12.B Report Sales Tax Ballot Measure 2024-06-04 — Pismo Beach City Council, June 4, 2024

PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #12.B
Meeting Date: June 4, 2024
TITLE:

Extending And Modifying A Sales And Use Tax
RECOMMENDATION:

1.Adopt a Resolution ordering the submission to the qualified electors of the City a measure relating to the extension and modification of a local transaction and use tax at the General Election to be held on Tuesday, November 5, 2024, and directing the City Attorney to prepare an impartial analysis thereof.

2.Introduce an Ordinance amending Title 3, Chapter 3.22, of the Pismo Beach Municipal Code extending and modifying a transactions and use tax to be administered by the California Department of Tax and Fee Administration.

3.Adopt a Resolution setting priorities for filing written arguments regarding a City measure submitted at the November 5, 2024, General Municipal Election.

4.Adopt a Resolution providing for the filing of rebuttal arguments for a City measure submitted at the November 5, 2024, General Municipal election.

EXECUTIVE SUMMARY:

At the June 4, 2014, general election, Pismo Beach residents voted to pass Measure I, the continuation of a previously approved half-cent sales and use tax (sales tax) measure that was first approved in 2008. The sales tax was set at 7.75% for a period of twelve (12) years, and was a general tax, with revenue going to the City’s general fund for any governmental purpose. It was approved by the following result:

Yes:No:
2,343 Votes, 71.22% 947 Votes, 28.78%
The sales tax sunsets (expires) on March 31, 2027, and if the City wants to continue to implement its proactive street paving program while simultaneously constructing infrastructure improvement projects, the sales tax must be renewed prior to the expiration date. The sales tax revenues have been invested in meaningful neighborhood and quality of life projects and have been well received. As a result, staff is recommending that the City Council place a measure on the ballot to extend the existing sales tax and setting the rate at one-cent, an increase of an additional half-cent. If the proposed ballot measure is approved by the voters, the new sales tax rate would be set at 8.25% and would expire on March 31, 2027.

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BACKGROUND

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 .

A general-purpose tax measure requires approval from the majority of voters (50% plus 1) to implement such a tax. The sales and use tax is a common method used by most cities in California to generate additional revenue for city programs and services.

The City receives about $2 million per year from the current sales tax. Visitors pay approximately 63% of this tax, generating the bulk of the sales tax based off goods purchased or restaurants visited while they are shopping in Pismo Beach. As a result, residents pay only 37% of the total proceeds collected, though residents receive 100% of the benefit through improved neighborhood infrastructure projects; which improves safety, results in cost savings for ongoing maintenance, and enhances quality of life by ensuring streets, parks, and sidewalks look good and are well maintained.

An additional benefit of the sales tax for infrastructure projects is both the lowered burden to the General Fund to support these projects and the ability to expedite repairs and maintain the City’s infrastructure resulting in a higher level of service and faster delivery schedule.

Measure I Accomplishments

Street Paving: To date, approximately 14.5 miles of street paving has been completed, with another one and a half miles scheduled for completion by July 2026. Measure I revenues contributed $8.3 million towards these street paving projects. Funding requirements for street maintenance over the next 10 years is projected to be $14 million.

Shell Beach Streetscape: The Shell Beach Streetscape project transformed the heart of Shell Beach into a vibrant, pedestrian-friendly area, including the enhancement of sidewalks, landscaping, lighting, and public spaces to create a more inviting and accessible environment for residents and visitors alike. Measure I revenues contributed $2.6 million towards the Shell Beach Streetscape project.

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Other Projects: Other projects completed or scheduled for completion include:

 Storm drain maintenance, repair and improvements, and completion of storm drain studies that will determine where and what type of storm drains need to be constructed in areas where there are drainage issues. Measure I revenues contributed approximately $1 million towards various drainage projects;  Continued bluff protection and improved beach access, that included the Ocean Boulevard Improvements project. Measure I revenues contributed $1.5 million towards the Ocean Boulevard Improvements project;
 Continued maintenance and rehabilitation of the City’s Pier; and  Reconstruction of the Bello Veterans’ Hall Parking Lot.

The resource needs for infrastructure projects continue to be a critical need. Should the sales tax be continued and set at one-cent by the voters, approximately $4 million would be generated annually. These funds would be available for use by the city for any governmental purpose, such as:
 Continuous improvement to our many neighborhood parks;  Construction of new storm drains in areas of the City that have drainage issues;  Preserving essentially emergency services, including 911, police and fire response; and
 Improving City facilities, including two veterans’ halls, and replacing the Addie Street public restrooms.

Neighboring Cities’ Sales Tax Rates

Table 1 below shows the current sales tax rates for nearby cities.

Table 1. Neighboring Cities’ Sales Tax Rates

City Sales Tax
Rate
San Luis Obispo 8.75%
Grover Beach 8.75%
Morro Bay 8.75%
Paso Robles* 8.75%
Santa Maria 8.75%
Atascadero* 8.75%
Arroyo Grande** 7.75%
Pismo Beach 7.75%
*Considering extending their sales tax
**Arroyo Grande is considering a 1% increase to their existing rate

If the proposed ballot measure is approved, the City’s new sales tax rate would be set at

8.25%, which would be the lowest or second-lowest in the County (dependent on the outcome of the Arroyo Grande election). When compared to other similar “destination” Council Agenda 6-4-2024 12.B-3

communities, such as Santa Barbara (8.75%), Carpinteria (9.00%), or Monterey (9.25%), Pismo Beach would continue to be a value and competitive.

Sunset Date
The current sales tax will sunset March 31, 2027. The expiration provision on the existing tax is widely supported by residents. The provision is popular because it encourages the City to work with residents to prioritize and be specific about projects over a set period of time, and it provides voters with additional security that funds will be invested well since they ultimately will get to continue to vote on whether the tax remains or not. To maintain public trust and continue the tax with high levels of support, staff is recommending a expiration that is 12 years from the operative date of the tax.

In addition, although the Elections Code does not mandate that the City Council actually adopt the ordinance extending the transactions and use tax that will be submitted to the voters, the California Department of Tax and Fee Administration has requested that the City Council adopt the ordinance with a first and second reading, in addition to adopting the resolution placing the measure on the ballot. Therefore, if introduced, the ordinance will return to the City Council at its next meeting for second reading and adoption. The ordinance will not be operative unless it is approved by the voters.

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.

Arguments For and Against
For a measure that is placed on the ballot by the legislative body, any member or members of the legislative body authorized by that body, or any individual voter who is eligible to vote on the measure, or bona fide association of citizens, or any combination of voters and associations, may file a written argument for or against any City measure.

The Code further sets forth the process for receiving arguments for and against the measure. However, the Code is silent as to how to choose any or all Council Members to write arguments and rebuttals. 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; or
2) Draft the argument at this meeting. Staff recommends this option.

Council Agenda 6-4-2024 12.B-4

Arguments shall not exceed 300 words in length and must be accompanied by the printed name(s) and signature(s) of the author(s) submitting it. In case any argument is signed by more than five authors, the signatures of the first five shall be printed.

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.

Rebuttals
The Elections Official shall give copies of the “Argument in Favor” and the “Argument Against” to the opposing authors as soon as the filing period for the “direct” arguments has closed. The rebuttal arguments shall not exceed 250 words and 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.

Conclusion and Recommendation
By placing the measure on the ballot, the City Council is seeking input from the voters of Pismo Beach on the future of the City and the type of service levels they would like to receive moving forward.

Staff recommends that the City Council:
1) Adopt a Resolution (Attachment 1) placing the Pismo Beach Essential Services Measure on the November 2024 ballot,
2) Introduce, by title only, an Ordinance (Attachment 1.A) extending and modifying the sales tax,
3) Adopt a Resolution (Attachment 2) setting the priorities for filing of written arguments and authorizing Council Member(s) to file such arguments, and 4) Adopt a Resolution (Attachment 3) providing for the filing of rebuttal arguments.

FISCAL IMPACT:

The County Clerk-Recorder’s office has estimated that the cost of adding a ballot measure to the City’s consolidated general municipal election would be approximately $4,400. The actual cost of the measure will depend upon the number of registered voters in the city, among other factors. Funds for these actual costs will be included within the City Clerk’s budget, along with the cost for the general municipal election. Staff will come back to the City Council in December 2024 to appropriate additional funds, if needed.

If the Pismo Beach Essential Services Measure is placed on the November 2024 ballot and is approved, the City could receive approximately $4.0 million in transaction sales and use tax measures effective April 1, 2025 for 12 years. If the Measure is placed on the November 2024 ballot but is not approved, the City’s existing Measure I would continue to generate $2.0 million until its expiration on March 31, 2027.

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ATTACHMENTS:

1. Resolution to place the Pismo Beach Essential Services Measure on the November 2024 ballot

1.A. Exhibit A to Resolution: Ordinance extending and modifying the sales tax

2. Resolution setting priorities for filing of written arguments

3. Resolution providing for the filing of rebuttal arguments Submitted by: Jorge Garcia, City Manager
City Manager Approval:

Council Agenda 6-4-2024 12.B-6

RESOLUTION NO. R-2024-XXX

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

CALIFORNIA ORDERING THE SUBMISSION TO THE QUALIFIED ELECTORS OF

THE CITY A MEASURE RELATING TO THE EXTENSION AND MODIFICATION OF A

LOCAL TRANSACTION AND USE TAX AT THE GENERAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 5, 2024, AND DIRECTING THE CITY ATTORNEY TO

PREPARE AN IMPARTIAL ANALYSIS THEREOF
WHEREAS, the City Council of the City of Pismo Beach has by Resolution R-2024-XXX called for a general municipal election to be held on November 5, 2024; and WHEREAS, in 2008 and 2014, the voters of the City of Pismo Beach approved an ordinance adding Chapter 3.22 of the Pismo Beach City Municipal Code, establishing a local transactions and use tax at the rate of 0.5 percent; and WHEREAS, the City Council has the authority under Elections Code Section 9222 to place on the ballot a measure for the voters of the City of Pismo Beach to extend the implementation of Chapter 3.22 of the Pismo Beach City Municipal Code; and WHEREAS, Section 2(b) of Article XIII C of the California Constitution, added by Proposition 218, effective November, 1996, requires that a measure proposing a general tax be submitted to the voters at an election consolidated with a regularly scheduled general election for members of the governing body of the local government except in cases of emergency as declared by the City Council; and WHEREAS, the City Council has by Resolution R-2024-XXX requested that the County of San Luis Obispo consent and agree to the consolidation of the general municipal election with the statewide general election; and
WHEREAS, pursuant to California Constitution Article XIII C, Section 2(b) and Elections Code Section 10201, the City has determined to submit a measure to the voters to enact an ordinance extending and modifying the rate of the transactions and use tax at the City’s next regular consolidated general municipal election.

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

Section 1. Pursuant to Election Code Section 9222, the proposed ballot proposition attached hereto in draft ordinance form as Exhibit A, and titled “The Pismo Beach Essential Services Measure”, is hereby approved for placement on the ballot and submission to voters at the City’s regular election scheduled for November 5, 2024. The question shall be posed as follows:

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Attachment 1

CITY OF PISMO BEACH
MEASURE _____
The Pismo Beach Essential Services Measure. To maintain the City of Pismo Beach’s long term financial stability and services such as fixing potholes; keeping streets, sidewalks, infrastructure, parks, and public facilities safe, clean, and well-maintained; providing police/fire protection, 9-1-1 emergency services; addressing homelessness; and for general government use, shall the City extend its Measure I sales tax and set the rate at 1¢ per dollar, providing approximately $4,000,000 annually for 12 years; requiring independent audits, with all funds used locally?
YES
NO
Section 2. City staff is directed to take all appropriate and necessary actions to cause the foregoing proposition to be placed on the ballot at the regular election of November 5, 2024.

Section 3. Pursuant to Election Code Section 9280, the City Attorney of the City of Pismo Beach is hereby directed to prepare and submit an impartial analysis explaining the effect of the measure on existing law and the operation of the measure.

Section 4. The City Clerk shall certify to the passage and adoption of this resolution, and immediately transmit a certified copy of this resolution to the San Luis Obispo County Clerk-Recorder for inclusion on the November 5, 2024, ballot.

Section 5. Pursuant to the requirements of Elections Code Section 10403 and in addition to the request previously set forth in Resolution R-2024-XXX, the Board of Supervisors of San Luis Obispo County is hereby requested to consent and agree to the consolidation of a General Municipal Election with the Statewide General Election on Tuesday, November 5, 2024 for the placement of the above-referenced measure on the same ballot and under the same conditions set forth in Resolution R-2024-XXX.

UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 4th day of June 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:

Council Agenda 6-4-2024 12.B-8
Attachment 1

Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Pismo Beach, California, on _______________________. ________________________
Erica Inderlied, City Clerk
Council Agenda 6-4-2024 12.B-9
Attachment 1

ORDINANCE NO. O-2024-XXX

AN ORDINANCE OF THE PEOPLE OF THE CITY OF PISMO BEACH, CALIFORNIA AMENDING TITLE 3, CHAPTER 3.22 OF THE PISMO BEACH MUNICIPAL CODE

EXTENDING AND MODIFYING A TRANSACTIONS AND USE TAX TO BE

ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE

ADMINISTRATION
The People of the City of Pismo Beach, California do ordain as follows:

SECTION 1. FINDINGS.

A. One of the primary roles of City government is to provide vital public services such as fixing potholes, keeping streets, sidewalks, infrastructure, parks, and public facilities safe, clean, and well-maintained, providing police/fire protection, 9-1-1 emergency services, addressing homelessness, and many other essential city services.

B. The City's revenue for such vital services comes from property tax, sales tax, hotel tax, and other such revenues.

C. Prior to 2008, budget cuts forced the City to spend less on street and sidewalk maintenance, pothole repair, park maintenance and replacement of 20- to 30-year- old storm drains than was necessary to adequately maintain this infrastructure in fully functional working condition. As a result, many City streets were in poor condition and inefficient storm drainage could have resulted in flooding.

D. In 2008, the voters of Pismo Beach approved a transactions and use tax in the amount of one-half of one percent, the funds from which have been used entirely for the improvement of City infrastructure, with none of the additional funds being used for administrative or other soft costs. In 2014, the voters of Pismo Beach approved the extension of the transactions and use tax. The City has used this money to pave streets, improve drainage and other City infrastructure.

E. The cost to continue to provide these vital services at current levels of service continues to escalate and exceeds the amount of funds and revenues generated from all other sources of income available for such purpose. The extension of the transactions and use tax, originally approved by the voters in 2008 and extended by the voters in 2014, and modification of the tax rate to one percent, is necessary to continue to maintain the public good, welfare, and safety.

F. Without the extension of the transactions and use tax, the City will have to either generate additional revenue to continue to maintain existing City infrastructure or begin making cuts to other essential City services.

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Attachment 1.A

G. A local finance measure gives Pismo Beach residents local control. More than 63% of taxable purchases in the City are made by visitors to the City. Every penny generated by the measure stays in Pismo Beach to be used for the needs and services of our residents and the City.

H.The extension and modification of such a tax will allow the City to continue to provide a high level of essential services to residents, businesses and visitors throughout the City.

I. All funds from a locally approved transactions and use tax would stay in Pismo Beach to benefit local residents and could not be taken away by the State.

J. A local measure will include a twelve-year sunset clause, after which the tax will cease to be collected unless reauthorized by the voters.

SECTION 2. AMENDMENT OF CODE.

Pismo Beach Municipal Code Title 3 is hereby amended to revise Chapter 3.22 to read in its entirety as follows:

CHAPTER 3.22 TRANSACTIONS AND USE TAX

3.22.010 Title.

This ordinance shall be known as the “Transactions and Use Tax Ordinance of the City of Pismo Beach”. The City of Pismo Beach hereinafter shall be called “City.” This ordinance shall be applicable in the incorporated territory of the City.

3.22.020 Purpose.

This ordinance is adopted to extend and modify the transactions and use tax initially approved by the voters in 2008 and extended by the voters in 2014, to achieve the following, among other purposes, and the provisions hereof shall 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 Council Agenda 6-4-2024 12.B-11
Attachment 1.A

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 State 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 State Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.

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

3.22.030 Operative date.

As to adoption of the transactions and use tax pursuant to Ordinance O-2008-002 approved by the voters in November 2008, “Operative Date” means the first day of the first calendar quarter commencing more than one hundred ten (110) days after the adoption of Ordinance O-2008-002.

As to the extension of the transactions and use tax pursuant to Ordinance O-2014- 008 approved by the voters in November 2014, “Operative Date” means the first day of the first calendar quarter commencing more than one hundred ten (110) days after the adoption of Ordinance O-2014-008.

Otherwise, “Operative Date” means the first day of the first calendar quarter commencing more than one hundred ten (110) days after the adoption of this ordinance, the date of adoption being set forth below.

3.22.040 Contract with state.

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

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Attachment 1.A

3.22.050 Transactions tax rate.

Commencing on the Operative Date under Ordinances O-2008-002 and O-2014- 008, for the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of one half of one percent (0.5%) of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City on and after the operative date of this ordinance. Commencing on the Operative Date, for the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of one percent (1%) of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City on and after the operative date of this ordinance.

3.22.060 Place of sale.

For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Department of Tax and Fee Administration.

3.22.070 Use tax rate.

Commencing on the Operative Date under Ordinances O-2008-002 and O-2014- 008, an excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of one half of one percent (0.5%) of the sales price of the property. Commencing on the Operative Date, an excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of one percent (1%) of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

3.22.080 Adoption of provisions of state law.

Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Council Agenda 6-4-2024 12.B-13
Attachment 1.A

Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.

3.22.090 Limitations on adoption of state law and collection of use taxes.

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

A. Wherever the State of California is named or referred to as the taxing agency, the name City of Pismo Beach 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 Board of Control, State Department of Tax and Fee Administration, State Treasury, or the Constitution of the State of California;

2. The result of that substitution would require action to be taken by or against Pismo Beach or any agency, officer, or employee thereof rather than by or against the State Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this ordinance.

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

4. In 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.

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Attachment 1.A

3.22.100 Permit not required.

If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.

3.22.110 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.

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Attachment 1.A

3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.

4. A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.

5. For the purposes of subparagraphs (3) and (4) of this 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 ordinance, the storage, use or other consumption in this City of tangible personal property:

1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance.

2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.

3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.

4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance.

5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed Council Agenda 6-4-2024 12.B-16
Attachment 1.A

not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.

7. “A retailer engaged in business in the City” shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.

D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.

3.22.120 Amendments.

All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance. The City Council may make amendments to this chapter that do not affect the rate or duration of the tax imposed without approval of the voters of the City.

Council Agenda 6-4-2024 12.B-17
Attachment 1.A

3.22.130 Enjoining collection forbidden.

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.

3.22.140 Semi-annual report to council.

The City Manager shall report to Council not less frequently than semi-annually on the amount of tax collected under this ordinance, and any expenditures made, or proposed to be made with such collections.

SECTION 3. USE OF TAX PROCEEDS.

All proceeds of the tax levied and imposed hereunder shall be accounted for and paid into the City of Pismo Beach General Fund, and may be used for any lawful purpose as designated by the City Council.

SECTION 4. SEVERABILITY.

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

SECTION 5. STATUTORY AUTHORITY FOR TAX.

This ordinance is adopted pursuant to Revenue and Taxation Code section 7285.9.

SECTION 6. ELECTION REQUIRED.

This ordinance shall not become operative unless and until a majority of the electors voting on this measure vote to approve the imposition of the tax at the general municipal election to be held on November 5, 2024.

SECTION 7. EFFECTIVE DATE AND TERMINATION DATE.

If this ordinance is approved by a majority of the electors voting on the issue at the November 5, 2024 general municipal election, pursuant to Elections Code Section 9217, the ordinance shall be become effective ten (10) days after the City Council accepts the certified results of the election. Should this ordinance be approved by a majority of electors at the November 5, 2024 election, it shall be repealed without further action of the City Council or voters twelve (12) years after the Operative Date, after which date the tax imposed by this ordinance shall not be collected.

Council Agenda 6-4-2024 12.B-18
Attachment 1.A

INTRODUCED at a regular meeting of the City Council held this 4th day of June, 2024, on motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:

Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
ADOPTED at a regular meeting of the City Council held this th day of , 2024, on motion of Council Member , seconded by Council Member , and on the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:

Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
APPROVED AS TO FORM:
______________________________
David M. Fleishman, City Attorney
PASSED AND ADOPTED by the People of the City of Pismo Beach this 5th day of November 2024.

Attest:
________________________
Erica Inderlied, City Clerk
Council Agenda 6-4-2024 12.B-19
Attachment 1.A

RESOLUTION NO. R-2024-XXX

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

CALIFORNIA SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING A CITY MEASURE SUBMITTED AT THE NOVEMBER 5, 2024,

GENERAL MUNICIPAL ELECTION
WHEREAS, a General Municipal Election is to be held in the City of Pismo Beach, on November 5, 2024, at which the City Council has ordered the submission of the following measure to the voters:

CITY OF PISMO BEACH
MEASURE _____
The Pismo Beach Essential Services Measure. To maintain the City of Pismo Beach’s long term financial stability and services such as fixing potholes; keeping streets, sidewalks, infrastructure, parks, and public facilities safe, clean, and well-maintained; providing police/fire protection, 9-1-1 emergency services; addressing homelessness; and for general government use, shall the City extend its Measure I sales tax and set the rate at 1¢ per dollar, providing approximately $4,000,000 annually for 12 years; requiring independent audits, with all funds used locally?
YES
NO
WHEREAS, under Elections Code Section 9282, the City Council, or a member or members of the City Council authorized by the City Council, or an individual voter who is eligible to vote on the measure, or bona fide association of citizens, or a combination of voters and associations, may file a written argument for or against the measure set forth above.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PISMO BEACH DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
[ALTERNATIVE 1]
SECTION 1. That the City Council authorizes the following member(s) of its body _____________________________ ______________________________ Council Member in Favor Council Member Against _____________________________ ______________________________ Council Member in Favor Council Member Against Council Agenda 6-4-2024 12.B-20
Attachment 2

_____________________________ ______________________________ Council Member in Favor Council Member Against _____________________________ ______________________________ Council Member in Favor Council Member Against _____________________________ ______________________________ Council Member in Favor Council Member Against to file (a) written argument(s) not exceeding 300 words regarding the City measure as specified above, accompanied by the printed name(s) and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California, on behalf of the City Council. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk. [ALTERNATIVE 2]
SECTION 1. That the City Council authorizes all members of the City Council to file (a) written argument(s) In Favor of or Against the City measure(s) not exceeding 300 words, accompanied by the printed name(s) and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk.

The 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 who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument, which shall be furnished by the City Clerk.

SECTION 2. Pursuant to Elections Code Section 9287, in the event more than one argument for or against the City measure described above is submitted to the City Clerk within the time prescribed, the City Clerk shall select one of the arguments in favor and one of the arguments against the proposed measure for printing and distribution to the voters. In selecting the argument, the City Clerk shall give preference and priority, in the order below, to the arguments of the following:
(a) The Mayor and/or members of the City Council authorized by the City Council;
(b) Bona fide associations of citizens; and
(c) Individual voters who are eligible to vote on the measure.

Council Agenda 6-4-2024 12.B-21
Attachment 2

SECTION 3. Pursuant to Elections Code Section 9286(b), the deadline for filing (and changing or withdrawing) arguments for or against the City measure described above with the City Clerk shall be not later than 5:00 p.m. on June 18, 2024.

UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 4th day of June 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:

RESOLUTION NO. R-2024-XXX

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

CALIFORNIA PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR A CITY MEASURE SUBMITTED AT THE NOVEMBER 5, 2024, GENERAL MUNICIPAL

ELECTION
WHEREAS, a General Municipal Election is to be held in the City of Pismo Beach, on November 5, 2024, at which the City Council has ordered the submission of the following measure to the voters:

CITY OF PISMO BEACH
MEASURE _____
The Pismo Beach Essential Services Measure. To maintain the City of Pismo Beach’s long term financial stability and services such as fixing potholes; keeping streets, sidewalks, infrastructure, parks, and public facilities safe, clean, and well-maintained; providing police/fire protection, 9-1-1 emergency services; addressing homelessness; and for general government use, shall the City extend its Measure I sales tax and set the rate at 1¢ per dollar, providing approximately $4,000,000 annually for 12 years; requiring independent audits, with all funds used locally?
YES
NO
WHEREAS, Section 9285 of the Elections Code of the State of California authorizes the City Council, by majority vote, to adopt provisions for the filing of rebuttal arguments for City measures submitted at municipal elections.

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

SECTION 1. Pursuant to Section 9285 of the Elections Code of the State of California, when the Elections Official has selected the arguments for and against the measure which will be printed and distributed to the voters, the Elections Official 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.

SECTION 2. The author or a majority of the authors of an argument relating to a City measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. The rebuttal arguments shall be filed with the Election Official, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the Council Agenda 6-4-2024 12.B-23
Attachment 3

name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments.

The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument, which shall be furnished by the City Clerk.

SECTION 3. That all previous resolutions providing for the filing of rebuttal arguments for City measures are repealed.

SECTION 4. That the provisions of Section 1 shall apply only to the election to be held on November 5, 2024, and shall then be repealed.

SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 4th day of June 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RECUSED:

Pismo Beach City CouncilJune 4, 2024

Pismo Beach City Council
June 4, 2024