Item 15 - General Tax Measure — Yucaipa City Council, June 24, 2024

Agenda Item No.

CITY OF YUCAIPA

AGENDA REPORT
TO: Honorable Mayor and City Council
FROM: Chris Mann, City Manager
FOR: City Council Meeting of June 24, 2024
SUBJECT: Consider Adoption of Resolutions Placing the Yucaipa Public Safety and Essential Services Protection Measure on the November 5, 2024, General Municipal Election Ballot to Establish either a 1 Percent or 1.5 Percent General Transactions and Use (Sales) Tax
RECOMMENDATION:

That the City Council:
1) Adopt Resolution No. 2024-38, a resolution of the City Council of the City of Yucaipa, California, ordering the submission to the qualified electors of the City a measure establishing a one cent transactions and use (sales) tax or
Adopt Resolution No. 2024-39, a resolution of the City Council of the City of Yucaipa, California, ordering the submission to the qualified electors of the City a measure establishing a one and one half cent transactions and use (sales) tax; and 2) Adopt Resolution No. 2024-40, a resolution of the City Council of the City of Yucaipa, California, setting deadlines and priorities for filing written arguments and rebuttals regarding the City initiated transactions and use tax measure and directing the City Attorney to prepare an impartial analysis; and
3) Resolution No. 2024-41, a resolution of the City Council of the City of Yucaipa, California, stating its intention to expend the proceeds of the transactions and use tax from the Yucaipa Public Safety and Essential Services Protection Measure to prevent cuts to public safety services if approved by the voters at the November 5, 2024 General Election; and
4) Resolution No. 2024-42, a resolution of the City Council of the City of Yucaipa, California, directing the City Manager to execute cost-cutting measures as an alternative plan of fiscal sustainability should a sales tax measure fail to pass in the November 5, 2024 General Election.

BACKGROUND/DISCUS SION:

When I delivered our annual budget to you last year, just three months into my job as City Manager, I shared that the City was operating in a structural deficit and had been doing so since 2019. This situation is approximately 15 years in the making, and the City attempted to address the problem by proposing a sales tax measure in 2020. However, following the failure of that measure, the City did not take action to correct course by establishing other significant revenue streams and/or making meaningful cuts in spending. Thus, the problem has grown worse over time.

Operating in a structural deficit is unsustainable, and we must develop a long-term solution to avoid eventual insolvency. A return to structural balance will require additional revenue, cost cutting measures, or a combination of the two. Due to the size of the deficit and the already lean City staffing, there is no way to solve the problem through spending cuts alone without cutting deeply into public safety services. Public safety is by far the largest portion of the City's budget.

Our contracts for police and fire services are projected to cost the City $23 million next fiscal year. 63% of the City's General Fund goes to public safety, whereas the net cost of all non-public safety City staff is only 9% of the budget. If we are to solve the deficit through cuts alone, there is simply not enough meat on the bone to get us there in any area other than public safety. That being said, if we are forced to cut public safety, there will need to be cuts throughout the organization and service levels across the board will be impacted. Yucaipa remains committed to ensuring our community continues to be a safe and desirable place to live, do business, and raise a family, but if sufficient additional revenues are not established, then significant cuts to public safety, road maintenance, parks, programming for youth and seniors, and other services that enable our high quality of life will be unavoidable.

Service reductions are particularly concerning in the area of public health, safety, and emergency response. In an emergency, seconds count. Approximately 80 percent of calls to the City of Yucaipa Fire Department are for medical emergencies, such as heart attacks, strokes, and car accidents. Without additional funding, the City will have to close one of our three fire stations and reduce firefighters and paramedics by approximately 30 percent. This is especially concerning given that resources are already spread thin, and we currently have a need to expand emergency medical response (i.e., the addition of a paramedic squad). With just two fire stations serving 55,000 residents spread out over 28 square miles, average response times will be significantly longer. Additional funds would help to ensure our first responders have the staffing and life-saving equipment they need to respond quickly and effectively, saving lives and protecting property.

Last year, there were over 700 robberies, burglaries, and thefts —including auto thefts —in Yucaipa. Without additional funding, the City will have no choice but to cut the number of patrol deputies in our police services contract. This will impact recently implemented programs such as the Solutions Oriented Policing (SOP) Team and the "saturation operations" which have been successfully decreasing the number of homeless individuals on our streets, shutting down known drug houses, and reducing homeless/drug-related crime throughout the City. Without additional revenue, we may no longer have the staffing for these programs to continue.

Without additional funding, the City will have to reduce community services programming, eliminating most programs that do not generate enough revenue to cover their own costs, which would lead to the elimination of many of our youth and senior programs. This will force us to close the community swimming pool, the senior center, and perhaps a number of our parks, scale back programming at the Yucaipa Performing Arts Center (YPAC) and reduce or eliminate festivals and celebrations such the Music and Arts Festival and 4th of July fireworks.

As we discussed in depth during our special town hall meeting on June 17th, we are now facing a $7.3 million deficit in the upcoming fiscal year. This deficit is a result of significant investments in infrastructure beginning in about 2008 (e.g., drainage basins, the YPAC, parks, Police Department, Fire Station 3, etc.), unrealized revenue expectations (i.e., commercial development that has not materialized at the levels predicted), and rising costs that have accumulated over time for everything from materials and labor to our contracts for police and fire services, all amid increased demand for services citywide as our population has grown. Using limited reserves to balance our long-term budget and service needs is not sustainable, and the time to make difficult decisions is now.

With decisions of this magnitude, the City wants to engage the community in a robust dialogue so that we can identify and prioritize the services that are most important to residents. The City recently worked with the professional polling firm FM3 to conduct a resident survey to identify the community's top priorities. Police, fire, and paramedic response, street repair, and services for youth and seniors topped the list.

Another component of our public engagement is the recently launched Financial Fixer Tool, an interactive online tool that puts residents in the driver's seat to develop a long-term solution to close our structural deficit. Residents can use this tool to view different scenarios involving cutting services and/or raising revenue to protect critical services. Initial feedback from the tool reinforces what the polling company found, and attendees of our June 17th meeting shared the same message: protect public safety at all costs. The results of our polling, and of the conversation with the community at the June 17th town hall meeting, seem to indicate that a sales tax measure may be the most widely acceptable solution to avoiding cuts to public safety and other desired services.

In order to prevent cuts to critical City services that include, among other things, police protection, fire and paramedic response, and services for youth and seniors, staff has prepared for City Council consideration a ballot measure for the November election to establish a City's sales tax of either one percent (1%) or one and a half percent (1.5%), depending on which direction the Council chooses.

This additional sales tax will not apply to many of the necessities upon which people rely, such as food, prescriptions, or services. The City's sales tax consultant, HdL, has reported that the estimated revenue for a 1% measure is $6 million per year and for a 1.5% measure $9 million per year.

A notable consideration is that state law places a cap on total sales tax of 9.25%. The current sales tax rate in San Bernardino County is 7.75%, which includes the statewide base sales tax of 7.25% and the 0.5% Measure I transportation tax administered by the San Bernardino County Transportation Authority (SBCTA) that was originally enacted by voters countywide in 1989. Of this 7.75%, only 1% of sales occurring within city limits flows to the City of Yucaipa. SBCTA has indicated that they intend to seek an increase of the Measure I sales tax in 2026. So, it is likely that the cap will be

reached, and Yucaipa residents will end up paying this sales tax anyway. Passing a city sales tax now, thus reserving that cap space for Yucaipa, will preserve our ability to keep sales tax dollars local instead of sending our money throughout the entire County.

Should Yucaipa voters pass a City sales tax, the proposed measure requires the establishment of an oversight committee to ensure the proper usage of the funds generated. In addition, once structural balance is reached, it will be critical that the City avoids entering into structural deficit again in the future. To that end, the Finance Depar intent will work on a long-term financial plan for the Council's consideration, which will tie future spending increases to revenue growth.

California Elections Code Section 9222 and Revenue and Taxation Code Section 7285.9 authorize the City Council to place a general transactions and use (sales) tax measure on the ballot for consideration by the voters. California Constitution Article XIIIC, Section 2 (Proposition 218) requires that the voters approve such general tax by majority vote.

Attached are two resolutions to place the measure on the ballot.

Resolution No. 2024-38 (1% sales tax) or Resolution No. 2024-39 (1.5% sales tax) are the principal resolutions which call for the election and place the measure on the November 5, 2024, ballot. They contain the language of the proposed sales tax measure (and adopting ordinance) to be submitted to the voters and direct the City Attorney to prepare an impartial analysis of the measure pursuant to California Elections Code Section 9280. It is noted that because the California Deparinnient of Tax and Fee Administration (CDTFA - formerly known as the Board of Equalization) collects and administers local sales taxes, any draft local sales tax measure must be reviewed and approved by CDTFA before placement on the ballot. The City has been in contact with CDTFA and has secured their written approval of the tax measure's language.

Resolution No. 2024-40 sets deadlines and rules for how and when interested persons may submit arguments for or against the proposed City sales tax measure.

Under California Proposition 218, the upcoming November 5, 2024, Municipal General Election is an appropriate date to place a local, general tax measure on the ballot. Pursuant to California Government Code Section 53724(b) (Proposition 62) and Revenue and Taxation Code Section 7285.9, a two-thirds vote of the membership of the City Council is required to adopt these resolutions.

Additionally, Resolution No. 2024-41 was drafted per the request of Councilmember Garner for the purpose of stating the City's intention to expend the proceeds of the transactions and use tax from the Yucaipa Public Safety and Essential Services Protection Measure on public safety services if approved by the voters and for the creation of a Citizen's Oversight Committee.

Also attached is Resolution No. 2024-42, which directs staff to pursue significant and unavoidable cost-cutting measures should the sales tax fail to pass on the November ballot. Operating in a deficit is not sustainable. If the community is not successful in resolving the deficit with new revenues, deep organizational -wide cuts would be required to bring structural balance to the budget. The City has contemplated that scenario and is prepared to act accordingly. The operating budgetary deficit in the General Fund and Public Safety Fund combined in FY25 is $7.3 million. We are estimating that by

January 1, 2025, the continuing trend will push the deficit to $8 million. We have identified service level cuts of $8 million citywide. Resolution 2024-42, directing the City Manager to execute the cost- cutting plan should the sales tax measure fail, is attached to this report and includes Exhibit A, the cost-cutting list by service line. Cost-cutting measures to include:
• Closing one of the City's three fire stations (Station 2, located on Yucaipa Blvd.) and eliminating from our contract with Cal Fire all firefighter positions currently assigned to that station, saving an estimated $2 million annually.
• Reducing the cost of our contract with the San Bernardino County Sheriff's Department by $2 million, primarily through the elimination of Sheriff's Deputy positions (estimated 5-7 patrol deputy positions).
• Closing the Senior Center, saving an estimated $300,000 annually. • Closing the 7th Street Pool, saving an estimated $300,000 annually. • Reducing YPAC programming that does not achieve full cost recovery, saving an estimated $250,000 annually.
• Reducing Community Center programming that does not achieve full cost recovery, saving an estimated $250,000 annually.
• Identifying additional cuts to Community Services programming of $900,000. • Identifying cuts of $1 million in net costs of Development Services. • Identifying cuts of $1 million in net costs of support services. • Cost-cutting measures identified above include the freezing of any vacant, non -critical positions, and negotiating any combination of furloughs and/or layoffs with the Yucaipa City Employees Association.

It is important to note that costs are tracked by activity, so service level cost cuts are also presented by activity. The estimates are primarily comprised of staff reductions. For example, closing the doors at a fire station does not save $2 million, the savings come from not staffing the closed station. The support function continuously reorganizes based on the service levels it is supporting. As such, the cost -cuts to be determined will be achieved based on remaining service levels.

It is also important to note that, without sufficient additional revenues, it is likely that additional service level cuts will be required in FY26 as public safety costs are expected to rise significantly over the next couple of years.

FISCAL IMPACT:

If passed by voters, it is estimated that a 1% sales tax will generate $6 million per year and a 1.5% sales tax will generate $9 million per year. The cost to the City to add a measure to the November ballot is pending from the San Bernardino County Registrar of Voters. The City will also need to spend some funds on public education, although the needed funds for this are already included in the approved budget for FY25.

Attachments:

1. Resolution No. 2024-38

2. Resolution No. 2024-39

3. Resolution No. 2024-40

4. Resolution No. 2024-41

5. Resolution No. 2024-42

ATTACHMENT 1

RESOLUTION NO. 2024-38

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA,

CALIFORNIA, ORDERING THE SUBMISSION TO THE QUALIFIED

ELECTORS OF THE CITY THE YUCAIPA PUBLIC SAFETY AND

ESSENTIAL SERVICES PROTECTION MEASURE ESTABLISHING A

ONE CENT TRANSACTIONS AND USE (SALES) TAX
WHEREAS, the City of Yucaipa wishes the community to decide on whether to raise local revenue that cannot be taken by the state, or make significant budget cuts, including potential cuts to the number of Fire Stations, firefighters , and number of police officers on the street, street and pothole repair services, and local drinking water protection, which may impact 911 response and the ability of the City to keep public areas safe and clean; and WHEREAS, approximately 80 percent of calls to the City of Yucaipa Fire Department are for medical emergencies, such as heart attacks, strokes, and car accidents; and WHEREAS, without additional funding the City may have to close one of the three fire stations, reduce firefighters and paramedics by 30%, impacting the staffing and life-saving equipment first responders need to respond quickly and effectively and save lives; and WHEREAS, last year, there were over 700 robberies, burglaries, and thefts —including auto thefts —in Yucaipa; and
WHEREAS, without additional funding the City will be forced to cut up to half the City's police officers, which will reduce 911 emergency response times and the police patrols that help keep parks, business areas, and residents and their property safe; and WHEREAS, the need for additional funding is large enough that non-public safety reductions will not be enough to address the current structural budget deficit; and WHEREAS, without additional funds, the City will be forced to close the community pool and senior center and close up to half the City's park to address budget shortfalls, leading to the elimination of most of our youth, afterschool, and senior programs only which our families rely, and increasing the possibility that vacant, unused spaces could attract crime and homelessness; and
WHEREAS, the Measure as written incorporates strict accountability requirements such as a citizen's oversight committee, public disclosure of all spending, annual independent financial audits that ensure funds are used effectively and as promised, and legal requirement that all funds raised by this measure stay in Yucaipa for essential local services, without a penny being taken by the State;
WHEREAS, the City Council is committed to transparency and public engagement, and believes that submitting this measure to the electors is the best way to allow the community to have a direct say in the future of their city's services.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:

Section 1.

Findings and Incorporation. The City Council hereby finds that the above recitals are true and correct and incorporates the recitals into the body of this Resolution.

Section 2. City Council Actions. The City Council of the City of Yucaipa, California, does hereby order that:
(A) Pursuant to its rights and authority, the City Council does order submitted to the voters at the General Municipal Election to be held on November 5, 2024 the following question:

Yucaipa Public Safety and Essential Services Protection Measure; to prevent reducing police officers/firefighters/paramedics/fire stations, and to maintain other essential services, including 911 response, property crime/gang prevention, senior/youth/afterschool programs, homelessness prevention, street/pothole repair, and for general government use, shall a measure establishing a one -cent transactions and use (sales) tax providing approximately $6,000,000 (six million dollars) annually until ended by voters, requiring oversight, independent audits, spending disclosure, local control of all funds, be adopted?
YES
NO
(B) The text of the "Yucaipa Public Safety and Essential Services Protection Measure" that shall be submitted to the voters of the City of Yucaipa is attached as Exhibit "A" hereto and dated June 24, 2024. The City Clerk shall maintain a copy of the Measure and the proposed Ordinance and shall make the same available for public inspection upon request. (C) The vote requirement for the Measure to pass is a majority (50% + 1) of the votes cast.
(D) Pursuant to Section 10403 of the Elections Code, the City Council hereby requests the Board of Supervisors and Registrar of Voters of the County of San Bernardino to consolidate the ballot measure with the general election to be held on November 5, 2024.
(E) The City Manager or his designee shall pay all election expenses related to this Measure upon presentation of a sufficient invoice. (F) The City Clerk is hereby directed to file this Resolution with the Board of Supervisors and Registrar of Voters of the County of San Bernardino, on or before the deadline set by the Registrar of Voters for inclusion on the ballot for November 5, 2024.

(G) In all particulars not recited by this Resolution, the election shall be held and conducted as provided by law for holding municipal elections, including but not limited to those provisions of Elections Code Section 10418.
(H) The notice of the time and place of holding the election is given and the City Clerk is authorized and directed to give such further notice in time, form, and manner required by law.
(I)
The City Clerk shall certify the passage and adoption of this Resolution.

Section 3. Effective Date. This Resolution shall take effect immediately upon adoption.

PASSED, APPROVED, and ADOPTED this 24th day of June, 2024.

Justin Beaver, Mayor
ATTEST:

Ana V. Sauseda, MMC
Director of General Services/City Clerk

ORDINANCE NO.

AN ORDINANCE OF THE PEOPLE OF THE CITY OF YUCAIPA

ADOPTING A ONE PERCENT GENERAL TRANSACTIONS AND USE
TAX
WHEREAS the People of the City of Yucaipa desire to impose a general transactions and use tax to support the provision of general municipal services and all lawful public purposes within the city, including but not limited to police, fire, paramedic, 911 emergency response, property crime/gang prevention, senior/youth/afterschool programs, homelessness prevention, and street/pothole repair; and
WHEREAS the California Revenue and Taxation Code permit the adoption of local transactions and use taxes for general purposes upon approval by a majority vote of the electorate; and
WHEREAS it is the intent of the City Council to adopt an ordinance that aligns with the provisions of state law to ensure efficient administration and minimal deviation from existing procedures used by the California Department of Tax and Fee Administration (CDTFA); and WHEREAS the City of Yucaipa aims to establish a tax ordinance that minimizes the cost of tax collection and the burden of record -keeping for retailers, while maximizing the benefits and revenue for the city's general fund; and
WHEREAS an independent annual audit will be conducted to ensure transparency and accountability in the use of tax proceeds, with findings presented to the City Council, a citizen oversight committee, and made available for public review; and WHEREAS the City Council finds that it is in the best interest of the residents of Yucaipa to ensure that the revenues generated from this tax are used effectively and efficiently to maintain and enhance city services.

THE PEOPLE OF THE CITY OF YUCAIPA DO HEREBY ORDAIN AS FOLLOWS Section 1. Incorporation of Recitals
The recitals set forth in the preamble to this ordinance are hereby incorporated by reference and made a part of this ordinance as if fully set forth herein. The People of the City of Yucaipa finds that each of those recitals is true and correct and relies upon them as a basis for adopting this ordinance.

Section 2. Adoption of Tax; Municipal Code Amendment
Chapter 3.18 adopting a one percent (1%) Transactions and Use Tax, set forth in Exhibit A to this Ordinance and incorporated as though written in full, is hereby adopted and added to the Yucaipa Municipal Code.

Ordinance — Yucaipa Transactions and Use Tax

Section 3. Amendments
This ordinance may be amended only by a majority vote of the registered voters of the City of Yucaipa voting on the proposed amendment at a regular or special election. Any proposed amendment to this ordinance shall be presented to the voters in compliance with the applicable provisions of the California Elections Code and other relevant state and local laws. The City Council may propose amendments for voter consideration in accordance with these requirements.

Section 4. Severability.

If any section, subsection, sentence, clause, phrase, or portion of this ordinance or its application to any person or circumstance is held to be invalid or unconstitutional by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance.

The People of the City of Yucaipa hereby declare that they would have adopted this ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.

Section 5. Legal Defense
The People of the City of Yucaipa desire that this Ordinance, if approved by the voters and thereafter challenged in court, be defended by the City Attorney. The City Attorney shall defend this Ordinance, appeal any adverse judgment against the constitutionality, statutory permissibility, and implementation, and take other such action as in his or her reasonable legal judgment is necessary to defend the Ordinance.

Section 6. Conflicting Measures
A. This measure is intended to be comprehensive. It is the intent of the People of the City of Yucaipa that in the event this measure and one or more other measures related to taxes appear on the same ballot, whether place on the ballot through a citizen initiative or by the City Council, the provisions of the other measure or measures shall be deemed to be in conflict with this measure.

B. In the even that this measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and all provisions of the other measure or measures shall be null and void.

C. If this measure is approved by a majority of the voters but does not receive a greater number of affirmative votes than any other measure appearing on the ballot regarding taxes, provisions of this measure shall tax effect to the extent that they are not in conflict with other said measures.

D. If this measure is approved by the voters but superseded by law by any other conflicting measure approved by the voters at the same election, and the conflicting measure is later held invalid, this measure shall be self-executing and given full force and effect.

Ordinance — Yucaipa Transactions and Use Tax

Section 7. CEQA
The People of the City of Yucaipa find that this Ordinance is not subject to the California Environmental Quality Act (CEQA) because pursuant to Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) Section 10560(c)(3) (the activity is not a project as defined by Section 15378).

Section 8. Adjustment of Appropriations Limit.

Pursuant to Article XIIB of the Constitution of the State of California and applicable laws, the appropriations limit for the City of Yucaipa is hereby increased by the aggregate sum authorized to be levied by this tax for fiscal year 2024-25 and each year thereafter.

Section 9. Liberal Construction
This Ordinance shall be liberally construed to effectuate its purposes.

Section 10. Effective Date
This Ordinance shall take effect upon its approval by a majority of the electorate of the City of Yucaipa at the earliest date provided by law.

Section 11. Municipal Affair
The People of the City of Yucaipa hereby declare that, separately and together, the purposes encompassed by this Ordinance constitute municipal affairs. The People of the City of Yucaipa hereby further declare their desire for this Ordinance to coexist with any similar tax measures adopted by the city, county or state.

Section 12. Certification.

The City Clerk shall certify to the passage of this Ordinance, publish the same as required by applicable law, and forward a copy of the Ordinance to the California Department of Tax and Fee Administration.

Ordinance — Yucaipa Transactions and Use Tax

EXHIBIT A
Chapter 3.18

TRANSACTIONS AND USE TAX
Sec. 3.18.010. Title.

This chapter shall be known as the "City of Yucaipa Transactions and Use Tax Ordinance.' Sec. 3.18.020. Purpose and intent.

In enacting the City of Yucaipa Transactions and Use Tax Ordinance (this chapter), it is the purpose and intent of the people of the city to:
(1) Impose a retail transactions and use tax in accordance with the provisions of the Revenue and Taxation Code § 7251 et seq. and Revenue and Taxation Code § 7285.9 of the which may be used for general municipal services and all lawful public purposes of the city. (2) Adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the sales and use tax law of the state 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.
(3) Adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the state board of equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the state board of equalization in administering and collecting the state sales and use taxes.
(4) Adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of part 1.6 of division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this chapter.

Sec. 3.18.030. 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, as it exists on the operative date of this chapter, and in the incorporated territory of the city as it may hereafter be amended through annexation, at the rate of one percent (1%) of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of the ordinance codified in this chapter.

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Yucaipa Transactions and Use Tax Ordinance

Sec. 3.18.040. 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 the ordinance codified in this chapter for storage, use or other consumption in the incorporated territory of the city, and in the incorporated territory of the city as it may hereafter be amended through annexation, at the rate of one percent (1 %) of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

Sec. 3.18.050. Independent annual audit.

The proceeds resulting from the transactions and use tax imposed by this chapter shall be deposited into the city's general fund and shall be subject to the same independent annual audit requirements as other general fund revenue. The independent auditor's report, which shall include an accounting of the revenues received and expenditures made from the transactions and use tax, will be presented annually to the citizen oversight committee, the city council and made available for public review.

Sec. 3.18.060. Operative date.
"Operative date" shall mean the first day of the first calendar quarter commencing more than 110 days after the adoption of the City of Yucaipa Transactions and Use Tax Ordinance.

Sec. 3.18.070. Termination.

The transactions and use tax levied by this chapter shall commence on the operative date and shall continue thereafter until repealed or amended by the necessary vote of the registered voters of the city.

Sec. 3.18.080. Contract with state.

Prior to the operative date, the city shall contract with the state board of equalization to perform all functions incident to the administration and operation of this chapter; provided, that if the city shall not have contracted with the state board of equalization 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.

Sec. 3.18.090. Place of sale.

For the purposes of this chapter, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his or her 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

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Yucaipa Transactions and Use Tax Ordinance

sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the state or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the state board of equalization.

Sec. 3.18.100. Adoption of provisions of state law.

Except as otherwise provided in this chapter and except insofar as they are inconsistent with the provisions of part 1.6 of division 2 of the Revenue and Taxation Code, all of the provisions of the Revenue and Taxation Code § 6001 et seq. are hereby adopted and made a part of this chapter as though fully set forth herein.

Sec. 3.18.110. Limitations on adoption of state law and collection of use tax.

In adopting the provisions of part 1 of division 2 of the Revenue and Taxation Code:
(1) Wherever the state is named or referred to as the taxing agency, the name of the city shall be substituted therefor. However, the substitution shall not be made when:
a. The word "state" is used as a part of the title of the state controller, state treasurer, state board of control, state board of equalization, state treasury, or the constitution of the state. b. The result of that substitution would require action to be taken by or against the city or any agency, officer, or employee thereof rather than by or against the state board of equalization, in performing the functions incident to the administration or operation of this chapter. c. In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the state, where the result of the substitution would be to:

1. 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;

2. 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.
d. In the Revenue and Taxation Code §§ 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828.
(2) The word "city" shall be substituted for the word "state" in the phrase "retailer engaged in business in this state" in section 6203 and in the definition of that phrase in section 6203.

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Yucaipa Transactions and Use Tax Ordinance

Sec. 3.18.120. 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 chapter.

Sec. 3.18.130. 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 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 or her 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 the Vehicle Code § 4000 et seq., aircraft licensed in compliance with the Public Utilities Code § 21411, and undocumented vessels registered under the Vehicle Code § 9840, 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 the ordinance codified in this chapter.
(4) A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of the ordinance codified in this chapter. (5) For the purposes of subsections (b)(3) and (b)(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

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any period of time for which any partyto the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. (c) There are exempted from the use tax imposed by this chapter, the storage, use or other consumption in the 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 propertyfor 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 state Revenue and Taxation Code. (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 the ordinance codified in this chapter.
(4) If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of the ordinance codified in this chapter. (5) For the purposes of subsections (c)(3) and (c)(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 subsection (c)(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 the Vehicle Code § 4000 et seq., aircraft licensed in compliance with the Public Utilities Code § 21411, or undocumented vessels registered under the Vehicle Code § 9840. 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.

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

Sec. 3.18.140. Amendments.

All amendments subsequent to the effective date of this chapter to the Revenue and Taxation Code part 1 of division 2 relating to sales and use taxes and which are consistent with part 1.6 and part 1.7 of division 2 of the Revenue and Taxation Code, and all amendments to part 1.6 and part 1.7 of division 2 of the Revenue and Taxation Code, shall automatically become a part of this chapter, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this chapter.

Sec. 3.18.150. Enjoining collection forbidden.

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

Sec. 3.18.160. Citizen oversight committee.
(a) A citizens' oversight committee is hereby established to independently review and advise upon the city's expenditure of proceeds generated by the transactions and use tax. The committee shall meet as necessary to discharge the responsibilities of the committee. All meetings of the committee shall be held in accordance with provisions of the Ralph M. Brown Act (Government Code § 54950 et seq.).
(1) The committee shall consist of five members, all of whom shall be residents of the city. The city shall initially post and publish notice soliciting applications for persons interested in being members of the committee and shall thereafter repost and republish notice soliciting applications as necessary to fill vacancies on the committee. The city council shall review all applications for eligibility and at a public meeting interview all eligible applicants and appoint five eligible applicants to serve as members of the committee. Each member of the committee shall serve for a term of two years and such service shall be at the pleasure of the city council. Three members of the committee shall constitute a quorum. Members of the committee shall not receive a stipend for their service. (2) The citizens' oversight committee shall annually review and report on a. The city's proposed and actual expenditure of proceeds generated by the transaction and use tax; and

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b. The independent annual audit prepared annually by the city. The committee's report shall be submitted to the city council for review and discussion at a noticed public meeting of the city council.
(3) The committee shalt not have authority to hire or retain its own staff, consultants, or contractors, but the city manager and city attorney shall provide such staff resources as are reasonably necessary to assist the committee with the discharge its duties under this chapter.

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ATTACHMENT 2

RESOLUTION NO. 2024-39

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA,

CALIFORNIA, ORDERING THE SUBMISSION TO THE QUALIFIED

ELECTORS OF THE CITY A MEASURE ESTABLISHING A ONE AND

ONE HALF CENT TRANSACTIONS AND USE (SALES) TAX
WHEREAS, the City of Yucaipa wishes the community to decide on whether to raise local revenue that cannot be taken by the state, or make significant budget cuts, including potential cuts to the number of Fire Stations, firefighters , and number of police officers on the street, street and pothole repair services, and local drinking water protection, which may impact 911 response and the ability of the City to keep public areas safe and clean; and WHEREAS, approximately 80 percent of calls to the City of Yucaipa Fire Department are for medical emergencies, such as heart attacks, strokes, and car accidents; and WHEREAS, without additional funding the City may have to close one of the three fire stations, reduce firefighters and paramedics by 30%, impacting the staffing and life-saving equipment first responders need to respond quickly and effectively and save lives; and WHEREAS, last year, there were over 700 robberies, burglaries, and thefts —including auto thefts —in Yucaipa; and
WHEREAS, without additional funding the City will be forced to cut up to half the City's police officers, which will reduce 911 emergency response times and the police patrols that help keep parks, business areas, and residents and their property safe; and WHEREAS, the need for additional funding is large enough that non-public safety reductions will not be enough to address the current structural budget deficit; and WHEREAS, without additional funds, the City will be forced to close the community pool and senior center and close up to half the City's park to address budget shortfalls, leading to the elimination of most of our youth, afterschool, and senior programs only which our families rely, and increasing the possibility that vacant, unused spaces could attract crime and homelessness; and
WHEREAS, the Measure as written incorporates strict accountability requirements such as a citizen's oversight committee, public disclosure of all spending, annual independent financial audits that ensure funds are used effectively and as promised, and legal requirement that all funds raised by this measure stay in Yucaipa for essential local services, without a penny being taken by the State;
WHEREAS, the City Council is committed to transparency and public engagement, and believes that submitting this measure to the electors is the best way to allow the community to have a direct say in the future of their city's services.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:

Section 1.

Findings and Incorporation. The City Council hereby finds that the above recitals are true and correct and incorporates the recitals into the body of this Resolution.

Yucaipa Public Safety and Essential Services Protection Measure; to prevent reducing police officers/firefighters/paramedics/fire stations, and to maintain other essential services, including 911 response, property crime/gang prevention, senior/youth/afterschool programs, homelessness prevention, street/pothole repair, and for general government use, shall a measure establishing a one -and - one -half (1.5) cent transactions and use (sales) tax providing approximately $9,000,000 (nine million dollars) annually until ended by voters, requiring oversight, independent audits, spending disclosure, local control of all funds, be adopted?
YES
NO
(B) The text of the "Yucaipa Public Safety and Essential Services Protection Measure" that shall be submitted to the voters of the City of Yucaipa is attached as Exhibit "A" hereto and dated June 24, 2024. The City Clerk shall maintain a copy of the Measure and the proposed Ordinance and shall make the same available for public inspection upon request. (C) The vote requirement for the Measure to pass is a majority (50% + 1) of the votes cast.
(D) Pursuant to Section 10403 of the Elections Code, the City Council hereby requests the Board of Supervisors and Registrar of Voters of the County of San Bernardino to consolidate the ballot measure with the general election to be held on November 5, 2024.
(E) The City Manager or his designee shall pay all election expenses related to this Measure upon presentation of a sufficient invoice. (F) The City Clerk is hereby directed to file this Resolution with the Board of Supervisors and Registrar of Voters of the County of San Bernardino, on or before the deadline set by the Registrar of Voters for inclusion on the ballot for November 5, 2024.

(G) In all particulars not recited by this Resolution, the election shall be held and conducted as provided by law for holding municipal elections, including but not limited to those provisions of Elections Code Section 10418.
(H) The notice of the time and place of holding the election is given and the City Clerk is authorized and directed to give such further notice in time, form, and manner required by law.
(I) The City Clerk shall certify the passage and adoption of this Resolution.

Section 3. Effective Date. This Resolution shall take effect immediately upon adoption.

PASSED, APPROVED, and ADOPTED this 24th day of June, 2024.

Justin Beaver, Mayor
ATTEST:

Ana V. Sauseda, MMC
Director of General Services/City Clerk

ORDINANCE NO.

AN ORDINANCE OF THE PEOPLE OF THE CITY OF YUCAIPA

ADOPTING A ONE AND ONE HALF PERCENT GENERAL

TRANSACTIONS AND USE TAX
WHEREAS the People of the City of Yucaipa desire to impose a general transactions and use tax to support the provision of general municipal services and all lawful public purposes within the city, including but not limited to police, fire, paramedic, 911 emergency response, property crime/gang prevention, senior/youth/afterschool programs, homelessness prevention, and street/pothole repair; and
WHEREAS the California Revenue and Taxation Code permit the adoption of local transactions and use taxes for general purposes upon approval by a majority vote of the electorate; and
WHEREAS it is the intent of the City Council to adopt an ordinance that aligns with the provisions of state law to ensure efficient administration and minimal deviation from existing procedures used by the California Department of Tax and Fee Administration (CDTFA); and WHEREAS the City of Yucaipa aims to establish a tax ordinance that minimizes the cost of tax collection and the burden of record -keeping for retailers, while maximizing the benefits and revenue for the city's general fund; and
WHEREAS an independent annual audit will be conducted to ensure transparency and accountability in the use of tax proceeds, with findings presented to the City Council, a citizen oversight committee, and made available for public review; and WHEREAS the City Council finds that it is in the best interest of the residents of Yucaipa to ensure that the revenues generated from this tax are used effectively and efficiently to maintain and enhance city services.

Section 2. Adoption of Tax; Municipal Code Amendment
Chapter 3.18 adopting a one and one half percent (1.5%) Transactions and Use Tax, set forth in Exhibit A to this Ordinance and incorporated as though written in full, is hereby adopted and added to the Yucaipa Municipal Code.

Ordinance — Yucaipa Transactions and Use Tax

Section 4. Severability.

Ordinance — Yucaipa Transactions and Use Tax

Section 8. Adjustment of Appropriations Limit.

Section 9. Liberal Construction
This Ordinance shall be liberally construed to effectuate its purposes.

Section 10. Effective Date
This Ordinance shall take effect upon its approval by a majority of the electorate of the City of Yucaipa at the earliest date provided by law.

Section 12. Certification.

Ordinance — Yucaipa Transactions and Use Tax

EXHIBIT A
Chapter 3.18

TRANSACTIONS AND USE TAX
Sec. 3.18.010. Title.

This chapter shall be known as the "City of Yucaipa Transactions and Use Tax Ordinance.' Sec. 3.18.020. Purpose and intent.

Sec. 3.18.030. 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, as it exists on the operative date of this chapter, and in the incorporated territory of the city as it may hereafter be amended through annexation, at the rate of one and one half percent (1.5%) of the gross receipts of any retailerfrom the sale of all tangible personal property sold at retail in said territory on and after the operative date of the ordinance codified in this chapter.

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Yucaipa Transactions and Use Tax Ordinance

Sec. 3.18.040. 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 the ordinance codified in this chapter for storage, use or other consumption in the incorporated territory of the city, and in the incorporated territory of the city as it may hereafter be amended through annexation, at the rate of one and one half percent (1.5%) 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.

Sec. 3.18.050. Independent annual audit.

Sec. 3.18.070. Termination.

Sec. 3.18.080. Contract with state.

Sec. 3.18.090. Place of sale.

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Yucaipa Transactions and Use Tax Ordinance

Sec. 3.18.100. Adoption of provisions of state law.

Sec. 3.18.110. Limitations on adoption of state law and collection of use tax.

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Sec. 3.18.120. 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 chapter.

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Sec. 3.18.140. Amendments.

Sec. 3.18.150. Enjoining collection forbidden.

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ATTACHMENT 3

RESOLUTION NO. 2024-40

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA,

CALIFORNIA, SETTING DEADLINES AND PRIORITIES FOR FILING

WRITTEN ARGUMENTS AND REBUTTALS REGARDING THE CITY

INITIATED TRANSACTIONS AND USE TAX MEASURE AND

DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL

ANALYSIS
WHEREAS, the City Council has placed a measure to establish a transactions and use tax before the voters at the general election to be held on November 5, 2024; and WHEREAS, pursuant to Elections Code Section 9287, the City Council is given first priority to submit an argument in favor of a proposed City Council initiated measure and to select its member(s) to draft the argument; and
WHEREAS, pursuant to Elections Code Section 9280, the City Council may direct the City Attorney to prepare an impartial analysis of the measure.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:

Section 1.

Section 2.

Section 3.

Section 4.

In accordance with Elections Code Sections 9282(b) and 9283, arguments for or against the Measure, not exceeding 300 words in length and signed by no more than five (5) persons, may be submitted to the City Clerk prior to July 22, 2024 at 5:00 p.m. after which no arguments for or against the Measure may be submitted. The City Council authorizes any of its members, and/or up to four (4) other registered voters or elected/appointed officials with jurisdiction over all or part of the City, to file a written argument in favor of the Measure and submit it to the City Clerk by the deadline above.

In accordance with Elections Code Section 9285, rebuttal arguments, not exceeding 250 words and signed by no more than five (5) persons, may be submitted to the City Clerk prior to July 26, 2024, at 5:00 p.m.

In accordance with Elections Code Section 9280, the City Attorney is directed to file with the City Clerk an impartial analysis of the Measure, not to exceed 500 words, showing the effect of the measure on the existing law and the operation of the Measure, prior to July 22, 2024 at 5:00 p.m.

That during the period commencing July 22, 2024, and ending on August 1, 2024, the City Clerk shall make available for public inspection the arguments filed for and against the Measure as well as the impartial analysis.

Section 5. This Resolution shall take effect immediately upon adoption.

PASSED, APPROVED, and ADOPTED this 24th day of June, 2024.

Justin Beaver, Mayor
ATTEST:

Ana V. Sauseda, MMC
Director of General Services/City Clerk

ATTACHMENT 4

RESOLUTION NO. 2024-41

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

YUCAIPA, CALIFORNIA, STATING ITS INTENTION TO EXPEND

THE PROCEEDS OF THE TRANSACTIONS AND USE TAX FROM THE

YUCAIPA PUBLIC SAFETY AND ESSENTIAL SERVICES

PROTECTION MEASURE ON PUBLIC SAFETY SERVICES IF
APPROVED BY THE VOTERS AT THE NOVEMBER 5, 2024

ELECTION
WHEREAS, the City Council's first priority is ensuring that the City of Yucaipa is a safe community to live, work, and raise a family; and
WHEREAS, the adopted fiscal year 2024-2025 budget has significant deficits that are unsustainable and cannot be eliminated by cuts to non -safety services alone; and WHEREAS, under the law, the Yucaipa Public Safety and Essential Services Protection Measure would adopt a general transactions and use tax, which may be used for any lawful purpose and general municipal services; and
WHEREAS, the adoption of the Yucaipa Public Safety and Essential Services Protection Measure would allow the City Council to prevent cuts to 911 response, police and fire services, including preventing the closure of a fire station and elimination of sheriff deputy positions; and WHEREAS, the Yucaipa City Council commits to using the proceeds from the general transactions and use tax adopted by the Yucaipa Public Safety and Essential Services Protection Measure to prevent cuts to public safety services.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:

Section 1. The above recitals are true and correct and adopted by reference into the operative provisions of this Resolution.

Section 2. The City Council declares its intention to utilize the proceeds of the general transactions and use tax to prevent cuts to public safety services.

Section 3. Prior to consideration of the City's annual budget, the City Manager shall submit to the Citizen's Oversight Committee, established by the Yucaipa Public Safety and Essential Services Protection Measure, an expenditure plan showing the proposed expenditure of proceeds from the general transactions and use tax. The Committee shall report on the proposed expenditure plan to the City Council prior to adoption of the City's annual budget.
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Section 4. This Resolution shall take effect immediately upon adoption.

PASSED, APPROVED, and ADOPTED this 24th day of June, 2024.

Justin Beaver, Mayor
ATTEST:

Ana V. Sauseda, MMC
Director of General Services/City Clerk

ATTACHMENT 5

RESOLUTION NO. 2024-42

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA,

CALIFORNIA, DIRECTING THE CITY MANAGER TO EXECUTE

COST-CUTTING MEASURES AS AN ALTERNATIVE PLAN OF FISCAL

SUSTAINABILITY SHOULD A SALES TAX MEASURE FAIL TO PASS
IN THE NOVEMBER 5, 2024 GENERAL ELECTION
WHEREAS, on June 10, 2024, the City Council adopted an operating budget and capital improvement program for fiscal year 2024-2025; and
WHEREAS, the Fiscal Year 2024-2025 Operating Budget and Capital Improvement Program is available on the City's website and on file in the Office of the City Clerk; and WHEREAS, the Fiscal Year 2024-2025 Operating Budget reflects an unsustainable ongoing structural deficit, in the amount of $7.3 million for this fiscal year alone; and WHEREAS, fiscal sustainability requires either revenue increases or service level reductions; and
WHEREAS, a community town hall discussion was held at the Yucaipa Performing Arts Center on July 17, 2024, to gather public input on the preferred course correction actions; and WHEREAS, the City Council has voted to place a sales tax measure on the ballot for the November 5, 2024, General Election.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:

Section 1.

The City Manager is directed, in the event the sales tax measure placed on the November 5, 2024 General Election ballot fails to be passed by voters, to execute organizational -wide service level adjustments in order to cut costs to levels that are supported by recurring revenues, to include, but not be limited to, services as listed in Exhibit A.

PASSED, APPROVED, and ADOPTED this 24th day of June, 2024.

Justin Beaver, Mayor
ATTEST:

Ana V. Sauseda, MMC
Director of General Services/City Clerk

Resolution 2024-42
Exhibit A
Cost -Cutting Measures — Alternative Course to Fiscal Sustainability Should a Sales Tax Measure Fail to Pass on the November 5, 2024 General Election Ballot Should a sales tax measure fail to pass on the November 5, 2024 General Election ballot, organizational -wide spending cuts will be required in order to balance current revenues with the cost of service lines and service levels. The operating budgetary deficit in the General Fund and Public Safety Fund combined in FY25 is $7.3 million. As the deficit continues to grow, by January 1, 2025, we are estimating that $8 million of annual costs will need to be cut to achieve balance. The following list identifies cuts by service line in order to achieve the $8 million target. Additionally, the estimated annual service level dollar value is included in brackets. The estimates reflect total cost savings, which are primarily comprised of staff reductions. For example, closing the doors at a fire station does not save $2 million; the savings come from not staffing the closed station. Cost-cutting measures to include:

Public Safety — Elimination of $4 million (20% of net cost) • Reduce the cost of the City's contract with the San Bernardino County Sheriff's Department by $2 million, primarily through the elimination of Sheriff's Deputy positions (estimated 5-7 patrol deputy positions). ($2M) • Close Fire Station #2 and eliminate all firefighter positions currently assigned to that station. ($2M)
Community Services — Elimination of $2 million net cost (100% of net cost) • Close the Senior Center. ($300K)
• Close the 7th Street Pool. ($300K)
• Reduce YPAC programming that does not achieve full cost recovery. ($250K) • Reduce Community Center programming that does not achieve full cost recovery. ($250K)
• Additional cuts of $900K to be determined. ($900K)
Development Services — Elimination of $1 million net cost (10% of net cost) • Cuts to be determined. ($1M)
Support — Elimination of $1 million (15% of net cost)
• Cuts to be determined. ($1M)
Cost-cutting measures identified above include the freezing of any vacant, non -critical positions, and negotiating any combination of furloughs and/or layoffs with the Yucaipa City Employees Association.

Yucaipa City CouncilJune 24, 2024

Yucaipa City Council
June 24, 2024