CITY OF ONTARIO
Special City Council/Housing Authority
Meeting
DECEMBER
9, 2022
City Hall
303 East B Street, Ontario, CA 91764
MAYOR PAUL S. LEON • MAYOR PRO TEM ALAN D. WAPNER
COUNCIL MEMBERS JIM W. BOWMAN, DEBRA DORST-PORADA AND RUBEN VALENCIA CITY CLERK SHEILA MAUTZ • TREASURER JAMES R. MILHISER
CITY MANAGER SCOTT OCHOA • CITY ATTORNEY RUBEN DURAN
WELCOME TO A MEETING OF THE ONTARIO CITY COUNCIL
All documents for public review are on file with the Records Management/City Clerk's Department located at 303 East B Street, Ontario, CA 91764.
Anyone wishing to speak in person during public comment or on a particular item will be required to fill out a blue slip. Blue slips must be turned in prior to public comment beginning or before an agenda item is taken up. The Clerk will not accept blue slips after that time. To comment by email, submit your comments no later than 8:00 a.m. on the day of the meeting by emailing your name, agenda item you are commenting on and your comments to
[email protected].
All
comments received by the deadline will be forwarded to the City Council for consideration before action is taken on the matter and will be entered into the record.
Comments will be limited to 3 minutes. Speakers will be alerted when they have 1 minute remaining and when their time is up. Speakers are then to return to their seats and no further comments will be permitted.
In accordance with State Law, remarks during public comment are to be limited to subjects within Council's jurisdiction. Remarks on other agenda items will be limited to those items.
Remarks from those seated or standing in the back of the chamber will not permitted. All those wishing to speak including Council and Staff need to be recognized by the Chair before speaking.
CITY OF ONTARIO Special City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 1
ACCOMODATIONS
If you need special assistance or accommodations to participate in this meeting, please contact the City Clerk's office at 909-395-2009. Notification of 48 hours prior to the meeting will help the City make reasonable arrangements. Equipment for the hearing impaired is available in the Records Management Office.
ORDER OF BUSINESS
The special City Council and Housing Authority meeting begins with Public Comment at 10:00 a.m. immediately followed by the Regular Meeting and Public Hearings. No agenda item will be introduced for consideration after 1:00 p.m. except by majority vote of the City Council.
CALL TO ORDER
(OPEN SESSION)
ROLL CALL
Wapner, Bowman, Dorst-Porada, Valencia, Mayor/Chairman Leon
PLEDGE OF ALLEGIANCE
Council Member Dorst-Porada
PUBLIC COMMENTS 10:00 A.M.
The Public Comment portion of the Council/Housing Authority meeting is limited to 30 minutes with each speaker given a maximum of 3 minutes. An opportunity for further Public Comment may be given at the end of the meeting. Under provisions of the Brown Act, Council is prohibited from taking action on oral requests.
To comment by email, submit your comments by email no later than 8:00 a.m. on the day of the meeting by emailing your name, agenda item you are commenting on and your comment to [email protected]. All Comments received by the deadline will be forwarded to the City Council for consideration before action is taken on the matter and entered into the record. As previously noted -- if you wish to address the Council, fill out one of the blue slips at the rear of the chambers and give it to the City Clerk.
AGENDA REVIEW/ANNOUNCEMENTS
The City Manager will go over all updated materials and correspondence received after the Agenda was distributed to ensure Council Members have received them. He will also make any necessary recommendations regarding Agenda modifications or announcements regarding Agenda items to be considered.
CITY OF ONTARIO Special City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 2
1. CANVASS OF GENERAL MUNICIPAL ELECTION ON NOVEMBER 8, 2022.
ATTACHMENT:
Final Certified Election Results.pdf^01
ATTACHMENT:
CANVASS OF GENERAL MUNICIPAL ELECTION - Measure Q^Reso^02
ATTACHMENT:
Tax Measure Ordinance^03^RM
2. AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH HINDERLITER DE
LLAMAS & ASSOCIATES (HDL) FOR SALES TAX CONSULTING AND REVENUE RECOVERY
SERVICES
3. ADOPT RESOLUTIONS FOR THE ADMINISTRATION AND EXAMINATION OF RECORDS OF THE LOCAL TRANSACTIONS AND USE TAX (MEASURE Q).
ADMINISTRATIVE REPORTS/DISCUSSION/ACTION
That the City Council adopt a resolution reciting the facts of the General Municipal Election, as
it pertains to Tax Measure Q,
held on November 8th, 2022, and declaring the results thereof and such other matters as provided by law.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA,
RECITING THE FACT OF THE GENERAL MUNICIPAL ELECTION HELD ON NOVEMBER 8, 2022, DECLARING THE RESULT OF THE GENERAL TAX MEASURE Q, AND SUCH OTHER MATTERS AS PROVIDED BY LAW.
AN ORDINANCE OF THE PEOPLE OF THE CITY OF ONTARIO, CALIFORNIA, ADDING CHAPTER 12 TO TITLE 3 OF THE ONTARIO MUNICIPAL CODE TO ENACT A ONE PERCENT (1%) GENERAL TRANSACTIONS AND USE TAX (SALES TAX) TO BE
ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION.
CONSENT CALENDAR
All matters listed under CONSENT CALENDAR will be enacted by one motion in the form listed below – there will be no separate discussion on these items prior to the time Council votes on them, unless a member of the Council requests a specific item be removed from the Consent Calendar for a separate vote.
Each member of the public wishing to address the City Council on items listed on the Consent Calendar will be given a total of 3 minutes.
That the City Council authorize the City Manager or his designee to execute an amendment to the existing agreement (on file in the Records Management Department) for sales tax consulting and revenue recovery services with Hinderliter de Llamas & Associates (HdL), of Brea, California, to add Transactions and Use Tax (Measure Q) consulting and revenue recovery services, for $3,120 for a new not to exceed amount of $622,446.
CITY OF ONTARIO Special City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 3
ATTACHMENT:
Resolution to Execute Agreements^RESO^01^RM
ATTACHMENT:
Resolution for Examination of Confidential Records^RESO^02^RM That the City Council take the following actions:
A
.
Adopt a Resolution authorizing the City Manager to execute agreements with the California Department of Tax and Fee Administration to implement a local transactions and use tax.
B
.
Adopt a Resolution rescinding Resolution No. 2020-143 and authorizing examination of sales or transactions and use tax by city officials and an independent contractor.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA
AUTHORIZING THE CITY MANAGER TO EXECUTE AGREEMENTS WITH THE
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION FOR IMPLEMENTATION OF A LOCAL TRANSACTIONS AND USE TAX.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, RESCINDING RESOLUTION NO. 2020-143 AND AUTHORIZING EXAMINATION OF
SALES OR TRANSACTIONS AND USE TAX RECORDS BY CERTAIN CITY OFFICIALS AND AN INDEPENDENT CONTRACTOR.
STAFF MATTERS
City Manager Ochoa
COUNCIL MATTERS
Mayor Leon
Mayor pro Tem Wapner
Council Member Bowman
Council Member Dorst-Porada
Council Member Valencia
ADJOURNMENT
CITY OF ONTARIO Special City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 4 Department: Records Management
Prepared By: Claudia Y Isbell
Staff Member Presenting:
Claudia Y. Isbell, Assistant City Clerk
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 1
SUBJECT:
CANVASS OF GENERAL MUNICIPAL ELECTION ON NOVEMBER 8, 2022.
CITY OF ONTARIO
Agenda Report
December
9, 2022
SECTION:
ADMINISTRATIVE
REPORTS/DISCUSSION/ACTION
RECOMMENDATION:
That the City Council adopt a resolution reciting the facts of the General Municipal Election,
as it pertains to Tax Measure Q,
held on November 8th, 2022, and declaring the
results thereof and such other matters as provided by law.
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Operate in a Businesslike Manner
FISCAL IMPACT:
There is no direct fiscal impact associated with approval of this Resolution.
BACKGROUND & ANALYSIS:
A General Municipal Election was held in the City of Ontario, California, on Tuesday, November 8, 2022 for the election of two members of the City Council, the City Mayor, each of which to serve full four-year terms, and General Tax Ballot - Measure Q.
Pursuant to Resolution No. 2022-124, the City of Ontario requested the Board of Supervisors of the County of San Bernardino to consolidate the General Municipal Election. As a result, the City's election was consolidated with the Statewide General Election, and the Election Department of the County of San Bernardino who is responsible for the canvassing of the returns of the General Municipal Election. The County of San Bernardino concluded its canvassing process 30 days after the election, and posted the Final Certified Election Results on December 8, 2022. The Statement of Certification of Election Results should be available on December 9, 2022 and will be presented as additional information at the special meeting.
As it pertains to Measure Q, copies of the Statement of Certification of Election Results for the 2022 General Municipal Election, Final Certified Election Results, and Total Canvass will be attached as Exhibit A to the Resolution.
Pursuant to Elections Code section 9217, Ordinance No. 3239 adding Chapter 12 to Title 3 of the Ontario Municipal Code to enact a one percent (1%) General Transactions and Use tax (Sales Tax) shall be deemed adopted upon Certification of the Election where the majority of the eligible voters
of the City of Ontario vote in favor, and shall take effect ten (10) thereafter.
5 Staff recommends that the City Council adopt the Resolution reciting the fact of the General Municipal Election as it pertains to Measure Q, thereby adopting Ordinance No. 3239. 6 7
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,
CALIFORNIA, RECITING THE FACT OF THE GENERAL MUNICIPAL
ELECTION HELD ON NOVEMBER 8, 2022, DECLARING THE RESULT
OF THE GENERAL TAX MEASURE Q, AND SUCH OTHER MATTERS AS
PROVIDED BY LAW
WHEREAS, a General Municipal Election was held and conducted in the City of Ontario, California, on Tuesday, November 8, 2022, as required by law; and WHEREAS, notice of the election was given in time, form and manner as provided by law; that voting precincts were properly established; that election officers were appointed and that in all respects the election was held and conducted and the votes were cast, received and canvassed and the returns made and declared in time, form and manner as required by the provisions of the Elections Code of the State of California for the holding of elections in general law cities; and
WHEREAS, pursuant to Resolution Nos. 2022-123, 2022-124, and 2022-125 adopted August 2, 2022, the Registrar of Voters canvassed the returns of the election and has certified the results to this City Council, the results are received and the appropriate sections are attached and made a part hereof as "Exhibit A."
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. The whole number of votes cast in the City for Measure Q was 31,789. The number of votes given in favor was 15,972 and the number against was 14,030.
SECTION 2. The City Council does declare and determine that as a result of the election, a majority of the voters voting on the measure relating to a General Tax Measure Q, did vote in favor of it, and that the measure was carried and shall be deemed adopted and ratified.
SECTION 3. The City Clerk shall enter on the records of the City Council of the City, a statement of the result of the election, showing: (1) The whole number of votes cast in the City; (2) The measure voted upon; (3) The number of votes given at each precinct for and against the measure; (4) The total number of votes for and against the measure.
SECTION 4. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. 8 PASSED, APPROVED AND ADOPTED this 9th day of December, 2022. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
________________________________
SHEILA MAUTZ, CITY CLERK
APPROVED AS TO LEGAL FORM:
_______________________________
BEST BEST & KRIEGER LLP
CITY ATTORNEY
9 STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO )
CITY OF ONTARIO )
I, Sheila Mautz, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2022-_____ was duly passed and adopted by the City Council of the City of Ontario at their special meeting held December 9, 2022 by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
____________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2022-____ duly passed and adopted by the Ontario City Council at their special meeting held December 9, 2022. _____________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
10 EXHIBIT “A”
11 ORDINANCE NO. 3239
AN ORDINANCE OF THE PEOPLE OF THE CITY OF ONTARIO,
CALIFORNIA, ADDING CHAPTER 12 TO TITLE 3 OF THE ONTARIO MUNICIPAL CODE TO ENACT A ONE PERCENT (1%) 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 Ontario (“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 one percent (1%); and
WHEREAS, if approved by the City Council and Ontario voters, the Transactions and Use Tax Ordinance will be incorporated into Chapter 12 of Title 3 of the Ontario Municipal Code.
NOW, THEREFORE, THE PEOPLE OF THE CITY OF ONTARIO DO HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Title and Text. This Ordinance shall be known as the Ontario 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 two-thirds (2/3) supermajority of all members of the City Council on August 2, 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 Ontario 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 Ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.
12 SECTION 6. The Mayor shall sign this Ordinance and the City Clerk shall certify as to the adoption and shall cause a summary thereof to be published at least once, in a newspaper of general circulation in the City of Ontario, California within fifteen (15) days of the adoption. The City Clerk shall post a certified copy of this ordinance, including the vote for and against the same, in the Office of the City Clerk, in accordance with Government Code Section 36933.
I hereby certify that the Ontario Transactions and Use Tax Ordinance was PASSED, APPROVED, AND ADOPTED by the People of the City of Ontario on the 8 th day of November 2022.
_____________________________________
PAUL S. LEON, MAYOR
ATTEST:
_________________________________
SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________
BEST BEST & KRIEGER LLP
CITY ATTORNEY
13 Chapter 12 – TRANSACTIONS AND USE TAX
Sections:
3-12.01 - Purpose.
3-12.02 - Contract with State.
3-12.03 - Transactions Tax Rate.
3-12.04 - Place of Sale.
3-12.05 - Use Tax Rate.
3-12.06 - Adoption of Provisions of State Law.
3-12.07 - Limitations on Adoption of State Law and Collection of Use Taxes. 3-12.08 - Permit Not Required.
3-12.09 - Exemptions and Exclusions.
3-12.10 - Amendments.
3-12.11 - Enjoining Collection Forbidden.
3-12.12 - Duration of Tax
Sections:
3-12.01 - 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 taxes, and at the same time, minimize the burden of record-keeping upon persons subject to taxation under the provisions of this ordinance.
14 3-12.02 - 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. 3-12.03- 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 one percent (1%) 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. 3-12.04 - 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. 3-12.05 - 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 one percent (1%) 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.
3-12.06 - 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.
15 3-12.07 - 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.
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. 16 3-12.08 - 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. 3-12.09 - 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 state-administered transactions or use tax.
B. There are exempted from the computation of the amount of transactions tax the gross receipts from:
1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that 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. 17 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.
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 18 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. 3-12.10 - 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. 3-12.11 - 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 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.
3-12.12 – Duration of Tax.
The tax imposed by this chapter shall continue until this ordinance is repealed. 19 Department: Financial Services
Prepared By: Maeghen Warren
Staff Member Presenting:
Armen Harkalyan, Executive Director of Finance
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 2
SUBJECT:
AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH
HINDERLITER DE LLAMAS & ASSOCIATES (HDL) FOR SALES TAX CONSULTING
AND REVENUE RECOVERY SERVICES
CITY OF ONTARIO
Agenda Report
December
9, 2022
SECTION:
CONSENT CALENDAR
RECOMMENDATION:
That the City Council authorize the City Manager or his designee to execute an amendment to the existing agreement (on file in the Records Management Department) for sales tax consulting and revenue recovery services with Hinderliter de Llamas & Associates (HdL), of Brea, California, to add Transactions and Use Tax (Measure Q) consulting and revenue recovery services, for $3,120 for a new not to exceed amount of $622,446.
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Operate in a Businesslike Manner
FISCAL IMPACT:
The recommended Amendment No. 2 with HdL will amend the Agreement and Amendment No. 1 to add consulting and revenue recovery services for Transactions and Use Tax (Measure Q). The new contract not to exceed amount of $622,446 includes the not to exceed amount of $619,326 from Amendment No. 1 and adds $3,120 to Transactions and Use Tax consulting and revenue recovery.
Additionally, the City will pay an audit fee of 25% for revenue recovery services of the initial amount on any new transactions and use tax revenue received through specific allocation audits and recovery services. The audit fees will vary from one year to another, averaging about $90,000 annually and is not included in the contract not to exceed amount. The net amount paid in audit fees will be offset by the recovered revenues.
The additional appropriations to the General Fund for the Transactions and Use Tax services will be included in the next quarterly budget update. Appropriations for subsequent fiscal years will be requested during the annual budget process. Future funding is contingent upon City Council approval and budget adoption.
BACKGROUND & ANALYSIS:
The HdL company was founded in 1983 and since then has helped cities, counties, and special districts maximize revenues through allocation audits and financial and 20 economic analysis. Supported by special computer analysis, databases, and field investigations, the company's positive relationship with taxpayers, understanding of complex tax laws, and close coordination with the California Department of Tax and Fee Administration (CDTFA), County Auditors, and Assessors assures timely correction and recovery of misallocated revenues and has generated millions of dollars in new monies for client agencies. HdL serves over 400 agencies across the nation.
Due to the complex nature of administering local transactions and use tax, the misallocations and lack of reporting on the updated rate of the tax are common. These errors often result in cities receiving less tax revenues than they are entitled to receive. Therefore, it is for the City's best interest to contract services with HdL to ensure continued sales tax and transactions and use tax revenue monitoring. It is worth noting that most of HdL's key staff members have extensive local government experience, having previously held positions in city management, finance, planning, economic development or revenue collection.
On November 8, 2022, the majority of voters of the City of Ontario voted to approve the 1% local sales tax increase (Measure Q). This general purpose local sales tax is separate from the existing 1% Bradley Burns sales and use tax rate allocated to the City of Ontario as part of the existing 7.75% sales tax rate. Hinderliter de Llamas (HdL) is currently providing sales tax forecasting, analysis, audit, and revenue recovery services to the City for the local Bradley Burns 1% sales tax rate.
Amendment No. 2 will add Transactions and Use Tax (Measure Q) to the existing Agreement with HdL for the same services.
Measure Q will take effect on April 1, 2023, and the City will receive its first advance in June 2023 with the first full quarter's data available and revenue received at the end of August 2023. 21 Department: Financial Services
Prepared By: Maeghen Warren
Staff Member Presenting:
Armen Harkalyan, Executive Director of Finance
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 3
SUBJECT:
ADOPT RESOLUTIONS FOR THE ADMINISTRATION AND EXAMINATION OF RECORDS OF THE LOCAL TRANSACTIONS AND USE TAX (MEASURE Q).
CITY OF ONTARIO
Agenda Report
December
9, 2022
SECTION:
CONSENT CALENDAR
RECOMMENDATION:
That the City Council take the following actions:
A
.
Adopt a Resolution authorizing the City Manager to execute agreements with the California Department of Tax and Fee Administration to implement a local transactions and use tax.
B
.
Adopt a Resolution rescinding Resolution No. 2020-143 and authorizing examination of sales or transactions and use tax by city officials and an independent contractor.
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Maintain the Current High Level of Public Safety
Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
Focus Resources in Ontario's Commercial and Residential Neighborhoods Invest in the Growth and Evolution of the City’s Economy Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT:
The one percent (1%
) local sales tax will generate approximately an additional $95 million annually for the City's General Fund and will be effective on April 1, 2023. The estimated revenue to be collected from this additional local sales tax for Fiscal Year 2022-23 is estimated to be $20 million for the period April through June 2023. These estimates were included in the First Quarter Budget Update approved by City Council on November 15, 2022. Additionally, there are estimated costs from the California Department of Tax and Fee Administration for preparatory expenses in the
amount of $175,000 that will be included in the next quarterly budget update.
BACKGROUND & ANALYSIS:
On Tuesday,
November 8, 2022, the voters of the City of Ontario
approved the local sales tax increase (Measure Q). This 1% sales tax measure is a general purpose tax taking effect on April 1, 2023, and will generate approximately an average of $95 million in annual revenues for the City's General Fund, with dollars that legally cannot be taken by the State or other regional agencies. W
ith the passage of Measure Q, the City’s overall sales tax rate will 22 increase to 8.75% on April 1, 2023, and will apply to general consumer goods and merchandise.
Unprocessed foods (such as groceries from a grocery store or farmer's market), prescription medications, real estate transactions, and services are exempt from the tax.
This additional local revenue can be used to augment existing staffing levels in various City departments, including Ontario Police Department, Community Improvement, and Homeless Services. Funds can also enhance the City's capital improvement program (CIP), and allow for strategic investments in streets, storm drains, parks, drinking water facilities, and crime prevention infrastructure. Additionally, programs including emergency response, youth and senior services, and access to new affordable housing can be expanded.
Pursuant to Revenue and Taxation Code Section 7265, the new tax is scheduled to become operative on April 1, 2023, and will be administered by the California Department of Tax and Fee Administration (CDTFA). The CDTFA requires that the City Council certify the results of the election by December 12, 2022 in order for CDTFA to implement the tax on April 1, 2023. If the certification date falls after December 12, 2022, the next implementation date would be July 1, 2023.
Additionally, CDTFA requires that the City Council
approve a resolution authorizing the City
Manager to execute an agreement with the CDTFA for implementation of the local transactions and use tax. The CDTFA is requesting that the City, in addition to the resolution, also complete and return the following items as soon as possible, but not later than January 2, 2023.
Five (5) Original Preparatory Agreement
Five (5) Original Administrative Agreement
Five (5) Certified copies of Resolution Authorizing the Execution of Agreements Five (5) Certified copies of the Transactions and Use Tax Ordinance One (1) Certified copies of Certification of Final Election Results One (1) Contact Form for All Communications
One (1) Resolution for Examination of Confidential Records One (1) Copy of Consultant Agreement
One (1) Contact Form for Notifications & Appeals
One (1) EFT Authorization Agreement plus copy of voided check One (1) Media and Registration Request Form
To ensure the continued confidentiality to sales, transactions and use tax records, as mandated by the California Revenue and Taxation Code Section 7056, the City will restrict access to collections and receipts to those positions requested in the resolution. Therefore, to maintain the highest level of security, it is recommended to update and expand the list of designation of City positions that are permitted to receive and examine City's sales, transactions and use tax records from the CDTFA. It is also recommended to include Hinderliter deLlamas & Associates (HdL), as this firm is contracted by the City to provide sales, transactions and use tax consulting services for economic analysis, web-based data, auditing, and staff training when it pertains to local sales taxes.
As indicated in the resolution, the following are recommended City positions to have access to the sales, transactions and use tax records along with the City's sales tax consultant, HdL:
23 Assistant City Manager
Assistant Finance Director
Chief Investment Officer
City Manager
Departmental Administrator (Finance)
Economic Development Analyst
Economic Development Coordinator
Executive Director of Economic Development
Executive Director of Finance
Financial Analyst (Finance)
Investments and Treasury Officer
Revenue Manager
Senior Financial Analyst (Finance)
24 RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,
CALIFORNIA AUTHORIZING THE CITY MANAGER TO EXECUTE
AGREEMENTS WITH THE CALIFORNIA DEPARTMENT OF TAX AND
FEE ADMINISTRATION FOR IMPLEMENTATION OF A LOCAL
TRANSACTIONS AND USE TAX.
WHEREAS, on August 2, 2022, the City Council of the City of Ontario (“City”) approved Resolution No. 2022-125 to place a 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) at the rate of one percent (1%), identified as Measure Q, on the November 8, 2022 ballot; and WHEREAS, on November 8, 2022, a majority of voters of the City of Ontario approved Measure Q and the transactions and use tax, thereby authorizing the enactment of Ordinance No. 3239; and
WHEREAS, on December 9, 2022, the City Council of the City approved Ordinance 3239 amending the City Municipal Code and providing for a local transactions and use tax; and
WHEREAS, the California Department of Tax and Fee Administration (“Department”) administers and collects the transactions and use taxes for all applicable jurisdictions within the state; and
WHEREAS, the Department will be responsible to administer and collect the transactions and use tax for the City; and
WHEREAS, the Department requires that the City enter into an Agreement for Preparation to Administer and Operate City’s Transactions and Use Tax Ordinance (“Preparatory Agreement”) and an Agreement for State Administration of City Transactions and Use Taxes (“Administration Agreement”) prior to implementation of said taxes; and
WHEREAS, the Department requires that the City Council authorize the Preparatory Agreement and the Administration Agreement.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY OF ONTARIO AS FOLLOWS:
SECTION 1. Preparatory Agreement. The City Council hereby authorizes the City Manager to complete and execute the Preparatory Agreement in substantially the same form as set forth in Exhibit “A” attached hereto and incorporated herein by reference.
25 SECTION 2. Administration Agreement. The City Council hereby authorizes the City Manager to complete and execute the Administration Agreement in substantially the same form as set forth in Exhibit “B” attached hereto and incorporated herein by reference.
SECTION 3. Other Related Actions. The City Council hereby authorizes the City Manager or his designee to complete and execute any other documents and take all actions necessary or required by the Department to implement and administer the Transactions and Use Tax Ordinance.
SECTION 4. Effective Date. This Resolution shall take effect upon adoption.
The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 9th day of December 2022.
PAUL S. LEON, MAYOR
ATTEST:
SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
CITY ATTORNEY
26 STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO )
CITY OF ONTARIO )
I, Sheila Mautz, City Clerk of the City of Ontario, DO HEREBY CERTIFY that the foregoing Resolution No. 2022-___ was duly passed and adopted by the City Council of the City of Ontario at their special meeting held December 9, 2022 by the following roll call vote, to wit:
AYES: MAYOR/COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2022-___ duly passed and adopted by the Ontario City Council at their special meeting held December 9, 2022
SHEILA MAUTZ, CITY CLERK
(SEAL)
27 EXHIBIT A
AGREEMENT FOR PREPARATION TO ADMINISTER AND OPERATE
CITY'S TRANSACTIONS AND USE TAX ORDINANCE
In order to prepare to administer a transactions and use tax ordinance adopted in accordance with the provision of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, the CITY OF ONTARIO, hereinafter called City, and the CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION, hereinafter called Department, do agree as follows:
1. The Department agrees to enter into work to prepare to administer and operate a transactions and use tax in conformity with Part 1.6 of Division 2 of the Revenue and Taxation Code which has been approved by a majority of the electors of the City and whose ordinance has been adopted by the City.
2. City agrees to pay to the Department at the times and in the amounts hereinafter specified all of the Department's costs for preparatory work necessary to administer the City's transactions and use tax ordinance. The Department's costs for preparatory work include costs of developing procedures, programming for data processing, developing and adopting appropriate regulations, designing and printing forms, developing instructions for the Department's staff and for taxpayers, and other appropriate and necessary preparatory costs to administer a transactions and use tax ordinance. These costs shall include both direct and indirect costs as specified in Section 11256 of the Government Code.
3. Preparatory costs may be accounted for in a manner which conforms to the internal accounting and personnel records currently maintained by the Department. The billings for costs may be presented in summary form. Detailed records of preparatory costs will be retained for audit and verification by the City.
4. Any dispute as to the amount of preparatory costs incurred by the Department shall be referred to the State Director of Finance for resolution, and the Director's decision shall be final.
5. Preparatory costs incurred by the Department shall be billed by the Department periodically, with the final billing within a reasonable time after the operative date of the ordinance. City shall pay to the Department the amount of such costs on or before the last day of the next succeeding month following the month when the billing is received. 28 6. The amount to be paid by City for the Department's preparatory costs shall not exceed one hundred seventy-five thousand dollars ($175,000) (Revenue and Taxation Code Section 7272.)
7. Communications and notices may be sent by first class United States mail.
Communications and notices to be sent to the Department shall be addressed to:
California Department of Tax and Fee Administration
P.O. Box 942879 MIC: 27
Sacramento, CA 94279-0027
Attention: Administrator
Local Revenue Branch
Communications and notices to be sent to City shall be addressed to:
City of Ontario
303 East B Street
Ontario, CA 91764
Attention: Executive Director of Finance
8. The date of this agreement is the date on which it is approved by the Department of General Services. This agreement shall continue in effect until the preparatory work necessary to administer City's transactions and use tax ordinance has been completed and the Department has received all payments due from City under the terms of this agreement.
CITY OF ONTARIO CALIFORNIA DEPARTMENT OF TAX
AND FEE ADMINISTRATION
By By
(Signature) Administrator
Local Revenue Branch
Scott Ochoa
(Typed Name)
City Manager
(Title)
29 B-1
EXHIBIT B
AGREEMENT FOR STATE ADMINISTRATION
OF CITY TRANSACTIONS AND USE TAXES
The City Council of the City of Ontario has adopted, and the voters of the City of Ontario (hereafter called “City” or “District”) have approved by the required majority vote, the City of Ontario Transactions and Use Tax Ordinance (hereafter called “Ordinance”), a copy of which is attached hereto. To carry out the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code and the Ordinance, the California State Department of Tax and Fee Administration, (hereinafter called the “Department”) and the City do agree as follows:
ARTICLE I
DEFINITIONS
Unless the context requires otherwise, wherever the following terms appear in the Agreement, they shall be interpreted to mean the following:
1. "District taxes" shall mean the transactions and use taxes, penalties, and interest imposed under an ordinance specifically authorized by Revenue and Taxation code Section 7285.9, and in compliance with Part 1.6, Division 2 of the Revenue and Taxation Code.
2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance referred to above and attached hereto, Ordinance No. 3239, as amended from time to time, or as deemed to be amended from time to time pursuant to Revenue and Taxation Code Section 7262.2.
30 ARTICLE II
ADMINISTRATION AND COLLECTION
OF CITY TAXES
A. Administration. The Department and City agree that the Department shall perform exclusively all functions incident to the administration and operation of the City Ordinance.
B. Other Applicable Laws. City agrees that all provisions of law applicable to the administration and operation of the Department Sales and Use Tax Law which are not inconsistent with Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration and operation of the City Ordinance. City agrees that money collected pursuant to the City Ordinance may be deposited into the State Treasury to the credit of the Retail Sales Tax Fund and may be drawn from that Fund for any authorized purpose, including making refunds, compensating and reimbursing the Department pursuant to Article IV of this Agreement, and transmitting to City the amount to which City is entitled.
C. Transmittal of money.
1. For the period during which the tax is in effect, and except as otherwise provided herein, all district taxes collected under the provisions of the City Ordinance shall be transmitted to City periodically as promptly as feasible, but not less often than twice in each calendar quarter.
2. For periods subsequent to the expiration date of the tax whether by City’s self- imposed limits or by final judgment of any court of the State of California holding that City’s ordinance is invalid or void, all district taxes collected under the provisions of the City Ordinance shall be transmitted to City not less than once in each calendar quarter.
3. Transmittals may be made by mail or electronic funds transfer to an account of the City designated and authorized by the City. A statement shall be furnished at least quarterly indicating the amounts withheld pursuant to Article IV of this Agreement. 31 D. Rules. The Department shall prescribe and adopt such rules and regulations as in its judgment are necessary or desirable for the administration and operation of the City Ordinance and the distribution of the district taxes collected thereunder.
E. Preference. Unless the payor instructs otherwise, and except as otherwise provided in this Agreement, the Department shall give no preference in applying money received for state sales and use taxes, state-administered local sales and use taxes, and district transactions and use taxes owed by a taxpayer, but shall apply moneys collected to the satisfaction of the claims of the State, cities, counties, cities and counties, redevelopment agencies, other districts, and City as their interests appear.
F. Security. The Department agrees that any security which it hereafter requires to be furnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it also will be available for the payment of the claims of City for district taxes owing to it as its interest appears. The Department shall not be required to change the terms of any security now held by it, and City shall not participate in any security now held by the Department.
G. Records of the Department.
When requested by resolution of the legislative body of the City under section 7056 of the Revenue and Taxation Code, the Department agrees to permit authorized personnel of the City to examine the records of the Department, including the name, address, and account number of each seller holding a seller’s permit with a registered business location in the City, pertaining to the ascertainment of transactions and use taxes collected for the City. Information obtained by the City from examination of the Department's records shall be used by the City only for purposes related to the collection of transactions and use taxes by the Department pursuant to this Agreement.
H. Annexation. City agrees that the Department shall not be required to give effect to an annexation, for the purpose of collecting, allocating, and distributing District transactions and use taxes, earlier than the first day of the calendar quarter which commences not less than two months after notice to the Department. The notice shall 32 include the name of the county or counties annexed to the extended City boundary. In the event the City shall annex an area, the boundaries of which are not coterminous with a county or counties, the notice shall include a description of the area annexed and two maps of the City showing the area annexed and the location address of the property nearest to the extended City boundary on each side of every street or road crossing the boundary.
ARTICLE III
ALLOCATION OF TAX
A. Allocation. In the administration of the Department's contracts with all districts that impose transactions and use taxes imposed under ordinances, which comply with Part 1.6 of Division 2 of the Revenue and Taxation Code:
1. Any payment not identified as being in payment of liability owing to a designated district or districts may be apportioned among the districts as their interest appear, or, in the discretion of the Department, to all districts with which the Department has contracted using ratios reflected by the distribution of district taxes collected from all taxpayers.
2. All district taxes collected as a result of determinations or billings made by the Department, and all amounts refunded or credited may be distributed or charged to the respective districts in the same ratio as the taxpayer's self-declared district taxes for the period for which the determination, billing, refund or credit applies.
B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with respect to vehicles, vessels, or aircraft, the address of the registered owner appearing on the application for registration or on the certificate of ownership may be used by the Department in determining the place of use.
33 ARTICLE IV
COMPENSATION
The City agrees to pay to the Department as the State's cost of administering the City Ordinance such amount as is provided for by law. Such amounts shall be deducted from the taxes collected by the Department for the City.
ARTICLE V
MISCELLANEOUS PROVISIONS
A. Communications. Communications and notices may be sent by first class United States mail to the addresses listed below, or to such other addresses as the parties may from time to time designate. A notification is complete when deposited in the mail.
Communications and notices to be sent to the Department shall be addressed to:
California State Department of Tax and Fee Administration P.O. Box 942879
Sacramento, CA 94279-0027
Attention: Administrator
Local Revenue Branch
Communications and notices to be sent to the City shall be addressed to:
City of Ontario
303 East B Street
Ontario, CA 91764
Attention: Executive Director of Finance
Unless otherwise directed, transmittals of payment of District transactions and use taxes will be sent to the address above.
34 B. Term. The date of this Agreement is the date on which it is approved by the Department of General Services. The Agreement shall take effect on April 1, 2023. This Agreement shall continue until December 31 next following the expiration date of the City Ordinance, and shall thereafter be renewed automatically from year to year until the Department completes all work necessary to the administration of the City Ordinance and has received and disbursed all payments due under that Ordinance.
C. Notice of Repeal of Ordinance. City shall give the Department written notice of the repeal of the City Ordinance not less than 110 days prior to the operative date of the repeal.
35 ARTICLE VI
ADMINISTRATION OF TAXES IF THE
ORDINANCE IS CHALLENGED AS BEING INVALID
A. Impoundment of funds .
1. When a legal action is begun challenging the validity of the imposition of the tax, the City shall deposit in an interest-bearing escrow account, any proceeds transmitted to it under Article II. C., until a court of competent jurisdiction renders a final and non- appealable judgment that the tax is valid.
2. If the tax is determined to be unconstitutional or otherwise invalid, the City shall transmit to the Department the moneys retained in escrow, including any accumulated interest, within ten days of the judgment of the trial court in the litigation awarding costs and fees becoming final and non-appealable.
B. Costs of administration. Should a final judgment be entered in any court of the State of California, holding that City's Ordinance is invalid or void, and requiring a rebate or refund to taxpayers of any taxes collected under the terms of this Agreement, the parties mutually agree that:
1. Department may retain all payments made by City to Department to prepare to administer the City Ordinance.
2. City will pay to Department and allow Department to retain Department's cost of administering the City Ordinance in the amounts set forth in Article IV of this Agreement.
3. City will pay to Department or to the State of California the amount of any taxes plus interest and penalties, if any, that Department or the State of California may be required to rebate or refund to taxpayers.
4. City will pay to Department its costs for rebating or refunding such taxes, interest, or penalties. Department's costs shall include its additional cost for developing procedures for processing the rebates or refunds, its costs of actually making these 36 refunds, designing and printing forms, and developing instructions for Department's staff for use in making these rebates or refunds and any other costs incurred by Department which are reasonably appropriate or necessary to make those rebates or refunds. These costs shall include Department's direct and indirect costs as specified by Section 11256 of the Government Code.
5. Costs may be accounted for in a manner, which conforms to the internal accounting, and personnel records currently maintained by the Department. The billings for such costs may be presented in summary form. Detailed records will be retained for audit and verification by City.
6. Any dispute as to the amount of costs incurred by Department in refunding taxes shall be referred to the State Director of Finance for resolution and the Director's decision shall be final.
7. Costs incurred by Department in connection with such refunds shall be billed by Department on or before the 25th day of the second month following the month in which the judgment of a court of the State of California holding City's Ordinance invalid or void becomes final. Thereafter Department shall bill City on or before the 25th of each month for all costs incurred by Department for the preceding calendar month. City shall pay to Department the amount of such costs on or before the last day of the succeeding month and shall pay to Department the total amount of taxes, interest, and penalties refunded or paid to taxpayers, together with Department costs incurred in making those refunds.
CITY OF ONTARIO CALIFORNIA STATE DEPARTMENT OF
AND FEE ADMINISTRATION
By By _______________________________
(Signature) Administrator
Local Revenue Branch
Scott Ochoa
(Typed Name)
City Manager
(Title)
37 RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, RESCINDING RESOLUTION NO. 2020-143 AND
AUTHORIZING EXAMINATION OF SALES OR TRANSACTIONS AND
USE TAX RECORDS BY CERTAIN CITY OFFICIALS AND AN
INDEPENDENT CONTRACTOR.
WHEREAS, pursuant to Ordinance No. 1131 and California Revenue & Taxation Code Section 7200 et seq., the City of Ontario entered into a contract with the California Department of Tax and Fee Administration (“Department”) to perform all functions incident to the administration and collection of local sales or transactions and use taxes; and
WHEREAS, pursuant to Ordinance No. 3239 and California Revenue & Taxation Code Section 7270, the City of Ontario entered into a contract with the California Department of Tax and Fee Administration (“Department”) to perform all functions incident to the administration and collection of transactions and use taxes; and WHEREAS, the City Council of the City of Ontario deems it desirable and necessary for authorized representatives of the City to examine confidential sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected by the Department for the City pursuant to that contract; and WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Department records, and establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales or transactions and use tax records of the Department; and WHEREAS, previous resolutions of the City Council of the City of Ontario adopted pursuant to Section 7056 of the Revenue and Taxation Code, including Resolution No. 96-050, are superseded and replaced by this Resolution.
NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED, AND RESOLVED, by the City Council of the City of Ontario as follows:
SECTION 1. That the recitals set out above are true and correct.
SECTION 2.
(a) That the following City officials and employees (“Authorized Persons”) are designated to represent the City of Ontario with authority to examine sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department pursuant to the contract between the City and the Department:
38 Assistant City Manager
Assistant Finance Director
Chief Investment Officer
City Manager
Departmental Administrator (Finance)
Economic Development Analyst
Economic Development Coordinator
Executive Director of Economic Development
Executive Director of Finance
Financial Analyst (Finance)
Investments and Treasury Officer
Revenue Manager
Senior Financial Analyst (Finance)
(b) That the City Manager also may designate in writing additional City officials or employees to examine sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department pursuant to the contract between the City and the Department. (c) That the information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to that contract.
SECTION 3. That all Authorized Persons, or other such official or employee of the City designated in writing by the City Manager to the Department, is hereby appointed to represent the City with authority to examine those sales or transactions and use tax records of the Department, for purposes related to the following governmental functions of the City:
City administration;
Revenue management and budgeting;
Community and economic development;
Business license tax administration;
Sales tax and economic analysis;
Allocation audit, deficiency and recovery; and
Database creation and management.
The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above.
SECTION 4. That Hinderliter de Llamas & Associates, an independent contractor, is hereby designated to examine the sales or transactions and use transactions tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department. The person or entity designated by this section meets all of the following conditions:
(a) has an existing contract with the City to examine those sales or transactions and use tax records;
39 (b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Sections 2 or 3 of this Resolution to examine the information. (c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract; and
(d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.
SECTION 5. The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to the contract between the City and the Department.
SECTION 6. That this Resolution supersedes all prior resolutions of the City Council of the City of Ontario adopted pursuant to Section 7056 of the Revenue and Taxation Code, including Resolution Nos. 96-050, 2009-001, and 2020-143.
The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
PASSED, APPROVED AND ADOPTED this 9th day of December 2022. ________________________________
PAUL S. LEON, MAYOR
ATTEST:
_________________________________
SHEILA MAUTZ, CITY CLERK
APPROVED AS TO LEGAL FORM:
_________________________________
BEST BEST & KRIEGER LLP
CITY ATTORNEY
40 STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO )
CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that the foregoing Resolution No. was duly passed and adopted by the City Council of the City of Ontario at their special meeting held December 9, 2022 by the following roll call vote, to wit:
AYES: MAYOR/COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. duly passed and adopted by the Ontario City Council at their special meeting held December 9, 2022. ________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
41