It is important to note that, by law, the proposed measure would provide general revenue to the City which would be available for any governmental purpose, but the measure is crafted to give voters a clear statement regarding the types of uses the Council intends to prioritize for the funding. If the measure is enacted, staff will return to the Council for direction on developing a policy and expenditure plan based on the potential uses described in the measure.
Revenue and expenditures of the funds would be tracked separately with annual independent financial audits and reports provided to the City Council and the public so that residents can be confident their tax dollars are being used for the uses described in the ballot measure. The measure would take effect on April 1, 2025 and would stay in effect unless repealed by the voters. Staff estimates that the measure will initially generate about $20 million per year. The combined sales/transactions and use tax in West Sacramento would increase to 9.25 percent until at least 2033 when the quarter-cent Measure V is set to expire.
The following table provides the schedule for the proposed measure should the Council adopt Ordinance 24-7 and Resolution 24-52.
Action/Milestone Date
City Council 1st Reading of Ordinance May 1, 2024
City Council 2nd Reading and Adoption of Ordinance May 15, 2024 City Council adoption of Resolution for a ballot measure May 15, 2024 City Council calls election/ballot measure & directs who will prepare arguments May 15, 2024 Arguments due 7-14 days after the City Council calls the election June 5, 2024 Rebuttals due 10 days after arguments are due June 15, 2024 Last day for Yolo County Board of Supervisors approval of election August 9, 2024 General election November 5, 2024
Effective date of Transactions and Use Tax (if passed) April 2025 Environmental Considerations
The proposed actions contained in this report fall within the “common sense” CEQA exemption set forth in CEQA Guidelines Section 15061(b)(3), excluding projects where “it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” Commission Recommendation
N/A
Strategic Plan Integration
This item was developed in direct response to the Council’s 2024 Strategic Plan Policy Item titled “Fiscal Strategy: Sales Tax Measure for Core Services & Infrastructure Bond”.
Alternatives
The primary alternative to staff’s recommended action is to decline to adopt Ordinance 24-7 and Resolution 24-
52. This alternative is not recommended because it would not allow the City Council to move forward with the one cent sales tax which is needed to adequately address General Fund budget gaps in order to significantly improve the City’s operations and maintenance services.
Coordination and Review
City Manager’s Office staff prepared this item in consultation with the City Attorney’s Office, Finance Department, Police Department, Fire Department, Capital Projects Department, Parks and Recreation Department, and Public Works O&M Department.
Budget/Cost Impact
If approved by voters, the proposed sales tax would yield general revenue to the City of about $20 million per year, subject to fluctuations due to economic growth or recession. Should the proposed measure be put before the voters and pass, prior to any expenditures of the new revenue, the Council would adopt a policy, including 545 Second Reading and Adoption of Ordinance 24-7 and Adoption of Resolution 24-52 May 15, 2024
transparency measures, governing the allocation and use of the measure funds. Each budget cycle, these funds would be budgeted for specific projects and programs by the Council at regular public meetings.
ATTACHMENTS
1. Ordinance 24-7
2. Resolution 24-52
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ORDINANCE NO. 24-7
AN ORDINANCE OF THE CITY OF WEST SACRAMENTO IMPOSING A
TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION
Section 1. TITLE. This ordinance shall be known as the West Sacramento Transactions and Use Tax Ordinance. The City of West Sacramento hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City.
Section 2. OPERATIVE DATE. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below.
Section 3. PURPOSE. This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:
A To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.
B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.
C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.
D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.
Section 4. CONTRACT WITH STATE. Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.
Section 5. TRANSACTIONS TAX RATE. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 1.00% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance. 547
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Section 6. PLACE OF SALE. For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.
Section 7. USE TAX RATE. An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 1.00% 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 8. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.
Section 9. LIMITATIONS ON ADOPTION OF STATE LAW AND COLLECTION OF USE TAXES. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:
1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Treasury, or the Constitution of the State of California;
2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this Ordinance.
3. In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
a. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.
4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.
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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.
C. “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 10. PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.
Section 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 ordinance.
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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 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 550
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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 12. AMENDMENTS. All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance.
Section 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 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.
Section 14. 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 15. EFFECTIVE DATE. This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately.
Section 16. TERMINATION DATE. The authority to levy the tax imposed by this ordinance shall expire upon repeal by the voters of the City of West Sacramento.
PASSED AND ADOPTED by the City Council of the City of West Sacramento, State of California, on , 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Martha Guerrero, Mayor
ATTEST: APPROVED AS TO FORM:
Jennifer Cusmir, City Clerk Jeffrey Mitchell, City Attorney 551
RESOLUTION 24-52
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST SACRAMENTO CALLING A SPECIAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 5, 2024, FOR THE
PURPOSES OF APPROVING AN ORDINANCE IMPOSING A ONE PERCENT
TRANSACTIONS AND USE TAX FOR ROADS, PUBLIC SAFETY, HOMELESSNESS,
PARKS AND TRAILS MAINTENANCE, AND KEEPING PUBLIC SPACES SAFE AND CLEAN, AND OTHER UNRESTRICTED GENERAL REVENUE PURPOSES; REQUESTING
THAT THE YOLO COUNTY BOARD OF SUPERVISORS CONSOLIDATE THE ELECTION WITH THE STATEWIDE ELECTION; AUTHORIZING THE MAYOR TO PREPARE A WRITTEN ARGUMENT IN SUPPORT OF THE TAX MEASURE; AND DIRECTING THE CITY
ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS OF THE MEASURE WHEREAS, since the City’s incorporation in 1987, West Sacramento has added 30,000 residents, over 1,000 new businesses, and over 10,000 new daily worker and commuter trips; and, WHEREAS, this progress has generated tremendous economic opportunity for the community and the region, creating jobs, supporting new dining, shopping, and entertainment options, increasing recreational opportunities, and enabling significant improvement to the quality of life for residents; and,
WHEREAS, this growth has also increased the demand for municipal services while the costs of providing those services has outpaced the availability of new revenue; and, WHEREAS, general fund revenues are inadequate to address these budgetary challenges that particularly affect the City’s operations and maintenance departments; and, WHEREAS, the City has implemented a general fund stability strategy that created significant ongoing General Fund capacity, most of which was utilized to address immediate budget needs related to City services; however, it did not create enough capacity to adequately address the City’s operation and maintenance service gaps going forward; and, WHEREAS, the City has evaluated several options for funding operations and maintenance services including road maintenance, public safety, parks and trails maintenance, and homelessness services, and has determined that the most effective and sustainable option is the implementation of a new one percent transactions and use tax.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of West Sacramento hereby resolves, declares, determines, and orders as follows:
Section 1. The foregoing recitals are true and correct, and hereby incorporated by reference.
Section 2. Pursuant to California Constitution Article XIII C, section 2 and Elections Code section 9222, the City Council of the City of West Sacramento submits to the qualified voters of the City, the West Sacramento General Services and Initiatives Tax Measure (the "Tax Measure"), which if approved, would adopt a general transactions and use tax, as authorized by Revenue and Taxation Code section 7285.9. This Tax Measure shall be designated by letter by the Yolo County Elections Department. Pursuant to Election Code section 10400, et seq., the election for this Tax Measure is hereby 552
Resolution 24-52
May 15, 2024
called and shall be considered with the regular election to be conducted on November 5, 2024.
Section 3. The Tax Measure to be presented to the voters shall be as set forth below. This question requires the approval of a majority of qualified electors casting votes:
Section 4. The ordinance authorizing the general tax to be approved by the voters pursuant to Sections 2 and 3 of this resolution is set forth in full in Exhibit A, attached hereto.
Section 5. The City Clerk is authorized, instructed, and directed to work with the Yolo County Registrar of Voters, as needed, in order to properly and lawfully conduct the election.
The ballots to be used in the election shall be in the form and content as required by law. The Yolo County Registrar of Voters is authorized to canvass the return of the municipal election. In all Particulars not recited in this resolution, the election shall be held and conducted as provided by law for holding municipal elections.
Section 6. The Board of Supervisors is requested to instruct its Registrar of Voters to provide such services as may be necessary for the holding of the consolidated election. The election shall be held in all respects as if there were only one election. The City of West Sacramento recognizes that the county will incur additional costs because of this consolidation and agrees to reimburse the county for those costs. The City Manager is hereby authorized and directed to expend the necessary funds to pay for the City's cost of placing the Tax Measure on the election ballot. Such services provided by the county may include, but are not limited to, the following:
Publication of notices calling the election
Publications of notices calling for ballot arguments
Provision of voter lists
Obtaining and staffing polling places
Provision and delivery of precinct supplies
Counting of ballots and certification of election
Other election activities authorized by law
All aspects of election not specified above may be agreed upon by the County Clerks and the City Manager
MEASURE "_": To rebuild roads and repair potholes, increase police and fire protection, recruit and retain public safety
personnel, maintain parks and trails, address
homelessness, and keep public spaces safe and clean,
shall the City of West Sacramento measure enacting
a one cent transactions and use tax (sales tax)
providing approximately 20 million dollars annually
for general government use, until ended by voters,
with all funds locally controlled and subject to
independent financial audits and public spending
disclosures, be adopted?
553
Resolution 24-52
May 15, 2024
Section 7.
a.) Pursuant to California Elections Code section 9282, on behalf of the City Council, the Mayor is hereby authorized to prepare a written argument in favor of the proposed Tax Measure, not to exceed three hundred (300) words each. At the Mayor's discretion, the arguments may also be signed by members of the City Council or a bona fide association of citizens, or by individual voters who are eligible to vote on the Tax Measure. In the event that an argument is filed against the Tax Measure, the Mayor is also authorized to prepare rebuttal argument(s) on behalf of the City Council, which may also be signed by members of the City Council or bona fide association of citizens, or by individual voters who are eligible to vote on the Measure.
b.) Pursuant to California Elections Code section 9280, the City Council hereby directs the City Clerk to transmit a certified copy of the Tax Measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the Tax Measure not to exceed five hundred (500) words in length, showing the effect of the Tax Measure on the existing law and the operation of the Tax Measure, and transmit the impartial analyses to the Yolo County Registrar of Voters. c.) Pursuant to California Election Code section 9285, when the City Clerk has selected the arguments for and against the Tax Measure, which will be printed and distributed to the voters, the City Clerk is directed to send copies of the arguments in favor of the Tax Measure to the authors of the arguments against, and copies of the arguments against to the authors of the arguments in favor.
Section 8. The City Clerk is directed to file certified copies of this resolution with the Board of Supervisors and the Registrar of Voters of the County of Yolo, together with the attached ballot measure.
Section 9. The jurisdictional boundaries of the City of West Sacramento have not changed since the last General Municipal Election.
Section 10. This resolution shall become effective immediately upon its passage and adoption.
PASSED AND ADOPTED this 15th day of May 2024 by the following vote:
AYES:
NOES:
ABSENT:
Martha Guerrero, Mayor
ATTEST:
Jennifer Cusmir, City Clerk
554
Resolution 24-52
May 15, 2024
EXHIBIT A
Ordinance Authorizing General Transaction and Use Tax
555