Agenda packet — Los Gatos City Council, July 1, 2024

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IMPORTANT NOTICE
This is a hybrid meeting and will be held in-person at the Town Council Chambers at 110 E. Main Street and virtually through Zoom Webinar (log-in information provided below). Members of the public may provide public comments for agenda items in-person or virtually through the Zoom Webinar by following the instructions listed below. The live stream of the meeting may be viewed on television and/or online at www.LosGatosCA.gov/TownYouTube.

This meeting will be teleconferenced pursuant to Government Code Section 54953(b)(3). Council Member Rob Rennie will be participating from a teleconference location at 16870 Prospect Ave., Thousand Island Park, NY, 13692. The teleconference locations shall be accessible to the public and the agenda will be posted at the teleconference location 24 hours before the meeting.

HOW TO PARTICIPATE
The public is welcome to provide oral comments in real-time during the meeting in three ways:

Zoom Webinar (Online): Join from a PC, Mac, iPad, iPhone or Android device. Please click this URL to join: https://losgatoscagov.zoom.us/j/81062359617?pwd=0ao0xPIWhnqtFeK9sAnWBUyhaR4q1r.1 Passcode: 819640 You can also type in 810 6235 9617 in the “Join a Meeting” page on the Zoom website at and use passcode 819640.
- When the Mayor announces the item for which you wish to speak, click the “raise hand” feature in Zoom. If you are participating by phone on the Zoom app, press *9 on your telephone keypad to raise your hand.

Telephone: Please dial (877) 3361839 for US Toll-free or (636) 651-0008 for US Toll. (Conference code: 686100)
- If you are participating by calling in, press #2 on your telephone keypad to raise your hand.

In-Person: Please complete a “speaker’s card” located on the back of the chamber benches and return it to the Town Clerk before the meeting or when the Mayor announces the item for which you wish to speak.

NOTES: (1) Comments will be limited to three (3) minutes or less at the Mayor’s discretion. (2) If you are unable to participate in real-time, you may email to [email protected] the subject line “Public Comment Item #__ ” (insert the item number relevant to your comment). All comments received will become part of the record.
(3) Deadlines to submit written comments are:
- 11:00 a.m. the Thursday before the Council meeting for inclusion in the agenda packet. - 11:00 a.m. the Friday before the Council meeting for inclusion in an addendum. - 11:00 a.m. on the day of the Council meeting for inclusion in a desk item. (4) Persons wishing to make an audio/visual presentation must submit the presentation electronically to [email protected] no later than 3:00 p.m. on the day of the Council meeting.

SPECIAL MEETING OF THE TOWN COUNCIL
AGENDA
JULY 1, 2024
110 EAST MAIN STREET AND TELECONFERENCE

TOWN COUNCIL CHAMBERS
5:15 PM
Mary Badame, Mayor
Matthew Hudes, Vice Mayor
Rob Moore, Council Member
Rob Rennie, Council Member
Maria Ristow, Council Member

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CALL MEETING TO ORDER

ROLL CALL
APPROVE REMOTE PARTICIPATION (This item is listed on the agenda in the event there is an emergency circumstance requiring a Council Member to participate remotely under AB 2449 (Government Code 54953)).

VERBAL COMMUNICATIONS (Members of the public may address the Town Council only on the agenda item. Remarks shall be limited to three minutes, or such time authorized by the Mayor.) PUBLIC HEARINGS (Members of the public may be allotted up to three minutes to comment on the public hearing item)

1. Adopt a Resolution to Place a 1/8th Cent Sales Tax on the November 2024 Ballot as a General Tax, Introduce an Ordinance to Approve the Tax Ordinance, Adopt a Resolution to Add a Companion Advisory Measure, and Authorize a Budget Adjustment in the Amount of $132,000 from the Available Capital/Special Projects Reserve ORDINANCE TITLE: AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS

GATOS APPROVING THE ORDINANCE TO BE SUBMITTED TO THE VOTERS OF THE TOWN OF LOS GATOS AT THE NOVEMBER 5, 2024, GENERAL MUNICIPAL ELECTION THAT

PROPOSES TO IMPOSE A ONE-EIGHTH OF ONE PERCENT GENERAL TRANSACTIONS AND

USE TAX IN THE TOWN OF LOS GATOS
ADJOURNMENT (Council policy is to adjourn no later than midnight unless a majority of Council votes for an extension of time)
ADA NOTICE In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Clerk’s Office at (408) 354- 6834.

Notification at least two (2) business days prior to the meeting date will enable the Town to make reasonable arrangements to ensure accessibility to this meeting. [28 CFR §35.102-35.104] Town Council Meetings Broadcast Live on KCAT, Channel 15 (on Comcast) on the 1st and 3rd Tuesdays at 7:00 p.m.

Rebroadcast of Town Council Meetings on the 2nd and 4th Tuesdays at 7:00 p.m.

Live & Archived Council Meetings can be viewed by going to:
www.LosGatosCA.gov/TownYouTube

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PREPARED BY: Katy Nomura
Assistant Town Manager
Reviewed by: Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 07/01/2024
ITEM NO: 1
DATE: June 26, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution to Place a 1/8th Cent Sales Tax on the November 2024 Ballot as a General Tax, Introduce an Ordinance to Approve the Tax Ordinance, Adopt a Resolution to Add a Companion Advisory Measure, and Authorize a Budget Adjustment in the Amount of $132,000 from the Available Capital/Special Projects Reserve
ORDINANCE TITLE: AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN

OF LOS GATOS APPROVING THE ORDINANCE TO BE SUBMITTED TO THE VOTERS OF THE TOWN OF LOS GATOS AT THE NOVEMBER 5, 2024, GENERAL

MUNICIPAL ELECTION THAT PROPOSES TO IMPOSE A ONE-EIGHTH OF ONE

PERCENT GENERAL TRANSACTIONS AND USE TAX IN THE TOWN OF LOS GATOS
RECOMMENDATION:

Adopt a resolution (Attachment 1) to place a 1/8th cent sales tax on the November 2024 ballot as a general tax, introduce an ordinance (Attachment 2) to approve the tax ordinance adopt a resolution (Attachment 3) to add a companion advisory measure, and authorize a budget adjustment in the amount of $132,000 from the available Capital/Special Projects Reserve.

REMARKS:

On June 18, 2024, Council voted not to consider a special sales tax for the 2024 ballot and requested a special meeting in July to discuss the potential of a general sales tax with a companion advisory measure. This approach that has been used in other jurisdictions in which a general tax is placed on the ballot along with a companion advisory measure that indicates the specific use(s) for which the voters would prefer the tax revenue to be spent should both measures pass.

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ITEM NO. 1.

PAGE 2 OF 4
SUBJECT: Adopt a Resolution to Place a 1/8th Cent Sales Tax on the November 2024 Ballot DATE: June 26, 2024
REMARKS (continued):

The advantage of the general tax with a companion advisory measure is that each only need a simple majority to pass. In addition, having a companion advisory measure prioritizing the specific uses of the tax revenue would provide compelling guidance to the elected officials of the will of the voters.

Attachment 1 is a draft resolution placing a general tax on the ballot with the proposed ordinance imposing a general tax as Exhibit A. Attachment 2 is a draft ordinance approving placement of the general tax on the ballot with the proposed ordinance imposing a general tax as Exhibit A. Attachment 3 is a resolution placing an advisory measure on the ballot to accompany the general tax measure. The advisory measure focuses on the three priorities as identified by Council on May 21, 2024: police, emergency preparedness/wildfire prevention (such as vegetation management), and traffic relief. The resolutions and ordinances have been prepared by municipal tax counsel.

Attachment 6 contains examples of California cities that have successfully passed a general tax with a companion advisory measure.

In addition to the information included for the June 18, 2024 Town Council meeting, the following information may be helpful for Council’s consideration:
 Upon further research, staff determined that effective January 1, 2024, the statute governing the County’s legislative exemption to exceed the sales tax cap was updated to no longer compete with another jurisdiction’s ability to impose a tax. Up until this change, a County sales tax increase would have taken away the Town’s ability to increase sales tax. With this new legislative language, the County can impose up to an additional 5/8th cent sales tax and Los Gatos would still be able to impose a 1/8th cent sales tax. If both were to occur, this would result in a tax rate of 10%. While Los Gatos would still have the ability to impose a 1/8th cent sales tax after a County sales tax increase, it may not be favorable. Under the current statute, the County would have until 2028 to pass such a tax.
 At the June 18, 2024 Town Council meeting, feedback was provided regarding the advisory measure’s uses of the potential tax revenue. A Council Member suggested that the traffic congestion language be more specific. This could be accomplished by replacing broader traffic congestion language with, “Highway 9/Highway 17 improvements to reduce traffic congestion,” in both the general tax ballot language and the advisory measure ballot language. In addition, the Chamber of Commerce suggested including economic vitality as a funding category in the advisory measure.

The Council direction is welcome to decide the final funding categories to be included in each measure.

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ITEM NO. 1.

PAGE 3 OF 4
SUBJECT: Adopt a Resolution to Place a 1/8th Cent Sales Tax on the November 2024 Ballot DATE: June 26, 2024
REMARKS (continued):
 Attachment 5 contains answers to questions from Council Members.

CONCLUSION:

The Town Council has the opportunity to determine whether to:

1. Adopt a resolution (Attachment 1) to place a 1/8th cent sales tax on the November 2024 ballot as a general tax, introduce an ordinance (Attachment 2) to approve the tax ordinance, adopt a resolution (Attachment 3) to add a companion advisory measure, and authorize a budget adjustment in the amount of $132,000 from the available Capital/Special Projects Reserve; or

2. Provide other direction; or

3. Take no action.

August 9, 2024 is the last day in which the Santa Clara County Registrar of Voters is accepting resolutions to add measures for the November 2024 election.

COORDINATION:

This report was prepared in collaboration between NBS, the Town Manager’s Office, the Town Attorney, and municipal tax counsel.

FISCAL IMPACT:

The estimated cost to put two measures on the ballot (i.e., general tax and companion advisory measures) is $132,000. Budget adjustments would be needed to add these resources to the adopted Fiscal Year 2024/25 Operating Budget. The source of funds would be the Capital/ Special Projects Reserve.

If a sales tax measure passes in November, it is estimated to generate approximately $1 million per year.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

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ITEM NO. 1.

PAGE 4 OF 4
SUBJECT: Adopt a Resolution to Place a 1/8th Cent Sales Tax on the November 2024 Ballot DATE: June 26, 2024
Attachments:

1. Draft General Tax Resolution with Exhibit A: General Tax Ordinance

2. Draft Ordinance Approving Proposed Ordinance with Exhibit A: General Tax Ordinance

3. Resolution Approving Advisory Measure to General Tax

4. Examples of Approved General Taxes with Advisory Measures

5. Responses to Questions from Council Members

6. Public Comment

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ITEM NO. 1.
1 of 4
Resolution 2024- July 1, 2024
ATTACHMENT 1
RESOLUTION NO. _______

A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS, CALIFORNIA,

SUBMITTING A SUPPLEMENTAL GENERAL TRANSACTIONS AND USE TAX MEASURE TO THE VOTERS AT THE TUESDAY, NOVEMBER 5, 2024,

GENERAL MUNICPAL ELECTION
WHEREAS, Town of Los Gatos residents have indicated that the quality of life in Los Gatos is highly valued; and
WHEREAS, the costs of providing Town services and programs to residents have significantly increased over the years and Town revenues have not kept pace; and WHEREAS, additional locally controlled funding would allow the Town to maintain and enhance critical public safety services and infrastructure; and WHEREAS, the Town seeks to maintain and improve public safety services; and WHEREAS, the Town also seeks to maintain and improve emergency services, including protection against wildfire and storm hazards; and
WHEREAS, the Town also seeks to help fund infrastructure programs improving traffic flow and mobility to relieve congestion;
WHEREAS, Government Code section 53724 and Revenue & Taxation Code section 7285.9 authorize the Town Council to submit to the qualified voters of the Town for their approval a proposed transactions and use tax; and
WHEREAS, locally-enacted funding sources such as a voter-approved transactions and use tax are not subject to seizure by the State or County; and
WHEREAS, the Town Council desires to submit to the qualified voters of the Town a proposed one-eighth of one percent (0.125%) Transactions and Use Tax (the "Tax") to be collected in addition to the existing one-eighth of one percent (0.125%) Transactions and Use Tax currently being collected within the Town; and
WHEREAS, the Tax must be approved by the electorate to be effective; and WHEREAS, the Town Council also desires to submit to the qualified voters of the Town on the same ballot as the proposed Tax measure a proposed non-binding advisory measure (“the Advisory Measure”) asking the voters whether they would prefer the revenues from the Tax measure, should it pass, to be spent on certain identified priorities; and

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ITEM NO. 1.
2 of 4
Resolution 2024- July 1, 2024
ATTACHMENT 1
WHEREAS, by Resolution 2024-029, the Town Council of the Town of Los Gatos called a municipal election to be held on Tuesday, November 5, 2024, (“the Election”) and requested the Board of Supervisors of the County of Santa Clara to consolidate the election with the General Statewide election; and
WHEREAS, the consolidated municipal election will be held, regulated, and conducted in accordance with the provisions of the law as provided in Resolution 2024-029.

NOW THEREFORE, BE IT RESOLVED, that the Town Council orders as follows:

Section 1. The Town Council finds and determines that each of the findings set forth above are true and correct.

Section 2. The Town Council hereby submits the proposed ordinance set forth in Exhibit A, attached hereto and incorporated in this Resolution by this reference, to the qualified voters of the Town at the Election, and orders the following question to be submitted to the voters at the Election and appear on the ballot immediately after the Advisory Measure:
“To maintain/enhance Los Gatos essential services, including Police/emergency services, rapid 911 response, wildfire/storm hazard prevention/protection, infrastructure to reduce traffic congestion, and for general government use, shall the measure enacting a 1/8 cent sales tax (0.125%), raising approximately $1 million annually, ending in 20 years, with mandatory annual audits, independent resident oversight, and all funds controlled locally in Los Gatos, be adopted?”

YES
NO
The measure requires a majority of the qualified voters voting on the measure to pass.

Section 3. The “full text” of the proposed ordinance shall appear in the Voter Information Pamphlet. The “full text” of the proposed ordinance is attached to this resolution as “Exhibit A.” Section 4. Pursuant to Elections Code section 9280, the Town Council hereby directs the Town Clerk to transmit a copy of the measure to the Town Attorney. The Town 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 Town Clerk on or before 4:00 p.m. on August 12, 2024.

Section 5. Pursuant to Elections Code Section 9286 et. seq., August 12, 2024, at 4:00 p.m. shall be the deadline for submission of arguments in favor of, and arguments against, this measure.

Arguments in favor of or against the measure shall not exceed 300 words in length. The Mayor, or her designee(s), is hereby authorized to prepare a written argument in favor of the proposed

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ITEM NO. 1.
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Resolution 2024- July 1, 2024
ATTACHMENT 1
measure on behalf of the Town Council. At the Mayor’s discretion, the Argument may also be signed by bona fide associations or by individual voters who are eligible to vote in the Town of Los Gatos. Each argument shall be signed, filed with the Town Clerk, and include the printed name(s) and signature(s) of the author(s) submitting the argument. If more than one argument for or against is received, the priorities established by Elections Code section 9287 shall control.

Section 6. Subdivision (a) of section 9285 of the Elections Code shall apply to the Election and shall control the submission of any rebuttal arguments for this measure. If an argument in favor and an argument against the measure have been selected to be printed in the voter information guide, the Clerk shall send a copy of the argument in favor of the measure to the authors of the argument against the measure and a copy of an argument against the measure to the authors of the argument in favor of the measure. The rebuttal authors or persons designated by them may prepare and submit rebuttal arguments not to exceed 250 words in length. Rebuttal arguments must be submitted not later than August 19, 2024, by 4:00 p.m. This Section shall apply only to the election to be held on November 5, 2024, and shall then be repealed.

Section 7. Pursuant to Elections Code section 10002, the Town Council hereby requests the Board of Supervisors of the County of Santa Clara to make available the services of the Registrar of Voters for the purpose of performing the usual services necessary in the conduct of the consolidated general municipal election, including the provisions of election supplies and voters' pamphlets; and that upon approval of such requests, the Registrar of Voters of the County of Santa Clara shall be reimbursed for all costs incurred by said services.

Section 8. Pursuant to the Elections Code commencing with section 10400, the Town Council hereby requests the Board of Supervisors of the County of Santa Clara to order the consolidation of the general municipal election to be conducted within the boundaries of the Town of Los Gatos on November 5, 2024, with respect to which the Board of Supervisors of the County of Santa Clara has the power to order a consolidation. The Town Council further consents to and orders the consolidation of the general municipal election hereby called with the statewide general election and acknowledges that the consolidated election will be held and conducted in the manner prescribed in Elections Code section 10418.

Section 9. The Town Clerk is hereby authorized and directed to publish a notice of the general municipal election within the time and in the manner specified in the Elections Code Section 12112. The Town Clerk is further authorized and directed to do all other things required by law to hold the general municipal election above provided.

Section 10. The Town Clerk is hereby authorized and directed to certify to the adoption of this resolution and to transmit a certified copy to the Board of Supervisors of the County of Santa Clara and to the Registrar of Voters of the County of Santa Clara.

Section 11. That the Town Manager is authorized to negotiate and execute an agreement with the California Department of Tax and Fee Administration (formerly the Board of Equalization) in

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ITEM NO. 1.
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Resolution 2024- July 1, 2024
ATTACHMENT 1
accordance with Revenue and Taxation Code section 7270 to perform all functions incident to the administration and operation of the ordinance if adopted.

PASSED AND ADOPTED at a special meeting of the Town Council of the Town of Los Gatos this 1
st day of July, 2024 by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: _________________

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ITEM NO. 1.

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EXHIBIT A
ORDINANCE NO._________

AN ORDINANCE OF THE PEOPLE OF THE TOWN OF LOS GATOS IMPOSING A

SUPPLEMENTAL TRANSACTIONS AND USE TAX FOR A PERIOD OF TWENTY YEARS The People of the Town of Los Gatos ordain as follows:

SECTION 1. AMENDMENT OF MUNICIPAL CODE.

Chapter 25 of the Los Gatos Town Code is hereby amended by adding provisions as set forth in this section below. Portions of the Chapter not included in this Ordinance are not changed.

Chapter 25

REVENUE AND TAXATION
ARTICLE VIII. SUPPLEMENTAL TRANSACTIONS AND USE TAX
Section 25.080.010. Title.

This article shall be known as the Los Gatos Supplemental Transactions and Use Tax Ordinance. The town of Los Gatos hereinafter shall be called "Town." This article shall be applicable in the incorporated territory of the Town.

Section 25.080.020. Operative Date.
"Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below.

Section 25.080.030. Purpose.

This article is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:
(1) 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 Town 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. (2) 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.

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ITEM NO. 1.

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(3) 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. (4) 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 taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.

Section 25.080.040. Contract with State.

Prior to the operative date, the Town 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 Town 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.

Section 25.080.050. 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 Town at the rate of one-eight of one percent (0.125%) 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.

Section 25.080.060. 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.

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Section 25.080.070. Use Tax Rate.

An excise tax is hereby imposed on the storage, use or other consumption in the Town 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 one-eight of one percent (0.125%) 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.

Section 25.080.080. Adoption of Provisions of State Law.

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

Section 25.080.090. 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:
(1) Wherever the State of California is named or referred to as the taxing agency, the name of this Town shall be substituted therefor. However, the substitution shall not be made when:
a. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Treasury, or the Constitution of the State of California; b. The result of that substitution would require action to be taken by or against this Town 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.
c. 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:

1. 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;

2. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.

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ITEM NO. 1.

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d. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.
(2) The word "Town" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203.
a. “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.

Section 25.080.100. 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.

Section 25.080.110.Exemptions and Exclusions.
(1) 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 state-administered transactions or use tax. (2) There are exempted from the computation of the amount of transactions tax the gross receipts from:
a. 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.
b. Sales of property to be used outside the Town which is shipped to a point outside the Town, 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 Town shall be satisfied:

1. 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

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ITEM NO. 1.

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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-Town address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and

2. With respect to commercial vehicles, by registration to a place of business outof-Town and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.
c. 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.
d. 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. e. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
(3) There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this Town of tangible personal property:
a. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance. b. 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.
c. 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. d. 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.

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ITEM NO. 1.

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e. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
f. Except as provided in subparagraph (7), a retailer engaged in business in the Town 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 Town or participates within the Town 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 Town or through any representative, agent, canvasser, solicitor, subsidiary, or person in the Town under the authority of the retailer. g. "A retailer engaged in business in the Town " 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 Town. (4) 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.

Section 25.080.120. 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.

Section 25.080.130. 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 Town, or against any officer of the State or the Town, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.

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ITEM NO. 1.

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Section 25.080.140. Residents’ Oversight and Annual Audit. (1) The Town Council shall appoint a committee (“Tax Finance Committee”) to review and report on the receipt of revenue and expenditure of funds from the tax authorized by this chapter (“revenues and expenditures”). The number, qualifications, and duties of Tax Finance Committee members shall be established by ordinance or resolution of the Town Council.
(2) Beginning with the fiscal year that ends June 30, 2025, the Town's independent auditors shall, as part of their annual audit of the Town's financial statements, review the collection and expenditure of revenue from the tax authorized by this chapter. The auditors' review shall be a public document. The Tax Finance Committee shall annually review the auditors' findings and report in writing to the Town Council regarding the revenues and expenditures. The Tax Finance Committee report shall be transmitted to the Town Council for consideration at a public meeting. (3) By January 31, 2025, the Town Council shall adopt a resolution establishing the composition of the Tax Finance Committee and further defining its responsibilities consistently with this section. Provisions defining the scope of the Tax Finance Committee’s responsibilities and reporting requirements shall address bond oversight, in the event that a decision is made at a later time to sell bonds that are in part backed by the revenues referenced in this section. The Town Council shall appoint the initial members of the Tax Finance Committee no later than March 1, 2025 Section 25.080.150. Termination Date.

The authority to levy the tax imposed by this chapter shall expire on March 31, 2045, without further action by the Town Council or the voters of the Town. After said date, the tax imposed by this Chapter can only be continued or reestablished by a majority vote of Los Gatos voters.

SECTION 2. ADJUSTMENT OF APPROPRIATIONS LIMIT.

Pursuant to Article XIIIB of the Constitution of the State of California and applicable laws, the appropriations limit for the Town is hereby increased by the aggregate sum authorized to be levied by this tax for fiscal year 2024-2025 and each year thereafter.

SECTION 3. CALIFORNIA ENVIRONMENTAL QUALITY ACT.

This ordinance is exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., under, including without limitation, Public Resources Code section 21065, and CEQA Guidelines sections 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment.

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ITEM NO. 1.

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SECTION 4. SEVERABILITY.

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

SECTION 5. EFFECTIVE DATE.

This ordinance relates to the levying and collecting of the Town transactions and use taxes and shall take effect immediately.

SECTION 6. NOTICE.

Upon approval by the voters, the Town Clerk Administrator shall certify to the passage and adoption of this Ordinance and shall cause it to be published according to law. * * * * * * * * *
It is hereby certified that this Ordinance was duly adopted by the voters at the November 5, 2024 General Municipal Election and took effect 10 days following adoption of a resolution declaring the results of the election at a regular meeting of the Town Council held on _____, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

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ITEM NO. 1.

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Draft Ordinance July 1, 2024
ATTACHMENT 2

DRAFT ORDINANCE

AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS

APPROVING THE ORDINANCE TO BE SUBMITTED TO THE VOTERS OF THE TOWN OF LOS GATOS AT THE NOVEMBER 5, 2024, GENERAL MUNICIPAL

ELECTION THAT PROPOSES TO IMPOSE A ONE-EIGHTH OF ONE PERCENT

GENERAL TRANSACTIONS AND USE TAX IN THE TOWN OF LOS GATOS WHEREAS, The Town Council of the Town of Los Gatos has adopted a resolution submitting to the voters of the Town of Los Gatos at the November 5, 2024, general municipal election as a measure on the ballot for their approval an ordinance, a copy of which is attached hereto as Exhibit A (“Proposed Ordinance”) that proposes to impose a one-eighth of one percent (0.125%) general Transactions and Use Tax in the Town of Los Gatos; and WHEREAS, The Town Council wishes to approve by its own ordinance the Proposed Ordinance, although the Proposed Ordinance cannot go into effect unless and until approved by a majority of the voters of the Town of Los Gatos voting on the measure at the November 5, 2024, general municipal election;
NOW, THEREFORE, BE IT ORDAINED by the Town Council of the Town of Los Gatos as follows:

The Town Council of the Town of Los Gatos approves the Proposed Ordinance, attached hereto as Exhibit A, which proposes to impose a one-eighth of one percent (0.125%) general Transactions and Use Tax in the Town of Los Gatos.

This Ordinance was introduced at a special meeting of the Town Council of the Town of Los Gatos on the 1
st day of July, 2024, and adopted by the Town Council of the Town of Los Gatos at its regular meeting on the ____ day of _____ 2024, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:
_______________________________

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:
___________________________________

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

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ITEM NO. 1.

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EXHIBIT A
ORDINANCE NO._________

AN ORDINANCE OF THE PEOPLE OF THE TOWN OF LOS GATOS IMPOSING A

SUPPLEMENTAL TRANSACTIONS AND USE TAX FOR A PERIOD OF TWENTY YEARS The People of the Town of Los Gatos ordain as follows:

SECTION 1. AMENDMENT OF MUNICIPAL CODE.

Chapter 25 of the Los Gatos Town Code is hereby amended by adding provisions as set forth in this section below. Portions of the Chapter not included in this Ordinance are not changed.

Chapter 25

REVENUE AND TAXATION
ARTICLE VIII. SUPPLEMENTAL TRANSACTIONS AND USE TAX
Section 25.080.010. Title.

Section 25.080.030. Purpose.

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ITEM NO. 1.

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Section 25.080.040. Contract with State.

Section 25.080.050. Transactions Tax Rate.

Section 25.080.060. Place of Sale.

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ITEM NO. 1.

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Section 25.080.070. Use Tax Rate.

Section 25.080.080. Adoption of Provisions of State Law.

Section 25.080.090. Limitations on Adoption of State Law and Collection of Use Taxes.

2. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.

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ITEM NO. 1.

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Section 25.080.100. 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.

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ITEM NO. 1.

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the Public Utilities Code, and undocumented vessels registered under Division

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ITEM NO. 1.

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Section 25.080.120. Amendments.

Section 25.080.130. Enjoining Collection Forbidden.

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ITEM NO. 1.

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SECTION 2. ADJUSTMENT OF APPROPRIATIONS LIMIT.

SECTION 3. CALIFORNIA ENVIRONMENTAL QUALITY ACT.

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ITEM NO. 1.

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SECTION 4. SEVERABILITY.

SECTION 5. EFFECTIVE DATE.

This ordinance relates to the levying and collecting of the Town transactions and use taxes and shall take effect immediately.

SECTION 6. NOTICE.

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

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ITEM NO. 1.
1 of 3
Resolution 2024- July 1, 2024
RESOLUTION NO. _______

A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS,

CALIFORNIA, SUBMITTING AN ADVISORY MEASURE TO THE VOTERS AT THE TUESDAY, NOVEMBER 5, 2024, GENERAL MUNICPAL ELECTION WHEREAS, the Town Council is submitting to the qualified voters of the Town a proposed one-eighth of one percent (0.125%) general Transactions and Use Tax (the "Tax") to be collected in addition to the existing one-eighth of one percent (0.125%) general Transactions and Use Tax currently being collected within the Town; and
WHEREAS, revenues from the Tax, if approved by a majority of the qualified voters voting on the measure, could legally be used by the Town for any legitimate municipal purpose; and WHEREAS, the Town Council wishes to ask the voters to state in a non-binding measure whether they would prefer the revenues from the Tax to be spent on certain identified priorities; and
WHEREAS, by Resolution 2024-029, the Town Council of the Town of Los Gatos called a municipal election to be held on Tuesday, November 5, 2024, (“the Election”) and requested the Board of Supervisors of the County of Santa Clara to consolidate the election with the General Statewide election; and
WHEREAS, the consolidated municipal election will be held, regulated, and conducted in accordance with the provisions of the law as provided in Resolution 2024-029.

NOW THEREFORE, BE IT RESOLVED, that the Town Council orders as follows:

Section 1. The Town Council finds and determines that each of the findings set forth above are true and correct.

Section 2. The Town Council hereby submits the following question to the qualified voters of the Town at the Election to appear on the ballot immediately before the general Transactions and Use tax measure:
“If Measure __ is approved by Los Gatos voters, authorizing a local 1/8th cent sales tax, shall the measure advising the Town that the revenues from Measure __ should be spent on the following categories: 1) Maintaining and enhancing Police and emergency services, including rapid 911 response times; 2) Wildfire and storm hazard prevention and protection; and 3) Infrastructure projects to improve traffic flow and reduce congestion, be adopted?” YES
NO
ATTACHMENT 3

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ITEM NO. 1.
2 of 3
Resolution 2024- July 1, 2024
This measure will require a majority of the qualified voters voting on the measure to pass.

Section 3. Pursuant to Elections Code section 9280, the Town Council hereby directs the Town Clerk to transmit a copy of the measure to the Town Attorney. The Town 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 Town Clerk on or before 4:00 p.m. on August 12, 2024.

Section 4. Pursuant to Elections Code section 9286 et. seq., August 12, 2024, at 4:00 p.m. shall be the deadline for submission of arguments in favor of, and arguments against, this measure.

Arguments in favor of or against the measure shall not exceed 300 words in length. The Mayor, or her designee(s), is hereby authorized to prepare a written argument in favor of the proposed measure on behalf of the Town Council. At the Mayor’s discretion, the Argument may also be signed by bona fide associations or by individual voters who are eligible to vote in the Town of Los Gatos. Each argument shall be signed, filed with the Town Clerk, and include the printed name(s) and signature(s) of the author(s) submitting the argument. If more than one argument for or against is received, the priorities established by Elections Code Section 9287 shall control.

Section 5. Subdivision (a) of section 9285 of the Elections Code shall apply to the Election and shall control the submission of any rebuttal arguments for this measure. If an argument in favor and an argument against the measure have been selected to be printed in the voter information guide, the Clerk shall send a copy of the argument in favor of the measure to the authors of the argument against the measure and a copy of an argument against the measure to the authors of the argument in favor of the measure. The rebuttal authors or persons designated by them may prepare and submit rebuttal arguments not to exceed 250 words in length. Rebuttal arguments must be submitted not later than August 19, 2024, by 4:00 p.m. This Section shall apply only to the election to be held on November 5, 2024, and shall then be repealed.

Section 6. Pursuant to Elections Code section 10002, the Town Council hereby requests the Board of Supervisors of the County of Santa Clara to make available the services of the Registrar of Voters for the purpose of performing the usual services necessary in the conduct of the consolidated general municipal election, including the provisions of election supplies and voters' pamphlets; and that upon approval of such requests, the Registrar of Voters of the County of Santa Clara shall be reimbursed for all costs incurred by said services.

Section 7. Pursuant to Elections Code commencing with section 10400, the Town Council hereby requests the Board of Supervisors of the County of Santa Clara to order the consolidation of the general municipal election to be conducted within the boundaries of the Town of Los Gatos on November 5, 2024, with respect to which the Board of Supervisors of the County of Santa Clara has the power to order a consolidation. The Town Council further consents to and orders the consolidation of the general municipal election hereby called with the statewide general election and acknowledges that the consolidated election will be held and conducted in the manner prescribed in Elections Code section 10418.

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ITEM NO. 1.
3 of 3
Resolution 2024- July 1, 2024
Section 8. The Town Clerk is hereby authorized and directed to publish a notice of the general municipal election within the time and in the manner specified in the Elections Code Section 12112. The Town Clerk is further authorized and directed to do all other things required by law to hold the general municipal election above provided.

Section 9. The Town Clerk is hereby authorized and directed to certify to the adoption of this resolution and to transmit a certified copy to the Board of Supervisors of the County of Santa Clara and to the Registrar of Voters of the County of Santa Clara.

PASSED AND ADOPTED at a special meeting of the Town Council of the Town of Los Gatos this 1
st day of July, 2024 by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: _________________

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ITEM NO. 1.

ATTACHMENT 4
Examples of Approved General Taxes with Advisory Vote
Loomis, California, Sales Tax with Advisory (November 2016) General Tax - Yes 59.59%
Measure F: To support the continued operation of the Loomis library, and for other general fund purposes, shall a quarter percent transactions and use tax ("sales tax") raising approximately $250,000 annually be adopted for a period of ten years, subject to annual audits? Advisory Vote - Yes 64.41%
Measure G: If a local transactions and use tax is enacted in the Town of Loomis, should its revenue be used predominantly to support the continued operation of the Loomis Library? Santa Monica, California, Sales Tax with Advisory (November 2016) General Tax - Yes 62.35%
MEASURE GSH: To maintain and improve Santa Monica community services including support for preservation of affordable housing, reducing homelessness, school repair and improvement, education of Santa Monica children and students, and other general fund services, shall an ordinance be adopted to increase by one-half percent Santa Monica’s transactions and use tax, subject to independent annual audits, all funds used locally, no money going to Sacramento, raising approximately $16 million annually, until ended by the voters?
Advisory Vote - Yes 70.18%
MEASURE GS: ADVISORY VOTE ONLY: If a local transactions and use tax is enacted in Santa Monica, should half its revenue be used to improve and maintain local public schools, including attracting and retaining high-quality teachers, expanding access to pre-schools, assisting at-risk students, and improving school technology, arts, music, math, and science instruction; and half to help preserve and ensure housing in Santa Monica that is affordable, protect residents from displacement by rising housing costs, and reduce homelessness?
King City, California Sales Tax with Advisory (November 2018) General Tax - Yes 56.03%
Measure K: Shall the measure increasing the City of King’s current one-half percent sales tax to one percent to generate an estimated increase of $800,000 annually for general city expenses, such as public safety and other essential services, street repairs, economic development efforts, and improving the City’s overall financial solvency subject to citizen oversight, an annual audit, and expiration of the tax in 10 years be adopted?
Advisory Vote - Yes 68.11%
Measure L: If the City of King General Sales Tax Measure K passes, should the revenues be used to balance the budget in order to maintain existing services; pay off General Fund debt and establish a financial reserve; fund public safety staffing, services and projects designed to eliminate youth violence; fund improvements to street and sidewalk infrastructure; and fund downtown public improvements and other economic development efforts designed to increase businesses, jobs and visitors to King City?

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ITEM NO. 1.

ATTACHMENT 4
Ukiah, California, Sales Tax with Advisory (November 2016) General Tax - Yes 51.5%
Measure Y: Shall Ordinance No. 1165 be adopted to impose as a general tax and additional transaction (sales) and use tax of one-half percent within the city limits of the City of Ukiah to fund essential City services, including street repair and maintenance? Such tax increase is estimated to raise $2,470,000 annually at a rate of .5%. The duration of the tax will continue unless or until the tax is repealed by majority vote in a municipal election
Advisory Vote - Yes 68.84%
Measure Z: Should street repair and maintenance and related public infrastructure improvements be the exclusive use of the revenues from an additional .5% sales tax in the City of Ukiah and add to and not replace current spending for street maintenance and repair? Fort Bragg, California, Hotel Tax with Advisory (November 2016) General Tax - Yes 59.55%
Measure AA: Shall Ordinance No. 924-2016 amending portions of Chapter 3.12 of the Fort Bragg Municipal Code to increase the City of Fort Bragg's existing Transient Occupancy Tax (a bed tax paid when overnight visitors rent a room) from ten percent (10%) to twelve percent (12%) to fund public services and maintain public areas, effective April 1, 2017, which proposed rate increase and amendment is anticipated to raise an additional $400,000 per year in revenue and which will continue until repealed by the City Council or the city voters, be adopted? Advisory Vote - Yes 69.65%
Measure AB: If Measure "AA" is approved by voters, shall the People of the City of Fort Bragg advise the City Council to use the additional funds in the following manner: (i) One-half of the revenues to substantially increase promotions, events, and marketing for Fort Bragg; (ii) One-quarter of the revenues to enhance Coastal Trail maintenance and security; (iii) One-eighth of the revenues to support establishment of the Noyo Center for Marine Sciences as a premiere visitor attraction; and (iv) Oneeighth of the revenues to undertake special projects that support tourism and benefit the community including, but not limited to, repair and enhancement of local athletic fields? Pasadena, California, Sales Tax with Advisory (November 2018) General Tax - Yes 68.74%
Measure I: Shall an ordinance be adopted to maintain essential City of Pasadena services such as fire, police, paramedics, emergency service/response times; keep fire stations open; improve neighborhood and school safety; repair streets/sidewalks; address homelessness; maintain after-school programs/senior services, and other general fund services, by establishing a ¾¢ sales tax providing approximately $21,000,000 annually until ended by voters; requiring audits and all funds locally controlled?
Advisory Vote - Yes 72.05%
Measure J: If Pasadena voters approve a local sales tax measure, should the City use 2/3rds of the measure’s annual revenue to maintain essential City of Pasadena services such as fire, police, paramedics, emergency service/response times; keep fire stations open; improve neighborhood and school safety; repair streets/sidewalks; address homelessness; maintain afterschool programs/senior services; with the remaining 1/3rd of the measure’s revenue going to support Pasadena public schools?

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ITEM NO. 1.

Responses to Council Members’ Questions
1 ATTACHMENT 5
In response to Council Members’ questions summarized below, staff has provided the following answers in italics:

1. Is this the adopted language from 2018? Why not use again? “Shall the measure to fund essential Town services such as maintaining neighborhood police patrols; improving traffic flow to reduce congestion; repairing potholes and fixing neighborhood streets; maintaining the Town’s long-term financial stability and other unrestricted general revenue purposes by enacting a one-eighth cent ($0.125%) sales tax for 20 years, providing about $800,000 annually, requiring Independent Citizens Oversight with public review of spending, and all revenues controlled locally, be adopted?” Yes, the 2018 ballot question was: “Shall the measure to fund essential Town services such as maintaining neighborhood police patrols; improving traffic flow to reduce congestion; repairing potholes and fixing neighborhood streets; maintaining the Town' s long -term financial stability and other unrestricted general revenue purposes by enacting a one-eighth cent (0.125 %) sales tax for 20 years, providing about $ 800,000 annually, requiring Independent Citizens Oversight with public review of spending, and all revenues controlled locally, be adopted?" The Council could choose to use this language again with the update to the estimated revenue generation of approximately $1 million and any other modifications as recommended by the Town Attorney and/or outside legal counsel. The current proposed language was updated based on Council direction on priority areas.

2. Why was an advisory measure not used in 2018?
There was no discussion of a companion advisory measure in 2018.

3. What body comprises the 2018 sales tax Independent Citizens Oversight Committee? How are members selected? What have their recommendations been, and how have they been incorporated in the Budget?
At the December 18, 2018 meeting, the Council adopted an Enabling Resolution (2018- 056) creating the Sales Tax Oversight Committee (see Exhibit A to this Attachment). The resolution called for a seven-member body whose members would be appointed by the majority of the Town Council. The Town did a recruitment, and the Council interviewed candidates and voted on the appointments as it does with other Town advisory bodies.

The Committee met once and recommended to the Town Council that the sales tax proceeds be used for tangible capital improvements consistent with the sales tax measure language. The Town Council decided to use 50% of the proceeds for capital and 50% for operating, such as Police services. In 2020, the voters approved an initiative to

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ITEM NO. 1.

Responses to Council Members’ Questions
2 ATTACHMENT 5
create the Finance Commission which dissolved the Sales Tax Oversight Committee and its duties became part of the Finance Commission scope.

4. Where are results of the 2024 scientific poll? Was this a scientific poll? What was the sample size? Margin of error?
Yes, it was a scientific poll and the results can be found in the materials for the May 21, 2024 Council meeting, Item 4, Attachments 3 and 4
(https://meetings.municode.com/adaHtmlDocument/index?cc=LOSGATOS&me=cfc2387c 088b4d3a933e71661acbbc1e&ip=True). The sample size was 200 and the margin of error was +/- 4.2% to +/- 6.9%, depending on the response level to the question.

5. Would this language qualify as a general tax: “To provide funding that cannot be taken by the State or County, to enhance Los Gatos essential services, including Highway 9/Highway 17 improvements to reduce traffic congestion, enhance police and emergency services, and increase prevention and protection from wildfire and storm hazards, [DROP: and for general government use] shall. . .” For a general tax, the ballot question must have some language stating that the revenues from the tax can be spent for any government use or purpose, or any municipal use or purpose, or anything to the effect that they are unrestricted funds. It should be clear that these are just examples and that the revenues can be spent on anything.

6. Does the proposed General Tax capture maximum online sales tax? Are other municipalities utilizing other techniques to capture online sales tax? The rules for allocating sales tax are set by statute, and Proposition 1A (Cal. Const. Art.

XIII, section 25.5), passed in 2004, prevents them from being changed. In short, yes, this measure would capture maximum sales tax. All municipalities are limited by the same regulations.

7. Why would the Resident Oversight Committee not be the Finance Commission? Why need another body? How would they be up to speed in any way similar the Finance Commission? Are there staff resources to support an additional body? This could be determined by Council. It is not required that the Finance Commission serve as the oversight body, but if Council desires, it could direct staff to include Finance Commission as the oversight body in the ballot measure ordinance. Language must be included in the ballot measure ordinance to allow this as the Finance Commission ordinance can only be amended by a vote of the public. Alternatively, the Council could

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ITEM NO. 1.

Responses to Council Members’ Questions
3 ATTACHMENT 5
do a separate measure to ask the voters to modify the duties and other provisions of the Finance Commission ordinance.

8. For the advisory measure, if “should” changed to shall, would this then become a specific tax?
Yes.

9. The following justification is offered to the public on the Town website:
“Has the Town reduced expenditures to balance its budget? Yes. The Town of Los Gatos has made deep cuts in Town expenditures to control costs while maintaining high service levels by taking the following proactive measures during major downturns and to be fiscally prudent:
• Significantly reduced staffing levels from 2001–2005 and did not return to prerecession staffing levels • Imposed wage freezes and unpaid furloughs
• Reduced employee benefit costs”
When did these measures occur and what was the financial result that is reflected in the 5 year Forecast?
Some examples of the measures taken and the respective cost savings are as follows:
• From Fiscal Year (FY) 2001/02 through FY 2004/05, through a combination of strategic hiring freezes and position defunding, operational efficiencies, full-time positions reductions to part-time positions (some of which were voluntary by Town employees), voluntary leave without pay, management salary deferrals, and other measures, the Town achieved approximately a $3.8M in cost reductions over those four fiscal years.
• In FY 2009/10, through the elimination of vacant positions, reduced overtime, fewer temporary staff hours, a management pay freeze, and staff furloughs, the Town achieved approximately $1.5M in savings at that time. • In FY 2010/11, through Departmental reorganizations, the elimination of select vacant positions, reduced overtime, staff furloughs, and alternative delivery models, the Town achieved approximately $900,000 of savings. • In FY 2011/12, through Departmental reorganizations such as the elimination of the Community Services Department, furloughs, and alternate service delivery models, the Town achieved approximately $800,000 in savings. • In FY 2012/13, through furloughs and staffing/salary changes, the Town achieved approximately $652,000 in savings.
• In FY 2012/2013, a three-tier pension plan was implemented for non-sworn employees and a two-tier pension plan was implemented for sworn employees,

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ITEM NO. 1.

Responses to Council Members’ Questions
4 ATTACHMENT 5
introducing PEPRA. While this did not provide an immediate cost savings, the new tiers would significantly reduce future pension costs.
• In FY 2013/14, through organizational restructuring, staffing changes, temporary staffing reductions, the elimination legacy positions and classifications, and other measures, the Town expected to achieve an approximate $81,000 in savings. • As a result of collaboration with the Town’s bargaining units during FY 2018/19, all units agreed to the elimination of retiree health benefits prospectively with the exception of the minimum employer contribution as required by the Public Employees’ Medical and Hospital Care Act (PEMHCA). The PEMHCA minimum represents a significant reduction from the previous Town paid discretionary retiree payments. As a closed retiree medical plan, the Town continues to see significant cost savings from this negotiated change. In addition, employees contribute a share of dependent premiums to assist with cost-containment.

10. Can a Council candidate endorse the tax measure or is that not allowed? Is it different for those running for Council that are not currently Council Members? Yes, a candidate running for Council can endorse the measure, as can a sitting member.

The Town Council can also endorse it. The Council/Town cannot spend Town funds to campaign for it. A Council Member can give a speech at the Rotary Club supporting it, for example, but the Council Member cannot use Town funds or Town personnel (while on the clock) to help do so.

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ITEM NO. 1.

RESOLUTION 2018 -056

A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN

OF LOS GATOS, CALIFORNIA, ESTABLISHING A

SALES TAX OVERSIGHT COMMITTEE
WHEREAS, on June 19, 2018 the Los Gatos Town Council adopted Ordinance No. 2274 imposing a General Transaction and Use Tax ( " Ordinance 2274 ") for a period of twenty years.

WHEREAS, the purpose of the Ordinance 2274 is to impose a local one - eighth cent ( 0. 125%) sales tax on retail transactions ( " Sales Tax') within the town limits of the Town of Los Gatos; and
WHEREAS, on November 6, 2018, the citizens of the Town approved imposition of the Sales Tax by approving ballot Measure G on the November 6, 2018 ballot; and WHEREAS, Ordinance 2274 and Measure G state that funds raised from the Sales Tax shall be used to fund essential Town services such as maintaining neighborhood police patrols; improving traffic flow to reduce congestion; repairing potholes and fixing neighborhood streets; and maintaining the Town' s long- term financial stability; and WHEREAS, the Ordinance 2274 and Measure G require Citizens Oversight, mandatory financial audits, and yearly reports to the community to ensure funds are spent as promised; and
WHEREAS, in accordance with the provisions of Section 2. 60. 140 of Ordinance 2274, the Town Council shall appoint a Committee to advise the Town Council on the expenditures funded by the Sales Tax revenues in order to ensure that said revenues are spent in accordance with the Town Council objectives stated in Ordinance 2274 and Measure G.

NOW, THEREFORE, BE IT RESOLVED, that the Los Gatos Town Council orders as follows:

Section 1. The Town Council hereby establishes the Town of Los Gatos Sales Tax Oversight Committee pursuant to Ordinance 2274 and Measure G.

Section 2. The Los Gatos Sales Tax Oversight Committee shall consist of seven ( 7) members.

Section 3. The members of the Los Gatos Sales Tax Oversight Committee shall be appointed by a majority vote of the Town Council.

Section 4. Each member of the Los Gatos Sales Tax Oversight Committee shall, on the date of appointment and throughout the member' s term on the Los Gatos Sales Tax Citizens Oversight Committee, be a resident of the Town of Los Gatos.

Resolution 2018 -056 1 of 3 December 18, 2018
Exhibit A to Attachment 5

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Section 5. The term of each member of the Los Gatos Sales Tax Oversight Committee shall be four ( 4) years.

Section 6. The terms of office of the resident members of the Los Gatos Sales Tax Oversight Committee shall be staggered and over lapped in such a manner that the terms of no more than one -third of the members expire each year.

Section 7. The Town Council shall fill any resident member vacancies of the Los Gatos Sales Tax Oversight Committee occurring during the term of the Committee.

Section 8. The members of the Los Gatos Sales Tax Oversight Committee shall serve without compensation, provided that with advance budgetary approval of the Town Council, the actual and necessary expenses ( if any) incurred by the members in the conduct of Town business shall be reimbursable pursuant to the provisions of the current Administrative Policy.

Section 9. The Los Gatos Sales Tax Oversight Committee shall meet semi - annually and all meetings shall be noticed and conducted in accordance with the applicable provisions of the Brown Act and Robert' s Rules of Order and Town Policies established for Commissions and Committees.

Section 10. Minutes of the actions taken during the Los Gatos Sales Tax Oversight Committee' s meetings shall be kept and shall be a public record.

Section 11. The function of the Los Gatos Sales Tax Oversight Committee shall be to serve in an advisory capacity to the Town Council. Prior to the Town' s expenditure of any Sales Tax revenues, the Los Gatos Sales Tax Oversight Committee shall review the Town' s proposed expenditures and advise the Town Council on whether such expenditures meet the Town Council' s objectives stated in Ordinance 2274 and Measure G. It shall not be within the purview of the Sales Tax Oversight Committee to direct staff, recommend any particular contract or project but only to determine whether such expenditures meet the Town Council' s objectives stated in Ordinance 2274 and Measure G. In addition, the final determination of whether such expenditures meet the Town Council' s objectives and the approval of any such expenditure shall be made by Town Council. The Los Gatos Sales Tax Oversight Committee shall issue an annual public report of the expenditures and appropriations of the Sales Tax revenues which were approved by the Town Council during the applicable fiscal year. The Los Gatos Sales Tax Oversight Committee shall undertake such other and additional duties as the City Council may direct.

Resolution 2018- 056 2 of 3 December 18, 2018

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PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 18th day of December 2018, by the following vote:

COUNCIL MEMBERS:

AYES: Marcia Jensen, Rob Rennie, Marico Sayoc, Barbara Spector, Mayor Steve Leonardis NAYS: None.

ABSENT: None.

ABSTAIN None.

TOWN OF LOS GATOS,

LOS GATOS, CALIFORNIA
ATTEST'.

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
Resolution 2018 -056 3 of 3 December 18, 2018

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From: Phil Koen
Sent: Wednesday, June 26, 2024 1:43 PM
To: Mary Badame <[email protected]>; Matthew Hudes <[email protected]>; Rob Rennie <[email protected]>; Maria Ristow <[email protected]>; Rob Moore <[email protected]>
Cc: ; Laurel Prevetti <[email protected]>; Gabrielle Whelan <[email protected]>
Subject: Comments regarding the proposed sales tax measure [EXTERNAL SENDER]
Dear Honorable Mayor and Council Members,
In my capacity as Chair of the Finance Commission, I offer the following comments for the Town Council’s
consideration. I have copied Linda Reiners, Vice Chair of the Finance Commission. Since the Finance Commission
does not have a meeting scheduled before the next Town
Council meeting, the broader Finance Commission has
not had an opportunity to review this letter.

Historically the Town’s financial forecasting has been
inaccurate and biased toward forecasting operating
deficits (e.g., operating expenditures exceeding
operating revenues). This long-standing bias suggests
the forecasting process is functioning more as a
political tool to build a case to increase tax revenues

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ITEM NO. 1.
as opposed to a financial planning tool used to inform
and guide sound financial decisions. I have attached
the Staff presentation to the Town Council in 2016
which was the basis for the Town Council voting to
proceed with Measure G, which was a 1/8 cent general
sales tax increase. If you refer to page 14 of the
presentation, you can see Staff presented various 5-
year forecasts which projected cumulative 5-year
General Fund deficits ranging from a ($2.0) million
deficit to a ($13.2) million deficit. There was no
scenario presented that projected an operating
surplus. In actuality, the Town experienced a
cumulative General Fund surplus to $9.2m and
achieved this without any ARPA proceeds. The
operating surplus was achieved even though the Town
experience material declines in sales tax and hotel
occupancy tax revenues from the impact of Covid in FY
2020 and FY 2021. Measure G did pass and
contributed approximately $3 million to the cumulative
$9.2m surplus. It should also be pointed out that in FY 2023 the General Fund reported an operating surplus
of $5.7m and is projected to have an operating surplus
of approximately $1m this current fiscal year. Because
of these operating results and the Town’s poor record
in forecasting, the Finance Commission questioned
the need to pursue an additional sales tax increase at

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ITEM NO. 1.
this time.

The 2018 Ballot box language mislead voters into
believing that the revenue generated from a new sales
tax will be committed to “essential services”. By
purposely placing the misleading verbiage at the front
of the clause the Town employed the concept of
“primacy” to focus the voters on the funding of
“essential Town services” when in fact it was a general tax with no requirement that these funds be dedicated
to anything (essential or otherwise) other than a legal government purpose. The proposed ballot box
language for the general sales tax is substantially the same as the 2018 ballot box language and employs the
same misleading tactic of appearing to commit the
sales tax proceeds to “essential services”. The Town
Council should understand that this misleading
language could be challenged in court and has been
the subject of a 2022 Santa Clara County Grand Jury
report. I have attached the report along with the Town’s comment letter that agreed with the Grand Jury’s
finding that ballot measures can be misleading and
should be avoided.

The Finance Commission fully reviewed and discussed

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ITEM NO. 1.
the various sales tax options and unanimously passed
a resolution recommending the Town Council pursue
the 1/8 cent sales tax only if the proceeds are legally tied to a specific use and because of a concern that
another jurisdiction could claim the remaining 1/8 cent tax available to the Town. The merits of a specific vs. general tax were discussed in detail and the
conclusion was a specific tax was needed to address
the misleading verbiage used in the 2018 ballot and to
legally bind future Town Councils use of proceeds
given this was a 20-year measure. If the Town Council
ignores the Finance Commission’s recommendation
and proceeds with a general sales tax, the Town
Council will find itself in the very difficult position of having to explain to voters why they ignored the advice offered by the individuals they appointed. If this were to happen, the Town Council should expect that a
“con” argument would appear in the voter pamphlet
pointing out the Finance Commission, which was
formed by a voter approved referendum to provide
expert advice to the Town Council and provide
oversight accountability for the use of Measure G Sales Tax proceeds, did not support a general sales tax
measure. This would not be good outcome for the
Town Council.

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ITEM NO. 1.

The strategy of placing both a general sales tax
measure with a companion advisory measure
continues the deception but in a more elegant way.

The advisory measure does nothing legally and would
cost the Town an additional $66,000 and for what
purpose? “Compelling guidance” is different from
legally binding the use of the sales tax proceeds over a 20-year period. If the Town Council truly believes
additional revenues are needed to fund specific needs,
such as police services, fire protection and more
investment in infrastructure, then the Town Council
should put forth a specific sales tax that will fund these specific needs and make the compelling case to the
voters to support such a tax measure. Even though a
higher percentage of “yes” votes are needed to
approve a specific tax, if the rational put forth is
compelling enough, voters will support the measure.

Intentionally misleading voters with ballot language
that suggests a specific tax is funding “essential
services”, but in fact is a general sales tax with no legal constraints on the use of proceeds for the sole
purpose of avoiding the higher threshold of approval, is not consistent with the values of transparency and
accountability the voters expect from their elected
representatives. If this strategy is pursued, I foresee a

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ITEM NO. 1.
very difficult time for a general sales tax measure
obtaining voter approval.

Thank you for considering these comments.

Phil Koen
Chair of the Finance Commission

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Los Gatos City CouncilJuly 1, 2024

Los Gatos City Council
July 1, 2024