The overall budget proposal remains consistent with the city’s framework for advancing the Council’s goal of fiscal stability. The proposed FY2022/23 budget uses a modest amount of budget flexibility to address priority needs. As the city continues to make progress in tackling its long-term structural budget deficit, focus remains on efforts to manage personnel costs and address unfunded liabilities. Specifically, while the budget proposal presented herein shows a surplus of $537,766 in FY2022/23, the updated General Fund forecast reflects a projected deficit of $737,307 in FY2023/24, growing to $1.3 million by the end of the five-year forecast’s planning horizon. This ongoing budget gap is attributable to expenditures outpacing revenues and mostly associated with projected increases in CalPERS retirement contribution rates resulting from lower interest earnings assumptions adopted by the CalPERS Board, and underperforming investment returns.
Proposed Budget Recommendations
Overall, the Proposed Budget is consistent with the budget framework developed over the past several fiscal years as well as feedback provided by the City Council through its regular quarterly budget updates and the Spring Budget Workshops held in April.
As has been the case in recent years, the budget necessarily incorporates fairly conservative revenue estimates, which contribute to limited discretionary budget flexibility. Nonetheless, the ability of the City to maintain and increase reserve levels has provided an opportunity to exercise diligence in implementing long-term, sustainable structural budget changes, while also providing the ability to utilize a prudent amount of one-time funding to address priority needs, above what can be supported by the baseline budget.
Several baseline General Fund budget adjustments are recommended in order to provide for a balanced budget and contribution to additional budget flexibility to support priority unmet needs.
The following summarizes the specific General Fund one-time funding recommendations included as part of the FY2022/23 Proposed Budget:
Under the current budget framework, limited budget flexibility is available to support on-going budget augmentations. The following table summarizes the recommendations for limited supplemental funding for ongoing, recurring annual General Fund appropriations:
These funding recommendations will be discussed in more detail during the Council presentation.
Capital Budget Overview
A major component of the city’s annual budget process is the update to the five-year Capital Improvement Program. For FY2022/23, the CIP budget proposes funding totaling $24.3 million, allocated as follows:
Selected highlights of the proposed FY2022/23 CIP Include:
Water/Sewer/Storm Drain
1. 2023 Water & Sewer Replacement Project $3,800,000
2. Large Diameter Wastewater Pipeline Repair, Replacement & Lining $1,050,000
3. Water Pollution Asset Replacement Project $ 750,000
4. Annual Sewer Repair and Replacement $ 700,000
5. Spring Lake Lift Station Pump Replacement $ 600,000
6. Replacement of Orangeberg Sewer Laterals $ 500,000 Transportation
1. SR 113/CR 25A Ultimate Interchange Modifications (Roundabouts) $1,567,082
2. East Gibson Road/Harry Lorenzo Ave./Bourn Drive Traffic Signal $1,190,000
3. 2022 Road Maintenance/Rehabilitation $1,000,000
4. Annual In-House Road Program Support $1,000,000 Park Facilities
1. Southeast Area Pool Project $6,116,905 As has been the case for the last ten years, CIP funding relies heavily on grants, sales tax measures and utility
funds. While development impact fee funds have improved over recent years due to healthy development activity, many categories continue to face challenges with accumulated deficits, ongoing debt service and limited availability of money for project expenditures.
Looking Ahead
As we prepare to transition to a new fiscal year, there are a number of issues on the horizon that will have a direct impact on the City’s ability to sustain the current and proposed service levels and/or provide additional budget flexibility to advance specific priority needs not provided for in this budget proposal.
Property and Sales Tax Revenue Updates
The City’s fiscal outlook has improved since the impact of the COVID-19 pandemic, in large part due to the protracted economic recovery which has yielded modest but consistent growth in our major tax revenues. The FY2022/23 budget assumes ongoing modest growth in property and sales tax revenues. Projected growth in sales tax is mostly attributable to robust sales in various categories such as general retail and auto sales. The updated five-year forecast assumes modest revenue growth rates in both property and sales tax throughout the remaining five-year forecast and is consistent with most economic forecasts. The City will receive its official assessed valuation of the property tax rolls in early July, soon after adoption of the FY2022/23 budget, and will continue to receive quarterly updates of sales tax receipts and projections. In the short-run, actual property and sales tax receipts are likely to be within the range of assumptions used in the development of the FY2021/22 budget, and in the medium-term, the budget plan provides for a level of general fund reserves sufficient to absorb any economic correction that negatively impacts tax revenues. Staff will continue to monitor revenue receipts and other factors that could very well inform updated financial forecast assumptions over the five-year planning horizon.
Ongoing Labor Negotiations
The City has eight employee bargaining groups with contracts that expire at various times. Management has been meeting with bargaining groups whose labor agreements expire on June 30, 2022 and will initiate discussions over the course of the next year with other bargaining groups that expire on June 30, 2023. While certain assumptions have been incorporated into the present Proposed Budget relative to personnel costs for employees represented by these bargaining groups, the terms of successor agreements may have direct short- term and long-term budget implications.
CalPERS Pension Costs
The Proposed Budget for FY2022/23 reflects the city’s costs associated with employer contributions for CalPERS pension obligations, as set by CalPERS for the coming fiscal year, and the five-year forecast, in turn, includes assumptions consistent with projected pension costs provided by CalPERS. City pension cost for FY2022/23, as well as updated five-year projections, include estimated savings due to the City's one-time extra payment made in FY2021/22. The one-time payment of $6.1 million will save the City $521,883 in FY2022/23 and $8.9 million through FY2037/38 across all City funds. The General Fund in particular will save $369,374 in FY2022/23 and $3.0 million through FY2037/38.
In late July or early August, updated CalPERS valuation reports are provided that will establish the pension contribution levels for FY2023/24 as well as updated five-year projections. The upcoming valuation reports (and those to follow) are expected to continue to have a significant impact on the city budget, particularly in light of recent actual and projected investment losses.
Conclusion
As we look forward to implementing the budget for FY2022/23, staff continues to look for ways to leverage local funding to enhance programs and services consistent with City Council and community priorities.
Through ongoing partnerships and collaborations with public and private sector partners, we are seeing the fruits of key initiatives undertaken over the past few years. With Measure F and Measure J (which will be Measure R in FY2022/23), the City has more resources and certainty to be able to carry out existing efforts and
future Council priorities. It is the overall goal of the Proposed Budget and long-term financial plan of the City to ensure that the City of Woodland can continue to deliver quality programs and services, invest in the future of the community, while sustaining a fiscally prudent budgetary framework.
Lastly, staff will be providing City Council with a presentation of the information described herein as well as other funding recommendations for other funds at the June 7, 2022 meeting. Although the budget numbers presented herein are considered substantially final, staff continues to refine and make adjustments where necessary. Council feedback received will inform the final FY2022/23 Budget scheduled for adoption at the June 21st meeting.
Conclusion:
Staff recommends that the City Council formally receive the proposed budget for FY2022/23.
Prepared by: Evis Morales, Finance Officer
Reviewed by: Kim McKinney, Director of Administrative Services
Attachments:
None
TO: THE HONORABLE MAYOR AND CITY COUNCIL
AGENDA: City Council Regular Meeting
DATE: June 7, 2022
ITEM #: H.26
SUBJECT: Placement of a Measure on the November 8, 2022 Municipal Election Ballot regarding City Council Salary
Recommendation for Action: Staff recommends that the City Council adopt Resolution No. _____, a Resolution of the City Council of the City of Woodland Calling for the Placement of a Measure on the November 8, 2022 Regular Municipal Election Ballot for the Submission to the Qualified Voters of a Proposed Ordinance Amending Section 2.04.300 of the Woodland Municipal Code to Allow City Council Salary to be Set at Five Hundred Dollars Per Month and Allowing City Council Salaries to be Set In the Future in Accordance with State Law.
Staff Contact:
Ken Hiatt, City Manager, (530) 661-5802, [email protected] Fiscal Impact:
If passed by the voters at the November 8, 2022 election, the proposed measure would increase City Council salaries from the current rate of $250 per month to $500 per month. This would result in a total additional cost for all five councilmembers of $15,000 per year, starting after the November 8, 2022 election. The City would additionally have to reimburse the Yolo County Registrar of Voters for the cost of the election, which is estimated at $25,000 to $40,000.
Background:
City Council compensation is set forth in the Section 2.04.300 of the City of Woodland Municipal Code. The current City Council compensation of $250 per month was established by Measure C, which was adopted by the voters at the April 8, 1986 election. Measure C provided that Council salaries could not be adjusted without a vote of the electorate of the City of Woodland. Since the passage of Measure C over 36 years ago, the City has grown by approximately 35,000 residents, the complexity and number of issues that the City Council works has increased, and the cost of living in the City has risen by a considerable amount, but City Council compensation has remained the same and cannot be adjusted without a vote of the people. Given the considerable time and effort that goes into serving as a City Council member, City staff believes it is appropriate to adjust City Council salaries to a level that is more consistent with the level of commitment required for the position, and that the City allow for future adjustments as may be allowed by State law without a subsequent election, which is time consuming and costly.
Discussion:
Government Code section 36516(a) provides that a city council may enact an ordinance providing that each member of the city council in a city with a population over 50,000 and up to and including 75,000 in population may receive a salary up to and including five hundred dollars ($500) per month. The U.S. Census data released in August 2021 lists the Woodland population at 61,032, and therefore under State law (absent the limitations of Measure C), City Council members may receive a salary of up to $500 per month. Government Code section 36516(a) additionally provides that the Council may increase its salary above the $500 per month limit, provided that the salary cannot be increase by more than five percent for each calendar year since the operative date for the last salary adjustment. Additionally, any increase in Council salary cannot take effect until after then following Council election. So, if one City Council votes to increase Council salary, that increase will not take effect until the next Council is seated.
The current Council salary is set at $250 per month. The salaries for City Council have not been increased or adjusted for over 36 years. City staff researched city council compensation in other local cities: The City of Winters (population 7,285) provides a monthly salary of $300; the City of West Sacramento (population 53,574) provides a monthly salary of $300; and the City of Davis (population 68,640) provides a monthly salary of $1,366.
Due to Measure C, Council salaries cannot be increased without a vote of the electorate. The City Council position is extremely time-consuming, and the issues that the Council has to address are increasingly complex and varied. Council members have to sacrifice significant amounts of time, and for those Council members that work full time, their Council commitments can force them to reduce their work hours as well as time with their families. The current Council salaries, which are not at all commensurate with the time required for the position, could serve as a deterrent to some prospective Council candidates from running for office. Staff believes that it is appropriate to ask the electorate to approve an increase to Council salaries to the level allowed by State law for a city of Woodland’s size, which would be more commensurate with the time commitments required for Council. Further, City staff believes it is overly costly and inefficient to require an election every time Council salaries would be increased to account for City growth or increases in cost of living. The proposed measure would also repeal Measure C, so that in the future the City Council could make adjust Council salaries in accordance with the requirements of state law. Therefore, if the proposed new measure passes and Measure C is repealed, future City Councils could vote to increase Council salaries by ordinance, provided that, as discussed above, salaries could not be increased by more than five percent per year, and any increase could not take effect until after the next Council election.
Conclusion:
Staff recommends that the City Council adopt Resolution No. _____, A Resolution of the City Council of the City of Woodland Calling for the Placement of a Measure on the November 8, 2022 Regular Municipal Election Ballot for the Submission to the Qualified Voters of a Proposed Ordinance Amending Section
2.04.300 of the Woodland Municipal Code to Allow City Council Salary to be Set at Five Hundred Dollars Per Month and Allowing City Council Salaries to be Set In the Future in Accordance with State Law.
Prepared By: Ethan Walsh, City Attorney
Reviewed By: Ken Hiatt, City Manager
Attachments:
1. Woodland - Resolution Calling Special Election to Adjust Council Salaries-c1
RESOLUTION NO. ___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WOODLAND CALLING FOR THE PLACEMENT OF A MEASURE ON THE NOVEMBER 8, 2022
REGULAR MUNICIPAL ELECTION BALLOT FOR THE SUBMISSION TO THE
QUALIFIED VOTERS OF A PROPOSED ORDINANCE AMENDING SECTION
2.04.300 OF THE WOODLAND MUNICIPAL CODE TO ALLOW CITY COUNCIL
SALARY TO BE SET AT FIVE HUNDRED DOLLARS PER MONTH AND ALLOWING
CITY COUNCIL SALARIES TO BE SET IN THE FUTURE IN ACCORDANCE WITH
STATE LAW
WHEREAS, at the General Municipal Election on April 8, 1986 the voters of the City of Woodland passed Measure C, an Initiative to Limit the Salaries of the Members of the Woodland City Council, which set City Council compensation at $250 per month, and declared that any increase to City Council salaries must be submitted to the electors, and that such increase must be approved by a majority of the electors voting in the election in order for such salary increase to take effect; and
WHEREAS, Government Code section 36516 provides that a City Council may enact an ordinance setting the salary for each member of the City Council, the amount of which shall be based on population; and
WHEREAS, Government Code section 36516(a) provides that a city council may enact an ordinance providing that each member of the city council in a city with a population over 50,000 and up to and including 75,000 in population may receive a salary up to and including five hundred dollars ($500) per month; and
WHEREAS, the population of the City of Woodland based on the 2020 federal census is 61,032 in population; and
WHEREAS, the time, commitment and expense of serving on the Council has increased significantly, but the monthly compensation for Council Members has not been adjusted since Measure C went into effect in 1986; and
WHEREAS, the People of the City of Woodland desire that the members of the City Council be permitted to receive monthly compensation in amounts as permitted by Government Code Section 36516 or any successor statute thereto; and WHEREAS, pursuant to Section 9222 of the California Elections Code, the City Council has authority to place propositions on the ballot to be considered at a Municipal Election; and WHEREAS, the City Council desires to submit to Woodland voters a measure that would change City Council compensation to be adjusted to $500 per month as allowed by Government Code Section 36516(a), and would further repeal Measure C, so that City Council salaries may be amended from time to time in accordance with the requirements and restrictions of State law; and
WHEREAS, the specific terms of the measure are provided for in the ordinance to be considered by the qualified voters, attached hereto as Exhibit “A” (the “Ballot Ordinance” or “Measure”) and by this reference made an operative part hereof, and in accordance with all applicable laws.
NOW, THEREFORE, BE IT RESOLVED The City Council of the City of Woodland, California, does resolve, declare, determine and order as follows:
SECTION 1. Recitals. The City Council of the City of Woodland hereby finds and determines that the foregoing recitals are true and correct, are incorporated herein and by this reference made an operative part hereof.
SECTION 2. Submission of Ballot Ordinance/Measure. The City Council of the City of Woodland, pursuant to its right and authority, hereby orders the Ordinance/Measure attached hereto as Exhibit “A” to be submitted to the qualified voters of the City at the Regular Municipal Election to be held on November 8, 2022. The proposed Ordinance shall be in the form attached hereto as Exhibit “A” to this Resolution and is incorporated by this reference as if fully set forth herein.
SECTION 3. Ballot Question. The City Council, pursuant to its right and authority, does hereby order that the Measure shall be presented and printed upon the ballot submitted to the qualified voters in the manner and form set forth in this Section 3. On the ballot to be submitted to the qualified voters at the election to be held at the Regular Municipal Election to be held on Tuesday, November 8, 2022, in addition to any other matters required by law, there shall be printed substantially the following:
YES“Shall the salary for City Council members of the City of Woodland be set at $500 per month, and in the future be adjusted by City ordinance in accordance with State law?” NO SECTION 4. Placement on the Ballot. The full text of the Ballot Ordinance shall be printed in the voter information guide, and a statement shall be printed in the ballot pursuant to Section 9223 of the Elections Code advising voters that they may obtain a copy of this ordinance, the Ballot Ordinance and/or ballot measure, at no cost, upon request made to the City Clerk.
SECTION 5. Delivery of Resolution to County. The City Clerk shall certify to the passage and adoption of this Resolution. The City Council directs the City Clerk to deliver copies of this Resolution, including the Ballot Ordinance attached hereto as Exhibit “A”, to the Clerk of the Board of Supervisors of Yolo County and to the Registrar of Voters of Yolo County.
SECTION 6. Public Examination. Pursuant to California Elections Code section 9295, this Measure will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the voter information guide. The Clerk shall post notice in the Clerk's office of the specific dates that the examination period will run.
SECTION 7. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof.
[continued on next page]
SECTION 8. Effective Date of Resolution. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Woodland, California, at a regular meeting held on this ___ day of June, 2022, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
___________________________________
MAYRA VEGA, MAYOR
ATTEST:
__________________________________
ANA GONZALEZ, CMC CITY CLERK
EXHIBIT “A”
ORDINANCE NO. _________
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
WOODLAND AMENDING SECTION 2.04.300 OF THE WOODLAND
MUNICIPAL CODE (COUNCIL MEMBER SALARY) AND REPEALING
MEASURE C OF 1986 WHICH RESTRICTED COUNCIL MEMBER
SALARIES
NOW, THEREFORE, THE PEOPLE OF THE CITY OF WOODLAND DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Amendment of Section 2.04.300. Section 2.04.300, “Council member salary” of the Woodland Municipal Code, is amended to read as follows:
"City Council members shall receive a salary of five hundred dollars per month.” Section 2. Repeal of Measure C. Measure C, as adopted by the People of the City of Woodland on April 8, 1986, is hereby repealed. City Council salaries shall hereafter be established by the City Council in accordance with Government Code Section 36516, or any successor statute thereto.
Section 3. If any portion of this Ordinance is declared invalid by a court of law or other legal body with applicable authority, the invalidity shall not affect or prohibit the force and effect of any other provision or application of the Ordinance that is not deemed invalid. The voters of the City hereby declare that they would have circulated for qualification and/or voted for the adoption of this section, and each portion thereof, regardless of the fact that any portion of the initiative may be subsequently deemed invalid.
Section 4. To the fullest extent allowed by law, the provisions of this Ordinance shall prevail over, and supersede, all other provisions of the Municipal Code and any ordinances, resolutions or administrative policies of the City of Woodland which are in conflict with any provision of this Ordinance.
Section 5. This Ordinance shall not be repealed or amended except by a measure approved by a majority of the electors voting on the issue at a General Municipal Election, or at a special election called for that purpose.
Section 6. This Ordinance shall take effect only if approved by a majority of the eligible voters of the City of Woodland voting at the General Municipal election to be held on November 8, 2022, and shall take effect ten (10) days after the City Council has certified the results of the General Municipal election by resolution.
Section 7. The Mayor is hereby authorized to attest to the adoption of this Ordinance by the People voting thereon on November 8, 2022, by signing where indicated below.
I hereby certify that the foregoing Ordinance was passed, approved and adopted by the People of the City of Woodland on the 8th day of November, 2022.
Mayra Vega, Mayor
ATTEST:
Ana Gonzalez, City Clerk
Dated:
TO: THE HONORABLE MAYOR AND CITY COUNCIL
AGENDA: City Council Regular Meeting
DATE: June 7, 2022
ITEM #: H.27
SUBJECT: Placement of Measure on the November 8, 2022 Municipal Election Ballot regarding Cannabis Tax
Recommendation for Action: Staff recommends that City Council adopt Resolution No. _____, calling for the placement of a general tax measure on the November 8, 2022 regular municipal election ballot for the submission to the qualified voters of a proposed ordinance adding Chapter 3.36 to Title 3 (Taxation and Purchasing) of the Woodland Municipal Code, establishing a tax on cannabis businesses operating within the City of Woodland.
Staff Contacts:
Ken Hiatt, City Manager (530) 661-5802, [email protected] Fiscal Impact:
The City will have to pay the County Elections office for the cost of conducting the election on this ballot measure, which is estimated to be $10 - $15,000. In the event that the general tax measure is passed by the voters of the City of Woodland, this measure would generate significant additional general fund revenue to the City. It is difficult to predict the specific amount of revenue that will be generated at this point in the process, as the City has not yet begun processing applications for retail cannabis uses, and therefore cannot predict the number or extent of cannabis businesses that will open in the City.
Background:
Current State law allows qualified patients and their caregivers to cultivate and possess cannabis for personal use in order to treat medical conditions. It also allows the personal possession and use of recreational cannabis. However, cities retain the authority to reasonably regulate the business of cultivating, processing, testing, distributing and selling cannabis and related products. The City of Woodland has allowed non-retail cannabis businesses to operate in the City subject to certain land use and business regulations for several years now. More recently, the City Council adopted ordinances to amend the Zoning Code to allow for a limited number of retail cannabis businesses to operate in the City, subject to issuance of conditional use permits and compliance with detailed standards established by the City. Cannabis businesses are also required to secure a cannabis business permit, which establishes additional criteria that each business must comply with as conditions of operating in the City. While the City’s existing ordinances create a comprehensive regulatory scheme for cannabis businesses in the City, they do not establish local taxes on such businesses. This is because State law (as set forth by Proposition 218) requires any new, increased or extended local taxes to be approved by the voters. Many cities throughout the State that do allow cannabis businesses have imposed local taxes on those businesses, however in order to do so the proposed tax must be placed on the ballot and approved by the voters of the City.
Discussion:
The proposed resolution would place a measure on the ballot for the November 8, 2022 election that, if passed by the voters, would adopt a local tax to be used for general governmental purposes. The tax would be equal to a percentage of gross receipts on all cannabis businesses operating within the City. The measure would allow the City to impose the tax at a maximum rate of up to ten percent of gross receipts of cannabis businesses, though the ordinance provides the City Council with the discretion to impose a lower tax rate if deemed appropriate. The City could additionally set the tax rate for different categories of cannabis uses at different levels, subject to the ten percent maximum rate. The City has surveyed the tax rates set by other jurisdictions
throughout the State, and while there is some variance in the tax rates charged, few cities have imposed taxes at rates above ten percent on gross receipts. This measure will give the City the flexibility to set tax rates at a level it deems appropriate following passage of the ballot measure, and make adjustments as needed subject to the proposed upper limit.
The ten percent serves as the maximum tax rate, and could not be increased without returning to the voters. “Gross receipts” is defined broadly to cover any money, in-kind contributions, exchange of property, or any other items of value received by the business for these cannabis operations. “Gross receipts” are taken from the “top of the ledger”, meaning they are calculated before the business takes any deductions for material and operational costs or losses to the business.
The proposed cannabis tax is a “general tax”, meaning that revenues would be deposited in the City’s General Fund and may be spent for any general City program (such as law enforcement, parks, youth/senior services, and street repair). The measure would additionally adopt a new Chapter 3.36 in the City’s Municipal Code, that would establish the means by which the new cannabis business tax would be administered. If passed by the voters, this tax would apply to any cannabis business that is now permitted in the City, or that may be allowed in the future. The City’s existing cannabis businesses have entered into Operating Agreements with the City pursuant to which they have voluntarily agreed to make certain payments to the City out of their gross receipts to provide additional funding to be used for community benefit. Those Operating Agreements, however, provide that in the event that the voters of the City adopt a cannabis business tax, the tax will replace their obligation to make payments under their Operating Agreements from gross receipts.
A general tax measure may not be placed on the ballot for consideration by the voters unless approved by at least a 2/3 vote of the Council. Therefore, in order to place this measure on the November 8, 2022 ballot, it must be approved by the Council with a minimum of four affirmative votes.
Conclusion:
Staff recommends that City Council adopt Resolution ____ calling for the placement of a general tax measure on the November 8, 2022 regular municipal election ballot for the submission to the qualified voters of a proposed ordinance adding Chapter 3.36 to Title 3 (Taxation and Purchasing) of the Woodland Municipal Code, establishing a tax on cannabis businesses operating within the City of Woodland.
Attachments:
1. Resolution Placing General Tax Measure on November 8 2022 General Election Ballot - Cannabis Tax Ordinance-c1
RESOLUTION NO. ______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WOODLAND CALLING FOR THE PLACEMENT OF A
GENERAL TAX MEASURE ON THE NOVEMBER 8, 2022
REGULAR MUNICIPAL ELECTION BALLOT FOR THE
SUBMISSION TO THE QUALIFIED VOTERS OF A PROPOSED
ORDINANCE ADDING CHAPTER 3.36 TO TITLE 3
(TAXATION AND PURCHASING) OF THE WOODLAND
MUNICIPAL CODE, ESTABLISHING A TAX ON CANNABIS
BUSINESSES OPERATING WITHIN THE CITY OF
WOODLAND
WHEREAS, pursuant to California Government Code sections 37100.5 and 37101, the City of Woodland has the authority to establish a local business tax upon cannabis businesses that engage in business in the City; and
WHEREAS, pursuant to Section 9222 of the California Elections Code, the City Council has authority to place propositions on the ballot to be considered at a Municipal Election; and WHEREAS, the City Council desires to submit to the voters an ordinance establishing a local general tax not to exceed 10% on the gross receipts received by any cannabis business through its operations and/or manufacturing; and
WHEREAS, the proposed cannabis business tax is a general tax the proceeds of which would be deposited into the City's general fund and which would pay for important City services such as law enforcement, street operations and maintenance, library services, parks and recreation services and general municipal services to the public; and WHEREAS, on November 6, 1996, the voters of the State of California approved Proposition 218 (California Constitution, Article XIIIC), an amendment to the State Constitution which requires that all general taxes which are imposed, extended or increased must be submitted to the electorate and approved by a majority vote of the qualified electors voting in the election; and
WHEREAS, the next regularly scheduled general election at which City Council members are to be elected is November 8, 2022; and
WHEREAS, pursuant to Government Code section 53724 (“Proposition 62”), a two-thirds (2/3) vote of all members of the City Council is required to place the Measure (as defined below) on the November 8, 2022 ballot; and
WHEREAS, the specific terms relating to the cannabis business tax are provided for in the ordinance to be considered by the qualified voters, attached hereto as Exhibit "A" (the "Ordinance" or "Measure") and by this reference made an operative part hereof, and in accordance with all applicable laws.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WOODLAND DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. Recitals. The City Council hereby finds and determines that the foregoing recitals are true and correct, are incorporated herein and by this reference made an operative part hereof.
SECTION 2. Submission of Ballot Measure. The City Council, pursuant to its right and authority as contained in California Propositions 62 and 218 and Elections Code section 9222, by a two-thirds vote of all members, hereby orders the Ordinance attached hereto as Exhibit "A" to be submitted to the qualified voters of the City at the Regular Municipal Election to be held on Tuesday, November 8, 2022. The proposed Ordinance shall be in the form attached hereto as Exhibit "A" to this Resolution and is incorporated by this reference as if fully set forth herein.
SECTION 3. Ballot Measure. The City Council, pursuant to its right and authority, does hereby order that the Measure shall be presented and printed upon the ballot submitted to the qualified voters in the manner and form set forth in this Section 3. On the ballot to be submitted to the qualified voters at the Regular Municipal Election to be held on Tuesday, November 8, 2022, in addition to any other matters required by law, there shall be printed substantially the following:
Yes ☐
To improve City services, such as law enforcement, parks, youth/senior services, and street repair, and for general government use, shall a measure be adopted enacting a tax on cannabis businesses up to 10% of gross receipts, until ended by voters? No ☐
SECTION 4. Placement on the Ballot. The full text of the Ordinance/Measure shall not be printed in the voter information guide, and a statement shall be printed in the ballot pursuant to Section 9223 of the Elections Code advising voters that they may obtain a copy of this Ordinance/Measure at no cost, upon request made to the City Clerk.
SECTION 5. Delivery of Resolution to County. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions. The City Council directs the City Clerk to deliver copies of this Resolution, including the Ordinance/Measure attached hereto as Exhibit "A", to the Clerk of the Board of Supervisors of Yolo County and to the Registrar of Voters of Yolo County.
SECTION 6. Public Examination. Pursuant to California Elections Code section 9295, this Measure will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the voter information guide. The Clerk shall post notice in the Clerk's office of the specific dates that the examination period will run.
SECTION 7. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof.
SECTION 8. Effective Date of Resolution. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Woodland, California, at a regular meeting held on this ___ day of June, 2022, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
___________________________________
MAYRA VEGA, MAYOR
ATTEST:
__________________________________
ANA GONZALEZ, CITY CLERK
EXHIBIT "A"
ORDINANCE NO. ______
AN ORDINANCE OF THE PEOPLE OF THE CITY OF
WOODLAND ADDING CHAPTER 3.36 (CANNABIS
BUSINESS TAX) TO TITLE 3 (TAXATION AND
PURCHASING) OF THE WOODLAND MUNICIPAL CODE
ESTABLISHING A TAX ON CANNABIS BUSINESSES
OPERATING WITHIN THE CITY OF WOODLAND
NOW THEREFORE, THE PEOPLE OF THE CITY OF WOODLAND DO
ORDAIN AS FOLLOWS:
SECTION 1. Subject to the approval of a majority of the voters of the City of Woodland at the Regular Municipal Election so designated by the City Council in a separate resolution placing the proposal on the ballot for such election, Chapter 3.36 (Cannabis Business Tax) is hereby added to Title 3 (Revenue and Finance) of the Woodland Municipal Code to read as follows:
"Chapter 3.36 CANNABIS BUSINESS TAX
3.36.010 Title.
3.36.020 Authority and purpose.
3.36.030 Intent.
3.36.040 Definitions.
3.36.050 Tax imposed.
3.36.060 Registration, reporting, and remittance of tax.
3.36.070 Payments and communications — timely remittance.
3.36.080 Payment — when taxes deemed delinquent.
3.36.090 Notice not required by City.
3.36.100 Penalties and interest.
3.36.110 Refunds and credits.
3.36.120 Refunds and procedures.
3.36.130 Personal cultivation not taxed.
3.36.140 Administration of the tax.
3.36.150 Appeal procedure.
3.36.160 Enforcement — action to collect.
3.36.170 Apportionment.
3.36.180 Constitutionality and legality.
3.36.190 Audit and examination of premises and records.
3.36.200 Other licenses, permits, taxes or charges.
3.36.210 Payment of tax does not authorize unlawful business.
3.36.220 Deficiency determinations.
3.36.230 Failure to report — nonpayment, fraud.
3.36.240 Tax assessment — notice requirements.
3.36.250 Tax assessment — hearing, application, and determination.
3.36.260 Conviction for violation — taxes not waived.
3.36.270 Violation deemed misdemeanor.
3.36.280 Severability.
3.36.290 Remedies cumulative.
3.36.300 Amendment or repeal.
3.36.010 Title.
This ordinance shall be known as the Cannabis Business Tax Ordinance.
3.36.020 Authority and Purpose.
The purpose of this Ordinance is to adopt a tax, for revenue purposes, pursuant to Sections 37101 and 37100.5 of the California Government Code, upon cannabis businesses that engage in business in the City. The Cannabis Business Tax is levied based upon business gross receipts. It is not a sales and use tax, a tax upon income, or a tax upon real property. The Cannabis Business Tax is a general tax enacted solely for general, governmental purposes of the City and not for
specific purposes. All of the proceeds from the tax imposed by this chapter shall be placed in the City's general fund and be available for any lawful municipal purpose.
3.36.030 Intent.
The intent of this Ordinance is to levy a tax on all cannabis businesses that operate in the City, regardless of whether such business would have been legal at the time this chapter was adopted. Nothing in this chapter shall be interpreted to authorize or permit any business activity that would not otherwise be legal or permissible under laws applicable to the activity at the time the activity is undertaken.
3.36.040 Definitions.
The following words and phrases shall have the meanings set forth below when used in this chapter:
A. "Business" shall include all activities engaged in or caused to be engaged in within the City, including any commercial or industrial enterprise, trade, profession, occupation, vocation, calling, or livelihood, whether or not carried on for gain or profit, but shall not include the services rendered by an employee to his or her employer.
B. "Calendar year" means January 1 through December 31, of the same year.
C. "Cannabis" means all or any parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from cannabis, and cannabis as defined by Section 11018 of the California Health and Safety Code, as it may be amended. For purposes of this chapter, “cannabis” means and includes both cannabis for medical purposes and non-medical, “adult-use” purposes, unless otherwise specified. Cannabis does not include industrial hemp.
D. "Cannabis product" means raw cannabis that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product. "Cannabis product" also means cannabis products as defined by Section 11018.1 of the California Health and Safety Code and is not limited to medicinal cannabis products.
E. "Cannabis business" means a business activity, including, but not limited to, planting, cultivation, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging, distributing, researching, testing, providing, or selling wholesale and/or retail sales of cannabis. A cannabis business includes any facility, building structure, or location, expressly including dispensaries and deliveries, and shall expressly include those commercial cannabis activities authorized and/or licensed by State law.
F. "Cannabis business permit" means a permit issued by the City to a person pursuant to Chapter 5.28 to authorize that person to operate or engage in a cannabis business within the City.
G. "Cannabis business tax" or "business tax," means the tax due pursuant to this chapter for engaging in a cannabis business in the City.
H. "Cannabis cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis licensed by the State and intended for commercial sale. For purposes of this chapter, cannabis cultivation does not mean or include personal cultivation of cannabis regulated by Chapter 17.108.
I. "Employee" means each and every person engaged in the operation or conduct of any business, whether as owner, member of the owner's family, partner, associate, agent, manager or solicitor, and each and every other person employed or working in such business for a wage, salary, commission, barter or any other form of compensation.
J. "Engaged in a cannabis business" means the commencing, conducting, operating, managing or carrying on of a cannabis business, whether done as owner, or by means of an officer, agent, manager, employee, or otherwise, whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities. A person shall be deemed engaged in business within the City if:
1. Such person or person's employee maintains a fixed place of business within the City for the benefit or partial benefit of such person;
2. Such person or person's employee owns or leases real property within the City for business purposes;
3. Such person or person's employee regularly maintains a stock of tangible personal property in the City for sale in the ordinary course of business;
4. Such person or person's employee regularly conducts solicitation of business within the City; or
5. Such person or person's employee performs work or renders services in the City.
The foregoing specified activities shall not be a limitation on the meaning of "engaged in business."
K. "Evidence of doing business" means evidence such as, without limitation, use of signs, circulars, cards or any other advertising media, including the use of internet or telephone solicitation, or representation to a government agency or to the public that such person is engaged in a cannabis business in the City.
L. "Gross Receipts," means the total amount actually received or receivable from sales and the total amounts actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in “gross receipts” shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, all cost of materials used, labor or service costs, interest paid or losses or other expenses. The following shall not be included in the definition of “Gross Receipts”: (1) Cash discounts allowed and taken on sales; (2) Such part of the sale price of property returned by purchasers upon rescission of the contact of sales as is refunded either in cash or by credit; and (3) Receipts of refundable deposits, except that refundable deposits forfeited an taken into income of the business shall not be excluded.
M. "Nursery" means a facility or part of a facility that is used only for producing clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis.
N. "Person" means an individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, whether organized as a nonprofit or for-profit entity, and includes the plural as well as the singular number.
O. "Processing" means a cultivation site that conducts only trimming, drying, curing, grading, packaging, or labeling of cannabis and non-manufactured cannabis products.
P. “Retail Sale,” "Sale," "Sell" and "to sell" means and includes any retail sale, exchange, or barter. It shall also mean any transaction whereby, for any consideration, title to cannabis, cannabis products are transferred from one person to another and includes the delivery of cannabis and/or cannabis products pursuant to an order placed for the purchase of the same, but does not include the return of cannabis and/or cannabis products to the licensee from whom the cannabis and/or cannabis product was purchased.
Q. "State" means the State of California.
R. "State license," "license," or "registration" means a state license issued pursuant to California Business & Professions Code Section 26050, and all other applicable state laws, required for operating a cannabis business.
S. "Tax Administrator" means the Director of Finance of the City of Woodland or his or her designee.
T. "Testing Laboratory" means a cannabis business that (i) offers or performs tests of cannabis and/or cannabis products, (ii) offers no service other than such tests, (iii) sells no products, excepting only testing supplies and materials, (iv) is accredited by an accrediting body that is independent from all other persons involved in the cannabis industry in the state and (v) is registered with the Bureau of Cannabis Control or other state agency.
3.36.050 Tax Imposed.
A. Beginning July 1, 2023, there is imposed upon each person who is engaged in business as a cannabis business a cannabis business tax. Such tax is payable regardless of whether the business has been issued a business license or cannabis business permit to operate lawfully in the City or is operating unlawfully. The City's acceptance of a cannabis business tax payment from a cannabis business operating illegally shall not constitute the City's approval or consent to such illegal operations.
B. The tax rate for a cannabis business tax shall be ten percent (10%) of gross receipts generated by that cannabis business activity.
C. Notwithstanding the tax rate imposed in subsection (B), the city council may, in its discretion, at any time by resolution implement any lower tax rate it deems appropriate, and may by resolution increase such tax rate from time to time, not to exceed the maximum rate established under subsection (B).
3.36.060 Registration, reporting and remittance of tax.
A. Registration of Cannabis Business. All cannabis businesses shall be required to annually register as follows:
1. All persons engaging in business as a cannabis business, whether an existing, newly established or acquired business shall register with the Tax Administrator within thirty (30) days of commencing operation and shall annually renew such registration within 30 days of the business registration of each year thereafter. In registering, such persons shall furnish to the Tax Administrator a sworn statement, upon a form provided by the Tax Administrator, setting forth the following information:
a. The name of the business;
b. The names and addresses of each owner;
c. The exact nature or kind of business;
d. The place where such business is to be carried on; and e. Any additional information which the Tax Administrator may require.
B. The cannabis business tax imposed by this chapter shall be paid, in arrears, on a monthly basis. Each person owing a cannabis business tax each calendar month shall, no later than the fifteenth day following the close of the calendar month, file with the Tax Administrator a statement ("tax statement") of the tax owed for that calendar month and the basis for calculating that tax. The Tax Administrator may require that the tax statement be submitted on a form prescribed by the Tax Administrator. The tax for each calendar month shall be due and payable on that same date that the tax statement for the calendar month is due.
C. Upon cessation of a cannabis business, tax statements and payments shall be immediately due for all calendar months up to the calendar month during which cessation occurred.
D. The Tax Administrator may, at his or her discretion, establish alternative reporting and payment periods for any taxpayer as the Tax Administrator deems necessary to ensure effective collection of the cannabis business tax. The Tax Administrator may also require that a deposit, to be applied against the taxes for a calendar month, be made by a taxpayer at the beginning of that calendar month. In no event shall the deposit required by the Tax Administrator exceed the tax amount he or she projects will be owed by the taxpayer for the calendar month. The Tax Administrator may require that a taxpayer make payments via a cashier's check, money order, wire transfer, or similar instrument.
3.36.070 Payments and communications - timely remittance.
Whenever any payment, statement, report, request or other communication is due, it must be received by the Tax Administrator on or before the final due date. A postmark will not be accepted as timely remittance. If the due date would fall on a Friday, Saturday, Sunday, or a holiday observed by the City, the due date shall be the next regular business day on which the City is open to the public.
3.36.080 Payment - when taxes deemed delinquent.
Unless otherwise specifically provided under other provisions of this chapter, the taxes required to be paid pursuant to this chapter shall be deemed delinquent if not received by the Tax Administrator on or before the due date as specified in Sections 3.36.060 and 3.36.070.
3.36.090 Notice not required by the City.
The City may as a courtesy send a tax notice to the cannabis business which owes the City a cannabis business tax. However, the Tax Administrator is not required to send a delinquency or other notice or bill to any person subject to the provisions of this chapter. Failure to send such notice or bill shall not affect the validity of any tax or penalty due under the provisions of this chapter.
3.36.100 Penalties and interest.
A. Any person who fails or refuses to pay any cannabis business tax required to be paid pursuant to this chapter on or before the due date shall pay penalties and interest as follows:
1. A penalty equal to ten percent (10%) of the amount of the tax, in addition to the amount of the tax, plus interest on the unpaid tax calculated from the due date of the tax at the rate of one percent (1.0%) per month.
2. If the tax remains unpaid for a period exceeding one calendar month beyond the due date, an additional penalty equal to twenty-five percent (25%) of the amount of the tax, plus interest at the rate of one percent (1.0%) per month on the unpaid tax and on the unpaid penalties.
3. Interest shall be applied at the rate of one percent (1.0%) per month on the first day of the month for the full month and will continue to accrue monthly on the tax and penalty until the balance is paid in full.
B. Whenever a check or electronic payment is submitted in payment of a cannabis business tax and the payment is subsequently returned unpaid by the bank for any reason, the taxpayer will be liable for the tax amount due plus any fees, penalties and interest as provided for in this chapter, and any other amount allowed under state law.
3.36.110 Refunds and credits.
A. No refund shall be made of any tax collected pursuant to this chapter, except as provided in Section 3.36.120.
B. No refund of any tax collected pursuant to this chapter shall be made because of the discontinuation, dissolution, or other termination of a business.
3.36.120 Refunds and procedures.
A.Whenever the amount of any cannabis business tax, penalty or interest has been overpaid, paid more than once, or has been erroneously collected or received by the City under this chapter, it may be refunded to the claimant who paid the tax provided that a written claim for refund is filed with the Tax Administrator within one (1) year of the date the tax was originally due or paid, whichever came first.
B.The Tax Administrator, his or her designee or any other City officer charged with the administration of this chapter shall have the right to examine and audit all the books and business records of the claimant in order to determine the eligibility of the claimant to the claimed refund. No claim for refund shall be allowed if the claimant refuses to allow such examination of claimant's books and business records after request by the Tax Administrator to do so.
C.In the event that the cannabis business tax was erroneously paid in an amount in excess of the tax due, and the error is attributable to the City, the City shall refund the amount of tax erroneously paid; provided that (i) a claim for refund has been timely filed with the Tax Administrator; and (ii) the refund cannot exceed, under any circumstance, the amount of tax overpaid during the twelve months preceding the last month for which the claim states the tax was overpaid.
3.36.130 Personal Cultivation Not Taxed.
The provisions of this chapter shall not apply to personal cannabis cultivation or personal use of cannabis, to the extent those activities are authorized in the "Medicinal and Adult Use Cannabis Regulation and Safety Act," as may be amended. This chapter shall not apply to personal use of cannabis that is specifically exempted from state licensing requirements, that meets the definition of personal use or equivalent terminology under state law, and provided that the individual receives no compensation whatsoever related to that personal cultivation or use.
3.36.140 Administration of the tax.
A. It shall be the duty of the Tax Administrator to collect the taxes, penalties, fees, and perform the duties required by this chapter.
B. For purposes of administration and enforcement of this chapter generally, the Tax Administrator may from time to time promulgate such administrative interpretations, rules, and procedures consistent with the purpose, intent, and express terms of this chapter as he or she deems necessary to implement or clarify such provisions or aid in enforcement.
C. The Tax Administrator may take such administrative actions as needed to administer the cannabis business tax, including but not limited to:
1. Provide to all cannabis business taxpayers forms for the reporting of the tax;
2. Provide information to any taxpayer concerning the provisions of this chapter;
3. Receive and record all taxes remitted to the City as provided in this chapter;
4. Maintain records of taxpayer reports and taxes collected pursuant to this chapter;
5. Assess penalties and interest to taxpayers pursuant to this chapter;
6. Determine amounts owed under and enforce collection pursuant to this chapter.
3.36.150 Appeal procedure.
Any taxpayer aggrieved by any decision of the Tax Administrator with respect to the amount of tax, interest, penalties and fees, if any, due under this chapter may appeal to the City Manager by filing a notice of appeal with the City Clerk within thirty (30) calendar days of the serving or mailing of the Tax Administrator's determination of the amount due. The City Clerk, or his or her designee, shall fix a time and place for hearing such appeal, and the City Clerk, or his or her designee, shall give notice in writing to such operator at the last known place of address.
The finding of the City Manager shall be final and conclusive and shall be served upon the appellant in the manner prescribed by this section 3.36.150 for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of the notice.
3.36.160 Enforcement - action to collect.
Any taxes, penalties and/or fees required to be paid under the provisions of this chapter shall be deemed a debt owed to the City. Any person owing money to the City under the provisions of this chapter shall be liable in an action brought in the name of the City for the recovery of such debt. The provisions of this section shall not be deemed a limitation upon the right of the City to bring any other action including criminal, civil and equitable actions, based upon the failure to pay the tax, penalties and/or fees imposed by this chapter or the failure to comply with any of the provisions of this chapter.
3.36.170 Apportionment.
If a business subject to the tax is operating both within and outside the City, it is the intent of the City to apply the cannabis business tax so that the measure of the tax fairly reflects the proportion of the taxed activity actually carried on in the City. To the extent federal or state law requires that any tax due from any taxpayer be apportioned, the taxpayer may indicate said apportionment on his or her tax return. The Tax Administrator may promulgate administrative procedures for apportionment as he or she finds useful or necessary.
3.36.180 Constitutionality and legality.
This tax is intended to be applied in a manner consistent with the United States and California Constitutions and state law. None of the tax provided for by this chapter shall be applied in a manner that causes an undue burden upon interstate commerce, a violation of the equal protection or due process clauses of the Constitutions of the United States or the State of California or a violation of any other provision of the California Constitution or state law. If a person believes that the tax, as applied to him or her, is impermissible under applicable law, he or she may request that the Tax Administrator release him or her from the obligation to pay the impermissible portion of the tax.
3.36.190 Audit and examination of premises and records.
A. For the purpose of ascertaining the amount of cannabis business tax owed or verifying any representations made by any taxpayer to the City in support of his or her tax calculation, the Tax Administrator shall have the power to inspect any location where any cannabis business occurs and to audit and examine all books and records (including, but not limited to bookkeeping records, state and federal income tax returns, and other records relating to the gross receipts of the business) of persons engaged in cannabis businesses. In conducting such investigation, the Tax Administrator shall have the power to inspect any equipment, such as computers or point of sale machines, that may contain such records.
B. It shall be the duty of every person liable for the collection and payment to the City of any tax imposed by this chapter to keep and preserve, for a period of at least three (3) years, all records as may be necessary to determine the amount of such tax as he or she may have been liable for the collection of and payment to the City, which records the Tax Administrator or his/her designee shall have the right to inspect at all reasonable times.
3.36.200 Other licenses, permits, taxes, fees or charges.
A.Nothing contained in this chapter shall be deemed to repeal, amend, be in lieu of, replace or in any way affect any requirements for any cannabis business permit, conditional use permit or City license required by, under or by virtue of any provision of any other Title or Chapter of this code or any other ordinance or resolution of the City, nor be deemed to repeal, amend, be in lieu of, replace or in any way affect any tax, fee or other charge imposed, assessed or required under any other Title or Chapter of this code or any other ordinance or resolution of the City. Any references made or contained in any other Title or Chapter of this code to any licenses, license taxes, fees, or charges, or to any schedule of license fees, shall be deemed to refer to the licenses, license taxes, fees or charges, or schedule of license fees, provided for in other Titles or Chapters of this code.
B.The Tax Administrator may revoke or refuse to renew the license required by Chapter 5.28 of this code for any business that is delinquent in the payment of any tax due pursuant to this section or that fails to make a deposit required by the Tax Administrator pursuant to Section
3.36.060. A cannabis business permit issued under the Woodland Municipal Code may be revoked, suspended or not renewed in the event that the business holding that permit has failed to (i) make a deposit required by the Tax Administrator pursuant to Section 3.36.060 or (ii) timely pay all taxes, interest and penalties owed by that business under this chapter.
3.36.210 Payment of tax does not authorize unlawful business.
A. The payment of a cannabis business tax required by this chapter, and its acceptance by the City, shall not entitle any person to carry on any cannabis business unless the person has complied with all of the requirements of this code and all other applicable state laws.
B. No tax paid under the provisions of this chapter shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any business in violation of any local or state law.
3.36.220 Deficiency determinations.
If the Tax Administrator is not satisfied that any statement filed as required under the provisions of this chapter is correct, or that the amount of tax is correctly computed, he or she may compute and determine the amount to be paid and make a deficiency determination upon the basis of the facts contained in the statement or upon the basis of any information in his or her possession or that may come into his or her possession within three (3) years of the date the tax was originally due and payable. One or more deficiency determinations of the amount of tax due for a period or periods may be made. When a person ceases engaging in a cannabis business, a deficiency determination may be made at any time within three (3) years thereafter as to any liability arising from engaging in such cannabis business whether or not a deficiency determination is issued prior to the date the tax would otherwise be due. Whenever a deficiency determination is made, a notice shall be given to the person concerned in the same manner as notices of assessment are given under Section 3.36.240.
3.36.230 Failure to report—nonpayment, fraud.
A. Under any of the following circumstances, the Tax Administrator may make and give notice of an assessment of the amount of tax owed by a person under this chapter at any time:
1. If the person has not filed a complete statement required under the provisions of this chapter;
2. If the person has not paid the tax due under the provisions of this chapter;
3. If the person has not, after demand by the Tax Administrator, filed a corrected statement, or furnished to the Tax Administrator adequate substantiation of the information contained in a statement already filed, or paid any additional amount of tax due under the provisions of this chapter; or
4. If the Tax Administrator determines that the nonpayment of any cannabis business tax due under this chapter is due to fraud, a penalty of twenty-five percent (25%) of the amount of the tax shall be added thereto in addition to penalties and interest otherwise payable under this chapter and any other penalties allowed by law.
B. The notice of assessment shall separately set forth the amount of any tax known by the Tax Administrator to be due or estimated by the Tax Administrator, after consideration of all information within the Tax Administrator's knowledge concerning the business and activities of the person assessed, to be due under each applicable provision of this chapter and shall include the amount of any penalties or interest accrued on each amount to the date of the notice of assessment.
3.36.240 Tax assessment - notice requirements.
The notice of assessment shall be served upon the person either by personal delivery, by overnight delivery by a nationally-recognized courier service, or by a deposit of the notice in the United States mail, postage prepaid thereon, addressed to the person at the address of the location of the business or to such other address as he or she shall register with the Tax Administrator for the purpose of receiving notices provided under this chapter; or, should the person have no address registered with the Tax Administrator for such purpose, then to such person's last known address.
For the purpose of Section 3.36.240, a service by overnight delivery shall be deemed to have occurred one (1) calendar day following deposit with a courier and service by mail shall be deemed to have occurred three (3) days following deposit in the United States mail.
3.36.250 Tax assessment - hearing, application and determination.
Within thirty (30) calendar days after the date of service of the notice of assessment the person may apply in writing to the Tax Administrator for a hearing on the assessment. If application for a hearing before the City is not made within the time herein prescribed, the tax assessed by the Tax Administrator shall become final and conclusive. Within thirty (30) calendar days of the receipt of any such application for hearing, the Tax Administrator shall cause the matter to be set for hearing before him or her no later than thirty (30) calendar days after the receipt of the application, unless a later date is agreed to by the Tax Administrator and the person requesting the hearing. Notice of such hearing shall be given by the Tax Administrator to the person requesting such hearing not later than five (5) calendar days prior to such hearing. At such hearing said applicant may appear and offer evidence why the assessment as made by the Tax Administrator should not be confirmed and fixed as the tax due. After such hearing the Tax Administrator shall determine and reassess (if necessary) the proper tax to be charged and shall give written notice to the person in the manner prescribed in Section 3.36.240 for giving notice of assessment.
3.36.260 Conviction for violation - taxes not waived.
The conviction and punishment of any person for failure to pay the required tax shall not excuse or exempt such person from any civil action for the tax debt unpaid at the time of such conviction. No civil action shall prevent a criminal prosecution for any violation of the provisions of this chapter or of any state law requiring the payment of all taxes.
3.36.270 Violation deemed misdemeanor.
Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor.
3.36.280 Severability.
If any provision of this chapter, or its application to any person or circumstance, is determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this chapter or the application of this chapter to any other person or circumstance and, to that end, the provisions hereof are severable.
3.36.290 Remedies cumulative.
All remedies and penalties prescribed by this chapter or which are available under any other provision of this code and any other provision of law or equity are cumulative. The use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of this chapter.
3.36.300 Amendment or repeal.
Except as set forth in this section 3.36.320, this chapter, or any section of this chapter, may be amended, modified, temporarily suspended, or repealed by the City Council without a vote of the people. However, as required by Article XIIIC of the California Constitution, voter approval is required for any amendment that would expand, extend, or increase the rate or methodology of any tax levied pursuant to this chapter. The people of the City of Woodland affirm that the following actions shall not constitute an increase of the rate or methodology of a tax:
A. The restoration or adjustment of the rate of the tax to a rate that is no higher than that allowed by this chapter, in those circumstances where, among others, the City Council has previously acted to reduce the rate of the tax or is incrementally implementing an increase authorized by this chapter;
B.An action that interprets or clarifies (i) the methodology of applying or calculating the tax or (ii) any definition applicable to the tax, so long as the interpretation or clarification (even if contrary to some prior interpretation or clarification) is not inconsistent with the provisions of this chapter; or
C.The collection of the tax imposed by this chapter even if the City had, for some period of time, suspended or failed to collect the tax.
SECTION 2. Pursuant to Article XIIIB of the California Constitution, the appropriation limit for the City of Woodland will be increased by the maximum projected aggregate collection authorized by the levy of this general tax, as indicated in Section 1, in each of the years covered by this Ordinance plus the amount, if any, by which the appropriation limit is decreased by law as a result of the levy of the general tax set forth in this Ordinance.
SECTION 3. If any portion of this Ordinance is declared invalid by a court of law or other legal body with applicable authority, the invalidity shall not affect or prohibit the force and effect of any other provision or application of the Ordinance that is not deemed invalid. The voters of the City hereby declare that they would have circulated for qualification and/or voted for the adoption of this Ordinance, and each portion thereof, regardless of the fact that any portion of the initiative may be subsequently deemed invalid.
SECTION 4. Pursuant to California Constitution Article XIIIC §(2)(b) and California Elections Code §9217, this Ordinance shall take effect only if approved by a majority of the eligible voters of the City of Woodland voting at the Regular Municipal Election to be held on November 8, 2022, and shall take effect ten (10) days after the City Council has certified the results of the Regular Municipal Election by resolution.
SECTION 5. The Mayor is hereby authorized to attest to the adoption of this Ordinance by the People voting thereon on November 8, 2022, by signing where indicated below.
I hereby certify that the foregoing Ordinance was PASSED, APPROVED AND ADOPTED by the people of the City of Woodland on the 8th day of November 2022.
Dated: __________________________ ________________________________ MAYOR
ATTEST:
___________________________
CITY CLERK