Extending and Modifying a Sales Tax
Agenda Item 12.B
By Jorge Garcia, City Manager
June 4, 2024
1 2
City Services
Police DepartmentFire Department Lifeguards
Streets & Roads Parks & RecreationWater & Wastewater
3 What are the City’s Priorities?
1.Traffic Circulation & Parking
2.Maintain a Focus on Public Safety
3.Water Supply and Conservation; Central Coast Blue
4.Community Character, Beautification, and Quality of
Life for Residents
5.Housing & Homelessness
Based on Pismo Beach residents feedback, the City Council set five key goals for FY 2024 & FY 2025.
4 City Staffing
The City’s budget supports 100 full-time employees. By investing in technology, other time-saving
initiatives and contracting out
temporary work, the City has been
successful in maintaining constant
staffing levels.
The City has recently added two
maintenance workers to help pick up
trash downtown and two internal
support positions to support the
growing needs of the City.
5 Public Safety Demands
The City of Pismo Beach Fire
Department, in a cooperative fire
protection agreement with the California
Department of Forestry and Fire Protection
(CAL FIRE), employs a full-time staff
including a Battalion Chief, 6 Fire Captains,
6 Fire Apparatus Engineers, and an
Administrative Assistant.
The Fire Department
responded to 1,497 calls for
service in 2023.
Almost 80%of calls for
service were for medical
emergencies.
6 The City of Pismo Beach Police
Department currently has 24 sworn
officers.
●The Department responded to 23,057
calls for service in 2023.
●The Department responded to over 4,000
calls for traffic related incidents,
enforcement, collisions, or DUI.
●Calls for service to the Pismo Beach Police
Department have increased 17%over
the last ten years.
Additionally, Pismo Beach employs 25 seasonal lifeguards and junior lifeguard program instructors.
The Lifeguards completed 44 water rescues in 2023.
Public Safety Demands Cont.
What is our City’s Infrastructure?
7 8
City Infrastructure
65 miles of paved roads
12 City-owned and maintained
buildings, including 2
Veterans’ Halls.
11 Public Restrooms
13 Parks including over 68
acres
7 Playgrounds
6 acres of parking lots,
providing 1,536 parking spaces
3 Baseball Fields
Road Engineers recently found that
nearly 30%of City streets are in
‘poor’ or ‘very poor’ condition.
Over the next 10 years, the City of
Pismo Beach is estimated to need at
least $14 million dollars just to
maintain paving of the City’s
streets.
The City’s current local sales tax,
used for funding street paving
projects, only generates $2 million
dollars a year, and expires in two
years.
9 Street Paving
10 Measure I
Measure I was passed by over 71% of Pismo
Beach voters in 2014, establishing a locally
controlled ½ cent sales tax, that expires in
2027.
Over the past 10 years, the City has invested
every dime of Measure I sales tax revenues
back into community, fixing streets, storm
drains, upgrading aging infrastructure,
repairing community buildings and supporting
other services provided by the City’s General
Fund.
No Measure I funds have been used for
salaries or pensions.
The City is also proud to have completed
major renovations including the Shell Beach
Streetscape Project, Pismo Pier Reconstruction
Project, and the Pier Plaza Project.
How is the City Funded?
11 12
How is the City Funded?
13 How City Revenues Are Invested
14 What are the City’s Reserves?
The City is considering a renewal of Measure I passed by voters in 2014. This proposal may include both a renewal of the expiring ½ cent sales tax as well as an additional ½ cent sales tax. Funding from this measure could be used for services including:
And any other services and infrastructure maintained by the General Fund. 15 Potential Revenue Measure
•Paving and maintaining local streets, fixing potholes & managing traffic
•Maintaining 911 emergency medical, police/ crime
prevention and fire response services
•Keeping existing parks and recreation facilities safe, clean, and well-maintained
•Addressing homelessness
16 Key Fact:
The City Keeps Only a
Fraction of Sales Tax
Collected in the City.
Current Sales Tax
Current Sales Tax Rate: 7.75%
Base Rate: 1%
Measure I: .5%
Potential Sales Tax
Potential New Rate: 8.25%
Base Rate: 1%Updated
Measure I: 1%
19 How does Pismo Beach Compare to its Neighbors?
City Sales Tax
Rate
Santa Maria 8.75%
Morro Bay 8.75%
San Luis
Obispo
8.75%
Arroyo Grande 7.75%
Pismo Beach 7.75%
●Pismo Beach sales tax rate is
7.75%, less than what is charged
in neighboring cities including
San Luis Obispo, Morro Bay, and
many others.
●Pismo’s is equal to what is paid
in Arroyo Grande (7.75%) but
lower than many similar
“destination” communities, such
as Santa Barbara (8.75%),
Carpinteria (9.00%), or Monterey
(9.25%).
●Potential new rate would be
8.25%
20 Key Fact:
63%of the sales tax dollars collected in Pismo Beach come from tourists and visitors from surrounding areas
What is a Sales and Use Tax?
Sales tax is imposed on retail transactions for tangible personal property.The use tax is imposed on consumers of tangible personal property that is used, consumed,or stored.Sales tax is not applicable to several general categories including:
1.Necessities of life (food products unless heated,health related service, prescription medicine,housing);
2.General public benefit (alternate energy,non-profit,religious,and educational organizations);
3.Industry benefit (motor vehicle fuel,manufactured housing and buildings, entertainment industry,etc.);
4.Exclusions by definition (admission charges,sales price/gross receipts); and
5.Other exemptions,exclusions,or credits (full list of exemptions is available at https://cdtfa.ca.gov/formspubs/pub61.pdf .
Outreach and Feedback
•Town Hall Meetings
•Community Meetings
•Online Survey
•Pismo Beach Hospitality Association
•Pismo Beach Chamber of Commerce
22 23
Potential Ballot Question
The Pismo Beach Essential Services Measure
To maintain the City of Pismo Beach’s long term financialstabilityandservicessuchasfixingpotholes;keepingstreets,sidewalks,infrastructure,parks,and publicfacilitiessafe,clean,and well-maintained;providingpolice/fire protection,9-1-1 emergency services;addressing homelessness;and for general governmentuse,shall the City extend its Measure I sales tax and settherateat1¢per dollar,providing approximately$4,000,000 annually for 12 years;requiring independentaudits,with all funds used locally? 24 Impartial Analysis
•The Elections Code (Code) sets forth that whenever any City measure qualifies to be placed on a ballot or at the direction of the City Council, the City Council may direct the Elections Official to transmit a copy of the measure to the City Attorney for preparation of the impartial analysis. •If the City Council so directs, the City Attorney shall prepare an impartial analysis of the measure showing the effect of the measure on the existing law and the operation of the measure in 500 words or less. This direction is included in the Resolution calling for the submission of the measure to the voters. 25 Arguments For and Against
•For a measure that is placed on the ballot, any member or members of the legislative body authorized by that body, may file a written argument for or against any City measure. •The City Council can decide to:
1)Delegate one or two Council Members to write and submit the argument on behalf of the entire Council; (Staff recommends this option), or 2)Draft the argument at this meeting
•If the decision is to delegate one or two Council Members to write the argument on behalf of the entire Council, the deadline to file arguments with the Elections Official for and against a measure would be Tuesday, June 18, 2024 , at 5:00 p.m.26
Rebuttals
•If an argument for or against a measure is
submitted, rebuttal arguments would be due to the
Elections Official no later than Friday, June 28,
2024 , at 5:00 p.m. The author, or a majority of the
authors of an argument may authorize in writing
any other person or persons to prepare, submit, or
sign the rebuttal argument.
27 Staff Recommendation
1)Adopt a Resolution placing the Pismo Beach Essential
Services Measure on the November 2024 ballot, and
2)Introduce, by title only, an Ordinance extending and
modifying the sales tax, and
3)Adopt a Resolution setting the priorities for filing of written arguments and authorizing Council Member(s)
to file such arguments, and
4)Adopt a Resolution providing for the filing of rebuttal arguments.
28