or submit a hard copy (Attachment 3) by the deadline.

Per California Election Code Section 9282, the initiative proponent has priority to file a written argument in favor of the ordinance, and the legislative body may submit an argument against the ordinance. Should the City Council choose not to authorize one or two members of the City Council to author the Argument Against the measure, the Elections Official will select an argument in accordance with California Elections Code Section 9282.

Rebuttals to Argument in Favor and Against
When the arguments are submitted, the Elections Official shall send a copy of the Argument in Favor to the authors of the Argument Against and the Argument Against to the authors of the Argument in Favor, along with a copy of the impartial analysis. An argument author may authorize another person to sign the rebuttal to the opposing argument using the form provided by the Elections Official and in accordance with California Elections Code Section 9285 (Attachment 4). Rebuttals to the Arguments in Favor and Against are due by Tuesday, August 23, 2022, at 6 p.m. and are limited to 250 words.

Consolidation with Los Angeles County
At its July 14, 2022 meeting, the City Council approved Resolution No. 22-7317 to consolidate the City of Hermosa Beach General Municipal Election with the Statewide General Election to be held on November 8, 2022. Approving the staff recommendation will allow Los Angeles County to carry out all consolidation services outlined in Resolution No. 22-7317 for this measure.

General Plan Consistency:

This report and the associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:

Governance Element
Goal 1. A high degree of transparency and integrity in the decision-making process.

Policy:
· 1.1 Open Meetings. Maintain the community’s trust by holding meetings in which decisions are being made, that are open and available for all community members to attend, participate, City of Hermosa Beach Page 4 of 5 Printed on 7/21/2022
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Staff Report
REPORT 22-0443
or view remotely.

Goal 2. The Community is active and engaged in decision-making processes.

Policy:
· 2.3 Public participation guidelines. Establish parameters and guidelines to ensure public participation is promoted through diverse methods.

Fiscal Impact:

Fiscal impacts associated with adding pages in the Official Sample Ballot pertaining to all measures being considered by the Council have been included in the budgeted total cost of the upcoming November 8, 2022 General Municipal Election of $110,000 in FY 2022-23. No additional cost to the budgeted total is expected from including this measure on the ballot.

Attachments:

1. Resolution-Adding to Ballot & Requesting Consolidation

2. Resolution-Arguments, Rebuttals & Impartial Analysis

3. Argument and Rebuttal Form

4. Authorization for Another Person to Sign Rebuttal Argument Form

5. Initiative Submitted to City Clerk on November 17, 2021

6. Letter of Findings from the Los Angeles County Registrar of Voters dated March 15, 2022

7. Certificate of Sufficiency

8. Link to November 23, 2021 City Council Agenda

9. Link to December 14, 2021 City Council Staff Report

10.Link to March 22, 2022 City Council Staff Report

11. Link to April 12, 2022 City Council Staff Report

12. Link to May 24, 2022 City Council Staff Report
Respectfully Submitted by: Myra Maravilla, City Clerk
Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Mike Jenkins, City Attorney
Approved: Suja Lowenthal, City Manager
City of Hermosa Beach Page 5 of 5 Printed on 7/21/2022
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CITY OF HERMOSA BEACH
RESOLUTION 22-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA

BEACH, CALIFORNIA, CALLING FOR THE PLACEMENT OF A MEASURE,

SUBMITTED BY INITIATIVE PETITION, ON THE BALLOT FOR THE NOVEMBER 8, 2022 GENERAL MUNICIPAL ELECTION FOR THE

SUBMISSION TO THE QUALIFIED VOTERS OF AN ORDINANCE TO
REPEAL THE CITY’S BAN ON CANNABIS BUSINESSES AND ALLOWS BY

CITY-APPROVED PERMIT UP TO TWO CANNABIS RETAIL STOREFRONT

BUSINESSES INCLUDING HOME DELIVERY FROM THOSE STORES AND

REQUESTING THE BOARD OF SUPERVISORS RENDER THE ELECTION CONSOLIDATION SERVICES ADOPTED IN RESOLUTION NO. 22-7317

FOR THIS MEASURE
WHEREAS, the City Council of the City of Hermosa Beach, at its meeting of June 14, 2022, adopted Resolution No. 22-7315, calling for the holding of a General Municipal Election on Tuesday, November 8, 2022; and WHEREAS, an initiative petition was filed on November 17, 2021, with the City Clerk of the City of Hermosa Beach, California, and signed by more than ten (10) percent of the number of Hermosa Beach voters on March 3, 2022, to submit to the voters a proposed ordinance that would repeal the City’s existing ban on cannabis businesses in Hermosa Beach; and
WHEREAS, the City Clerk determined that the number of signatures, prima facie, equaled or exceeded the minimum number of signatures required in accordance with California Elections Code section 9210; and WHEREAS, the County of Los Angeles verified the number of valid signatures exceeded the required number of required signatures in accordance with California Elections Code section 9211; and
WHEREAS, the City Council did not vote in favor of the adoption of the ordinance pursuant to Section 9215 of the Elections Code; and WHEREAS, the City Council is authorized and directed by California statute to submit the proposed ordinance to the voters; and
WHEREAS, the City Council respectfully requested the Board of Supervisors of the County of Los Angeles to order the consolidation of said General Municipal Election in Resolution No. 22-7317.
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,

CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The foregoing recitals are true and correct and are hereby incorporated and made an operative part of this resolution.

SECTION 2. Submission of the Ballot Measure. Pursuant to California Elections Code section 9215 and any other applicable requirements of the laws of the State of California relating to the City, the City Council, hereby orders the Measure to be submitted to the voters of the City at the General Municipal Election to be held on Tuesday, November 8, 2022.

SECTION 3. The City Council, pursuant to California Elections Code section 9215, hereby orders that the Measure shall be presented and printed upon the ballot submitted to the qualified voters in the manner and form set forth in this Section 3. On the ballot to be submitted to the qualified voters at the General Municipal Election to be held on Tuesday, November 8, 2022, in addition to any other matters required by law, there shall be printed substantially the following ballot question:

Shall an ordinance proposed by initiative petition be
adopted that repeals the City’s existing ban on
cannabis businesses and allows by City-approved
permit up to two cannabis retail storefront businesses, including home delivery from those stores?
YES
NO
SECTION 4. Conduct of Election. The City Clerk is authorized, instructed, and directed to procure and furnish any and all official ballots, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 5. Notice of the election is hereby given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law.

SECTION 7. Placement on the Ballot. The full text of the Measure shall not be printed in the Sample Ballot Booklet, and a statement shall be printed on the ballot pursuant to Elections Code section 9223 advising voters that they 1144

may obtain a copy of this Resolution and the Measure, at no cost, upon request made to the City Clerk.

SECTION 8: Consolidation with Los Angeles County. The City of Hermosa Beach respectfully requests that the election consolidation services, outlined in Resolution No. 22-7317, include this measure.

SECTION 9: Filing with County. The City Clerk shall, not later than the 88th day prior to the General Municipal Election to be held on Tuesday, November 8, 2022, file with the Board of Supervisors and the County Clerk – Registrar of Voters of the County of Los Angeles, State of California, a certified copy of this Resolution and enter it into the book of original resolutions, including the Ordinance/Measure attached hereto as Exhibit “B.”
SECTION 10. Public Examination. Pursuant to Elections Code section 9295, this Measure will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the voter information guide. The City Clerk shall post notice in the Clerk’s office of the specific dates that the examination period will run.

SECTION 11. Severability. The provisions of this Resolution are severable and if any provision of this Resolution is held invalid, that provision shall be severed from the Resolution and the remainder of this Resolution shall continue in full force and effect, and not be affected by such invalidity.

SECTION 12. This Resolution shall become effective upon its adoption.

SECTION 13. The City Clerk shall certify to the adoption of this Resolution. 1145

PASSED, APPROVED AND ADOPTED by the City Council of the City of Hermosa Beach, California, at a regular meeting held on this 26th day of July, 2022.
_________________________________________________________________________ Michael Detoy
PRESIDENT of the City Council, and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:
__________________________________ __________________________________ Myra Maravilla Michael Jenkins
City Clerk City Attorney
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CITY OF HERMOSA BEACH
RESOLUTION NO. 22-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA

BEACH, CALIFORNIA, SETTING PRIORITIES FOR FILING A WRITTEN

ARGUMENT AND REBUTTAL ARGUMENT REGARDING THE CANNABIS
INITIATIVE TO REPEAL THE CITY’S EXISTING BAN ON CANNABIS

BUSINESSES AND ALLOWS BY CITY-APPROVED PERMIT UP TO TWO

CANNABIS RETAIL STOREFRONT BUSINESSES INCLUDING HOME

DELIVERY FROM THOSE STORES TO BE SUBMITTED TO VOTERS AT THE GENERAL MUNICIPAL ELECTION TO BE HELD TUESDAY, NOVEMBER 8, 2022 AND DIRECTING THE CITY ATTORNEY TO PREPARE THE IMPARTIAL

ANALYSIS
WHEREAS, a General Municipal Election will be held in the City of Hermosa Beach, California, on Tuesday, November 8, 2022, at which there will be submitted to the voters the following question:

Shall an ordinance proposed by initiative petition be
adopted that repeals the City’s existing ban on cannabis businesses and allows by City-approved permit up to two cannabis retail storefront businesses, including home
delivery from those stores?
YES
NO
WHEREAS, the State of California Elections Code section 9282 contains the following priority provision for written arguments:
(a) For measures placed on the ballot by petition, the persons filing an initiative petition pursuant to this article may file a written argument in favor of the ordinance, and the legislative body may submit an argument against the ordinance.

WHEREAS, if more than one argument for or against any measure is submitted, the State of California Elections Code Section 9287 authorizes the elections official (City Clerk) to select the argument for printing and distributing to the voters, giving preference and priority as specified by law.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,

CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
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SECTION 1. Argument Writer(s). That the Hermosa Beach City Council hereby authorizes to prepare and file a written argument against the measure placed by petition to repeal the City’s existing ban on cannabis businesses and allows up to two cannabis retail storefront businesses including home delivery from those stores.

SECTION 2. Arguments. That arguments for the measures specified above shall not exceed 300 words and must be accompanied by the printed name(s) and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, and Division 9 of the Elections Code of the State of California.

Arguments may be changed or withdrawn until and including the date fixed by the City Clerk (6:00 p.m., Tuesday, August 9, 2022), after which no arguments for or against the measures may be submitted to the City Clerk.

Arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting them or, if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. Arguments shall be accompanied by a “Form of Statement To Be Filed By Author(s) of Arguments.”
SECTION 3. Impartial Analysis. Pursuant to Elections Code section 9280, the City Council hereby directs the City Clerk to transmit a copy of the Measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the Measure, not to exceed 500 words in length, showing the effect of the Measure on the existing law and the operation of the Measure, and transmit such impartial analysis to the City Clerk not later than the deadline for submittal of primary arguments for or against the Measure.

The impartial analysis shall include a statement indicating whether the Measure was placed on the ballot by a petition signed by the requisite number of voters or by the City Council. The full text of the Measure shall not be printed in the Sample Ballot Booklet. Printed immediately below the impartial analysis, in no less than 10-font bold type, will be: “The above statement is an impartial analysis of Ordinance or Measure ____. If you desire a copy of the ordinance or measure, please contact the Office of the City Clerk at (310) 318-0204 or at [email protected] and a copy will be mailed at no cost to you.” The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments (6:00 p.m., Tuesday, August 9, 2022). 1148

SECTION 4. Rebuttal Arguments. That pursuant to Sections 9285 of the Elections Code of the State of California, when the City Clerk has selected the arguments for and against the measure which will be printed and distributed to the voters, the City Clerk shall immediately send a copy of the argument in favor of the measure to the author(s) of the argument against the measure, and a copy of the argument against the measure to the author(s) of the argument in favor of the measure.

The author or a majority of the authors of an argument relating to a City measure may prepare and submit a rebuttal argument not exceeding 250 words, or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument.

A rebuttal argument may not be signed by more than five authors. Each rebuttal argument shall be accompanied by a “Form of Statement To Be Filed By Author(s) of Argument.”
The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting them or, if submitted on behalf of an organization, the name of the organization and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The deadline for filing rebuttal arguments will be 6:00 p.m., Tuesday, August 23, 2022, in order to meet the deadline of August 29, 2022 set forth by the County of Los Angeles for inclusion in the Official Sample Ballot.

Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut.

SECTION 5. That all previous resolutions providing for the filing of rebuttal arguments for City measures are repealed.

SECTION 6. That the provisions of Section 1 shall apply only to the election to be held on November 8, 2022, and shall then be repealed. 1149

SECTION 7. That the City Clerk shall certify to the passage and adoption of this Resolution; shall enter it into the book of original Resolutions, and shall make a minute of the passage and adoption thereof in the minutes of the meeting at which the Resolution is adopted.

PASSED, APPROVED and ADOPTED on this 26th day of July, 2022. __________________________________________________________________________ Mayor Michael Detoy
PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:
____________________________________ ___________________________________ Myra Maravilla Michael Jenkins
City Clerk City Attorney
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ARGUMENT AND REBUTTAL FORM
ELECTION DATE: ________________________________________ MEASURE I.D. (if any): ____________________ JURISDICTION: ________________________________________________________________________________ (Please mark (x) in the appropriate box)
 Argument in Favor
 Rebuttal to Argument Against
 Argument Against
 Rebuttal to Argument in Favor
Statements will be printed in uniform type, style and spacing according to the County’s system requirements. When preparing your statement, please use block paragraphs and single space format. Text submitted indented or centered will be typeset in block paragraph form. Entire statements in all capital letters, bold and italics (or any combination of enhancements) are not acceptable. Indentations cannot be accommodated. Words to be printed in boldface type, underscored and/or CAPITALIZED are to be clearly indicated. All statements should be checked by the authors for spelling and punctuation as the elections official is not permitted to edit any material contained therein. NOTE: Rebuttal arguments are not direct arguments. For example, a rebuttal to a direct argument in favor of a measure is NOT a direct argument against a measure. Please also note that rebuttal arguments are allowed only when both a direct argument for AND against a measure are filed.

ALL AUTHORS MUST SIGN ON THE REVERSE SIDE
Please attach typed statement to this form. Statements should be typed in upper and lower case letters. Statement will be typeset in the Official Sample Ballot Booklet using a standard font and size determined by the County. However, statements can be submitted using any standard font.
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LOS ANGELES COUNTY ELECTION PLANNING SECTION
REGISTRAR-RECORDER/COUNTY CLERK (562) 462-2317

DECLARATION BY AUTHOR(S) OF ARGUMENTS OR REBUTTALS
(Elections Code Section 9600)
All arguments concerning measures filed pursuant to Division 9 of the Elections Code shall be accompanied by the following declaration to be signed by each author of the argument/rebuttal. Names and titles listed will be printed in the Voter Information portion of the Official Sample Ballot Booklet in the order provided below.

The undersigned author(s) of the:
of ballot measure ___________________________________________ at the ____________________________________ (name and/or letter) (title of election)
election for the ___________________________________________________________________________ to be held on _____________________________________________________hereby state that such argument is true and correct to the (date)
best of his/her/their knowledge and belief.

1. Printed Name Signature
Title to Appear on Argument Date

2. Printed Name Signature
Title to Appear on Argument Date

3. Printed Name Signature
Title to Appear on Argument Date

4. Printed Name Signature
Title to Appear on Argument Date

5. Printed Name Signature
Title to Appear on Argument Date
IMPORTANT FILING INFORMATION: I, _______________________________________________________ am the designated filer of the above titled argument/rebuttal. Please notify me of any questions pertaining to this filing. Below is my contact information.

Mailing Address: ________________________________________________ E-Mail Address: _______________________ Contact Numbers: __________________________ _________________________ _________________________ Daytime Evening Fax
OFFICE USE ONLY Time Stamp
Word Counts
NUMBER OF WORDS:

PROJECT CODE NUMBER:

ELECTION DEPUTY:

RF53 A&R.April2021
 Argument in Favor
 Argument Against
 Rebuttal to Argument Against
 Rebuttal to Argument in Favor
1152

COUNTY OF LOS ANGELES ELECTION PLANNING SECTION

REGISTRAR-RECORDER/COUNTY CLERK

AUTHORIZATION FOR ANOTHER PERSON TO SIGN

REBUTTAL ARGUMENT
(Elections Code Sections 9167, 9317 & 9504)
I, authorize the person listed below to
(Print name of AUTHOR of the Argument
sign the rebuttal to the argument  in favor  against Measure (Check one) (Letter)
for the election to be
(Jurisdiction)
held on .
(Date)
Any Author of the Argument may be replaced with another author to sign the Rebuttal. (Print name of Rebuttal Author)
(Signature of Rebuttal Author)
(Title to appear on Rebuttal)
Signature of Argument Author: Date:

Attach this form to the “Declaration by Authors Form” submitted with the Rebuttal Argument. 1153
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STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

CITY OF HERMOSA BEACH

CERTIFICATE OF SUFFICIENCY
Initiative Petition entitled "An Ordinance Repealing the Current Ban on Cannabis Business Operations and Allowing for Commercial Retail, Delivery and Other Cannabis Business Operations in Hermosa Beach, Establishing a Process for Selecting a Maximum of Two Retail Operators, and Establishing Licensing and Operating Requirements”

I, SUSAN MORROW, INTERIM CITY CLERK OF THE CITY OF HERMOSA

BEACH, CALIFORNIA, DO HEREBY CERTIFY THAT SAID PETITION IS SUFFICIENT, FOR THE FOLLOWING REASONS:

1. The number of signatures needed to qualify this initiative, Hermosa Beach Cannabis Regulation and Public Safety Measure, for the City’s next regular municipal election is 1,421 or at least 10% of 14,214, the number of registered voters last reported by Los Angeles County to the Secretary of State pursuant to Election Code § 2187 effective at the time the notice specified in Election Code § 9202 was published.

2. The results of the signature verification by the City Clerk of the City of Hermosa Beach are as follows:

Number of signatures filed 1,821
Number of signatures verified 1,821
Number of signatures found sufficient 1,650
Number of signatures found not sufficient 171
Number of signatures not sufficient (duplicate) 1
Number of signatures withdrawal requests 3

THEREFORE, I HAVE HEREUNTO SET THE SEAL OF THE CITY OF
HERMOSA BEACH, CALIFORNIA.
______________________________
Susan Morrow, Interim City Clerk
Dated: March 16, 2022
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City Council Adjourned Regular Hybrid Meeting (Closed Session - 4:00 PM and Open Session - 6:00 PM)
07-26-22 16:00
Agenda Name Comments Support Oppose Neutral
c) REPORT 22-0443 ADOPT RESOLUTIONS PLACING THE CANNABIS

INITIATIVE,

SUBMITTED BY INITIATIVE PETITION, TO

REPEAL THE CITY'S BAN ON CANNABIS BUSINESSES

AND ALLOWS BY CITY-APPROVED PERMIT

UP TO TWO CANNABIS RETAIL STOREFRONT BUSINESSES,

INCLUDING HOME DELIVERY FROM THOSE STORES ON THE
NOVEMBER 8, 2022 GENERAL MUNICIPAL ELECTION BALLOT
(City Clerk Myra Maravilla)
2 0 0 0
Sentiments for All Agenda Items
The following graphs display sentiments for comments that have location data. Only locations of users who have commented will be shown.

Overall Sentiment
Agenda Item: eComments for c) REPORT 22-0443 ADOPT RESOLUTIONS PLACING THE CANNABIS INITIATIVE,

SUBMITTED BY INITIATIVE PETITION, TO

REPEAL THE CITY'S BAN ON CANNABIS BUSINESSES

AND ALLOWS BY CITY-APPROVED PERMIT

UP TO TWO CANNABIS RETAIL STOREFRONT BUSINESSES,

INCLUDING HOME DELIVERY FROM THOSE STORES ON THE
NOVEMBER 8, 2022 GENERAL MUNICIPAL ELECTION BALLOT
(City Clerk Myra Maravilla)
Overall Sentiment
Heidi J. Swan
Location:

Submitted At: 10:40am 07-25-22
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Can you please consider the following points as you draft your opposition statement, and note below references which confirm the following:

Cannabis dispensaries sell high potency products which endanger public health and can result in:
1) Cannabis induced psychosis, addiction and chronic vomiting 2) Greater risk of mental illness
3) Negative impacts on brain development for people under 26. 4) Higher incidence of Marijuana impaired drivers who are more likely to kill pedestrians & bicyclists than alcohol impaired drivers. Many of these accidents happen during the day. 5) Higher incidence of youth usage when a dispensary opens within 4 miles of their home. 6) Higher incidence of youth usage due to packaging designed to entice children. -CA Emergency room visits for cannabis rose 53% between 2016 and 2019 due to high potency THC. -There are no limits and no waning labels on the potency of the psychoactive ingredient, THC.

1.https://www.nytimes.com/2022/06/23/well/mind/teens-thc-cannabis.html *

2.https://www.nytimes.com/2022/06/23/well/mind/teens-thc-cannabis.html *

3.https://www.nytimes.com/2022/06/23/well/mind/teens-thc-cannabis.html *

4. https://www.forbes.com/sites/berlinschoolofcreativeleadership/2018/03/19/how-cell-phones-and-marijuana-arekilling-more-pedestrians-in-america/?sh=1ff79dc11b0f

5. https://pubmed.ncbi.nlm.nih.gov/33378105/

6. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2787715 *The New York Times
Psychosis, Addiction, Chronic Vomiting: As Weed Becomes More Potent, Teens Are Getting Sick With THC levels close to 100 percent, today’s cannabis products are making some teenagers highly dependent and dangerously ill.

Dabbing, a method of inhaling highly concentrated THC, has become increasingly popular among teenagers.

By Christina Caron
June 23, 2022, 5:00 a.m. ET
Carolyn Petty
Location: 90254, Hermosa Beach
Submitted At: 5:06pm 07-24-22
If the City Council prepares the written argument against the industry sponsored cannabis initiative, I request that you consider the following as part of the argument:

1. Dispensaries have large amounts of cash and product and attract crime, evidenced by armed robberies at dispensaries which happen regularly.

2. Our own Police Chief has stated that Cannabis dispensaries pose a risk to public safety and will be a drain on resources. Neighboring homes are at risk.

3. Residents should not believe dispensaries will bring revenues to the city. The industry sponsored initiative does not include a tax component and there is no guarantee the city sponsored tax measure will pass.

4. Dispensaries will operate “By Right” and without a Conditional Use Permit, an important tool which allows a city to yield control over an operator. Cannabis dispensaries will operate with fewer conditions than alcohol serving establishments.

5. This initiative will leave the city vulnerable to lawsuits. The dispensaries that are not granted permits to operate will most likely sue the city, as evidenced by lawsuits filed in other cities. The ordinance was written in a way to ensure enough ambiguity to bolster a position that the scoring process was unfair and favored the cannabis 1198
company who drove the initiative process.

6. Residents should not believe that the number of dispensaries will be capped at 2. It is specifically referenced in the initiative that more than 2 dispensaries may be permitted by means of a judicial remedy. Once the losing parties sue the city, a judge will most likely allow others to open. This has happened in Pasadena.

Additionally, I and others are concerned that the City Attorney’s impartial analysis may not be so impartial. The Manhattan Beach impartial analysis subtly advocates for dispensaries and should serve as an example of what NOT to write.

For example: It references these establishments as “By Right” and does not explain that a Conditional Use Permit is not required. Residents need to understand the distinction.

It specifically calls out one very minor provision in the scoring process which allocates 50 points out of a possible 1,000 points if a cannabis dispensary donates to a non-profit. That number is inconsequential but because it was specifically referenced, the implication is that this could be a major consideration. It is disturbing that out of all the scores, he extracts this very minor element. If this was 500 points or more, it may be worth highlighting, but 5% is unquestionably and objectively immaterial.

It references setbacks from schools and day care centers, but not residential dwellings.

In Hermosa Beach, prior analysis provide by City Attorney Jenkins points out the possible legal challenges driven by:
1) Conflicting language in the initiative, in particular, the continual references to the word “ministerial” when in fact the scoring process is not objective, but subjective.
2) The decision will be made by the City Manager, not a panel. This could easily lead to challenges. 3) The award of the 2 licenses is not subject to appeal; hence any aggrieved party (the cannabis operators who are NOT awarded a license) will have no choice but to sue in court if they wish to challenge the decision.

This is precisely why the city has a City Attorney - his job is to protect us from legal challenges. It is fairly apparent that this initiative was written this way intentionally, in order to create problems for the city. They knew exactly what they were doing when they wrote this - none of this was language was accidental. If this is not pointed out to the community, our residents will not realize the type of people that we are dealing with.

Please make sure he does his job and explains to the voters why this ordinance leaves Hermosa Beach vulnerable to lawsuits.

Thank you.
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City of Hermosa Beach
Staff Report
City Hall
1315 Valley Drive
Hermosa Beach, CA 90254
Staff Report
REPORT 22-0455
Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of July 26, 2022
CONSIDERATION OF PLACING A MEASURE ON THE NOVEMBER 8, 2022 GENERAL

MUNICIPAL ELECTION BALLOT ASKING VOTERS TO APPROVE A LOCAL BUSINESS TAX ON

CANNABIS BUSINESSES OPERATING WITHIN THE CITY OF HERMOSA BEACH SHOULD

CANNABIS BUSINESSES BE ALLOWED TO OPERATE IN THE CITY
(City Manager Suja Lowenthal)
Recommended Action:

Staff recommends City Council:

1. Consider adding a measure to add Chapter 3.44 to Title 3 (Revenue and Finance) of the Hermosa Beach Municipal Code, establishing a tax on cannabis businesses operating within the City of Hermosa Beach to November 8, 2022 General Municipal Election and select one or more argument writer(s) in favor of this measure should a determination be made to submit this measure to the voters;

2. Adopt a resolution calling for the placement of a measure on the ballot for the November 8, 2022 General Municipal Election for the submission to the qualified voters of an ordinance adding Chapter 3.44 to Title 3 (Revenue and Finance) of the Hermosa Beach Municipal Code, establishing a tax on cannabis businesses operating within the City of Hermosa Beach and requesting the Board of Supervisors render the election consolidation services adopted in Resolution No. 22-7317 for this measure (Attachment 1); and

3. Adopt a resolution setting priorities for filing a written argument and rebuttal argument regarding a proposed ordinance adding Chapter 3.44 to Title 3 (Revenue and Finance) of the Hermosa Beach Municipal Code, establishing a tax on cannabis businesses operating within the City of Hermosa Beach to be submitted to voters at the General Municipal Election to be held Tuesday, November 8, 2022, and directing City Attorney to prepare the impartial analysis (Attachment 2).

The Resolution to place the Cannabis Tax measure on the ballot must be approved by a two-thirds (2/3) vote of the membership of the City Council (4 affirmative votes) to pass.

Executive Summary:

Cannabis businesses are currently prohibited in Hermosa Beach. An initiative has qualified for the November 8, 2022 ballot that would allow retail cannabis in the City. Also, the Council has indicated City of Hermosa Beach Page 1 of 7 Printed on 7/21/2022
powered by Legistar™1200
Staff Report
REPORT 22-0455
November 8, 2022 ballot that would allow retail cannabis in the City. Also, the Council has indicated an interest in considering an amendment to the Hermosa Beach Municipal Code to allow delivery into the City of cannabis from businesses located outside the City.

If the initiative passes or the Council allows delivery at any time in the future, the resulting cannabis operations would be subject to the City’s existing business tax and State sales tax. Most cities in California that allow cannabis business operations impose a separate cannabis business tax on those businesses. Under Proposition 218, a new tax must be approved by a majority of the voters voting at a regular municipal election. If approved, and cannabis business were allowed to operate in the City either through the initiative measure passing or through City Council action in the future, this tax would ensure these businesses pay its fair share for City services, including the City services prioritized by residents including preventing thefts and property crimes, supporting public safety and 911 emergency response, recruiting and retaining well-trained police officers, protecting coastal waters and beaches from pollution, supporting safe schools, and keeping parks and public areas clean and safe.

The City Council has the opportunity to ask the voters whether to impose a cannabis tax, up to 15 percent, at the November 8, 2022 General Municipal Election, which would take effect only if cannabis sale is allowed in the City either by way of the initiative or through delivery. The next available election at which a tax may be placed on the ballot is November 2024.

Background:

Current State law allows qualified patients and their caregivers to cultivate and possess cannabis for personal use in order to treat certain medical conditions. It also allows the personal possession and use of recreational cannabis. However, cities retain their authority to reasonably regulate the business of cultivating, processing, and selling cannabis and related products. The sale of cannabis for any purpose is currently prohibited in the City of Hermosa Beach.

On November 17, 2021, the Hermosa Beach City Clerk received a petition from the cannabis industry for the purposes of adopting an initiative that would repeal Hermosa Beach’s existing ban on all commercial cannabis business operations and allow commercial cannabis operations in the City (Attachment 5). The initiative measure does not include a tax on cannabis. At City Council’s regular meeting on November 23, 2021, Mayor Detoy requested, and a unanimous vote of the City Council supported, directing staff to place on the next regular session agenda an item addressing the City’s options.

At its December 14, 2021 meeting, City Council directed the City Manager to form an Advisory Group to explore policy issues and provide City Council with input on whether the City’s current ban on cannabis business operations should be modified. The group held a total of six public meetings and at its sixth and final meeting on March 29, 2022, the Cannabis Advisory Group arrived at its final input and recommendations regarding whether the City’s current ban on cannabis business operations City of Hermosa Beach Page 2 of 7 Printed on 7/21/2022 powered by Legistar™1201
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and recommendations regarding whether the City’s current ban on cannabis business operations should be modified. With all nine members present, the group unanimously agreed that it was opposed to the cannabis industry initiative and the group’s final report and recommendations were presented to the City Council at its April 12, 2022 meeting.

At its March 22, 2022 meeting, the City Clerk reported to the Council that the initiative petition had acquired sufficient signatures to qualify for the ballot. The City Council opted not to adopt the initiative by ordinance but as required by law, to instead submit the ordinance, without alteration, to the voters in the November 8, 2022 Municipal Election.

At its May 24, 2022 meeting, the City Council voted to oppose the industry-sponsored initiative.

Council also directed staff to bring to Council for its consideration an ordinance allowing delivery of cannabis from outside the City and a measure that would impose a tax on cannabis businesses, should they be permitted in the City. State law requires any new local taxes to be approved by the voters (Proposition 218).

Past Council Actions
Meeting Date Description
November 23, 2021
(Regular Meeting)
Under Future Agenda Items, Mayor Detoy requested City
Council consider directing staff to place on the December 14, 2021 agenda an item addressing the City’s options in light of the cannabis industry initiative filed with the City Clerk. The request was supported by a unanimous vote of the City Council.

December 14, 2021
(Regular Meeting)
City Council directed the City Manager to form an Advisory Group, subject to the Brown Act, to explore policy issues and provide City Council with input on whether the City’s current ban on cannabis business operations should be
modified.

March 22, 2022
(Regular Meeting)
City Council opted not to adopt the cannabis industry
initiative by ordinance and instead submit the ordinance, without alteration, to the voters in the November 8, 2022 Municipal Election.

April 12, 2022 (Regular
Meeting)
City Council received and discussed the final report and recommendations of the Cannabis Advisory Group.

May 24, 2022 (Regular
Meeting)
City Council action to oppose the cannabis industrysponsored initiative filed with the City Clerk on November 17, 2021. Council also directed staff to bring to Council for its consideration an ordinance allowing delivery of cannabis from outside the City and a measure that would impose a tax on cannabis businesses, should they be permitted in the City.

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March 22, 2022
(Regular Meeting)
City Council opted not to adopt the cannabis industry
initiative by ordinance and instead submit the ordinance, without alteration, to the voters in the November 8, 2022 Municipal Election.

April 12, 2022 (Regular
Meeting)
City Council received and discussed the final report and recommendations of the Cannabis Advisory Group.

May 24, 2022 (Regular
Meeting)
City Council action to oppose the cannabis industrysponsored initiative filed with the City Clerk on November 17, 2021. Council also directed staff to bring to Council for its consideration an ordinance allowing delivery of cannabis from outside the City and a measure that would impose a tax on cannabis businesses, should they be permitted in the City.

Discussion:

Under the City’s current business tax scheme, a cannabis business operating in the City would pay an annual tax of (i) $218 per year if the sales were under $250,000 or (ii) $1 per $1,000 in gross receipts up to a maximum tax of $8,000 if sales exceed $250,000. A business located outside the City, but delivering cannabis within the City, would pay an annual flat tax of $218 per delivery vehicle.

Many cities that allow cannabis business operations have enacted a tax specifically directed at cannabis businesses. Such a tax would produce considerably more revenue for the City than application alone of the City’s existing generic business tax. By way of example, if two cannabis retail stores operated in the City, and delivery is allowed from outside the City, a maximum 15 percent tax would be estimated to produce $1,050,000-$2,250,000 in revenue.

The attached resolutions propose placing a measure on the ballot that would establish a maximum 15 percent general tax on cannabis businesses operating in the City of Hermosa Beach, should such businesses be allowed to open. The tax would only take effect if the industry initiative passes in The General Municipal Election in November or if the Council were to adopt an ordinance allowing cannabis delivery from outside the City. In those circumstances, if adopted, the tax would automatically apply to such businesses.

The measure is written broadly-applying to both the “wholesale” and “retail” ends of businesses, but only applies if a specific type of business is actually allowed to operate in the City. It would impose a tax on both medical and recreational cannabis businesses. This measure is solely a taxing measure -it does not allow any type of cannabis business to operate in the City. It creates a tax on businesses that are not currently allowed and may or may not be allowed in the future.

The proposed measure would:
• Establish a maximum 15 percent gross receipts tax on all cannabis businesses operating within the City. “Gross receipts” is defined broadly to cover any money, in-kind contributions, exchange of property, or any other items of value received by the business for cannabis cultivation, processing, manufacture, delivery, distribution, storing, or sale. “Gross receipts” are taken from the “top of the ledger”, meaning they are calculated before the business takes any City of Hermosa Beach Page 4 of 7 Printed on 7/21/2022
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taken from the “top of the ledger”, meaning they are calculated before the business takes any deductions for material and operational costs or losses to the business; and • Establish an additional tax with a maximum rate of twenty dollars ($20.00) per square foot rate of space utilized in connection with the cultivation/processing of cannabis or cannabis-infused products (such as tinctures, oils, concentrates, creams, candies and “medibles”). This would include “grow rooms”, space where cannabis is harvested and dried, “lab” space where cannabis is tested for quality control, the “factory floor” where cannabis is processed and manufactured into cannabis-infused products, packaging and labeling areas, and areas used for distribution and transport.

The above rates are maximum rates. The measure would permit the City Council to adjust tax rates up or down, by ordinance, provided no rate exceeds the maximum without future voter approval. The proposed maximum tax rate of 15 percent represents the highest amount that staff would recommend City Council consider.

As an alternative, Council may wish to consider proposing the lower maximum amount of 10 percent, which was the amount tested in the recently conducted community survey completed in May 2022.

The Hermosa Beach Community Survey found that overall, 40 percent of respondents strongly support, and 25 percent somewhat support, a gross receipts tax of up to 10 percent on cannabis businesses within the City. Voter support for a higher maximum rate may vary.

The measure proposes general taxes which would be deposited in the City’s General Fund and may be spent for any City program. The taxes are intended to be collected monthly. The measure contains detailed rules with respect to collection, administration, enforcement and refund procedures for the taxes. The measure also expressly provides that it will apply to any cannabis business that is now permitted in the City, or that may be allowed in the future.

Pursuant to Proposition 218 (California Constitution, Article XIIIC), all general taxes which are imposed, extended or increased must be submitted to the electorate and approved by a majority vote of the qualified electors voting in the election. As such, the Council is not being asked to adopt the proposed measure. Instead, staff requests that the Council consider adopting the two resolutions attached to this report in order to place the measure on the November 8, 2022 ballot so that Hermosa Beach voters can decide.

Attachment 1 is the principal resolution which calls the election to place the measure on the November 8, 2022 ballot. Under California Proposition 218, the upcoming November 8, 2022 Municipal General Election is an appropriate date to place a local tax measure on the ballot. The second resolution sets deadlines and rules for how and when interested persons may submit arguments for or against the proposed measure. Pursuant to Proposition 62, a two-thirds vote of the City of Hermosa Beach Page 5 of 7 Printed on 7/21/2022
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membership of the City Council is required to adopt the first resolution (4 affirmative votes).

Staff recommends that Council consider whether to place a cannabis tax on the November 8, 2022 ballot or instead await the outcome of the vote on the initiative. Should the Council not place the tax on the November 8, 2022 ballot and hereafter legalize delivery of cannabis into the City, the earliest opportunity to impose a tax on delivery would be November, 2024.

Argument in Favor and Against
The City Clerk will accept arguments in favor of and against the proposed measure by Tuesday, August 9, 2022, at 6 p.m. Each argument is limited to 300 words and will be titled “Argument in Favor of Measure __” and “Argument Against Measure __” in the Official Sample Ballot Booklet submitted to voters. Please email [email protected] <mailto:[email protected]> or submit a hard copy (Attachment 3) by the deadline.

Per California Elections Code Section 9282 and 9287, the City Council has priority to and may authorize one or two members of the City Council to author the Argument in Favor. Should the City Council choose not to authorize one or two members of the City Council to author the Argument in Favor and more than one argument is submitted (in favor or against) to the Elections Official, the Elections Official will select an argument in accordance with California Elections Code Section 9287.

Rebuttals to Arguments in Favor and Against
When the arguments are submitted, the Elections Official shall send a copy of the Argument in Favor to the authors of the Argument Against and the Argument Against to the authors of the Argument in Favor, along with a copy of the impartial analysis. An argument author may authorize another person to sign the rebuttal to the opposing argument using the form provided by the Elections Official (Attachment 4) and in accordance with California Elections Code Section 9285. Rebuttals to the Arguments in Favor and Against are due by Tuesday, August 23, 2022, at 6 p.m. and are limited to 250 words.

Consolidation with Los Angeles County
At its July 14, 2022 meeting, the City Council approved Resolution No. 22-7317 to consolidate the City of Hermosa Beach General Municipal Election with the Statewide General Election to be held on November 8, 2022. Approving the staff recommendation will allow Los Angeles County to carry out all consolidation services outlined in Resolution No. 22-7317 for this measure.

General Plan Consistency:

This report and associated recommendation have been evaluated for their consistency with the City’s General Plan. Relevant Policies are listed below:

Governance Element
Goal 1. A high degree of transparency and integrity in the decision-making process.

Policy:
· 1.1 Open Meetings. Maintain the community’s trust by holding meetings in which decisions City of Hermosa Beach Page 6 of 7 Printed on 7/21/2022
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· 1.1 Open Meetings. Maintain the community’s trust by holding meetings in which decisions are being made, that are open and available for all community members to attend, participate, or view remotely.

Goal 2. The Community is active and engaged in decision-making processes.

Policy:
· 2.3 Public participation guidelines. Establish parameters and guidelines to ensure public participation is promoted through diverse methods
Fiscal Impact:

Fiscal impacts associated with adding pages in the Official Sample Ballot pertaining to all measures being considered by the Council have been included in the budgeted total cost of the upcoming November 8, 2022 General Municipal Election of $110,000 in FY 2022-23. No additional cost to the budgeted total is expected from including this measure on the ballot.

If approved at a maximum 15 percent, and if cannabis sales are permitted in the City, the cannabis business tax is estimated to generate approximately $1,050,000-$2,250,000 in additional annual General Fund revenues.

Attachments:

1. Resolution (Cannabis Tax)-Add to Ballot & Consolidate

2. Resolution (Cannabis Tax)-Argument, Rebuttal & Impartial Analysis

3. Argument and Rebuttal Form

4. Authorization for Another Person to sign Rebuttal Argument Form

5. Initiative submitted to City Clerk on November 17, 2021

6. Link to November 23, 2021 City Council Agenda

7. Link to December 14, 2021 City Council Staff Report

8. Link to March 22, 2022 City Council Staff Report

9. Link to April 12, 2022 City Council Staff Report

10.Link to May 24, 2022 City Council Staff Report
Respectfully Submitted by: Mike Jenkins, City Attorney
Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Mike Jenkins, City Attorney
Approved: Suja Lowenthal, City Manager
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CITY OF HERMOSA BEACH
RESOLUTION NO. 22-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA

BEACH, CALIFORNIA, CALLING FOR THE PLACEMENT OF A MEASURE ON THE BALLOT FOR THE NOVEMBER 8, 2022 GENERAL MUNICIPAL

ELECTION FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF AN ORDINANCE ADDING CHAPTER 3.44 TO TITLE 3 (REVENUE AND

FINANCE) OF THE HERMOSA BEACH MUNICIPAL CODE, ESTABLISHING

A LOCAL BUSINESS TAX ON CANNABIS BUSINESSES OPERATING WITHIN

THE CITY OF HERMOSA BEACH AND REQUESTING THE BOARD OF

SUPERVISORS RENDER THE ELECTION CONSOLIDATION SERVICES
ADOPTED IN RESOLUTION NO. 22-7317 FOR THIS MEASURE
WHEREAS, pursuant to California Government Code sections 37100.5 and 37101, the City of Hermosa Beach has the authority to establish a local business tax upon cannabis businesses that engage in business in the City; and WHEREAS, pursuant to Section 9222 of the California Elections Code, the City Council has authority to place propositions on the ballot to be considered at a Municipal Election; and
WHEREAS, the City Council desires to submit to the voters an ordinance establishing both (i) a maximum 15% local general tax on the gross receipts received by any cannabis business through its operations and/or manufacturing; and (ii) a maximum $20.00 per square foot local general tax on the space utilized at such a business for cannabis cultivation; and
WHEREAS, the proposed cannabis business tax is a general tax the proceeds of which would be deposited into the City's general fund and which would pay for important City services such as law enforcement, street operations and maintenance, library services, parks and recreation services and general municipal services to the public; and
WHEREAS, on November 6, 1996, the voters of the State of California approved Proposition 218 (California Constitution, Article XIIIC), an amendment to the State Constitution which requires that all general taxes which are imposed, extended or increased must be submitted to the electorate and approved by a majority vote of the qualified electors voting in the election; and WHEREAS, the next regularly scheduled general election at which City Council members are to be elected is November 8, 2022; and 1207
WHEREAS, pursuant to Government Code section 53724 (“Proposition 62”), a two-thirds (2/3) vote of all members of the City Council is required to place the Measure on the November 8, 2022 ballot; and
WHEREAS, the specific terms relating to the cannabis business tax are provided for in the ordinance to be considered by the qualified voters, attached hereto as Exhibit "B" (the "Ordinance" or "Measure") and by this reference made an operative part hereof, and in accordance with all applicable laws.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The foregoing recitals are true and correct and are hereby incorporated and made an operative part of this Resolution.

SECTION 2. Submission of Ballot Measure. The City Council, pursuant to its right and authority as contained in California Propositions 62 and 218 and Elections Code section 9222, by a two-thirds vote of all members, hereby orders the Ordinance attached hereto as Exhibit "A" to be submitted to the qualified voters of the City at the General Municipal Election to be held on Tuesday, November 8, 2022. The proposed Ordinance shall be in the form attached hereto as Exhibit "B" to this Resolution and is incorporated by this reference as if fully set forth herein.

SECTION 3. Ballot Measure. The City Council, pursuant to its right and authority, does hereby order that the Measure shall be presented and printed upon the ballot submitted to the qualified voters in the manner and form set forth in this Section 3. On the ballot to be submitted to the qualified voters at the Regular Municipal Election to be held on Tuesday, November 8, 2022, in addition to any other matters required by law, there shall be printed substantially the following:

Shall an ordinance be adopted enacting a local
business tax on cannabis/hemp businesses up to $20.00
per square foot for cultivation and up to 15% of gross
receipts for all other cannabis/hemp businesses,
estimated to generate $1,050,000 - $2,250,000 annually
(assuming two retail stores operating and taxed at
maximum rate), until ended by voters, for general
governmental use, subject to independent audits, to be
effective only if cannabis business operations are
allowed in the City?
Yes
No
1208
SECTION 4. Conduct of Election. The City Clerk is authorized, instructed, and directed to procure and furnish any and all official ballots, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 5. Notice of the Election. Notice of the election is hereby given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law.

SECTION 6. Placement on the Ballot. The full text of the Measure shall not be printed in the Sample Ballot Booklet, and a statement shall be printed on the ballot pursuant to Section 9223 of the Elections Code advising voters that they may obtain a copy of this Ordinance/Measure at no cost, upon request made to the City Clerk.

SECTION 7. Consolidation with Los Angeles County. The City of Hermosa Beach respectfully requests that the election consolidation services, outlined in Resolution No. 22-7317, attached hereto as “Exhibit A,” include this measure.

SECTION 8. Filing with County. The City Clerk shall, not later than the 88th day prior to the General Municipal Election to be held on Tuesday, November 8, 2022, file with the Los Angeles Registrar-Recorder/County Clerk a certified copy of this Resolution and enter it into the book of original resolutions, including the Ordinance/Measure attached hereto as Exhibit "B.”
SECTION 9. Public Examination. Pursuant to California Elections Code section 9295, this Measure will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the voter information guide. The Clerk shall post notice in the Clerk's office of the specific dates that the examination period will run.

SECTION 10. CEQA. The City Council hereby finds and determines that the ballot measure relates to organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment, and therefore is not a project within the meaning of the California Environmental Quality Act ("CEQA") and the State CEQA Guidelines, section 15378(b)(5).

SECTION 11. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Resolution 1209
which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof.

SECTION 12. Effective Date of Resolution. This Resolution shall take effect immediately upon its adoption.

SECTION 13. The City Clerk shall certify to the adoption of this Resolution.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Hermosa Beach, California, at a regular meeting held on this 26th day of July, 2022.
__________________________________________________________________________ Michael Detoy
PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:
____________________________________ ___________________________________ Myra Maravilla Michael Jenkins
City Clerk City Attorney
1210
Exhibit “A”
Resolution No. 7317 - Requesting Consolidation Services From Los Angeles County
[attached behind this page]
1211

CITY OF HERMOSA BEACH
RESOLUTION 22-7317

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,

CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY

OF LOS ANGELES TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2022 WITH THE STATEWIDE GENERAL ELECTION TO BE HELD IN THE COUNTY OF LOS ANGELES THE SAME DAY;

TO AUTHORIZE THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS

ANGELES TO CANVASS THE RETURNS OF SAID GENERAL MUNICIPAL ELECTION; AND TO REQUEST THAT THE REGISTRAR-RECORDER/COUNTY

CLERK OF SAID COUNTY BE PERMITTED TO RENDER FULL SERVICES TO THE

CITY OF HERMOSA BEACH RELATING TO THE CONDUCT OF SAID

GENERAL MUNICIPAL ELECTION PURSUANT TO CALIFORNIA ELECTIONS CODE SECTION 10403
WHEREAS, a General Municipal Election has been called by the City of Hermosa Beach to be held in the City of Hermosa Beach on November 8, 2022; and,
WHEREAS, a Statewide General Election to be held in the County of Los Angeles has been or will be called to be held on November 8, 2022; and, WHEREAS, it is desired, pursuant to the authority found in California Elections Code section 10403, to consolidate said General Municipal Election with said Statewide General Election to be held in the County of Los Angeles; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hermosa Beach as follows:

SECTION 1: The Board of Supervisors of the County of Los Angeles is hereby respectfully requested to order the consolidation of said General Municipal Election to be held on November 8, 2022, with the Statewide General Election to be held in the County of Los Angeles on November 8, 2022.

SECTION 2: The Board of Supervisors of the County of Los Angeles is hereby further respectfully requested to place upon the same ballot as that provided DocuSign Envelope ID: 0489BBA2-28BA-4F25-AAF2-5733D7D521E3 1212

for said Statewide General Election to be held in the County of Los Angeles on November 8, 2022, the names of the candidates for the offices of Councilmember, Full Term
Councilmember, Full Term
Councilmember, Full Term
to be submitted to the electors of the City of Hermosa Beach at said General Municipal Election.

SECTION 3: The City of Hermosa Beach acknowledges that the consolidated election will be held and conducted in the manner prescribed in Section 10418 of the California Elections Code.

SECTION 4: The Registrar-Recorder/County Clerk of the County of Los Angele acknowledges that an estimate was given to the City of Hermosa Beach on the costs of the consolidated election. Should the costs exceed twenty percent of the estimation, the Registrar-Recorder/County Clerk of the County of Los Angele will notify the City of Hermosa Beach in writing.

SECTION 5: The Board of Supervisors of the County of Los Angeles is hereby authorized and respectfully requested to canvass the returns of said General Municipal Election.

SECTION 6: The Board of Supervisors of the County of Los Angeles is hereby authorized and respectfully requested to authorize and permit the RegistrarRecorder/County Clerk of the County of Los Angeles to:
a) Print and supply ballots for said City of Hermosa Beach General Municipal Election;
b) Mail the City’s sample ballots and candidate statements of qualifications to the electors of the City of Hermosa Beach as part of the same material that will be mailed to the voters of the Statewide General Election to be held in the County of Los Angeles;
c) Perform such other services as may be required for the consolidation and conduct of said City of Hermosa Beach General Municipal Election with said Statewide General Election to be held in the County of Los Angeles.

DocuSign Envelope ID: 0489BBA2-28BA-4F25-AAF2-5733D7D521E3 1213

SECTION 7: The vote centers for the election shall be open as required during the identified voting period pursuant to California Elections Code sections 4007 and 14401.

SECTION 8: The City shall reimburse the County of Los Angeles in full for the services performed on behalf of the City upon the presentation of a bill by the County.

SECTION 9: The City Clerk is hereby directed to deliver a certified copy of this resolution to the Board of Supervisors of the County of Los Angeles and to transmit an electronic copy to the Board of Supervisors and the RegistrarRecorder/County Clerk of the County of Los Angeles.

PASSED, APPROVED and ADOPTED this 14th day of June 2022. __________________________________________________________________________ PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:

Myra Maravilla Michael Jenkins
City Clerk City Attorney
DocuSign Envelope ID: 0489BBA2-28BA-4F25-AAF2-5733D7D521E3 1214
State of California )
County of Los Angeles ) ss
City of Hermosa Beach )
June 16, 2022
Certification of Council Action
RESOLUTION NO. 22-7317

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH,

CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY

OF LOS ANGELES TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2022 WITH THE STATEWIDE GENERAL ELECTION TO BE HELD IN THE COUNTY OF LOS ANGELES THE SAME DAY;

TO AUTHORIZE THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS

ANGELES TO CANVASS THE RETURNS OF SAID GENERAL MUNICIPAL ELECTION; AND TO REQUEST THAT THE REGISTRAR-RECORDER/COUNTY

CLERK OF SAID COUNTY BE PERMITTED TO RENDER FULL SERVICES TO THE

CITY OF HERMOSA BEACH RELATING TO THE CONDUCT OF SAID

GENERAL MUNICIPAL ELECTION PURSUANT TO CALIFORNIA ELECTIONS CODE SECTION 10403
I, Myra Maravilla, City Clerk of the City of Hermosa Beach do hereby certify that the above and foregoing Resolution 22-7317 was duly approved and adopted by the City Council of said City at its regular meeting thereof held on the 14th day of June, 2022 and passed by the following vote:

AYES: MAYOR DETOY, MAYOR PRO TEMPORE JACKSON, COUNCILMEMBERS

ARMATO, CAMPBELL, MASSEY
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
________________________________
Myra Maravilla
City Clerk
DocuSign Envelope ID: 0489BBA2-28BA-4F25-AAF2-5733D7D521E3 1215
EXHIBIT "A"
Cannabis Tax Ordinance
[attached behind this page]
1216

CITY OF HERMOSA BEACH
ORDINANCE NO. 22-

AN ORDINANCE OF THE PEOPLE OF THE CITY OF HERMOSA BEACH, CALIFORNIA, ADDING CHAPTER 3.44 (CANNABIS BUSINESS TAX) TO TITLE 3 (REVENUE AND FINANCE) OF THE HERMOSA BEACH MUNICIPAL

CODE ESTABLISHING A TAX ON CANNABIS BUSINESSES OPERATING

WITHIN THE CITY OF HERMOSA BEACH

NOW THEREFORE, THE PEOPLE OF THE CITY OF HERMOSA BEACH DO ORDAIN AS FOLLOWS:

SECTION 1. Subject to the approval of a majority of the voters of the City of Hermosa Beach at the Regular Municipal Election so designated by the City Council in a separate resolution placing the proposal on the ballot for such election, Chapter 3.44 (Cannabis Business Tax) is hereby added to Title 3 (Revenue and Finance) of the Hermosa Beach Municipal Code to read as follows:
"Chapter 3.44 CANNABIS BUSINESS TAX

3.44.010 Title.

3.44.020 Authority and purpose.

3.44.030 Intent.

3.44.040 Definitions.

3.44.050 Tax imposed.

3.44.060 Registration, reporting, and remittance of tax.

3.44.070 Payments and communications — timely remittance.

3.44.080 Payment — when taxes deemed delinquent.

3.44.090 Notice not required by City.

3.44.100 Penalties and interest.

3.44.110 Refunds and credits.

3.44.120 Refunds and procedures.

3.44.130 Personal cultivation not taxed.

3.44.140 Administration of the tax.

3.44.150 Appeal procedure.

3.44.160 Enforcement — action to collect.

3.44.170 Apportionment.

3.44.180 Constitutionality and legality.

3.44.190 Audit and examination of premises and records.

3.44.200 Other licenses, permits, taxes or charges.

3.44.210 Payment of tax does not authorize unlawful business.

3.44.220 Deficiency determinations.

3.44.230 Failure to report — nonpayment, fraud.

3.44.240 Tax assessment — notice requirements.

3.44.250 Tax assessment — hearing, application, and determination. 1217

3.44.260 Conviction for violation — taxes not waived.

3.44.270 Violation deemed misdemeanor.

3.44.280 Severability.

3.44.290 Remedies cumulative.

3.44.300 Amendment or repeal.

3.44.010 Title.

This ordinance shall be known as the Cannabis Business Tax Ordinance.

3.44.020 Authority and Purpose.

The purpose of this Ordinance is to adopt a tax, for revenue purposes, pursuant to Sections 37101 and 37100.5 of the California Government Code, upon cannabis businesses that engage in business in the City. The Cannabis Business Tax is levied based upon business gross receipts except for commercial cannabis or industrial hemp cultivation which shall be taxed on square footage. It is not a sales and use tax, a tax upon income, or a tax upon real property. The Cannabis Business Tax is a general tax enacted solely for unrestricted general governmental purposes of the City and not for specific purposes. All of the proceeds from the tax imposed by this chapter shall be placed in the City's general fund and be available for any lawful municipal purpose. The tax established under this Chapter shall not be separately identified or otherwise specifically assessed or charged to any customer or client of a cannabis business.

3.44.030 Intent.

The intent of this Ordinance is to levy a tax on all cannabis or industrial hemp businesses that operate in the City, regardless of whether such business would have been legal at the time this chapter was adopted. Nothing in this chapter shall be interpreted to authorize or permit any business activity that would not otherwise be legal or permissible under laws applicable to the activity at the time the activity is undertaken.

3.44.040 Definitions.

The following words and phrases shall have the meanings set forth below when used in this chapter:

A. "Business" shall include all activities engaged in or caused to be engaged in within the City, including any commercial or industrial enterprise, trade, profession, occupation, vocation, calling, or livelihood, whether or not carried on for gain or profit, but shall not include the services rendered by an employee to his or her employer.
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B. "Calendar year" means January 1 through December 31, of the same year.

C. "Cannabis" means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" shall not include "industrial hemp," unless otherwise specified.

D. "Cannabis product" means raw cannabis that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product. "Cannabis product" also means cannabis products as defined by Section 11018.1 of the California Health and Safety Code and is not limited to medicinal cannabis products.

E. "Canopy" means all areas occupied by any portion of a cannabis or industrial hemp plant whether contiguous or noncontiguous on any one site.

When plants occupy multiple horizontal planes (as when plants are placed on shelving above other plants) each plane shall be counted as a separate canopy area.

F. "Cannabis business" means any business involving cannabis or industrial hemp, including but not limited to cultivating, transporting, distributing, manufacturing, compounding, converting, processing, preparing, storing, packaging, delivering, testing, dispensing, retailing and wholesaling of cannabis, cannabis products, industrial hemp, industrial hemp products or of ancillary products and accessories, whether or not carried on for gain or profit.

G. "Cannabis business tax" or "business tax," means the tax due pursuant to this chapter for engaging in a cannabis business in the City.

H. "Commercial cannabis cultivation" means cultivation of cannabis or industrial hemp undertaken in the course of conducting a cannabis business.

I. "Commercial cannabis permit" means a permit issued by the City to a person to authorize that person to operate or engage in a cannabis business within the City.

J. "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis or industrial hemp and includes, but is not limited to, the operation of a nursery. 1219
K. "Employee" means each and every person engaged in the operation or conduct of any business, whether as owner, member of the owner's family, partner, associate, agent, manager or solicitor, and each and every other person employed or working in such business for a wage, salary, commission, barter or any other form of compensation.

L. "Engaged in a cannabis business" means the commencing, conducting, operating, managing or carrying on of a cannabis business, whether done as owner, or by means of an officer, agent, manager, employee, or otherwise, whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities. A person shall be deemed engaged in business within the City if:

1. Such person or person's employee maintains a fixed place of business within the City for the benefit or partial benefit of such person;

2. Such person or person's employee owns or leases real property within the City for business purposes;

3. Such person or person's employee regularly maintains a stock of tangible personal property in the City for sale in the ordinary course of business;

4. Such person or person's employee regularly conducts
solicitation of business within the City; or

5. Such person or person's employee performs work or renders services in the City.

The foregoing specified activities shall not be a limitation on the meaning of "engaged in business."
M. "Evidence of doing business" means evidence such as, without limitation, use of signs, circulars, cards or any other advertising media, including the use of internet or telephone solicitation, or representation to a government agency or to the public that such person is engaged in a cannabis business in the City.

N. "Gross Receipts," except as otherwise specifically provided, means, whether designated a sales price, royalty, rent, slotting fee, commission, dividend, or other designation, the total amount (including all receipts, cash, credits, services and property of any kind or nature) received or payable for sales of goods, wares or merchandise, or for the performance of any act or service of any nature for which a charge is made or credit allowed (whether such service, act 1220
or employment is done as part of or in connection with the sale of goods, wares, merchandise or not), without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, losses or any other expense whatsoever. However, the following shall be excluded from Gross Receipts:

1. Cash discounts where allowed and taken on sales;

2. Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;

3. Such part of the sale price of any property returned by purchasers to the seller as refunded by the seller by way of cash or credit allowances or return of refundable deposits previously included in gross receipts;

4. Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the taxpayer in the regular course of the taxpayer's business;

5. Cash value of sales, trades or transactions between
departments or units of the same business located in the City of Hermosa Beach or if authorized by the Tax Administrator in writing in accordance with section 3.44.140(B);

6. Whenever there are included within the gross receipts amounts which reflect sales for which credit is extended and such amount proved uncollectible in a subsequent year, those amounts may be excluded from the gross receipts in the period they prove to be uncollectible; provided, however, if the whole or portion of such amounts excluded as uncollectible are subsequently collected they shall be included in the amount of gross receipts for the period when they are recovered;

7. Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded;

8. Amounts collected for others where the business is acting as an agent or trustee and to the extent that such amounts are paid to those for whom collected. These agents or trustees must provide the Tax Administrator with the names and the addresses of the others and the amounts paid to them. This exclusion shall not apply to any fees, percentages, or other payments retained by the agent or trustees; 1221

9. Retail sales of t-shirts, sweaters, hats, stickers, key chains, bags, books, posters, rolling papers, cannabis accessories such as pipes, pipe screens, vape pen batteries (without cannabis or industrial hemp) or other personal tangible property which the Tax Administrator has excluded in writing by issuing an administrative ruling per Section 3.44.140 shall not be subject to the cannabis business tax under this chapter. However, any business activities not subject to this chapter as a result of an administrative ruling shall be subject to the appropriate business tax provisions of Title 3 or any other Title or Chapter of this code as determined by the Tax Administrator.

O. "Industrial hemp" means a crop that is limited to types of the plant Cannabis sativa L. having no more than three-tenths of 1 percent tetrahydrocannabinol (THC) contained in the dried flowering tops, whether growing or not; the seeds of the plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin produced therefrom.

P. "Industrial hemp products" "Industrial hemp products" means any raw hemp that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product. "Hemp product" also means hemp products as defined by Section 11018.5 of the California Health and Safety Code.

Q. "Nursery" means a facility or part of a facility that is used only for producing clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis or industrial hemp industrial hemp.

R. "Person" means an individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, whether organized as a nonprofit or for-profit entity, and includes the plural as well as the singular number.

S. "Processing" means a cultivation site that conducts only trimming, drying, curing, grading, packaging, or labeling of cannabis, industrial hemp and non-manufactured cannabis products.

T. “Retail Sale,” "Sale," "Sell" and "to sell" means and includes any retail sale, exchange, or barter. It shall also mean any transaction whereby, for any consideration, title to cannabis, cannabis products, industrial hemp and/or industrial hemp products are transferred from one person to another and includes the delivery of cannabis, cannabis products, industrial hemp and/or industrial 1222
hemp products pursuant to an order placed for the purchase of the same, but does not include the return of cannabis, cannabis products, industrial hemp and/or industrial hemp products to the licensee from whom the cannabis, cannabis product, industrial hemp and/or industrial hemp product was purchased.

U. "State" means the State of California.

V. "State license," "license," or "registration" means a state license issued pursuant to California Business & Professions Code Section 26050, and all other applicable state laws, required for operating a cannabis business.

W. "Tax Administrator" means the Director of Finance of the City of Hermosa Beach or his or her designee.

X. "Testing Laboratory" means a cannabis business that (i) offers or performs tests of cannabis, cannabis products, industrial hemp and/or industrial hemp products (ii) offers no service other than such tests, (iii) sells no products, excepting only testing supplies and materials, (iv) is accredited by an accrediting body that is independent from all other persons involved in the cannabis industry in the state and (v) is registered with the Bureau of Cannabis Control or other state agency.

3.44.050 Tax Imposed.

A. Beginning January 1, 2023, there is imposed upon each person who is engaged in business as a cannabis business a cannabis business tax. Such tax is payable regardless of whether the business has been issued a business license or commercial cannabis permit to operate lawfully in the City or is operating unlawfully. The City's acceptance of a cannabis business tax payment from a cannabis business operating illegally shall not constitute the City's approval or consent to such illegal operations.

B. The maximum rate of the cannabis business tax shall be calculated as follows:

1. For every person engaged in commercial cannabis cultivation, including cultivation of industrial hemp, in the City, the maximum rate shall be Twenty dollars ($20.00) per square foot of canopy space used for cultivation or nursery.
a. On January 1, 2024 and on each January 1 thereafter, the maximum tax rate specified above shall increase by the percentage increase in the Consumer Price Index ("CPI") for all urban 1223
consumers in the Los Angeles-Long Beach-Anaheim area as published by the United States Government Bureau of Labor Statistics or three percent (3%) whichever is greater.

2. For every person engaged in the operation of a testing laboratory, retail sales, distribution, manufacturing and/or processing for cannabis, cannabis products, industrial hemp and/or industrial hemp products, or any other type of cannabis business not described in this section 3.44.050 said person shall be subject to the maximum tax rate not to exceed fifteen percent (15%) of gross receipts generated by that cannabis business activity.

C. Persons subject to the cannabis business tax shall register with the City and pay the registration fee pursuant to Section 3.44.060. They shall also be required to obtain a business license pursuant to Title 5 of this code; provided, however, that cannabis business activities subject to the cannabis business tax shall be excluded from determining the amount of any business license tax payable under Title 5.

D. The rates set forth above may be adjusted by the City Council from time to time as more particularly described in Section 3.44.300, by ordinance or resolution, subject to the maximum rates set forth in subparagraph (B) above.

3.44.060 Registration, reporting and remittance of tax.

A. Registration of Cannabis Business. All cannabis businesses shall be required to annually register as follows:

1. All persons engaging in business as a cannabis business, whether an existing, newly established or acquired business shall register with the Tax Administrator upon receipt of any other required entitlements from the City and prior to commencing operation and shall annually renew such registration on or prior to the annual anniversary of the registration each year thereafter. In registering, such persons shall furnish to the Tax Administrator a sworn statement, upon a form provided by the Tax Administrator, setting forth the following information:
a. The name of the business;
b. The names and addresses of each owner;
c. The exact nature or kind of business;
d. The place where such business is to be carried on; and 1224
e. Any additional information which the Tax Administrator may require.

B. An annual registration fee in an amount determined by resolution of the City Council shall be presented with the sworn statement submitted under this section. This fee shall not be considered a tax and shall be in such amount as to only recover the City’s actual cost of processing registration and enforcement.

C. The cannabis business tax imposed by this chapter shall be paid, in arrears, on a monthly basis. Each person owing a cannabis business tax each calendar month shall, no later than the fifteenth day following the close of the calendar month, file with the Tax Administrator a statement ("tax statement") of the tax owed for that calendar month and the basis for calculating that tax. The Tax Administrator may require that the tax statement be submitted on a form prescribed by the Tax Administrator. The tax for each calendar month shall be due and payable on that same date that the tax statement for the calendar month is due.

D. Upon cessation of a cannabis business, tax statements and payments shall be immediately due for all calendar months up to the calendar month during which cessation occurred.

E. The Tax Administrator may, at his or her discretion, establish alternative reporting and payment periods for any taxpayer as the Tax Administrator deems necessary to ensure effective collection of the cannabis business tax. The Tax Administrator may also require that a deposit, to be applied against the taxes for a calendar month, be made by a taxpayer at the beginning of that calendar month. In no event shall the deposit required by the Tax Administrator exceed the tax amount he or she projects will be owed by the taxpayer for the calendar month. The Tax Administrator may require that a taxpayer make payments via a cashier's check, money order, wire transfer, or similar instrument.

3.44.070 Payments and communications - timely remittance.

Whenever any payment, statement, report, request or other communication is due, it must be received by the Tax Administrator or postmarked on or before the final due date. If the due date would fall on a Friday, Saturday, Sunday, or a holiday observed by the City, the due date shall be the next regular business day on which the City is open to the public.

3.44.080 Payment - when taxes deemed delinquent.
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Unless otherwise specifically provided under other provisions of this chapter, the taxes required to be paid pursuant to this chapter shall be deemed delinquent if not received by the Tax Administrator on or before the due date as specified in Sections 3.44.060 and 3.44.070.

3.44.090 Notice not required by the City.

The City may as a courtesy send a tax notice to the cannabis business which owes the City a cannabis business tax. However, the Tax Administrator is not required to send a delinquency or other notice or bill to any person subject to the provisions of this chapter. Failure to send such notice or bill shall not affect the validity of any tax or penalty due under the provisions of this chapter.

3.44.100 Penalties and interest.

A. Any person who fails or refuses to pay any cannabis business tax required to be paid pursuant to this chapter on or before the due date shall pay penalties and interest as follows:

1. A penalty equal to ten percent (10%) of the amount of the tax, in addition to the amount of the tax, plus interest on the unpaid tax calculated from the due date of the tax at the rate of one percent (1.0%) per month.

2. If the tax remains unpaid for a period exceeding one calendar month beyond the due date, an additional penalty equal to twenty-five percent (25%) of the amount of the tax, plus interest at the rate of one percent (1.0%) per month on the unpaid tax and on the unpaid penalties

3. Interest shall be applied at the rate of one percent (1.0%) per month on the first day of the month for the full month and will continue to accrue monthly on the tax and penalty until the balance is paid in full.

B. Whenever a check or electronic payment is submitted in payment of a cannabis business tax and the payment is subsequently returned unpaid by the bank for any reason, the taxpayer will be liable for the tax amount due plus any fees, penalties and interest as provided for in this chapter, and any other amount allowed under state law.

3.44.110 Refunds and credits.

A. No refund shall be made of any tax collected pursuant to this chapter, except as provided in Section 3.44.120.
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B. No refund of any tax collected pursuant to this chapter shall be made because of the discontinuation, dissolution, or other termination of a business.

3.44.120 Refunds and procedures.

A. Whenever the amount of any cannabis business tax, penalty or interest has been overpaid, paid more than once, or has been erroneously collected or received by the City under this chapter, it may be refunded to the claimant who paid the tax provided that a written claim for refund is filed with the Tax Administrator within one (1) year of the date the tax was originally due or paid, whichever came first.

B. The Tax Administrator, his or her designee or any other City officer charged with the administration of this chapter shall have the right to examine and audit all the books and business records of the claimant in order to determine the eligibility of the claimant to the claimed refund. No claim for refund shall be allowed if the claimant refuses to allow such examination of claimant's books and business records after request by the Tax Administrator to do so.

C. In the event that the cannabis business tax was erroneously paid in an amount in excess of the tax due, and the error is attributable to the City, the City shall refund the amount of tax erroneously paid; provided that (i) a claim for refund has been timely filed with the Tax Administrator; and (ii) the refund cannot exceed, under any circumstance, the amount of tax overpaid during the twelve months preceding the last month for which the claim states the tax was overpaid.

3.44.130 Personal Cultivation Not Taxed.

The provisions of this chapter shall not apply to personal cannabis cultivation or personal use of cannabis, to the extent those activities are authorized in the "Medicinal and Adult Use Cannabis Regulation and Safety Act," as may be amended. This chapter shall not apply to personal use of cannabis that is specifically exempted from state licensing requirements, that meets the definition of personal use or equivalent terminology under state law, and provided that the individual receives no compensation whatsoever related to that personal cultivation or use.

3.44.140 Administration of the tax.

A. It shall be the duty of the Tax Administrator to collect the taxes, penalties, fees, and perform the duties required by this chapter. 1227
B. For purposes of administration and enforcement of this chapter generally, the Tax Administrator may from time to time promulgate such administrative interpretations, rules, and procedures consistent with the purpose, intent, and express terms of this chapter as he or she deems necessary to implement or clarify such provisions or aid in enforcement.

C. The Tax Administrator may take such administrative actions as needed to administer the cannabis business tax, including but not limited to:

1. Provide to all cannabis business taxpayers forms for the reporting of the tax;

2. Provide information to any taxpayer concerning the provisions of this chapter;

3. Receive and record all taxes remitted to the City as provided in this chapter;

4. Maintain records of taxpayer reports and taxes collected pursuant to this chapter;

5. Assess penalties and interest to taxpayers pursuant to this chapter;

6. Determine amounts owed under and enforce collection
pursuant to this chapter.

3.44.150 Appeal procedure.

Any taxpayer aggrieved by any decision of the Tax Administrator with respect to the amount of tax, interest, penalties and fees, if any, due under this chapter may appeal to the City Manager by filing a notice of appeal with the City Clerk within thirty (30) calendar days of the serving or mailing of the Tax Administrator's determination of the amount due. The City Clerk, or his or her designee, shall fix a time and place for hearing such appeal, and the City Clerk, or his or her designee, shall give notice in writing to such operator at the last known place of address. The finding of the City Manager shall be final and conclusive and shall be served upon the appellant in the manner prescribed by this section 3.44.150 for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of the notice.

3.44.160 Enforcement - action to collect.
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Any taxes, penalties and/or fees required to be paid under the provisions of this chapter shall be deemed a debt owed to the City. Any person owing money to the City under the provisions of this chapter shall be liable in an action brought in the name of the City for the recovery of such debt. The provisions of this section shall not be deemed a limitation upon the right of the City to bring any other action including criminal, civil and equitable actions, based upon the failure to pay the tax, penalties and/or fees imposed by this chapter or the failure to comply with any of the provisions of this chapter.

3.44.170 Apportionment.

If a business subject to the tax is operating both within and outside the City, it is the intent of the City to apply the cannabis business tax so that the measure of the tax fairly reflects the proportion of the taxed activity actually carried on in the City. To the extent federal or state law requires that any tax due from any taxpayer be apportioned, the taxpayer may indicate said apportionment on his or her tax return. The Tax Administrator may promulgate administrative procedures for apportionment as he or she finds useful or necessary.

3.44.180 Constitutionality and legality.

This tax is intended to be applied in a manner consistent with the United States and California Constitutions and state law. None of the tax provided for by this chapter shall be applied in a manner that causes an undue burden upon interstate commerce, a violation of the equal protection or due process clauses of the Constitutions of the United States or the State of California or a violation of any other provision of the California Constitution or state law. If a person believes that the tax, as applied to him or her, is impermissible under applicable law, he or she may request that the Tax Administrator release him or her from the obligation to pay the impermissible portion of the tax.

3.44.190 Audit and examination of premises and records.

A. For the purpose of ascertaining the amount of cannabis business tax owed or verifying any representations made by any taxpayer to the City in support of his or her tax calculation, the Tax Administrator shall have the power to inspect any location where commercial cannabis cultivation occurs and to audit and examine all books and records (including, but not limited to bookkeeping records, state and federal income tax returns, and other records relating to the gross receipts of the business) of persons engaged in cannabis businesses. In conducting such investigation, the Tax Administrator shall have the power to inspect any equipment, such as computers or point of sale machines, that may contain such records.
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B. It shall be the duty of every person liable for the collection and payment to the City of any tax imposed by this chapter to keep and preserve, for a period of at least three (3) years, all records as may be necessary to determine the amount of such tax as he or she may have been liable for the collection of and payment to the City, which records the Tax Administrator or his/her designee shall have the right to inspect at all reasonable times.

3.44.200 Other licenses, permits, taxes, fees or charges.

A. Nothing contained in this chapter shall be deemed to repeal, amend, be in lieu of, replace or in any way affect any requirements for any commercial cannabis permit or City license required by, under or by virtue of any provision of any other Title or Chapter of this code or any other ordinance or resolution of the City, nor be deemed to repeal, amend, be in lieu of, replace or in any way affect any tax, fee or other charge imposed, assessed or required under any other Title or Chapter of this code or any other ordinance or resolution of the City. Any references made or contained in any other Title or Chapter of this code to any licenses, license taxes, fees, or charges, or to any schedule of license fees, shall be deemed to refer to the licenses, license taxes, fees or charges, or schedule of license fees, provided for in other Titles or Chapters of this code.

B. The Tax Administrator may revoke or refuse to renew the license required by Section 5.04.020 of this code for any business that is delinquent in the payment of any tax due pursuant to this section or that fails to make a deposit required by the Tax Administrator pursuant to Section 3.44.060. A commercial cannabis permit issued under the Hermosa Beach Municipal Code may be revoked, suspended or not renewed in the event that the business holding that permit has failed to (i) make a deposit required by the Tax Administrator pursuant to Section 3.44.060(E) or (ii) timely pay all taxes, interest and penalties owed by that business under this chapter.

3.44.210 Payment of tax does not authorize unlawful business.

A. The payment of a cannabis business tax required by this chapter, and its acceptance by the City, shall not entitle any person to carry on any cannabis business unless the person has complied with all of the requirements of this code and all other applicable state laws.

B. No tax paid under the provisions of this chapter shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any business in violation of any local or state law.
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3.44.220 Deficiency determinations.

If the Tax Administrator is not satisfied that any statement filed as required under the provisions of this chapter is correct, or that the amount of tax is correctly computed, he or she may compute and determine the amount to be paid and make a deficiency determination upon the basis of the facts contained in the statement or upon the basis of any information in his or her possession or that may come into his or her possession within three (3) years of the date the tax was originally due and payable. One or more deficiency determinations of the amount of tax due for a period or periods may be made. When a person ceases engaging in a cannabis business, a deficiency determination may be made at any time within three (3) years thereafter as to any liability arising from engaging in such cannabis business whether or not a deficiency determination is issued prior to the date the tax would otherwise be due. Whenever a deficiency determination is made, a notice shall be given to the person concerned in the same manner as notices of assessment are given under Section 3.44.240.

3.44.230 Failure to report—nonpayment, fraud.

A. Under any of the following circumstances, the Tax Administrator may make and give notice of an assessment of the amount of tax owed by a person under this chapter at any time:

1. If the person has not filed a complete statement required under the provisions of this chapter;

2. If the person has not paid the tax due under the provisions of this chapter;

3. If the person has not, after demand by the Tax Administrator, filed a corrected statement, or furnished to the Tax Administrator adequate substantiation of the information contained in a statement already filed, or paid any additional amount of tax due under the provisions of this chapter; or

4. If the Tax Administrator determines that the nonpayment of any cannabis business tax due under this chapter is due to fraud, a penalty of twenty-five percent (25%) of the amount of the tax shall be added thereto in addition to penalties and interest otherwise payable under this chapter and any other penalties allowed by law.

B. The notice of assessment shall separately set forth the amount of any tax known by the Tax Administrator to be due or estimated by the Tax Administrator, after consideration of all information within the Tax Administrator's 1231
knowledge concerning the business and activities of the person assessed, to be due under each applicable provision of this chapter and shall include the amount of any penalties or interest accrued on each amount to the date of the notice of assessment.

3.44.240 Tax assessment - notice requirements.

The notice of assessment shall be served upon the person either by personal delivery, by overnight delivery by a nationally-recognized courier service, or by a deposit of the notice in the United States mail, postage prepaid thereon, addressed to the person at the address of the location of the business or to such other address as he or she shall register with the Tax Administrator for the purpose of receiving notices provided under this chapter; or, should the person have no address registered with the Tax Administrator for such purpose, then to such person's last known address. For the purpose of Section 3.44.240, a service by overnight delivery shall be deemed to have occurred one (1) calendar day following deposit with a courier and service by mail shall be deemed to have occurred three (3) days following deposit in the United States mail.

3.44.250 Tax assessment - hearing, application and determination.

Within thirty (30) calendar days after the date of service of the notice of assessment the person may apply in writing to the Tax Administrator for a hearing on the assessment. If application for a hearing before the City is not made within the time herein prescribed, the tax assessed by the Tax Administrator shall become final and conclusive. Within thirty (30) calendar days of the receipt of any such application for hearing, the Tax Administrator shall cause the matter to be set for hearing before him or her no later than thirty (30) calendar days after the receipt of the application, unless a later date is agreed to by the Tax Administrator and the person requesting the hearing. Notice of such hearing shall be given by the Tax Administrator to the person requesting such hearing not later than five (5) calendar days prior to such hearing. At such hearing said applicant may appear and offer evidence why the assessment as made by the Tax Administrator should not be confirmed and fixed as the tax due. After such hearing the Tax Administrator shall determine and reassess (if necessary) the proper tax to be charged and shall give written notice to the person in the manner prescribed in Section 3.44.240 for giving notice of assessment.

3.44.260 Conviction for violation - taxes not waived.

The conviction and punishment of any person for failure to pay the required tax shall not excuse or exempt such person from any civil action for the tax debt unpaid at the time of such conviction. No civil action shall prevent a 1232
criminal prosecution for any violation of the provisions of this chapter or of any state law requiring the payment of all taxes.

3.44.270 Violation deemed misdemeanor.

Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor.

3.44.280 Severability.

If any provision of this chapter, or its application to any person or circumstance, is determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this chapter or the application of this chapter to any other person or circumstance and, to that end, the provisions hereof are severable.

3.44.290 Remedies cumulative.

All remedies and penalties prescribed by this chapter or which are available under any other provision of this code and any other provision of law or equity are cumulative. The use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of this chapter.

3.44.300 Amendment or modification.

Except as set forth in this section 3.44.300, this chapter, or any section of this chapter, may be amended, modified or temporarily suspended, but not repealed by the City Council without a vote of the people. However, as required by Article XIIIC of the California Constitution, voter approval is required for any amendment that would expand, extend, or increase the rate or methodology of any tax levied pursuant to this chapter. The people of the City of Hermosa Beach affirm that the following actions shall not constitute an increase of the rate or methodology of a tax:

A. The restoration or adjustment of the rate of the tax to a rate that is no higher than that allowed by this chapter, in those circumstances where, among others, the City Council has previously acted to reduce the rate of the tax or is incrementally implementing an increase authorized by this chapter; B. An action that interprets or clarifies (i) the methodology of applying or calculating the tax or (ii) any definition applicable to the tax, so long as the interpretation or clarification (even if contrary to some prior interpretation or clarification) is not inconsistent with the provisions of this chapter; or 1233
C. The collection of the tax imposed by this chapter even if the City had, for some period of time, suspended or failed to collect the tax.” SECTION 2. Pursuant to Article XIIIB of the California Constitution, the appropriation limit for the City of Hermosa Beach is increased to the maximum extent over the maximum period of time allowed under law consistent with the revenues generated by the tax established by this Ordinance.

SECTION 3. If any portion of this Ordinance is declared invalid by a court of law or other legal body with applicable authority, the invalidity shall not affect or prohibit the force and effect of any other provision or application of the Ordinance that is not deemed invalid. The voters of the City hereby declare that they would have circulated for qualification and/or voted for the adoption of this Ordinance, and each portion thereof, regardless of the fact that any portion of the initiative may be subsequently deemed invalid.

SECTION 4. Pursuant to California Constitution Article XIIIC §(2)(b) and California Elections Code §9217, this Ordinance shall take effect only if approved by a majority of the eligible voters of the City of Hermosa Beach voting at the Regular Municipal Election to be held on November 8, 2022, and shall take effect ten (10) days after the City Council has certified the results of the Regular Municipal Election by resolution.

SECTION 5. The Mayor is hereby authorized to attest to the adoption of this Ordinance by the People voting thereon on November 8, 2022, by signing where indicated below.
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I hereby certify that the foregoing Ordinance was PASSED, APPROVED AND ADOPTED by the people of the City of Hermosa Beach on the 8th day of November 2022.

CITY OF HERMOSA BEACH

MICHAEL DETOY, MAYOR
ATTEST:
_________________________________

MYRA MARAVILLA

CITY CLERK
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