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HomeMy WebLinkAbout1056ORDINANCE NO. 10~6 AN ORDINANCE OF THE CITY OF UKIAH ADOPTING CHAPTER 8C OF DIVISION 1 OF THE UKIAH CITY CODE IMPOSING A TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE STATE BOARD OF EQUALIZATION The City Council of the City of Ukiah hereby ordains as follows: SECTION ONE. Findings. The City Council and the people of the City of Ukiah hereby find: 1. The City of Ukiah is 4.7 square miles in size, but is surrounded by additional urban areas and residential subdivisions within an unincorporated portion of Mendocino County. The Ukiah Valley is the most populous portion of Mendocino County, containing, at least, 2/3 of the total county population. 2. The California Department of Finance estimates the population of the City of Ukiah ("City") as of January 1, 2004, at 15,900 people. 3. Ukiah is the County Seat for Mendocino County and a commercial center for Mendocino County, Lake County, Southern Humboldt County and Northern Sonoma County. 4. As such during business hours, the City population swells to perhaps as many as 40,000 people, including people who work, shop and receive services in Ukiah. 5. Ukiah also is located on U.S. Highway 101, which is the major north-south highway west of Interstate Highway 5, and links southern California to Northern California and Oregon. 6. Consequently, a small city with a population of 15,900 people must provide law enforcement, fire protection and emergency medical services to a day time population of 40,000, and respond to emergencies within the City, on U.S. Highway 101, and on a mutual aid basis within the larger Ukiah Valley. 7. Public safety services is a general fund obligation of the City, which receives revenues from ad valorem property taxes, sales taxes and vehicle license fees. The City receives only 1% of the gross receipts from taxable retail sales within the City and less than 10% of the property taxes collected from real property located within the City. 8. Due to the State of California's budget deficit, the City has seen its general fund revenues decrease in the last two years. In the 2003-2004 fiscal year, the City saw a reduction of over $300,000 in revenue from the 2002-2003 fiscal year and is projecting a deficit of over $700,000 for the 2004-2005 fiscal year. 9. As a result, the City is faced with a substantial deficit for fiscal years 2004-2005, which may require lay-offs or other reductions in expenditures for public safety services in the City. 1 10. The total calls for police service has increased from around 2500 calls in 1969 to 24,000 in 2003, or by almost 1000%. Just in the period between 1999-2003, crime reports taken have gone from 3900 in 1999 to 4300 in 2003. Calls for service have increased in virtually every category, including assaults with weapons, burglary, thefts and shoplifting, drugs, sexual assaults and domestic violence. In addition, the Police Department responds to over 400 traffic accidents per year. In 2003, the average peace officer in the City answered 1800 calls for service, wrote 288 crime reports, made 97 misdemeanor and 48 felony arrests, and wrote 127 traffic tickets. 11. In contrast, between the years 1969 and 2003, the number of patrol officers in the Ukiah Police Department has remained constant at 14 officers. Except in 1999, when the number increased to five, the number of detectives has remained constant at four detectives. There are not enough sworn peace officers in the department to have three officers on every shift in a 24- hour period. 12. The police department responds to a substantial number of calls from City businesses, many of these involving shoplifting. For example, in 2003 the department responded to almost 1000 calls from just seven businesses. 13. At the same time, the vehicles and equipment of the police department have not kept pace with the demands on the department. The department has a total of eight patrol vehicles, which range in age from 12 years to 2 years. Every protective vest used by its sworn peace officers is past its useful life of five years. Many of its vehicle light bars, radios and other equipment are no longer supported by their manufacturers. 14. The Fire Department provides fire prevention services, public education and information, disaster preparedness, emergency response services, not only to fires and medical emergencies, but also rescues, hazardous materials spills and other disasters. In 2003, the Department responded to calls for 79 fires, 1582 medical and rescue calls and an additional 523 miscellaneous calls for assistance. 15. The City currently has an excellent Insurance Services Office ("ISO") rating of '3' for a city its size, with '1' being the best and '10' the worst. With the potential for reduction in staffing and equipment, any increase in the ISO rating will substantially raise insurance rates within the City limits. ISO recommends a minimum of one ladder truck, if the City has buildings over 18,000 square feet or three or more stories in height. The City has 31 buildings over 18,000 square feet and 22 buildings that are three stories or more in height. Its existing ladder truck is due to be replaced at a cost of approximately $650,000. 16. At its current staffing, the Fire Department has a minimum staffing of four personnel on each shift, 24 hours per day assigned to staff one ambulance and one fire engine. The Fire Department needs to add additional paid staff over the next year to augment staffing shortages on the Engine Company. If the call volume continues to increase as it has for the last several years and the city continues to approve new commercial and residential construction as well as possible annexations, the department projects that within the next 10 years they will need to additionally staff the ladder truck and a second ambulance. In order to meet this projected demand the staffing levels need to increase. The Department also believes that adequate training will require an increase in the annual amount per employee currently spent of $600 to approximately $2000. 17. Of the City's three ambulances, one has 1 year before it should be shifted to reserve status. Another is 8 years old and should be in reserve status. The third is 11 years old and should be replaced. Much of the other equipment essential to the Fire Department mission is past its useful life and should be replaced, including all its self-contained breathing apparatus, all mobile radios, portable generators, rescue air bags, one of the department's two jaws of life, which are used in vehicle rescues, and 34% of its fire hose. Other equipment is due to be replaced within 2 years, including paramedic equipment, and personal protective gear. 18. Unlike the current 7.25% sales tax, all of the sales tax produced by this ordinance will ' remain in the City of Ukiah and be placed in a special fund that must be used exclusively to fund public safety services. In addition, this ordinance would prevent the City from reducing the amount of general fund revenues below the amount it spent in the 2003-2004 fiscal year on public safety services. This ordinance also requires the City to maintain the current level of public safety services and to increase the number of sworn peace officers in its Police Department by four and to commit, not less than, $200,000 per year to equipment and capital improvements for the Fire Department. 19. If this ordinance is adopted, the City will have sufficient funding to provide adequate staffing and equipment for both its police and fire departments. Without the additional sales tax revenues produced by this ordinance, the City may be faced with further reductions in staffing within its public safety departments and the use of outdated and fully depreciated equipment. SECTION TWO. A new Chapter 8C of Division 1 is hereby added to the Ukiah City Code to read as follows: Article 1. General. {}1735: TITLE: This ordinance shall be known as the City of Ukiah Transactions and Use Tax Ordinance. The City of Ukiah hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City. {}1736: 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. §1737: PURPOSE: This ordinance is adopted to achieve the following, 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 as authorized by Revenue and Taxation Code Section 7285.91 in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7286.24 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be effective and operative if a 2/3 majority of the City Council adopts this ordinance and a 2/3 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. C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefor 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 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. E. To raise revenue for public safety services as further provided herein. § 1738: 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 transactions and use tax ordinance; 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. Article 2. Transactions and Use Tax §1739: TRANSACTIONS TAX RATE: For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated and unincorporated territory of the City at the rate of one-half of one percent (.5%) 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. §1740: 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 State Board of Equalization. §1741: 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 one-half of one percent (.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. {[1742: 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 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. §1743: 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 Board of Control, State Board of Equalization, 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 State Board of Equalization, 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. 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. §1744: 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. §1745: 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 Chapter 2 of 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 subsections (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: 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 subsections (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 Chapter 2 of 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. Article 3. Permissible Uses of Transactions and Use Tax {}1746: EXPENDITURE PLAN: A. Use of the tax proceeds. The money received by the City from this one-half cent tax shall only be used to provide public safety services within the City. These monies may not be used for anything else. "Public safety services-~ means law enforcement and crime prevention services provided by the Ukiah Police Department, and fire protection and prevention and emergency medical services provided by the Ukiah Fire Department. These taxes may be used to pay for such public safety services expenses as the training and salaries, including overtime and specialty pay, and fringe benefits, of public safety officers and support staff working in the Police Department and of firefighters, emergency medical technicians and support staff working in the Fire Department. These funds may also be used for operating expenses, and the purchase of vehicles, equipment and supplies, and capital improvements used exclusively by the Police and Fire Departments. In each fiscal year commencing with the 2004-2005 fiscal year, the City shall deposit, into the Public Safety Services Fund" for the exclusive use of public safety services all of the following: (1) money produced by this tax; and (2) "Public Safety Revenue" which is the revenue produced by the Police and Fire Departments, such as income from the ambulance service, vehicle impound fees, fire prevention fees and other fees for public safety services, and four million four hundred two thousand four hundred sixty-one dollars ($4,402,461.00), the amount of general fund revenues budgeted for public safety services in the 2003-2004 fiscal year. The combination of these funds shall be called the "Public Safety Services Fund." The City shall maintain a minimum level of public safety services, but nothing in this Ordinance prevents the City Council from establishing a higher level of public safety services or prevents the City from reorganizing or changing the method of providing public safety services. The minimum level of public safety services shall be the level of such services available in the City in the 2003-2004 fiscal year, plus the following: (1) the equivalent of four additional full-time peace officers as defined in Penal Code Section 7 and Title 3, Part 2, Chapter 4.5 (commencing with Section 830) assigned to patrol services, and (2) not less than $200,000 per year for staff augmentation and capital expenditures benefiting the Fire Department, including, but not limited to, the purchase or improvement of equipment, vehicles and facilities. "Patrol services" as used herein means a uniformed assignment within the Police Department that provides general or specific law enforcement duties, including, but not limited to, Community Oriented Policing and Traffic Enforcement. Every five years after the Effective Date of this Ordinance, the City Council shall appoint five people to an "Oversight Committee" the only function of which shall be to review the City's budget for public safety services and the expenditure of the revenues so budgeted. The persons appointed to the Oversight Committee should represent a broad range of interests in the City, including such interests as business owners, ethnic minorities, Ukiah firefighters, Ukiah peace officers, persons providing emergency medical services for the City of Ukiah, homeowners and tenants. The City Manager shall provide the Oversight Committee with any information it requests which is not exempt from disclosure under the California Public Records Act and shall assist it in organizing and analyzing the information so provided. The Oversight Committee must prepare a written report which shall be presented to the City Council at a noticed public hearing and which shall be available to the general public for not less than 10 calendar days prior to the scheduled hearing date. The report shall contain an analysis of the level and types of service provided by the City's police and fire departments, the expenditure of the Public Safety Services Fund, and the unrestricted reserves within the budgets for those departments. It shall also make recommendations concerning the future use of these funds and levels and types of service. The Oversight Committee shall dissolve after it files its report with the City Council, until a new Oversight Committee is appointed for the next five year review. B. Accounting for tax revenue. All revenues produced by the tax imposed by this Ordinance and all interest on said revenues shall be credited to the Public Safety Services Fund and shall be designated for use and used only in accordance with subsection A of this Section 1746. The income to and expenditures from the Public Safety Services Fund shall be accounted for separately in the financial reports and records of the City of Ukiah. Article 4. Miscellaneous {}1747: 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 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. {}1748: 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 THREE 1. 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. The City Council hereby declares that it would have adopted this Ordinance and any section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more section, subsection, sentence, clause or phrase be declared unconstitutional or otherwise invalid. 2. EFFECTIVE DATE. This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately upon its approval by the voters as provided in Section 1737.A. Approved on July 7, 2004 by the following roll call vote of the Ukiah City Council: AYES: NOES: ABSENT: ABSTAIN: Councilmembers Rodin, Andersen, Smith, Baldwin, and Mayor Larson None None None Eric Larson, ATTEST: Marie Ulvila, Deputy City Clerk 10