Resolution - 2019-95RESOLUTION NO.2019-95
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, CALLING FOR AND
GIVING NOTICE OF THE HOLDING OF A SPECIAL
MUNICIPAL ELECTION TO BE HELD ON MARCH 3, 2020
FOR THE SUBMISSION TO THE VOTERS OF A
PROPOSED ORDINANCE ESTABLISHING A GENERAL
TRANSACTIONS (SALES) AND USE TAX IN THE
AMOUNT OF THREE-QUARTERS OF A PERCENT (0.75%)
WHEREAS, the next statewide election is the Primary Election to be held on March 3,
2020; and
WHEREAS, the Assistant City Clerk has certified to the City Council a petition (the
"Petition") proposing an initiative ordinance titled "An Ordinance of the City of West Covina
Establishing a Transactions and Use Tax to Preserve Public Safety Services in West Covina" (the
"Proposed Ordinance"); and
WHEREAS, the Proposed Ordinance would impose a three-quarter percent (0.75%)
transactions and use tax for general purposes as authorized by Revenue & Taxation Code section
7285.9; and
WHEREAS, a copy of the Proposed Ordinance is attached hereto as Exhibit "A" and
incorporated herein by reference; and
WHEREAS, by its Resolution No. 2019-94, the City Council accepted the certification of
the Petition; and
WHEREAS, the City Council is now required by Elections Code Section 9215 to act on
the Proposed Ordinance; and
WHEREAS, Pursuant to Elections Code section 1405(b), the City Council desires to act
on the Proposed Ordinance by submitting it to the voters, without modifications, at a special
election to be held on March 3, 2020.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS
FOLLOWS:
SECTION 1. The foregoing recitals are true and correct and incorporated as if fully set
forth herein.
SECTION 2. Pursuant to the requirements of the laws of the State of California relating
to general law cities, there is called and ordered to be held in the City of West Covina, California,
on Tuesday, March 3, 2020, a Special Municipal Election (the "Election") for the purpose of
submitting the Proposed Ordinance to the voters.
SECTION 3. The following question shall be submitted to the voters of the City of West
Covina at the Election:
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 4. The vote requirement for the measure to pass is a majority (50%+1) of the
votes cast.
SECTION 5. The ballots to be used at the election shall be in the form and content as
required by law.
SECTION 6. The Assistant City Clerk is authorized, instructed and directed to
coordinate with the Los Angeles County Registrar-Recorder/County Clerk to procure and famish
any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia
that may be necessary in order to properly and lawfully conduct the election.
SECTION 7. The polls shall be open at 7:00 a.m. of the day of the election and shall
remain open continuously from that time until 8:00 p.m. of the same day when the polls shall be
closed, except as provided in Elections Code section 14401.
SECTION S. In all particulars not recited in this resolution, the election shall be held and
conducted as provided by law for holding municipal elections.
SECTION 9. Notice of the time and place of holding the election is given and the
Assistant City Clerk is authorized, instructed and directed to give further or additional notice of
the election, in the time, form and manner as required by law.
(THIS SPACE HAS BEEN INi'ENIONALLY LEFT BLAND
SECTION 10. 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 De
APPROVED RM ATTEST
�� n
Thoma P. Du e 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. 2019-95 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 Cleric
EXHIBIT 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%). 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 proposes, 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.
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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. hi 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
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with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and
made a part of this ordinance as though fully set forth herein.
Section 9. LIMITATIONS ON ADOPTION OF STATE LAW AND COLLECTION OF
USE TAXES. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation
Code:
A. Wherever the State of California is named or referred to as the taxing agency,
the name of this City shall be substituted therefor. However, the substitution shall not be made
when:
1. The word "State" is used as a part of the title of the State Controller, State
Treasurer, State Treasury, or the Constitution of the State of California;
2. The result of that substitution would require action to be taken by or against
this City or any agency, officer, or employee thereof rather than by or against the California
Department of Tax and Fee Administration, in performing the functions incident to the
administration or operation of this Ordinance.
3. In those sections, including, but not necessarily limited to sections referring
to the exterior boundaries of the State of California, where the result of the substitution would be
to:
a. Provide an exemption from this tax with respect to certain sales, storage,
use or other consumption of tangible personal property which would not otherwise be exempt
from this tax while such sales, storage, use or other consumption remain subject to tax by the
State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or;
b. hnpose 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.
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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.
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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
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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