08-09-2018 - Public Safety Special Parcel Tax Measure for the N - Item No. 1 (2).pdfAGENDA
ITEMNO. 1
AGENDA STAFF REPORT
DATE:
TO:
FROM:
August 9, 2018
Mayor and City Council
Chris Freeland
City Manager
City of West Covina I Office of the City Manager
SUBJECT: PUBLIC SAFETY SPECIAL PARCEL TAX MEASURE FOR THE NOVEMBER
2018BALLOT
RECOMMENDATION:
It is recommended that the City Council give direction regarding the following resolutions:
• RESOLUTION NO. 2018-109 -A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, ORDERING THE SUBMISSION TO THE
QUALIFIED ELECTORS OF THE CITY OF A PUBLIC SAFETY PARCEL TAX
MEASURE FOR THE GENERAL ELECTION TO BE HELD ON NOVEMBER 6, 2018
• RESOLUTION NO. 2018-110 -A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, AUTHORIZING COUNCIL MEMBERS TO
SUBMIT ARGUMENTS, SETTING PRIORITIES FOR SELECTING ARGUMENTS TO
PRINT, AND DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL
ANALYSIS RELATING TO A CITY MEASURE FOR A SPECIAL PARCEL TAX
BACKGROUND:
At the July 26, 2018 City Council Meeting, the City Council instructed staff and the City Attorney to
prepare the necessary documentation to place a public safety special tax measure on the November 2018
ballot. City Council requested that each possible tax option be included in the staff report. Because the
ballot language would vary substantially based on the type of tax placed on the ballot, staff provided
infomiation regarding available options for a special tax and obtained Council direction on which option
should be turned into a measure.
Special Tax Ballot Measure
Page 2 of 4 -August 9, 2018
At the August 2, 2018 City Council Meeting, the City Council requested staff to prepare a ballot measure
seeking the community's approval for a parcel tax dedicated to public safety. In addition, the City Council
requested that the City Manager, Police Chief, and Fire Chief prepare a plan for the use of the funds.
The City has until August 10, 2018, to submit the necessary ballot materials to the County of Los Angeles.
DISCUSSION:
Under existing California law, including Proposition 218 and Proposition 62, a majority of the government
body (City Council) may place a special tax on the ballot. Once on the ballot, a special tax requires a two-
thirds (66.67%) supermajority vote of the electorate. A special tax is when the revenues collected from
the tax are eaimarked for a specific purpose (i.e. police and fire services).
Even with the proposed adoption of a balanced Fiscal Year 2018-19 Budget, the City of West Covina will
be facing significant financial challenges next year and for years to come. Many of the measures taken to
balance the proposed budget utilized one-time savings and revenues, including the reduction of the City's
General Fund Reserves from 20% to 17%. As such, an operating deficit is projected for Fiscal Year 2019-
20, due to these one-time actions, rising CalPERS health care costs, and increases in various contractual
services, etc. Additional revenues are needed to address the City's structural deficit and prevent further
reductions in services/prograins in the upcoming year, especially in Police and Fire services.
Parcel Tax Computation
Staff contacted HdL, which provides sales and property tax information for cities across California. HdL
estimated the necessary square feet of data for parcels in West Covina that could be included in a parcel
tax computation.
• Residential Parcels Square Footage
• Commercial Parcels Square Footage
• Miscellaneous/Irrigated Pai·cels Square Footage
• Vacant Parcels Square Footage
• Institutional Parcels Square Footage
• Recreational Parcels Square Footage
• Industrial Parcels Square Footage
Total Square Feet
237,093,757
20,454,100
19,936,932
11,206,620
6,016,087
5,846,436
1,430,688
301,984,620
Based on the total square feet in West Covina, for every 1¢ of tax per square foot, approximately
$3,000,000 in revenue is generated. Therefore, a 2¢ tax per square foot generates approximately
$6,000,000, 3¢ tax per square foot generates approximately $9,000,000, and a 4¢ tax per square foot
generates approximately $12,000,000.
Ballot Language
Staff has developed the following ballot language that prioritizes the funding for public safety use and
reflects cmTent resident concerns (i.e. homelessness, code enforcement, etc.) as follows:
Special Tax Ballot Measure
Page 3 of4-August9, 2018
WEST COVINA 911 EMERGENCY RESPONSE AND PUBLIC SAFETY
IMPROVEMENT MEASURE,
To reduce 911 response times, improve emergency medical care, increase neighborhood police
patrols; improve student safety, address homelessness, traffic and graffiti concerns; shall West
Covina collect a four cent (annually inflation adjusted) per square foot parcel tax to be used solely
for police, fire, code enforcement, anti-graffiti, crossing guards, and pension liabilities, initially
generating approximately $12 million annually, until ended by voters, requiring independent audits
and local control of funds?
In addition, the County of Los Angeles allows cities to request a Measure letter. Staff is
recommending Measure P, for Public Safety. At the time this report was prepared, West Covina
Fire Management and Police Management Associations have indicated a desire to be one of the
signatories to the measure.
Public Safety Expenditure Plan
Staffis proposing the reinstatement of those items eliminated in the Fiscal Year 2018-19 Budget. This
includes Engine No. 4 staffing in the Fire Department and overlap shift in the Police Depaitment with six
officer positions. Staff is also proposing the addition of code enforcement officers, expansion of fire
prevention, payment of the Public Safety PERS increases, and other increases in the Police and Fire
Departments. A more detailed accounting of the funds will be presented at the City Council Meeting.
Oversight of Funds
Any funds generated by the Public Safety Parcel Tax will be placed into a newly created Public Safety
Parcel Tax Revenue Account. Funds from this account can only be withdrawn with the authority of the
City Council and expended under the terms of the ballot measure (i.e. public safety purposes). Funds will
not be used to supplant any public safety budget items (i.e. existing personnel, benefits, or equipment) as
approved in the City of West Covina's Fiscal Year 2018-19 Budget.
This account will be audited on an annual basis by an outside auditor, with the findings submitted to a
citizens' oversight committee (City Audit Committee).
Education Campaign
Staff, with the City Attorney's review, will provide all residents with information on the parcel tax ballot
measure within the City's Discover West Covina and on the City's website, as permitted by California
law.
OPTIONS:
The City Council has the following options:
1. Determine the proposed tax rate and structure and approve resolutions accordingly; or
2. Receive and file this informational report.
Special Tax Ballot Measure
Page 4 of 4-August 9, 2018
FISCAL IMP ACT:
The cost to place the public safety ballot measure on the November 2018 ballot is approximately $9,000,
which will be paid out of the General Fund. A Public Safety Parcel Tax has the potential to generate
between $3,000,000 and $12,000,000 in new funds.
Prepared by:
Chris Freeland
City Manager
ATTACHMENTS:
Attachment No. 1 -Resolution No. 2018-109-Placing Parcel Tax on the Ballot
Attachment No. 2 -Resolution No. 2018-110-Submitting an Argument in Support of the Measure
ATTACHMENT NO. 1
RESOLUTION NO. 2018-109
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, ORDERING THE
SUBMISSION TO THE QUALIFIED ELECTORS OF THE
CITY OF A PUBLIC SAFETY PARCEL TAX MEASURE
FOR THE GENERAL ELECTION TO BE HELD ON
NOVEMBER 6, 2018
WHEREAS, the City's general tax revenues remain insufficient to fully fund all City
services unless some services are funded by a special tax; and
WHEREAS, establishment of a special parcel tax will help the City to continue to provide
essential public safety services; and
WHEREAS, the City Council desires to submit a special parcel tax measure to the voters
of the City at the General Municipal Election to be held on Tuesday, November 6, 2018 and to be
consolidated with any countywide election to be held on that date; and
WHEREAS, the proposed tax (the "Special Parcel Tax") is more completely described in
the ordinance attached hereto as Exhibit "A" and incorporated herein by reference (the "Tax
Ordinance"); and
WHEREAS, this resolution was adopted in accordance with the requirements of
Government Code Section 50077 and this meeting was noticed as a special meeting as required by
Section 54956 of the Government Code and applicable law; and
WHEREAS, based upon all of the facts before it on this matter, the City Council finds that
the submission of this question of a Special Tax to the voters is not subject to, or is exempt from,
the California Environmental Quality Act (CEQA) because it is not a project as defined by
California Code of Regulations Section 15378(b)(4) because it relates to the creation of
government funding mechanisms, which do not involve commitment to any specific project which
may result in a potentially significant physical impact on the environment.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WEST COVINA AS FOLLOWS:
Section 1. Recitals. The City Council hereby finds and determines that the foregoing
recitals are true and correct.
Section 2. Proposal. The City Council hereby proposes the Special Parcel Tax.
Section 3. Election. The City Council previously called a General Municipal Election for
Tuesday, November 6, 2018 (the "Election"), and now orders, pursuant to Section 9222 of the
Elections Code, that the Tax Ordinance be submitted to the voters at that election.
Section 4. Ballot Question. The question submitted by Section 3 of this Resolution shall
appear on the ballot as follows:
To reduce 911 response times, improve emergency medical
care, increase neighborhood police patrols; improve student safety, YES
address homelessness, traffic and graffiti concerns; shall West
Covina collect a four cent (annually inflation adjusted) per square
foot parcel tax to be used solely for police, fire, code enforcement,
anti-graffiti, crossmg guards, and pens10n liabilities, initially
generating approximately $12 million annually, until ended by NO
voters, requiring independent audits and local control of funds?
Section S. Approval. Pursuant to Section 4 of Article XIII A of the Constitution, this
measure requires approval by a two-thirds vote of those casting ballots on the measure.
Section 6. Consolidation. Pursuant to Section 10400 et seq. of the Elections Code, the
Board of Supervisors of Los Angeles County is requested to consolidate the Election with other
elections held on the same day in the same tell'itory or in the territory that is in part the same.
Section 7. Canvass. The Board of Supervisors is authorized to canvass the returns of the
Election pursuant to Section 10411 of the Elections Code.
Section 8. Conduct of Election. Pursuant to Section 10002 of the Elections Code, the
Board of Supervisors is requested to permit the County Registrar to render all services specified
by Section 10418 of the Elections Code relating to the election, for which services the City agrees
to reimburse the County, in accordance with cmTent County pro-rations and allocation procedures.
Section 9. Filing with County. The City Clerk shall file a certified copy of this Resolution
with the County.
APPROVED and ADOPTED this 9th day of August, 2018 by the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lloyd Jolmson, Mayor
ATTEST:
Nickolas S. Lewis, City Clerk
EXHIBIT A
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF WEST COVINA,
CALIFORNIA ADDING ARTICLE VI (SPECIAL PARCEL
TAX) TO CHAPTER 21 OF THE WEST COVINA
MUNICIPAL CODE
THE PEOPLE OF THE CITY OF WEST COVINA DO ORDAIN AS FOLLOWS:
Section 1. Adoption of Special Parcel Tax. Article VI is hereby added to Chapter 21 of
the West Covina Municipal Code to read as follows:
ARTICLE VI-Special Parcel Tax
Section 21-100 Short Title.
This Division may be referenced to as the West Covina Special Tax Ordinance of
2018.
Section 21.101 Tax Levied.
An annual special tax is hereby levied by the City on all lots and parcels within the
boundaries of the City other than lots and parcels that (i) are exempt from this tax
pursuant to the Constitution or laws of the United States or of the Constitution or
laws of the State of California or (ii) are exempt from the ad valorem property tax.
Section 21-102 Tax Rate.
A. For Fiscal Year 2019-2020, the rate of the tax shall be four cents ($0.04) per
square foot of lot or parcel size.
B. For each fiscal year after 2019-2020, the tax rate shall be the higher of (i) the
tax rate effective in the prior fiscal year or (ii) the result of multiplying the tax
rate set forth in paragraph A of this section by the inflation adjustment factor
set fmth in paragraph C of this section.
C. The inflation adjustment factor shall be calculated by dividing the Consumer
Price Index ("CPI") for the Febrnary immediately prior to the fiscal year by the
CPI for November 2018. For example, for fiscal year 2020-2021, the inflation
adjustment factor would be calculated by dividing the CPI for February 2020
by the CPI for November 2018.
D. For purposes of this section, Consumer Price Index means the Consumer Price
Index for All Urban Consumers (CPI-U) for the Los Angeles-Long Beach-
A-1
Anaheim CBSA area as published by the US Department of Labor. If this index
is no longer published, the successor index applicable to the City ( or reasonably
chosen by the City, in the event there is no direct replacement) shall instead be
used.
E. The City Council may, by resolution or ordinance, reduce the rate of the tax for
one or more fiscal years.
Section 21-103 Annual Tax Roll.
Each year, the Finance Director shall (i) file with the City Clerk a statement of the
tax rate effective for the upcoming fiscal year and an update tax roll listing (by
assessor's parcel number or other identifier) each lot or parcel subject to the tax and
the amount of the tax against said lot or parcel and (ii) transmit to the City Council
a statement of said tax rate. This shall constitute the official record of the
assessment of the special tax, and a copy thereof, together with any other pertinent
data, shall be transmitted to the appropriate county officials to facilitate collection
of the tax. The Finance Director may make such subsequent adjustments to the roll
as are necessary to correct calculation or clerical errors.
Section 21-104 Collection.
The tax shall be collected by the County of Los Angeles ("County") in the same
manner and subject to the same penalties and procedures as ad valorem property
taxes collected by the County. Unpaid taxes shall bear interest at the same rate as
the rate for unpaid ad valorem property taxes until paid. The County may deduct
its reasonable costs incurred for the service before remittal of the balance to the
city.
Section 21-105 Use of Funds.
Proceeds of the tax shall be used only for (1) police operations, police training,
police supplies, police personnel ( e.g. police officers, school resource officers, non-
sworn personnel), police equipment, police and/or fire dispatch, animal control, and
police facilities, (2) fire prevention and suppression operations, training and
supplies, firefighter and paramedic personnel, fire equipment and fire facilities,
(3) code enforcement, (4) graffiti tracking and abatement, (5) school crossing
guards; and (6) accrned and unfunded pension liabilities of the city for employees
performing services that can be funded pursuant to this Article.
Section 21-106 Accountability.
The proceeds of the tax shall be deposited in a special account, to be created and
maintained by the City. For so long as proceeds of the tax remain unexpended, the
Finance Director of the City shall cause independent auditors to prepare and file an
annual audit report with the City Council stating the amount of taxes collected, the
amount expended, and the purpose of the expenditures. Such annual report shall
relate to the Fiscal Year most recently ended, and may be incorporated into or filed
A-2
with the annual budget, audit or other appropriate routine report to the City Council.
The annual audit repmi required for the special tax proceeds shall be submitted to
the City's Audit Committee within thitiy (30) days of completion for their review.
The Audit Committee may submit comments and recommendations to the City
Council to ensure that the tax proceeds are spent appropriately.
Section 21-107 Duration.
The levy of tax shall commence with fiscal year 2019-2020. The tax shall be levied
annually, unless repealed by a vote of the people.
Section 21-108 Amendment.
The City Council may, by ordinance, amend, repeal, renumber or recodify any or
all of the provisions of this Article; provided, however, that no ordinance extending
the tax or increasing the maximum rate of the tax shall be effective unless submitted
to, and approved by, the voters of the City as required pursuant to the applicable
law at the time of such action.
Section 2. Severability. If, for any reason, any portion of this Ordinance is rendered or
declared invalid or unenforceable by a couti or an administrative body of competent jurisdiction
or by reason of any preemptive legislation, the remaining portions of this Ordinance !lhall remain
in full force and effect.
This Ordinance was approved and adopted by the People of the City of West Covina at the City's
November 6, 2018 general municipal election.
Lloyd Johnson, Mayor
ATTEST:
Nickolas S. Lewis, City Clerk
A-3
ATTACHMENT NO. 2
RESOLUTION NO. 2018-110
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, AUTHORIZING
COUNCIL MEMBERS TO SUBMIT ARGUMENTS,
SETTING PRIORITIES FOR SELECTING ARGUMENTS
TO PRINT, AND DIRECTING THE CITY ATTORNEY TO
PREPARE AN IMPARTIAL ANALYSIS RELATING TO A
CITY MEASURE FOR A SPECIAL PARCEL TAX
WHEREAS, A General Municipal Election is to be held in the City of West Covina, California,
on November 6, 2018, at which there will be submitted to the voters the following
question:
To reduce 911 response times, improve emergency medical care, YES
increase neighborhood police patrols; improve student safety, address
homelessness, traffic and graffiti concerns; shall West Covina collect
a four cent (armually inflation adjusted) per square foot parcel tax to NO be used solely for police, fire, code enforcement, anti-graffiti,
crossing guards, and pension liabilities, initially generating
approximately $12 million annually, until ended by voters, requiring
indenendent audits and local control of funds?
WHEREAS, the proposed ordinance submitted to the voters is attached as Exhibit A hereto.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA, DOES RESOLVE AS FOLLOWS:
SECTION 1. That the City Council authorizes, but does not obligate, any or all members of the
City Council to file a written argument (written either exclusively by the member(s)
or jointly by the member(s) with any other entity, bona fide association of citizens,
individual voters, or any combination thereof) in favor of the City measure not
exceeding 300 words, accompanied by the printed name(s) and signature(s) of the
author( s) submitting it, in accordance with Article 4, Chapter 3, Division 9 or the
Elections Code of the State of California. The argument may be changed or
withdrawn until, and including, the date fixed by the City Clerk after which no
arguments for or against the City measure may be submitted. In the event that more
than one argument is filed by different members, the City Council shall determine
by majority vote which argument shall be formally adopted by the City Council as
officially authorized by the legislative body.
The argument shall be filed with the City Clerk, signed, with the printed name(s)
and signature(s) of the author(s) submitting it, or if submitted on behalf of an
organization, the name of the organization, and the printed name and signature of
at least one of its principal officers who is the author of the argument. An argument
may be signed by multiple authors, but if more than five authors provide a signature
to the argument, then only the signatures of the first five authors shall be printed to
the exclusion of the excess signatures.
The arguments shall be accompanied by a completed Declaration of Author form
provided by the City Clerk.
SECTION 2. That the City Council directs the City Clerk to transmit a copy of the measure to
the city attorney. The city attorney shall prepare an impartial analysis of the
measure not exceeding 500 words showing the effect of the measure on the existing
law and the operation of the measure. The impartial analysis shall be filed by the
date set by the City Clerk for the filing of primary arguments.
SECTION 3. That the City Clerk is directed to fix and determine a reasonable date prior to the
election after which no arguments for or against the City measure may be submitted
for printing and distribution to the voters. If more than one argument for or against
the City measure is submitted to the City Clerk, the City Clerk shall select one of
the arguments for printing and distribution to the voters, according to the following
preference and priority, in the order named: the City Council, or member or
members of the City Council; bona fide associations of citizens; individual voters
who are eligible to vote on the City measure.
SECTION 4. The City Clerk shall certify to the passage and adoption hereof.
APPROVED AND ADOPTED this 9th day of August, 2018.
APPROVED AS TO FORM:
Kimberly Hall Barlow
City Attorney
Lloyd Johnson
Mayor
ATTEST:
Nickolas S. Lewis
City Clerk
I HEREBY CERTIFY that the foregoing resolution was duly adopted by the City Council of the
City of West Covina, California, at a regular meeting thereof on the 9th day of August, 2018, by
the following vote of City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Nickolas S. Lewis, City Clerk