Pacifica City Council
August 5, 2026

CITY OF PACIFICA

CITY COUNCIL AGENDA
Council Chambers
2212 Beach Blvd
Pacifica, CA 94044
Mayor Christine Boles
Vice Mayor Greg Wright
Councilmember Sue Beckmeyer
Councilmember Mary Bier
Councilmember Mayra Espinosa
City Council Special Meeting 1 August 05, 2026

SPECIAL MEETING
August 05, 2026 (WEDNESDAY) – 6:00 PM
www.cityofpacifica.org

PLEASE SILENCE CELL PHONES DURING MEETING
Observe and Participate in the Meeting: This meeting is held in-person at the meeting location published in the meeting agenda and includes the following remote access options to observe and participate:
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• Live Remote Public Comments:
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o Press * 6 to unmute when called upon to speak by the last 4-digits of your phone #. • When the Mayor announces the Agenda Item on which you would like to comment, raise your hand in Zoom. You will be called upon my screenname or last 4-digits of phone number if dialing in. Please mute any background sound and state your full name at the start of your comment.

Please note that remote access platforms for participation are subject to underlying technology functionality; any disruption of the remote access will be addressed pursuant to Administrative Policy No. 85, a copy of which is available on the City’s website at https://www.cityofpacifica.org/government/citycouncil/city-council-agendas . • Written Public Comments:

BEFORE THE MEETING: Written public comments may be submitted in advance by 12:00 p.m. on the meeting date by email to: [email protected]. Written public comments submitted by email should adhere to the following:
• Clearly indicate the Agenda Item No. or specify “Public Comment on Item Not on Agenda” in the Subject Line
• Include the submitter’s full name
Written public comments received by 12:00 p.m. on the meeting date will be provided in their entirety to the City Council and posted to the City’s website prior to the meeting but will not be read verbally at the meeting.

AT THE MEETING: Materials in writing provided at the meeting should provide seven (7) copies to provide for each Councilmember, City Clerk and City staff.

City Council Special Meeting 2 August 05, 2026
NOTE: Anyone requiring assistance or reasonable accommodations pursuant to the Americans with Disabilities Act for access to the meeting, related materials and/or ability to comment should provide at least 24 hours advance notice to the City Manager’s Office (650) 738-7301, or send request via email to: [email protected]. All meeting rooms are accessible to the disabled.
6:00 PM - OPEN SESSION
Call to Order
Roll Call
Reading of Land Acknowledgment
The City of Pacifica acknowledges that we occupy the unceded ancestral homeland of the Ramaytush Ohlone peoples, who are the original inhabitants of the San Francisco Peninsula. We honor the Ramaytush Ohlone peoples for their enduring commitment to Mother Earth. As the Indigenous protectors of this land and in accordance with their traditions, the Ramaytush Ohlone have never ceded, lost, nor forgotten their responsibilities as the caretakers of this place, as well as for all peoples who reside in their traditional territory. We affirm their sovereign rights as First Peoples and wish to pay our respects to the ancestors, elders, and relatives of the Ramaytush Ohlone peoples.

Salute to the Flag led by Mayor Boles

CONSIDERATION

1. Resolution of the City Council of the City of Pacifica Calling and Giving Notice for Holding a General Municipal Election on Tuesday, November 3, 2026, for Submission to the Qualified Voters of the City a Ballot Measure Regarding a 1% (1 Cent) Transactions and Use (Sales) Tax for General City Revenue Purposes and Requesting San Mateo County to Consolidate the City’s General Municipal Election with the November 3, 2026 Statewide General Election and to Provide Election Services.

PROPOSED ACTION: Move to adopt a Resolution of the City Council of the City of Pacifica Calling and Giving Notice for Holding a General Municipal Election on Tuesday, November 3, 2026, for Submission to the Qualified Voters of the City a Ballot Measure Regarding a 1% (1 Cent) Transactions and Use (Sales) Tax for General City Revenue Purposes and Requesting San Mateo County to Consolidate the City’s General Municipal Election with the November 3, 2026 Statewide General Election and to Provide Election Services.

A Transactions and Use Tax is a General Tax that requires a 2/3 majority vote of the City Council (4 out of 5 Councilmembers) to be placed on the ballot and a simple majority vote (50% + 1) of the voters to pass. Tonight's action by the City Council, if adopted, would place the proposed revenue measure before the voters of the City of Pacifica for their consideration.

PUBLIC COMMENTS ON ITEMS NOT ON THE POSTED AGENDA
This portion of the Agenda is available for the public to address the City Council on any issue that is not on the Agenda. Any person wishing to address the Council shall be City Council Special Meeting 3 August 05, 2026
recognized by the Mayor during this time, provided, however, that only items not on the Agenda for that meeting may be addressed. Comments on non-agendized items must address matters within the subject matter jurisdiction of the City. If comments do not address matters within the subject matter jurisdiction of the City, the City will provide you with an initial warning to stay within the subject matter jurisdiction of the City. If the warning is not followed, the Mayor will direct the City Clerk to cut off the microphone.

Councilmembers shall not enter into debate with speakers under Public Comments on Items Not on the Posted Agenda. A maximum of three minutes will be allowed for any speaker.

CLOSED SESSION
00a. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION. Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9 and paragraph (1) of subdivision (e) of Section 54956.9: One Case.

CLOSED SESSION REPORT

ADJOURN
NOTICE: If you challenge a city's zoning, planning or other decision in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Judicial review of any city administrative decision may be had only if a petition is filed with the court not later than the 90th day following the date upon which the decision becomes final. Judicial review of environmental determinations may be subject to a shorter time period for litigation, in certain cases 30 days following the date of the final decision The Pacifica Municipal Code is available online at the City’s website (www.cityofpacifica.org/municode);

HOW TO OBTAIN CITY COUNCIL AGENDAS
Posted agendas:

Agendas are posted no later than Friday prior to the City Council meeting date, at the entrance to the City Hall location at 170 Santa Maria Avenue, Pacifica.

View on the Internet:

Follow the link to Council agenda, at www.cityofpacifica.org E-mail subscription:

Send a request to Sarah Coffey, at [email protected] City Clerk’s Office/City Manager’s Office
City Hall, 170 Santa Maria Ave.

Council meetings:

Agendas are available at the City Council meeting

HOW TO REACH YOUR GOVERNMENT OFFICIALS
• San Mateo County Supervisor Ray Mueller, District 3, 500 County Center, Redwood City CA 94063 (650) 363-4569
• Governor Gavin Newsom, State Capitol Building, Sacramento CA 95814 (916) 445-2841 • State Senator Josh Becker, 1528 So. El Camino Real, Suite 303, San Mateo CA 94402 (650) 212-3313 • Assembly Member Marc Berman, 721 Colorado Ave, Suite 101, Palo Alto CA 94303 (650) 324-0224 City Council Special Meeting 4 August 05, 2026
• Congressman Sam Liccardo, 1117 Longworth House Office Building, Washington DC 20515 (202) 225-8104
• Senator Alex Padilla, 331 Hart Senate Office Building, Washington DC 20510 (202) 224-3553 • Senator Adam Schiff, SD-B40B Dirksen Senate Office Building, Washington DC 20510 (202) 224-3841 • President Donald J. Trump, 1600 Pennsylvania Ave. NW, Washington DC 20500

CITY COUNCIL
• Mayor Christine Boles, [email protected]
• Vice Mayor Greg Wright, [email protected]
• Councilmember Sue Beckmeyer, [email protected]
• Councilmember Mary Bier, [email protected]
• Councilmember Mayra Espinosa, [email protected]

CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
8/5/2026
1 SUBJECT:

Resolution of the City Council of the City of Pacifica Calling and Giving Notice for Holding a General Municipal Election on Tuesday, November 3, 2026, for Submission to the Qualified Voters of the City a Ballot Measure Regarding a 1% (1 Cent) Transactions and Use (Sales) Tax for General City Revenue Purposes and Requesting San Mateo County to Consolidate the City’s General Municipal Election with the November 3, 2026 Statewide General Election and to Provide Election Services.

RECOMMENDED ACTION:

Move to adopt a Resolution of the City Council of the City of Pacifica Calling and Giving Notice for Holding a General Municipal Election on Tuesday, November 3, 2026, for Submission to the Qualified Voters of the City a Ballot Measure Regarding a 1% (1 Cent) Transactions and Use (Sales) Tax for General City Revenue Purposes and Requesting San Mateo County to Consolidate the City’s General Municipal Election with the November 3, 2026 Statewide General Election and to Provide Election Services.

A Transactions and Use Tax is a General Tax that requires a 2/3 majority vote of the City Council (4 out of 5 Councilmembers) to be placed on the ballot and a simple majority vote (50% + 1) of the voters to pass. Tonight's action by the City Council, if adopted, would place the proposed revenue measure before the voters of the City of Pacifica for their consideration.

STAFF CONTACT:

Sean Charpentier, City Manager
(650) 738-7409
[email protected]
Yulia Carter, Assistant City Manager
(650) 738-7301
[email protected]
BACKGROUND:

Over the past year, the City Council has engaged in a comprehensive review of the City's longterm financial outlook and strategies to ensure Pacifica's long-term fiscal sustainability.

Concurrently, the City conducted extensive community outreach and engagement with residents, local businesses and community members on Pacifica’s fiscal sustainability and City service needs and priorities.

The City is facing an ongoing structural deficit in excess of $3.5 million a year. As explained further in the report below, there are several tough decisions the City has already made extensive cuts and any further cuts will affect the City services residents rely on. Due to these stark realities, the City conducted an interactive conversation around the budget process this year- The Pacifica Discussion 2026 - to hear community perspectives and concerns on the 1 Packet Pg. 5
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future of Pacifica and the services it provides.

Through the Pacifica Discussion, nearly 1,000 residents gave their feedback on City service needs and funding priorities and identified community funding priorities such as maintaining emergency medical response times, preventing the elimination of firefighter positions, maintaining police services, funding emergency response services, maintaining storm drains to prevent flooding and protecting Pacifica’s long-term financial stability.

Residents also expressed the importance of prioritizing paving streets in the worst conditions.

Despite the City’s best efforts, Pacifica still has among the worst-rated roads in the entire Bay Area, with only 28% of the City’s streets rated as at least “good” and 27% rated as “failed” to “very poor.” Pacifica has a backlog of $84 million in needed street and road repairs and maintenance needs. Pacifica needs an additional local funding source of those repairs will become even more expensive, pushing the backlog up to $123 million in five years.

With public safety on the top of resident’s priority list, fire and 911 emergency response services were most prominent amongst the feedback received. Pacifica’s current fire stations fire stations have no space for firefighters returning from calls to decontaminate and store personal protection equipment, which increases risk of exposure to carcinogens. The proposed Pacifica City Services Measure could fund the facilities that can reduce firefighters risk of exposure to hazardous materials.

Currently, the City cannot continue to fund these services, during two Fiscal Sustainability Study Sessions held in November 2025, the City Council reviewed the City's long-term financial forecast, which identified a growing structural imbalance between ongoing revenues and expenditures. The study sessions focused on preserving essential public services while maintaining the City's long-term financial stability and explored a comprehensive fiscal sustainability framework built around five interconnected "puzzle pieces", recognizing that no single strategy could resolve the City’s long-term fiscal challenges on its own.

1. Revenue Strategies - strengthening and diversifying ongoing revenue sources;

2. Organizational Investments - maintaining organizational capacity and attracting and retaining a competent and high-performing staff;

3. Economic Development - expanding the City's economic base and growing local revenues;

4. Housing Development - recognizing housing as an economic driver that supports workforce retention and long-term fiscal health; and

5. Community Partnerships - leveraging grants, regional partnerships, and outside funding to supplement local resources.
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It is important to recognize that achieving long-term fiscal sustainability would require pursuing all five puzzle pieces concurrently, rather than relying on any single strategy or revenue source.

Since those study sessions, the City has actively pursued each of these strategies. During development of the FY 2026-27 Budget, every department conducted a comprehensive review of its services using a structured framework that evaluated programs within three broad categories:
• Mandated and Public Health & Safety Services - federally, state, or legally required services, as well as services directly tied to protecting life, property, and public safety. • Core and Essential Services - critical services necessary to maintain basic City operations and community functioning, but not specifically required by law. • Discretionary Services and Community Enhancements - programs and services that enrich quality of life, strengthen community identity, and enhance Pacifica's vibrancy, but which may be more susceptible to modification when financial resources are constrained.

This framework enabled departments to evaluate not only potential expenditure reductions, but also opportunities to improve operational efficiency, reorganize services, pursue alternative service delivery models, and better align available resources with the City's highest priorities.

As a result of those efforts, the City Council adopted approximately $2.8 million in expenditure reductions, operational savings, and budget balancing measures as part of the FY 2026-27 Budget. These actions included staffing reductions, vacancy freezes, organizational restructuring, operational efficiencies, service level adjustments, expenditure deferrals, and other cost-saving measures. Collectively, these actions allowed the City to adopt a balanced operating budget while minimizing impacts to legally mandated and core public services wherever possible.

While these actions balanced the FY 2026-27 Budget, many of the adopted solutions were designed to address the City's immediate fiscal challenge rather than permanently resolve its underlying structural deficit. Several relied on one-time savings, expenditure deferrals, temporary operational adjustments, or delaying investments that will need to be revisited in future budget cycles if the structural imbalance persists.

As a result, absent additional long-term structural solutions, the City will face increasingly difficult budget decisions in future years.

The budget process also required the City Council to consider reductions to a number of discretionary services that generated significant public interest and community concern, including the proposed elimination of the City's aquatics program and senior transportation services. While funding was ultimately identified to continue the aquatics program during FY 2026-27, that decision does not eliminate the City's underlying structural fiscal challenge.

If the City's structural deficit continues, many of these same discretionary services, along with additional community programs, may once again need to be evaluated as part of future budget balancing efforts.

Throughout both Fiscal Sustainability Study Sessions and the FY 2026-27 Budget process, the City Council acknowledged that continued reliance on expenditure reductions alone would likely result in progressively deeper service reductions, diminished organizational capacity, deferred maintenance and infrastructure investment, and reduced ability to respond to community priorities. While expenditure management remains an essential component of the City's long1 Packet Pg. 7
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term fiscal sustainability strategy, evaluating revenue diversification opportunities is also part of a balanced and comprehensive approach to achieving long-term fiscal sustainability.

Among the revenue options discussed during the Fiscal Sustainability Study Sessions that occurred in November 2025 were modernization of the Utility Users Tax and Business License Tax, a parcel tax, and a local Transactions and Use Tax (sales tax). Pacifica’s current combined sales and use tax rate is 9.85 percent, consisting of the statewide base sales and use tax, countywide transactions and use taxes, and the City’s existing one-half cent Transactions and Use Tax approved by voters in 2022 (Measure Y). Following those discussions, the City continued its community engagement efforts through the Pacifica Discussion initiative, budget development study session, community surveys, and other public outreach to foster an informed community dialogue regarding the City's long-term fiscal outlook, community priorities, and potential funding options. The results of these efforts, together with the City's fiscal analysis, informed the recommendation presented in this report.

The purpose of this report is to consider whether to place before the voters a general one-cent Transactions and Use Tax measure on the November 3, 2026 General Municipal Election ballot.

If approved, the proposed measure would provide Pacifica voters the opportunity to determine whether to authorize an additional locally controlled revenue source to support essential City services and address the City's long-term fiscal sustainability challenges.

DISCUSSION:

Projected Structural Budget Shortfall
In April 2026, the Finance Department provided an updated 10 Year Long Term Financial Forecast of the City of Pacifica General Fund. This forecast showed that General Fund expenditures will continue to outpace recurring revenues absent additional corrective action and a structural deficit in the 2026-27 and following fiscal years in excess of $3.8 Million per year (see Attachment 1). This imbalance is driven by a combination of factors, including increasing personnel costs, inflation, pension obligations, aging infrastructure needs, and limited growth in the existing revenue sources, and ongoing uncertainty regarding the State’s Vehicle License Fee (VLF) in-lieu funding.

Although the FY 2026-27 Budget was balanced through a combination of expenditure reductions, operational savings, and other budget balancing measures, the Long-Term Financial Forecast indicates that additional structural solutions will be necessary to maintain long-term fiscal sustainability. As a result, the City Council has continued evaluating revenue diversification opportunities alongside ongoing expenditure management as part of a comprehensive fiscal sustainability strategy.

Local Revenue Measures on the November 2026 Ballot in San Mateo County Pacifica is not alone in evaluating local revenue options to address long-term fiscal challenges.

Several cities throughout San Mateo County are placing local revenue measures before their voters at the upcoming November 2026 General Election.

Two cities are considering Transactions and Use Tax for the November 3, 2026 ballot:
• City of San Carlos voters will be considering a ½ cent Transactions and Use Tax ($6 Million per year in estimated revenue),
• City of San Mateo voters will be considering a ¼ cent increase in the City’s Transactions and Use Tax ($7 Million per year in estimated revenue).

Other City revenue measures that appear on the November 3, 2026 ballot include:
• City of Brisbane - Business License Tax measure ($1 Million per year in estimated 1 Packet Pg. 8
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revenue),
• City of Burlingame - Transient Occupancy (Hotel) Tax measure ($5.7 Million per year in estimated revenue),
• City of East Palo Alto - $125 Million Infrastructure Bond Measure ($8.9 Million per year in estimated revenue),
• Town of Portola Valley - Charter City Property Transfer Tax measure ($ 2 Million per year in estimated revenue).

These measures demonstrate that many local jurisdictions throughout San Mateo County are evaluating a variety of revenue strategies to address increasing service demands, infrastructure needs, and long-term fiscal sustainability.

Placing a General Locally Controlled Revenue Measure on the Ballot A Local Transactions and Use Tax is a general tax that would require a 2/3 majority vote of the City Council (4 out of 5 Councilmembers) to be placed on the ballot and to allow Pacifica voters to decide a simple majority vote (50% + 1) of the voters to pass.

By law, a General Tax may only be placed on the ballot when there is a City Council election, except in cases of emergency declared by a unanimous vote of the City Council. California Constitution Article XIII C Section 2(b) governs this requirement, which restricts the placement of such a measure during such election years. For Pacifica, after the November 3, 2026 General Election, the next opportunity to place a General Tax on the ballot would be November 2028.

Proposed State Legislation (SB762) and Implementation Considerations State law currently limits the combined rate of all local Transactions and Use Taxes imposed within any county to a maximum of 2 percent. Because Pacifica has reached that statutory limit through existing countywide and local Transactions and Use Taxes, the City cannot impose an additional Transactions and Use Tax under current law.

Proposed state legislation, Senate Bill 762 (SB 762), authored by Senator Arreguin, would authorize the City of Pacifica and several other California jurisdictions to exceed the existing statutory limit. If enacted, SB 762 would provide the legal authority necessary for Pacifica voters to consider a one-cent Transactions and Use Tax estimated to generate approximately $5 million annually for the City's General Fund. The Bill is currently awaiting the Governor’s approval to be signed into law upon the Legislature’s return from recess.

Election and Legislative Timing
The timing of SB 762 presents unique implementation considerations. State election law requires local agencies to submit ballot measures to the San Mateo County Elections Office by August 7, 2026, while the Governor has until September 30, 2026, to sign or veto legislation passed during the current legislative session. Historically, the Governor has signed legislation similar to SB 762, including a similar bill which was recently signed this year. If the measure is placed on the ballot and subsequently approved by the voters, implementation of the tax would remain contingent upon SB 762 becoming law.

Implementation Considerations
If the SB 762 approved by both the State Assembly, the State Senate and the Governor, and the 1% (1cent) Transactions and Use Tax is approved by the voters, the City would be required to enter into an agreement with the California Department of Tax and Fee Administration (CDTFA) to administer and collect the tax. Under state law and CDTFA implementation requirements, the tax could become operative no earlier than the first calendar quarter beginning at least 110 days after all required actions have been completed. The operative date will depend on the timing of those actions, including execution of the required agreement with 1 Packet Pg. 9
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the CDTFA.

If SB 762 is not enacted, the City would not have the legal authority to impose or collect the additional Transactions and Use Tax authorized by the proposed ordinance. In that event, any voter-approved measure could not be implemented unless future legislation provides the necessary authority.

Community Input
Consistent with the City's commitment to transparency and public engagement, the City has undertaken extensive community outreach regarding its long-term fiscal sustainability challenges, service priorities, and potential funding strategies. In addition to two Fiscal Sustainability Study Sessions and multiple FY 2026-27 Budget Study Sessions, the City conducted community surveys, FlashVote polling, presentations to community stakeholder groups, electronic outreach through Connect With Pacifica, and other City communication channels. Additionally, the City launched the Pacifica Discussion 2026 initiative to provide residents with ongoing opportunities to learn about the City's long-term financial challenges, explore potential solutions, and share feedback on community priorities and funding options.

Again, residents have consistently identified community priorities such as maintaining public safety services, maintaining 911 police, fire and emergency medical response times, attracting and retaining experienced medical responders, preventing further deterioration of streets and roads by paving those in the worst conditions and qualifying for Pacifica’s fair share of matching funds from state and federal governments.

The City appreciates the many community members who have participated and shared their perspectives throughout this process. Community input has been gathered through the November 2025 Fiscal Sustainability Survey, the June 2026 Budget Priorities Survey (FlashVote), public study sessions, stakeholder presentations, Connect With Pacifica communications, the Pacifica Discussion 2026 initiative, and other outreach efforts. This feedback has informed the City's ongoing evaluation of service priorities, long-term fiscal sustainability strategies, and potential funding options. The City remains committed to keeping the community informed and engaged as these discussions continue.

Proposed Pacifica One Cent Transactions and Use Tax
The attached resolution (Attachment 2) would place the proposed Transaction and Use Tax ordinance (Attachment 3) before Pacifica voters at the November 3, 2026 General Municipal Election. If adopted by the City Council, the following ballot question would be submitted to Pacifica voters:

Pacifica City Services Measure. To protect Pacifica’s long-term financial stability; fund police, fire, 911 emergency response; prioritize paving streets in the worst conditions; keep parks, beaches and public spaces safe and maintained; and for general government use, shall the City of Pacifica’s measure establishing a 1% (1¢) transactions and use (sales) tax, generating approximately $5,000,000 annually until ended by voters, with public disclosure and local control of funds, and independent annual audits, be adopted?
If adopted by voters, the proposed ordinance would have the following key features:

1. It would impose a transactions and use tax of 1% (one cent) in accordance with applicable provisions of state law (Part 1.6 of Division 2 of the Revenue and 1 Packet Pg. 10
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Taxations Code).

2. In accordance with state law, the City of Pacifica would be required to enter into a contract with the California Department of Tax and Fee Administration (CDTFA) to collect and administer the tax.

3. Under the ordinance, the tax would begin being collected at the beginning of the first quarter that is at least 110 days after certification of the election results and satisfaction of all applicable state law and CDTFA administrative requirements. The operative date will depend on the timing of those actions, including execution of the required agreement with CDTFA.

4. The ordinance would deposit all tax proceeds into the City's General Fund.

Revenues would be subject to the same annual independent audit requirements as other General Fund revenues, with the annual audit including an accounting of Transactions and Use Tax revenues that would be presented to the City Council and made available for public review.

As a general tax, revenues generated by the proposed Transactions and Use Tax would be available for any lawful municipal purpose, as determined through the City's annual budget process and subject to City Council appropriation.

ALTERNATIVE ACTION:

If the proposed 1% (one cent) Transactions and Use Tax revenue measure is not placed on the November 2026 General Election ballot by the City Council and approved by the voters to close the upcoming gap in revenues compared to projected expenses, the City will continue to face a projected structural deficit. City Manager will be tasked to submit recommendations for additional reductions to municipal services, staffing, and capital investments starting in the 2027-28 fiscal year. This would further reduce the City’s organizational capacity, service levels and operations.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

This item advances the Vision 2025 & Beyond program and furthers the City Council’s all Strategic Goals and the City’s efforts towards Fiscal Sustainability.

FISCAL IMPACT:

If the City Council moves forward with a Transactions and Use Tax Ordinance for the November 3, 2026 ballot and the revenue measure is approved by the voters, the proposed 1% (one cent) transactions and use tax will generate approximately $5 million in additional annual revenue, subject to enactment of SB762 and implementation by CDTFA. This revenue will address the City's projected General Fund deficit as projected in the Long-Term Financial Forecast shown in Attachment 1.

ORIGINATED BY:

City Manager's Office
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ATTACHMENT LIST:

Attachment 1 - Long Range Financial Forecast (PDF)
Attachment 2 - Pacifica TUT Resolution (DOCX)
Attachment 3 - Pacifica TUT Ordinance (DOC)
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City of Pacifica
Long Term Financial Forecast Table and Assumptions
General Fund
revised March 2026 for Strategic Planning
LTFF will be revisisted during the FY 2026/27 Budget Process

REVENUE
2025-2026
Adopted Budget
2025-2026
Revised Budget
2026-2027
Projected
2027-2028
Projected
2028-2029
Projected
2029-2030
Projected
2030-2031
Projected
2031-2032
Projected
2032-2033
Projected
2033-2034
Projected
2034-2035
Projected
Property Tax 17,466,700 17,728,670 $ 18,349,200 $ 18,991,400 $ 19,656,100 $ 20,344,100 $ 21,056,100 $ 21,793,100 $ 22,555,900 $ 23,345,400 $ 24,162,500 Vehicle License Fees 5,410,902 4,639,057 3,498,579 4,623,976 5,953,841 6,856,277 7,876,674 7,781,402 8,772,534 10,301,412 9,761,571 Curr Yr VLF 5,954,201 5,954,201 6,347,200 6,766,100 7,212,700 7,688,700 8,196,200 8,737,100 9,313,700 9,928,400 10,583,700 Curr Yr Shortfall (2,869,875) (2,869,875) (3,909,634) (5,011,999) (5,168,493) (5,844,422) (5,488,019) (6,800,120) (6,029,185) (6,427,108) (6,851,314) Prev Yrs Backfill* 2,326,576 1,554,731 1,061,013 2,869,875 3,909,634 5,011,999 5,168,493 5,844,422 5,488,019 6,800,120 6,029,185 Sales Tax 3,241,230 3,125,230 3,187,700 3,251,500 3,332,800 3,416,100 3,501,500 3,589,000 3,678,700 3,770,700 3,865,000 Measure Y 2,505,100 2,560,000 2,611,200 2,663,400 2,730,000 2,798,300 2,151,225 - - - - Transient Occupancy Tax 2,358,000 2,984,221 1,999,000 1,741,500 1,793,700 1,847,500 1,902,900 1,960,000 2,018,800 2,079,400 2,141,800 Utility Users Tax 2,870,000 3,646,762 3,719,700 3,794,100 3,870,000 3,947,400 4,026,300 4,106,800 4,188,900 4,272,700 4,358,200 Other Tax - Franchise Tax 1,352,550 1,171,440 1,200,700 1,230,700 1,261,500 1,293,000 1,325,300 1,358,400 1,392,400 1,427,200 1,462,900 Other Tax - Business License Tax 582,000 582,000 596,100 608,400 623,600 639,200 655,200 671,600 688,400 705,600 723,200 Other Tax - Cannabis Tax 800,000 700,000 714,000 728,300 742,900 757,800 773,000 788,500 804,300 820,400 836,800 Excess ERAF 3,860,000 3,860,000 3,917,900 3,976,700 4,036,400 4,096,900 4,158,400 4,220,800 4,284,100 4,348,400 4,413,600 Department/Program Revenues 11,260,824 11,103,824 11,461,100 11,727,100 12,137,500 12,562,300 13,001,900 13,457,000 13,928,000 14,415,500 14,920,100 Intergovernmental 2,762,824 2,656,524 2,709,700 2,763,900 2,860,600 2,960,700 3,064,300 3,171,600 3,282,600 3,397,500 3,516,400 Investment Earnings 972,100 998,100 1,018,100 1,038,500 1,074,800 1,112,400 1,151,300 1,191,600 1,233,300 1,276,500 1,321,200 Charges for Services 7,525,900 7,449,200 7,733,300 7,924,700 8,202,100 8,489,200 8,786,300 9,093,800 9,412,100 9,741,500 10,082,500 Transfers In 1,478,800 1,478,800 1,593,800 1,625,700 1,658,200 1,691,400 1,725,200 1,759,700 1,794,900 1,830,800 1,867,400 Total Annual Revenue $ 53,186,106 $ 53,580,004 $ 52,848,979 $ 54,962,776 $ 57,796,541 $ 60,250,277 $ 62,153,699 $ 61,486,302 $ 64,106,934 $ 67,317,512 $ 68,513,071 Revenue Year-to-Year 8.65% 7.04% -1.36% 4.00% 5.16% 4.25% 3.16% -1.07% 4.26% 5.01% 1.78%

EXPENDITURES
2025-2026
Adopted Budget
2025-2026
Revised Budget
2026-2027
Projected
2027-2028
Projected
2028-2029
Projected
2029-2030
Projected
2030-2031
Projected
2031-2032
Projected
2032-2033
Projected
2033-2034
Projected
2034-2035
Projected
S&B 36,454,015 36,553,464 $ 38,230,302 $ 39,759,514 $ 41,349,895 $ 43,003,891 $ 44,724,046 $ 46,513,008 $ 48,373,528 $ 50,308,470 $ 52,320,808 Salary Savings (5%) - (1,461,842) (1,911,515) (1,987,976) (2,067,495) (2,150,195) (2,236,202) (2,325,650) (2,418,676) (2,515,423) (2,616,040) Salaries & Benefits 36,454,015 35,091,621 36,318,787 37,771,539 39,282,400 40,853,696 42,487,844 44,187,358 45,954,852 47,793,046 49,704,768 Contract Services 8,719,867 9,995,643 9,810,600 10,006,800 10,206,900 10,411,000 10,619,200 10,831,600 11,048,200 11,269,200 11,494,600 Material/Supplies/Maintenance 4,501,536 5,031,381 5,106,900 5,183,500 5,261,300 5,340,200 5,420,300 5,501,600 5,584,100 5,667,900 5,752,900 Transfers Out - Debt Service 2,048,781 1,419,798 2,990,583 3,067,962 3,088,206 2,895,486 1,797,046 1,781,108 1,570,438 1,520,294 1,520,412 Transfers Out - Allocations 1,419,798 2,041,561 2,072,200 2,103,300 2,134,800 2,166,800 2,199,300 2,232,300 2,265,800 2,299,800 2,334,300 Total annual operating Expenditures $ 53,143,997 $ 53,580,004 $ 56,299,070 $ 58,133,101 $ 59,973,606 $ 61,667,182 $ 62,523,690 $ 64,533,966 $ 66,423,390 $ 68,550,240 $ 70,806,980 Transfers Out - Capital 50,000 50,000 - - - - - - - - - Total General Fund Expenditures $ 53,193,997 $ 53,630,004 $ 56,299,070 $ 58,133,101 $ 59,973,606 $ 61,667,182 $ 62,523,690 $ 64,533,966 $ 66,423,390 $ 68,550,240 $ 70,806,980 Exp Year-to-Year 10.06% 12.50% 4.98% 3.26% 3.17% 2.82% 1.39% 3.22% 2.93% 3.20% 3.29% GF Structural Surplus/Deficit $ 42,109 $ (0) $ (3,450,091) $ (3,170,325) $ (2,177,065) $ (1,416,905) $ (369,991) $ (3,047,664) $ (2,316,455) $ (1,232,728) $ (2,293,909) Surplus/Def as % of GF Revenues 0.08% 0.00% -6.53% -5.77% -3.77% -2.35% -0.60% -4.96% -3.61% -1.83% -3.35% Beginning Fund Balance 19,309,076 22,635,647 22,585,647 19,135,556 15,965,231 13,788,166 12,371,261 12,001,270 8,953,606 6,637,151 5,404,423 Total Revenues 53,186,106 53,580,004 52,848,979 54,962,776 57,796,541 60,250,277 62,153,699 61,486,302 64,106,934 67,317,512 68,513,071 Total Expenditures 53,193,997 53,630,004 56,299,070 58,133,101 59,973,606 61,667,182 62,523,690 64,533,966 66,423,390 68,550,240 70,806,980 Projected Ending Fund Balance $ 19,301,185 $ 22,585,647 $ 19,135,556 $ 15,965,231 $ 13,788,166 $ 12,371,261 $ 12,001,270 $ 8,953,606 $ 6,637,151 $ 5,404,423 $ 3,110,514 Non-Spendable 8,287 23,188 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 Restricted 542,791 750,133 917,633 1,085,133 1,252,633 1,420,133 1,587,633 1,755,133 1,922,633 2,090,133 2,257,633 Assigned Reserves
Policy Level of 10% of Expenditures 5,314,400 5,358,000 5,629,907 5,813,310 5,997,361 6,166,718 6,252,369 6,453,397 6,642,339 6,855,024 7,080,698 VLF Restriction Budget Strategy #2 2,300,000 - - - - - - - - - - Facility Maintenance & Replacement 205,000 117,992 205,000 205,000 205,000 205,000 205,000 205,000 205,000 205,000 205,000 Compensated Absences 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Child Care Reserve 488,591 488,591 488,591 488,591 488,591 488,591 488,591 488,591 488,591 488,591 488,591 Legal Reserves 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 Assigned Reserves 8,607,991 6,264,583 6,623,498 6,806,901 6,990,952 7,160,309 7,245,960 7,446,988 7,635,930 7,848,615 8,074,289 Non-Spendable, Restricted & Assigned 9,159,069 7,037,904 7,566,131 7,917,034 8,268,585 8,605,442 8,858,593 9,227,121 9,583,563 9,963,748 10,356,922 Unassigned Fund Balance $ 10,142,116 $ 15,547,742 $ 11,569,425 $ 8,048,197 $ 5,519,581 $ 3,765,819 $ 3,142,677 $ (273,514) $ (2,946,412) $ (4,559,325) $ (7,246,408) Unassigned balance as % of Op. Exp. 19.07% 28.99% 20.55% 13.84% 9.20% 6.11% 5.03% -0.42% -4.44% -6.65% -10.23% GFOA Recommended Reserves 8,857,333 8,930,001 9,383,178 9,688,850 9,995,601 10,277,864 10,420,615 10,755,661 11,070,565 11,425,040 11,801,163 Above/(Below) GFOA Guidelines 1,284,783 6,617,741 2,186,247 (1,640,653) (4,476,020) (6,512,045) (7,277,938) (11,029,175) (14,016,977) (15,984,365) (19,047,571) * If VLF lobbying efforts fail, the entirety of the backfill revenue will be at jeopardy, and thus be adding to the deficit.

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Attachment: Attachment 1 - Long Range Financial Forecast [Revision 1] (6267 : Placement of Measure on

LONG-TERM FINANCIAL FORECAST ASSUMPTIONS
Updated March 2026 for Strategic Plan, LTFF will be revisited during the FY 2026/27 Budget Process The long-term financial model features a set of assumptions for revenues and expenditures based on conservative projections and information available at the time of publication. The forecast starts with the FY 2025-26 adopted budget, and includes preliminary FY 2025-26 mid-year revisions, plus nine (9) forecasted years, for a ten (10) year financial forecast. This forecast is intended to be used to guide strategic budgeting and financial stability efforts, in accordance with Strategic Goal #1 – Enhance organizational and fiscal stability.

Revenue Assumptions

1. Property Tax is the City's biggest revenue category. Based on the current collection trends, consistent with the anticipated increases in the assessed market value and information provided by the county and HdL, the City’s property tax consultant, these revenues are forecasted to trend higher than adopted budget, therefore have been adjusted with the mid-year revision. These revenues assume a 3.5% increase for the upcoming year and annually thereafter.

2. Vehicle License Fees (VLF) are tied to property-assessed value growth and a corresponding growth in tax revenue. Utilizing the estimates from San Mateo County, VLF assumes a 6.6% increase year over year, however the State has been unable to fulfill its payments in the year due, causing a shortfall each year. The shortfall becomes an estimate to be received two years later, which is referenced as a backfill. The FY 2025-26 Adopted Budget included the projected shortfall in the current year of $2.8 million, which will be due in FY 2028. The preliminary assumptions included the backfill to be received in the current year owed from FY 2024, in the amount of $2.3 million. After the Budget Study Session 1, Council approved Budget Strategy #2, that placed $2.3 million as assigned reserves in case the State doesn’t fulfill its obligation. However, since the State’s Budget only included paying cities 2/3 of the backfill amount, the 2025-26 revised budget shows this reduction in VLF revenues of $771,845. The VLF Backfill revenue is in constant jeopardy of not being received in future years. If the current lobbying efforts fail the entire backfill revenues due to the City next year will be in jeopardy, which would increase the FY 2026-27 projected deficit from $3.45m to $4.5m. The City has joined the lawsuit against the State along with San Mateo County and other affected cities in pursuit of the withheld VLF revenues.

3. Sales Tax is projecting a slight decline with the mid-year revision, however going forward a modest increase of 2% for the next two years based on the most recent projections by HdL (the City’s Sales Tax consultant), followed by a 2.5% increase for the next seven years to consider the cyclical nature of these revenues driven by the local economy.

4. Measure Y is the ½ % voter-approved Transaction and Use Tax that went into effect on April 1, 2023. The same projection method is applied to Measure Y as the other regular 1% of Bradley Burns Local Sales and Use Tax mentioned above, after reflecting a modest increase in the midyear revision, assuming a 2% increase through FY 2028 and 2.5% for the future years. Measure Y transactions and use tax measure is scheduled to sunset in 2031 and the forecast reflects that revenue reduction.

5. Transient Occupancy Tax reflects an increase for projected actuals with the mid-year revision and assumes a 2.5% increase through FY 2028 and a normal inflation change of 3% thereafter for the subsequent seven years. Unfortunately, due to the Council’s recent ordinance changes related to short-term rental (STR) regulations, the forecast incorporates a reduction of almost $1.5 million over the next three years due to a projected reduction in both coastal and non-coastal renewals.

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6. Utility Users' Taxes (UUT) incorporates a mid-year revision to reflect increases in projected actuals due to increased UUT collected on rate changes across the various gas and electric tiers and variety of customers. Revenues in this category also assume a uniform 2.0% increase for all remaining years conservatively forecasted.

7. Other Taxes include business license tax, cannabis operations tax, and franchise tax. A modest

2.5% increase is projected for these tax categories in future years. However, this category was also affected by the Council’s recent ordinance changes related to STR regulations and a slight decrease in business license activity was incorporated. Cannabis tax revenue has a decline in the mid-year revision due to a reduction in cannabis operators.

8. For FY 2025-26 the General Fund received 100% of the Excess Educational Revenue Augmentation Fund (ERAF) revenues projected. This is a change from the Council Policy of allocating only $145K of ERAF to the General Fund and splitting the rest of the ERAF funding 50% each between the Disaster Accounting Fund (Fund 238) and the Housing In lieu Fund (Fund 224).

Given the structural deficit the financial forecast keeps the current allocation to the General Fund in place through 2035. Council direction could change from year to year on this allocation methodology.

9. Departmental or Program Revenues include building, planning, and other permits, recreation revenues, grants, and rentals. The mid-year revision shows a slight decline due to trending forecasts on the STR permits, and loss of Senior Programs funding. This category includes a 2% increase through 2028, and a 3.5% increase thereafter based on the anticipated continuation of the current service activity level, plus inflationary adjustments to the Wastewater Fund administrative service fee and an anticipated increase in investment income.

10. Operating Transfers in reflect a modest increase of 2% in the out years to account for the cost increases that drive this transfer relationship. This category mainly includes the cost recovery reimbursements from Fund 216 (NPDES), Fund 210 (Gas Tax) and Fund 209 (Measure A).

Expenditures Assumptions

1. Salaries and Benefits (S&B) The FY 2025-26 adopted budget includes a full-time equivalent count of 201.75 Citywide. During the budget process Council made a one-time policy decision to not allocate $214k to the pension trust for FY 2025-26. For the mid-year revision, mou increases were incorporated with a 4.0% salary savings applied to account for these increases. The remaining years include a 4.0% increase annually thereafter to account for increases related to cost of medical, dental, and vision benefits, PERS rates, and unfunded pension liability payments, merit, and other labor-related increases, with a 5% salary savings factor, and include contributions to both the pension and OPEB trusts.

2. Contractual Services category assumes an annual increase of 2.0% for most City contracts to account for inflation and regular CPI increases in existing contracts.

3. Materials, Supplies, and Maintenance category assumes a modest 1.5% increase each year to account for inflation.

4. Operating Transfers Out Debt Service category is projected to be in accordance with the City’s updated debt service schedule for each projected year. These are the major debt service obligations included in financing: 2016 COP, 2019 POB, 2021 Civic Center, and the new 2023 Fire Equipment Lease. A reduction of the debt payment starting with FY 2031 is related to the projected payoff for the Pension Obligation Bond.

5. Operating Transfers Out Allocations category accounts for transfers to Internal Service Funds, including the Risk Management funds for General Liability and Worker's Compensation insurance

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Attachment: Attachment 1 - Long Range Financial Forecast [Revision 1] (6267 : Placement of Measure on Ballot Nov 3, 2026 - Transactions Use premiums and Motor Pool funds to cover motor pool operating expenditures. Also included in this category is an ongoing allocation to the motor pool vehicle replacement fund in order build up fund balance for future fleet replacement. The forecast shows a modest 1.5% increase each year to account for rising insurance premiums.

6. Capital Transfers Out category contains the approved allocation of $50k for the FY 2025-26 budget year. With no automatic ongoing contribution to capital in the future years.

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Attachment: Attachment 1 - Long Range Financial Forecast [Revision 1] (6267 : Placement of Measure on Ballot Nov 3, 2026 - Transactions Use 4925-5682-8592 v15
RESOLUTION NO. ______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA,

CALIFORNIA, SUBMITTING TO THE ELECTORS A BALLOT MEASURE

ESTABLISHING A TRANSACTIONS AND USE (SALES) TAX RATE AT THE RATE OF 1% (ONE-CENT); REQUESTING THAT THE SAN MATEO COUNTY BOARD OF

SUPERVISORS CONSENT TO THE CONSOLIDATION OF SUCH BALLOT MEASURE ON THE BALLOT FOR THE CITY’S GENERAL MUNICIPAL ELECTION

WHICH IS CONSOLIDATED WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 3, 2026; DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS; AND PROVIDING FOR PRIMARY AND

REBUTTAL ARGUMENTS
WHEREAS, pursuant to Resolution No. 43-2026, the City Council of the City of Pacifica (“City Council”) called a General Municipal Election to be held on Tuesday, November 3, 2026, for the purpose of electing council members as provided and, pursuant to Resolution No. 43-2026, the City Council requested that the San Mateo County Board of Supervisors consent to the consolidation of such General Municipal Election with the Statewide General Election to be held on the same date; and WHEREAS, pursuant to Article XIIIC of the California Constitution, Section 53720 et seq. of the California Government Code, the City has the authority to levy a general tax, including, but not limited to, increasing an existing tax; and WHEREAS, Article XIIIC, Section 2, of the California Constitution requires that the election at which a general tax is submitted to the electorate shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body; and
WHEREAS, Part 1.6 (commencing with Section 7251) of Division 2 of the California Revenue and Taxation Code, and Section 7285.9 of the California Revenue and Taxation Code, authorizes a city to adopt a transactions and use 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; and WHEREAS, Revenue and Taxation Code Section 7285.9 requires that any ballot measure/ordinance establishing or increasing a transactions and use tax must be approved by a 2/3 vote of all members of the City Council and by a majority vote of the qualified voters of the City voting on the ballot measure; and WHEREAS, Pacifica has a backlog of $84 million in needed street and road repairs and maintenance needs and without additional local funding it will become even more expensive, pushing the backlog up to $123 million in five years; and WHEREAS, Pacifica fire stations have no space for firefighters returning from calls to decontaminate and store personal protection equipment, increasing risk of exposure to carcinogens and the proposed measure could fund the facilities that reduce their risk

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of exposure to hazardous materials; and
WHEREAS, this measure will provide funding to address community identified priorities such as maintaining emergency medical response times, preventing the elimination of firefighter positions, maintaining police services, funding emergency response services, maintaining storm drains to prevent flooding and protecting Pacifica’s long-term financial stability; and
WHEREAS, the proposed measure includes strict accountability provisions including public spending reports and annual independent financial audits and all funds must be used only in Pacifica and none can be taken by the State; and WHEREAS, pursuant to Elections Code Section 9222, the City Council desires to submit to the voters at the General Municipal Election to be held on Tuesday, November 3, 2026, a question relating to a transactions and use (sales) tax, which will establish a transactions and use (sales) tax at the rate of 1% that provides approximately $5,000,000 annually until ended by voters.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pacifica as follows:

1. Recitals. The recitals set forth above are incorporated herein by this reference.

2. Submission of Measure. Pursuant to the laws of the State of California, including, but not limited to, Elections Code Sections 9222 and 10201, the City Council, hereby orders the submission to the qualified voters of the City of Pacifica at the General Municipal Election to be held on Tuesday, November 3, 2026, a measure that, if approved, establishes a transactions and use (sales) tax at the rate of 1%, which will provide approximately $5,000,000 annually until ended by voters (“Measure”). The abbreviated form of the Measure to appear on the ballot is specified below in Section 3.

3. Ballot Language. The City Council, pursuant to its right and authority, does hereby order the following question submitted to the voters at the consolidated general municipal election to be held on November 3, 2026:

Pacifica City Services Measure. To protect Pacifica’s
long-term financial stability; fund police, fire, 911
emergency response; prioritize paving streets in the worst conditions; keep parks, beaches and public spaces safe
and maintained; and for general government use, shall the City of Pacifica’s measure establishing a 1% (1¢)
transactions and use (sales) tax, generating approximately $5,000,000 annually until ended by voters, with public
disclosure and local control of funds, and independent
YES

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annual audits, be adopted?
NO

4. Text of Measure. The proposed complete text of the Measure to be submitted to the voters is attached as Exhibit A and incorporated herein by this reference. Pursuant to Revenue and Taxation Code Section 7285.9, the City Council hereby approves the proposed complete text of the Measure (which is the proposed ordinance provided therein) in the form as provided in Exhibit A and the submission thereof to the voters of the City at the General Municipal Election to be held on Tuesday, November 3, 2026.

The complete text of the Measure, as provided in Exhibit A, shall be printed in the ballot materials and be available for public inspection in the City Clerk’s office.

5. Voter Approval Requirement. The vote requirement for the Measure to pass is a majority (50% + 1) of the votes cast.

6. Form & Content of Ballots. The ballots to be used at the election shall be in form and content as required by law.

7. Coordination with County. The City Clerk, as the City’s elections official, is authorized, instructed and directed to coordinate with the County of San Mateo Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election.

8. Election Held Pursuant to Law. In all particulars not recited in this resolution, the election shall be held and conducted as provided by law for holding municipal elections.

9. Request for Consolidation.

A. Pursuant to California Elections Code sections 10400 et seq., the election for the Measure, as described in this Resolution, shall be consolidated with the established election to be conducted on Tuesday, November 3, 2026. Pursuant to the requirements of Elections Code Section 10403, the Board of Supervisors of the County of San Mateo is hereby requested to consent and agree to the consolidation of the Measure on the ballot for the City’s General Municipal Election which is consolidated with the Statewide General

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Election to be held on Tuesday, November 3, 2026.

B. The San Mateo County Elections Department is authorized to canvass the returns of the General Municipal Election to be held on Tuesday, November 3, 2026. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. The election will be held and conducted in accordance with the provisions of law regulating the elections, including, but not limited to, Elections Code Section 10418.

C. The Board of Supervisors of the County of San Mateo is requested to issue instructions to the San Mateo County Elections Department to take any and all steps necessary for conducting and holding the consolidated election.

D. The City of Pacifica recognizes that additional costs will be incurred by the County of San Mateo by reason of this consolidation and agrees to reimburse the County of San Mateo for any costs.

E. The City Clerk shall file a certified copy of this Resolution with the San Mateo County Board of Supervisors and San Mateo County Elections Department.

10. Arguments.

A. Primary Argument.
i. In accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California, written argument(s) In Favor of or Against City measure(s) shall not exceed 300 words and shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument.

The arguments shall be accompanied by forms as provided by the City Clerk and shall be filed with City Clerk no later than 5:00PM on August 10, 2026. Further, the arguments may be changed or withdrawn until 5:00PM on August 10, 2026, after which no arguments In Favor or Against the City measure may be submitted to the City Clerk.
ii. In the event that more than one argument in favor or against the City measure is timely submitted, then consistent with Elections Code Section 9287, the City Clerk shall select the argument to be included with the ballot materials, giving preference and priority in the order set forth in Elections Code Section 9287.

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B. Rebuttal Arguments.
i. Pursuant to Section 9285 of the Elections Code of the State of California, when the City Clerk has selected the arguments in favor and against the Measure (not exceeding 300 words each) which will be printed and distributed to the voters, the City Clerk shall send a copy of an argument in favor of the proposition to the authors of any argument against the
Measure and a copy of an argument against the Measure to the authors of any argument in favor of the Measure
immediately upon receiving the arguments.
ii. The author or a majority of the authors of an argument relating to a City measure may prepare and submit a rebuttal
argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument.
iii. A rebuttal argument may not be signed by more than five authors.
iv. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, by 5:00PM on August 17, 2026. The rebuttal arguments shall be accompanied by forms provided by the City Clerk.
v. Rebuttal arguments shall be printed in the same manner as the primary arguments. Each rebuttal argument shall
immediately follow the primary argument which it seeks to rebut.
vi. All previous resolutions providing for the filing of rebuttal arguments for City measures are repealed, but only to the extent such resolutions conflict with this Resolution.
vii. The provisions of this Section 10(B) shall apply only to the election to be held on November 3, 2026, and shall then be repealed.

C. Impartial Analysis.
i. The City Council directs the City Clerk to transmit a copy of the Measure to the City Attorney.
ii. The City Attorney shall prepare an impartial analysis of the

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Measure not exceeding 500 words showing the effect of the Measure on the existing law and the operation of the Measure. iii. The analysis shall include a statement indicating whether the Measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the City.
iv. In the event the entire text of the Measure is not printed on the ballot, nor in the voter information portion of the voter information guide, there shall be printed immediately below the impartial analysis, in no less than 10-point type, a statement in substantially the following form: "The above statement is an impartial analysis of Ordinance or Measure __. If you desire a copy of the ordinance or measure, please call the election official's office at 650-738-7307 and a copy will be mailed at no cost to you."
v. The impartial analysis shall be filed by 5:00PM on August 17, 2026.

D. Printing. The City Clerk shall cause the City Attorney’s impartial analysis, and duly selected arguments, to be printed and distributed to voters in accordance with State law regarding the same.

11. Notice of Election; Publication. Notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give further or additional notice of the election, in time, form, and manner as required by law.

12. Implementation. The City Clerk and City Manager are authorized to take all actions as necessary to effectuate the purposes of this Resolution and the election. The City Manager, subject to the City Attorney’s approval, is authorized to make any typographical, clerical, and non-substantive corrections and such other revisions as may be required to this Resolution and its exhibits/attachments, including such typographical, clerical, and non-substantive corrections and/or such other revisions as may be required by the California Department of Fee and Tax Administration.

13. Environmental Compliance. The City Council finds the adoption and approval of this Resolution and the Measure are not subject to the California Environmental Quality Act ("CEQA"), because the enactment of this Resolution and the Proposed Ordinance: (1) does not constitute a “project” as defined by CEQA pursuant to California Code of Regulations, Title 14, Sections 15060(c)(3) and 15378; (2) will not result in a direct or reasonably foreseeable indirect physical change in the environment pursuant to California Code of Regulations, Title 14, Section 15060(c)(2); and (3) is

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covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment pursuant to California Code of Regulations, Title 14, Section 15061(b)(3). This Resolution and the Measure establish a transactions and use tax, provide for the creation of City funding mechanisms and City fiscal activities, include organizational or administrative activities of government which will not result in direct or indirect physical changes to the environment, and do not involve any commitment to any project which may result in a potentially significant physical impact on the environment.

14. Certification. The City Clerk shall certify to the passage and adoption of this Resolution.
* * * * *
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California held on the 5
th day of August, 2026.

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

By ______________________________
Christine Boles
Mayor
ATTEST: APPROVED AS TO FORM:

By ______________________________ By: ______________________________ Sarah Coffey
City Clerk
Michelle Marchetta Kenyon
City Attorney

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-5682-8592 v15
Exhibit A
Proposed Complete Text of the Measure

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ORDINANCE NO._________

AN ORDINANCE OF THE CITY OF PACIFICA, CALIFORNIA, ADDING A NEW CHAPTER 20 TO TITLE 3 OF THE PACIFICA MUNICIPAL CODE WHICH ESTABLISHES A TRANSACTIONS AND USE (SALES) TAX AT THE RATE OF 1% (ONE-CENT)
WHEREAS, pursuant to Article XIIIC of the California Constitution, Section 53720 et seq. of the California Government Code, the City has the authority to levy a general tax, including, but not limited to, increasing an existing general tax; and WHEREAS, Article XIIIC, Section 2, of the California Constitution requires that the election at which a general tax increase is submitted to the electorate shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body; and
WHEREAS, Part 1.6 (commencing with Section 7251) of Division 2 of the California Revenue and Taxation Code, and Section 7285.9 of the California Revenue and Taxation Code, authorizes a city to adopt a transactions and use 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; and WHEREAS, Revenue and Taxation Code Section 7285.9 requires that any ballot measure/ordinance establishing or increasing a transactions and use tax must be approved by a 2/3 vote of all members of the City Council and by a majority vote of the qualified voters of the City voting on the ballot measure; and WHEREAS, by Resolution No. 61-2026, the City Council approved this Ordinance by a 2/3 vote of all its members; and
WHEREAS, Tuesday, November 3, 2026, is the date of the general municipal election, which has been consolidated with the statewide general election occurring on the same date, at which members of the City Council will be elected; WHEREAS, this Ordinance establishes a transactions and use tax at the rate of 1% by adding Chapter 20, entitled “Transactions and Use Tax of 2026”, to Title 3 of the Pacifica Municipal Code.

NOW, THEREFORE, the People of the City of Pacifica, California, do hereby ordain as follows:

Section 1. Recitals. The recitals set forth above are true and correct and incorporated herein by this reference.

Section 2. New Chapter. A new Chapter 20, entitled “Transactions and Use Tax of 2026”, is hereby added to Title 3 of the Pacifica Municipal Code as follows:

Chapter 20. Transactions and Use Tax of 2026
Section 3-20.01. – Title.

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This chapter shall be known as the “Transactions and Use Tax of 2026”.

The City of Pacifica hereinafter shall be called “City.” This chapter shall be applicable in the incorporated territory of the City.

Section 3-20.02. – Operative Date.
“Operative Date” means the first day of the first calendar quarter commencing more than 110 days after the adoption of this chapter. For purposes of Revenue and Taxation Code section 7265, this chapter shall be considered adopted on the date of the election in which it is approved by the qualified voters of the City.

Section 3-20.03. – Purpose.

This chapter 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 chapter.

Section 3-20.04. – 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

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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.

Section 3-20.05. – 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 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 chapter.

Section 3-20.06. – Place of Sale.

For the purposes of this chapter, 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.

Section 3-20.07. – 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 chapter for storage, use or other consumption in said territory at the rate of 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.

Section 3-20.08. – Adoption of Provisions of State Law.

Except as otherwise provided in this chapter 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 chapter as though fully set forth herein.

Section 3-20.09. – Limitations on Adoption of State Law and Collection of Use Taxes.

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In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:

A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor.

However, the substitution shall not be made when:

1. The word “State” is used as a part of the title of the State Controller, State Treasurer, State 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 chapter.

3. In those sections, including, but not necessarily
limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
a. Provide an exemption from this tax with
respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or;
b. Impose this tax with respect to certain sales,
storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.

4. In Sections 6701, 6702 (except in the last sentence
thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.

B. The word “City” shall be substituted for the word “State” in the phrase “retailer engaged in business in this State” in Section 6203 and in the definition of that phrase in Section 6203.

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.

Section 3-20.10. – Permit Not Required.

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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 chapter.

Section 3-20.11. – 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 chapter.

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 chapter.

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5. 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.

C. There are exempted from the use tax imposed by this
chapter, 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 chapter.

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 chapter.

5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease 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.

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7. “A retailer engaged in business in the City” shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division

3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.

D. Any person subject to use tax under this chapter 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 3-20.12. – Amendments.

All amendments subsequent to the effective date of this chapter 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 chapter, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this chapter.

Section 3-20.13. – 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 chapter, 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.

Section 3-20.14. – Severability.

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

Section 3-20.15. – Effective Date.

Pursuant to Elections Code Section 9217, this chapter shall be considered adopted on the date that the City Council declares that the voters of the City of Pacifica have approved the ordinance enacting this chapter by a vote of no less than a majority of the votes cast by the electors voting at the election held on Tuesday, November 3, 2026, and shall go into effect ten (10) days thereafter.

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Section 3-20.16. – Termination Date.

The tax imposed by this chapter shall remain in effect until repealed by the City’s voters.

Section 3-20.17. – General Tax.

The proceeds from the tax imposed by this chapter shall be for unrestricted general revenue purposes of the City and shall be placed into the General Fund of the City.

Section 3-20.18. – Amendment by City Council.

The City Council has the right and authority to amend this chapter, to further its purposes and intent (including but not limited to amendment for more efficient administration as determined by the City Council), in any manner that does not increase a tax rate, or otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution, pursuant to Elections Code Section 9217.

Section 3-20.19. – Annual Audit.

The proceeds resulting from this transactions and use tax shall subject to the same independent annual audit requirements as other general fund revenue. The independent auditor’s report, which shall include an accounting of the revenues received and expenditures made from the transactions and use tax, will be presented annually to the City Council and made available for public review. Further, such independent auditor’s report and such presentation thereof to the City Council may be combined with the City’s annual financial audit.

Section 3. Council Authority to Amend. The City Council has the right and authority to amend this Ordinance, to further its purposes and intent (including but not limited to amendment for more efficient administration as determined by the City Council), in any manner that does not increase a tax rate, or otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution, pursuant to Elections Code Section 9217.

Section 4. Environmental Compliance. The City finds the adoption of this Ordinance is not subject to the California Environmental Quality Act ("CEQA"), because the enactment of this Ordinance: (1) does not constitute a “project” as defined by CEQA pursuant to California Code of Regulations, Title 14, Sections 15060(c)(3) and 15378; (2) will not result in a direct or reasonably foreseeable indirect physical change in the environment pursuant to California Code of Regulations, Title 14, Section 15060(c)(2); and (3) is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment pursuant to California Code of Regulations, Title 14, Section 15061(b)(3). This Ordinance establishes a transactions and use tax, provides for the creation of City funding mechanisms and City fiscal activities, includes organizational or administrative activities of government which will not result in direct or indirect physical changes to the environment, and does not involve any commitment to any project which may result in a potentially significant

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physical impact on the environment.

Section 5. Severability. Should any section, subsection, paragraph, sentence, clause, or phrase of this Ordinance be declared unconstitutional or invalid for any reason, such declaration shall not affect the validity of the remaining portions of this Ordinance.

Section 6. Date of Adoption; Effective Date. Pursuant to Elections Code Section 9217, this Ordinance shall be considered adopted on the date that the City Council declares that the voters of the City of Pacifica have approved this Ordinance by a vote of no less than a majority of the votes cast by the electors voting at the General Municipal Election held on Tuesday, November 3, 2026, and shall go into effect ten (10) days thereafter.

Section 7. Execution. The Mayor shall sign this Ordinance and the City Clerk shall attest and certify to the passage and adoption of this Ordinance if a majority of the voters voting in the City’s general municipal election on November 3, 2026, approve it.

Section 8. Publication. The City Clerk shall cause this Ordinance to be published in the manner required by law.

PASSED, APPROVED AND ADOPTED BY THE PEOPLE OF THE CITY OF PACIFICA at the General Municipal Election held on November 3, 2026.

APPROVED
________________________________
Christine Boles, Mayor
ATTEST
________________________________
Sarah Coffey, City Clerk

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