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Resolution - 2019-96RESOLUTION NO.2019-96 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS ANGELES TO CONSOLIDATE A SPECIAL MUNICIPAL ELECTION TO BE HELD ON MARCH 3, 2020, WITH THE STATEWIDE PRIMARY ELECTION TO BE HELD ON THE SAME DATE PURSUANT TO SECTION 10403 OF THE ELECTIONS CODE WHEREAS, by its Resolution No. 2019-95, the City Council of the City of West Covina called a Special Municipal Election to be held on March 3, 2020, for the purpose of submitting to the voters of the City of West Covina a question relating to a proposed ordinance establishing of a local three-quarter percent (0.75%) transactions (sales) and use tax; and WHEREAS, it is desirable that the Special Municipal Election be consolidated with the Statewide Primary Election to be held on the same date and that, within the City, the precincts, polling places and election officers of the two elections be the same, and that the county election department of the County of Los Angeles canvass the returns of the Special Municipal Election and that the election be held in all respects as if there were only one election. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. Pursuant to Section 10403 of the Elections Code, the Board of Supervisors of the County of Los Angles is hereby requested to consent and agree to the consolidation of a Special Municipal Election with the Statewide Primary Election on Tuesday, March 3, 2020, for the purpose of submitting to the voters of the City of West Covina a question relating to the adoption of a proposed ordinance. SECTION 2. The measure is to appear on the ballot as follows: Shall the ordinance establishing a three-quarter percent (0.75%) local YES sales tax (transactions and use tax) that will raise approximately $9.7 million annually for the City's general fund until ended by voters and establishing an Oversight Committee, be adopted? NO SECTION 3. The proposed complete text of the measure (ordinance) to be submitted to the voters is attached as Exhibit A. SECTION 4. The vote requirement for the measure to pass is a majority (50%+1) of the votes cast. SECTION 5. The County election department is authorized to canvass the returns of the Special Municipal Election. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. The election will be held and conducted in accordance with the provisions of law regulating the statewide election. SECTION 6. The Board of Supervisors is requested to issue instructions to the County election department to take any and all steps necessary for the holding of the consolidated election. SECTION 7. The City Council recognizes that additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County for costs incurred upon presentation of a properly submitted bill. SECTION 8. The City Clerk is hereby directed to file a certified copy of this resolution with the Board of Supervisors and the County election department of the County of Los Angeles. SECTION 9. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. APPROVED AND ADOPTED this 3rd day of D er, 201 . Tony u or APPROVED RM ATTEST, w '�/ Thomas'p.buarte Carrie Gallagher, CMC City Attorney Assistant City Clerk I, CARRIE GALLAGHER, ASSISTANT CITY CLERK of the City of West Covina, California, do hereby certify that the foregoing Resolution No. 2019-96 was duly adopted by the City Council of the City of West Covina, California, at a regular meeting thereof held on the 3rd day of December, 2019, by the following vote of the City Council: AYES: Castellanos, Johnson, Lopez-Viado, Shewmaker NOES: None ABSENT: None ABSTAIN: Wu Carrie Gallagher, CMC Assistant City Clerk EXMIT A PROPOSED ORDINANCE ORDINANCE NO. AN ORDINANCE OF THE CITY OF WEST COVINA ESTABLISHING A TRANSACTIONS AND USE TAX TO PRESERVE PUBLIC SAFETY SERVICES IN WEST COVINA WHEREAS, the City of West Covina is facing a massive budget crisis impacting the general municipal services for the West Covina community; WHEREAS, one of the largest general fund expenditures is the funding of police, fire, and first -responder services for the West Covina community; WHEREAS, an increase in a transactions and use tax would lessen the financial burden facing the City of West Covina general fund and, as a result, benefit all municipal services, such as police, fire, and first -responder services; and WHEREAS, the goal of this ordinance is also to assure there is oversight on general fund expenditures and that such tax revenues generated herein are monitored to ensure the longevity of the general fund tax revenues for the benefit of the West Covina community. NOW THEREFORE, the People of the City of West Covina does ordain as follows: Section 1. TITLE. This ordinance shall be known as the City of West Covina Public Safety Preservation Transactions and Use Tax Ordinance. This ordinance increases the existing sales and use tax of nine and a half percent (9.50%) as of July 1, 2019 by a three-quarter of a percent (0.75%) to a sales and tax rate of ten and a quarter percent (10.25"/0). The City of West Covina hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City. Section 2. OPERATIVE DATE. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below. Section 3. PURPOSE. This ordinance is adopted to preserve general municipal service for the City of West Covina, including, but not limited to, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes: A. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose. B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code. (West Covina 7/12/2019) Ord City — rev 6/26/2019 1 C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes. D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance. Section 4. CONTRACT WITH STATE. Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. Section 5. TRANSACTIONS TAX RATE. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of a three quarter of a percent (0.75%) of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance. For clarification; the existing rate of nine and a half percent (9.50%) would increase by three quarter of a percent (0.75%) to ten and a quarter percent (10.25%). Section 6. PLACE OF SALE. For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration. Section 7. USE TAX RATE. An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of a three-quarter percent (0.75%) 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. For clarification, as with the transaction tax rate above, the existing rate of nine and a half percent (9.50%) would increase by three quarter of percent (0.75%) to ten and a quarter percent (10.25%). Section 8. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing (West Covina 7/12/2019) Ord City — rev 6/26/2019 2 with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein. Section 9. LIMITATIONS ON ADOPTION OF STATE LAW AND COLLECTION OF USE TAXES. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code: A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when: 1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Treasury, or the Constitution of the State of California; 2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this Ordinance. 3. hi those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to: a. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code. 4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code. B. The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203. 1. "A retailer engaged in business in the District" shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder. Section 10. PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance. (West Covina 7/12/2019) Ord City —rev 6/26/2019 3 Section 11. RENAMING OF EXISTING FINANCE & AUDIT COMMITTEE AS THE OVERSIGHT COMMITTEE AND MEMBERSHIP INCREASE FROM SEVEN TO NINE MEMBERS. The Audit Committee created by the City of West Covina pursuant to Resolution 2019-3 1, passed, approved, and adopted May 7, 2019, is amended, changed, modified, renamed and increased in membership as follows: A. Section 1, paragraph 1 of Resolution 2019-31 is replaced by the following: "The City Council of the City of West Covina hereby renames the previously established City of West Covina Finance & Audit Committee as the Oversight Committee." B. All instances of the words "Audit Committee" or "Finance & Audit Committee" in Resolution 2019-31 are replaced by the words "Oversight Committee." C. Section 1, paragraph 3 of Resolution 2019-31 is replaced by the following: "The Oversight Committee shall consist of nine members: the City Treasurer, two City Council members, and six members of the public; two of the six members of the public shall be employees of the City of West Covina Police and Fire Departments, respectively, appointed by the recognized employee organization representing those respective employees of the City police and fire department; in the case of the employees of the City of West Covina Police Department, the appointments shall be made by the President of the West Covina Police Officers' Association or such chair of the successor recognized employee organization for the City of West Covina Police Department; as to the City of West Covina Fire Department, the appointments shall be made by the chair of the city employee recognized employee organization representing those City fire department employees; should the City of West Covina Fire Department no longer be a part of the City of West Covina but the County of Los Angeles or such other special district outside the City, the President of the West Covina Police Officers' Association shall make both appointments until such a relevant City of West Covina Fire Department employee bargaining unit or recognized employee organization returns to exist within the City. D. The renaming and increase in membership of the committee created by Resolution 2019-31, as modified herein, does not limit the authority of the City Council to amend the powers or responsibilities of the Oversight Committee provided that such revisions are approved by the West Covina Police Officers' Association prior to the effectiveness of any proposed amendments. The goal of this Section 13 is to ensure the West Covina Police Officers' Association has adequate representation on the Oversight Committee and that it be consulted prior to any changes to said committee; approval of the West Covina Police Officers' Association may be given in writing and signed by its President. The President of the West Covina Police Officers' Association shall consult with the chair of the recognized employee organization of the City of West Covina Fire Department prior to submitting any approval. E. In all other respects, the Oversight Committee is to function subject to the rules and regulations established by Resolution 2019-31 of the City Council for the City of West Covina as passed, approved, and adopted May 7, 2019, as it may be amended from time to time. Any conflicts between this Ordinance and said resolution shall be resolved in favor of upholding the goals of this Section 13. Section 12. GENERAL TAX. The proceeds from the transactions and use tax imposed by this Ordinance shall be deposited in the general fund of the City and available for any lawful governmental purpose. (West Covina 7/12/2019) Ord City —rev 6/26/2019 4 Section 13. EXEMPTIONS AND EXCLUSIONS. A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or the amount of any state -administered transactions or use tax. B. There are exempted from the computation of the amount of transactions tax the gross receipts from: 1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government. 2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied: a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out -of -City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and b. With respect to commercial vehicles, by registration to a place of business out -of -City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address. 3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4. A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance. 5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property: (West Covina 7/12/2019) Ord City —rev 6/26/2019 5 1. The gross receipts from the sale of which have been subject to a transactions tax under any state -administered transactions and use tax ordinance. 2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California. 3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance. 5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. 6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer. 7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City. D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax. Section 14. AMENDMENTS. All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and (West Covina 7/12/2019) Ord City — rev 6/26/2019 6 Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance. Section 15. ENJOINING COLLECTION FORBIDDEN. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected. Section 16. SEVERABILITY. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby. PASSED, APPROVED, AND ADOPTED by the People of the City of West Covina, by the following vote: AYES: NOES: ABSENT: City Clerk Mayor (West Covina 7/12/2019) Ord City -rev 6/26/2019