Measure L Citizen Oversight Committee

Agenda MEASURE L CITIZENS’ OVERSIGHT COMMITTEE Meeting Date: Monday, July 15, 2019 Time: 6:00 p.m. Location: Carnegie Forum, 305 W. Pine Street, Lodi For information regarding this Agenda please contact: Andrew Keys, Deputy City Manager Telephone: (209) 333‐6700 A. Call to Order / Roll Call B. Receive Background Information on Measure L Citizen’s Oversight Committee Role and Annual Accountability Report and an Update on Fiscal Year 2018/19 and Fiscal Year 2019/20 Measure L Budget C. Adjournment Pursuant to Section 54954.2(a) of the Government Code of the State of California, this agenda was posted at least 72 hours in advance of the scheduled meeting at a public place freely accessible to the public 24 hours a day. ______________________________ Andrew Keys Deputy City Manager All staff reports or other written documentation relating to each item of business referred to on the agenda are on file in the Office of the City Clerk, located at 221 W. Pine Street, Lodi, and are available for public inspection. If requested, the agenda shall be made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in implementation thereof. To make a request for disability-related modification or accommodation contact the City Manager’s Office as soon as possible and at least 72 hours prior to the meeting date. Language interpreter requests must be received at least 72 hours in advance of the meeting to help ensure availability. Contact Andrew Keys at (209) 333-6700. Solicitudes de interpretación de idiomas deben ser recibidas por lo menos con 72 horas de anticipación a la reunión para ayudar a asegurar la disponibilidad. Llame a Andrew Keys (209) 333-6702.  AGENDA ITEM B CITY OF LODI MEASURE L CITIZEN’S OVERSIGHT COMMITTEE COMMUNICATION AGENDA TITLE: Receive Background Information on Measure L Citizen’s Oversight Committee Role and Annual Accountability Report and an Update on Fiscal year 2018/19 and Fiscal Year 2019/20 Measure L Budget MEETING DATE: July 15, 2019 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive background information on Measure L Citizen’s Oversight Committee role and annual accountability report and an update on Fiscal Year 2018/19 and Fiscal year 2019/20 Measure L Budget. BACKGROUND INFORMATION: Staff will present background information on Measure L and specifics related to the Oversight Committee, its role and the required annual accountability report. In addition, Staff will provide an update on approved expenditures to date. It is important to emphasize the Committee has no role in approving the planned expenditures or budget, however it is important for the Committee to have this information as a basis for performing oversight duties. FISCAL IMPACT: There is no fiscal impact from this report. FUNDING AVAILABLE: N/A ___________________________________________________ Andrew Keys Deputy City Manager/Internal Services Director Attachments: 6.20.18 City Council Communication Approving Measure L Ordinance 6.20.18 Staff Presentation to City Council Measure L Ballot Question Lodi Municipal Code Chapter 3.30 – 2018 General Retail Transactions and Use Tax APPROVED: ___________________________________________ Stephen Schwabauer, City Manager  Attachment 1 AGENDA ITEM H-01 CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: Introduce Ordinance Enacting On-Going General Retail Transactions and Use Tax of One-Half Cent (0.50) Per Dollar to Protect Lodi’s Essential City Services, to be Collected and Administered by the California Department of Tax and Fee Administration, Subject to Adoption by the Electorate MEETING DATE: June 20, 2018 PREPARED BY: City Manager and City Attorney RECOMMENDED ACTION: Introduce an ordinance for an on-going general retail transactions and use tax of one-half cent (0.50) per dollar to protect Lodi’s essential city services, to be collected and administered by the California Department of Tax and Fee Administration, subject to majority vote of the electorate. BACKGROUND INFORMATION: The City of Lodi has worked hard in recent years to maintain critical services such as police, fire, emergency response, street maintenance and repaving, and parks and recreation facilities. Fiscal realities of the past decade have forced the City to eliminate personnel and funding from every department, which has impacted city services. At the same time, the demand for services continues to increase as the City’s population grows. The City of Lodi faces serious long-term threats to its ability to provide the level of services its citizens have the right to expect and to its ability to maintain public infrastructure at the standard its citizens have the right to expect. A quick review of our five-year budget forecast puts the problem in stark relief. Notwithstanding an expanding economy and expanding revenues, costs are expanding at a much faster rate. The table below briefly summarizes the results of the forecast. It shows the City running out of local reserves in Fiscal Year 2021/22 and on the brink of financial insolvency in FY 2023/24, despite continued cost containment and strong revenue assumptions. The good news is the City has time to plan and is taking measures to both enhance revenues and contain costs. However, cost containment can only go so far. Absent new revenues, dramatic service cuts will be necessary to balance the budget in the 2-5 year time frame that will make the City service insolvent. FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 YE Est. Proposed Projected Projected Projected Projected Projected Revenues 51,190,776 51,300,380 52,296,000 53,494,000 54,739,000 55,989,000 57,258,000 Expensese 48,367,270 51,132,010 53,810,762 56,220,323 58,564,005 60,838,023 62,917,738 Revenues less Expenses 2,823,506 168,370 (1,514,762) (2,726,323) (3,825,005) (4,849,023) (5,659,738) Ending Reserves * 17,431,975 19,303,122 19,182,591 17,189,268 14,140,263 9,870,000 4,468,000 * Includes both local and Pension Stabilization Reserves. Also includes investment earnings not shown in revenues. APPROVED: ____________________________ Stephen Schwabauer, City Manager Knowing this reality, staff and Council have been engaged in a long term effort to communicate with our citizens and get an understanding of their needs and concerns. The City conducted a scientific poll of voters in February 2018, has reached out to dozens of stakeholder groups and residents, and sent an informational mailer and survey to all registered voters in May 2018. All told, City staff has reached out to every voter in Lodi about a possible sales tax measure, and has heard direct feedback from nearly 2,000 residents, including community feedback through mail, online, and polling. Resident’s Priorities In both February’s scientific poll and May’s general survey, Lodi residents and voters prioritized the City’s needs into three priority tiers: Tier 1: • Reduce crime and provide gang violence intervention and prevention services. • Maintain and improve rapid response times for fire, police, and medical emergencies • Fix potholes and maintain city streets. Tier 2: • Repair and upgrade Lodi Lake Park and other recreation facilities. • Provide homelessness intervention programs. Tier 3: • Keep Lodi Public Library open and maintain hours. Among the more than 1,500 community survey responses the City received in May and June, many residents wrote additional comments that were focused on police response times, enforcement of speed limits, and the negative secondary effects of homelessness. Many of our citizens consider all of our services as a critical priority. The estimated revenue to be generated by the tax measure and the proposed spending plan is set forth in detail below. Current sales tax rates within San Joaquin County are as follows: Agency Sales Tax Rate City of Stockton 9.00% City of Lathrop 8.75% City of Manteca 8.25% City of Tracy 8.25% City of Ripon 7.75% City of Escalon 7.75% County of San Joaquin (unincorporated) 7.75% City of Lodi 7.75% Should the voters approve the sales tax increases in November, Lodi’s sales tax rate would increase from 7.75 cents per dollar to 8.25 cents per dollar. For example, the sales tax for every $100 of purchased taxable merchandise would increase from $7.75 to $8.25, a 50-cent increase and raise an estimated $5.4 million dollars annually. The City’s sales tax consultant HdL estimates that nearly 25% of this amount would be paid by people who shop in Lodi but do not live here insuring that visitors pay their fair share for the use of our roads, parks and emergency services. This provides a meaningful advantage of a sales tax over a property tax, which is entirely paid by Lodi property owners. Council has indicated that any tax measure must include establishment of citizen oversight committees to oversee expenditures of the additional sales tax revenue. As drafted the tax measure calls for the establishment of a citizen oversight committee to be charged with meeting annually to review the previous year’s expenditure of the increased tax revenues. In addition, staff has included a provision in the measure requiring that an independent auditor audit the collection, management, and expenditure of the increased tax revenue. The independent audit report would be in addition to the City’s Comprehensive Annual Financial Report (CAFR) that is reviewed annually and approved by the Council following public comment and discussion. The committee would review the independent audit report and then the committee would make its own report to the Council stating how the funds were spent. The report would be presented at a regularly scheduled meeting of the Council and subject to public comment and discussion. Pursuant to Government Code section 36937(d), ordinances related to taxes shall take effect immediately, and Government Code section 36937 allows ordinances related to taxes to be passed immediately upon introduction. Consequently, the ordinances will be effective immediately upon adoption by a 2/3 vote of all members of the City Council, subject to majority voter approval at the November 6, 2018 general election. Expenditure Plan: As a general revenue measure, the option before council does not carry a detailed expenditure plan. However, Lodi has received significant input from our citizens about what is most important to them to preserve. As such the Council, Staff and Oversight Committee are compelled to ensure that any funds raised by the measure are spent to meet those priorities. As we have heard from both the scientific poll, our discussions with community groups and leaders, and and from our more recent survey, those priorities are as follows: To make neighborhoods safer, maintain/ improve essential City of Lodi services including: reducing crime; maintaining neighborhood police patrols/ gang violence intervention/ prevention; fixing potholes/ city streets; maintaining neighborhood fire stations; enhancing rapid police/ fire response times by restoring firefighter and adding police positions; maintaining recreation facilities/ programs. The ordinance has been reviewed and approved by the California Department of Tax and Fee Administration and is attached to this council communication. FISCAL IMPACT: Annual revenue generated from the additional sales taxes is estimated to be $5,400,000. Revenue from the measure will be separately accounted for, and expenditures will be overseen by designated citizen oversight committees. ______________________________ ______________________________ Stephen Schwabauer, City Manager Janice D. Magdich, City Attorney Attachments: 1. General Retail Transactions and Use Tax Ordinance  Attachment 2 2018 City Services Revenue Measure Overview Presentation Presented by: Steve Schwabauer, City Manager June 20, 2018  Introduction • Community demand to MAINTAIN essential city services has reached a critical point in the City of Lodi. • Residents deserve the opportunity to consider a local revenue measure on the November 2018 ballot to address that need. • Tonight we will review the components of such a proposal. 2  Five Year Budget Forecast 3  On the Horizon 1. Continuing public information & engagement process 2. City Council Action on a recommended City services local revenue measure proposal (July 18) 3. Then an 88‐day campaign window beginning on Aug 10. * If City Council takes action to place a measure on the ballot, after taking such action, City employees cannot advocate for or against the measure on City time or using City resources. 4  Approach We are Council Election Day Here Action November 6 July 18  Feasibility Parallel Process: Plan-Input Election Prep CAMPAIGN Post Election Pursuing a revenue measure is a STRATEGIC endeavor. 5  Approach Track 1 City Staff Due Diligence City Departments, Facilities, Finance, Legal, Logistics, etc. Track 2 Council Engagement NEED, Process, Info/Data/Research, Consensus, etc. Track 3 Stakeholder & Opinion Leader Engagement “People Support What They Help Create.” 6  Approach GOAL: Align City Needs with Voter Support City of Lodi Facility and What Lodi OUR Service Voters Will GOAL SUPPORT NEEDS 7  Public Engagement We are LISTENING! May 2018 Mailer 16,897 mailers sent AND… in recent months: • Stakeholder Meetings • Citizen Poll • Opinion Leader Conversations 8  Public Engagement WE ARE LISTENING! Exchange in progress… Input Opportunities: • Online – City website 1 • Return postcard 2 4 So far, 1,500+ responses 5 received in one month. 3 The public can continue to weigh in at 6 www.Lodi.gov/survey 9  Public Comments • “I strongly support the proposed tax increase, providing the majority of the funds go towards the police and fire. Road maintenance after that.” – M.L. • “Vandalism & petty theft are getting way too common. I would like to see more police patrols.” – S.N. • “I love living in this town. Crime is going up a lot. There are homeless people everywhere. It’s starting to get out of hand.” – Anonymous • “Stick with the basics. A safe city with clean streets and parks.” – Ben 10  Public Comments • “Lodi Lake and the nature area should be a high priority. It’s one of the selling points of the community.” – P.H. • “Potholes on city streets are awful.” – Anonymous • “Lodi Public Library Foundation, Friends and the library staff have worked hard to provide a safe place for youth, encourage lifelong learning and offer community programs…. Don’t destroy a gem of Lodi.” – J.T. • “None of these issues are more important than the other.” – C.B. • “I will not vote for any taxes until I see a new pension fund system in place for new hires.” – M.H. 11  Ballot Package KEY Components: 1. Financials ‐ Sales Tax Amount: ½‐cent ‐ $5.4M Annually for Essential City Services 2. 75‐Word Ballot Question 3. Legal Considerations and the RESOLUTION 4. Community Alignment 12  Ballot Package City of Lodi SIGNIFICANT NEEDS Include: The • Police: Maintaining response times and neighborhood police patrols to reduce crime. Project List • Fire and Emergency Medical: These needs resonate most → Maintaining and improving rapid response times for fire and medical emergency situations. • Road Maintenance: Fixing potholes and maintaining city streets. • Homelessness: Providing homelessness intervention programs. • Parks and Recreation: Repairing and upgrading Lodi Lake Park and other recreation facilities. • Library: Keeping Lodi Public Library open and maintain hours. 13  Ballot Package Draft PROPOSED BALLOT QUESTION Draft To make neighborhoods safer, maintain/improve essential City of Lodi services including: reducing crime; maintaining neighborhood police patrols/gang violence intervention/ prevention; fixing potholes/city streets; maintaining neighborhood fire stations; enhancing rapid police/fire response times by restoring firefighter and adding police positions; maintaining recreation facilities/ programs; and unrestricted general fund purposes; shall the City of Lodi measure enacting an ongoing half cent local sales tax, providing $5,400,000 annually, with independent citizen oversight, and funds spent locally, be adopted? 14  Ballot Package ___ N NO. 2018-_ RESOLUTIO CALLING AN CITY OF LODI, PROVE AN Legal Framework: OF TH E COUNCIL DI TO AP OF THE CITY E CITY OF LO E-HALF A RESOLUTION K THE VOTERS OF TH NS AND USE TAX OF ON E AS ELECTION TO RAL RETAIL TRANSAC TIO RAL REVENU GE NE UN RE STR ICTED GENE AM EN D OR ONGO ING R FO R VOTERS PER DOLLA UNTIL THE BY AN (0.50) CENT MA IN IN EFFECT RE PO RTED ON TO RE REVIEWED AN D ESTING PURPOSES, , AND REQU AND TO BE ERSIGHT COMMITTEE OF SAN JOAQ UIN Resolution REPEAL IT, CITIZENS OV THE COUNTY HED GENERAL ND EN T RS FO R INDEPE RVISO LIS ARD OF SUPE ON WITH THE ESTAB 2018, AND DIRECT THAT THE BO E ELE CTI BER 6, ON TE TH TUESDAY, NO VEM E ELECTION CONSOLIDA CONDUCT TH BE HELD ON VOTERS TO ELECTION TO GISTRAR OF === ====== UN TY RE === === THE CO ========= THE CITY’S BEHALF ============ ============ s and === === === ============ d vita l mu nicipal service === to fun is necessary S, add ition al revenue WHEREA by restoring uding: ponse times ‐ Conditions facilities, incl 1. Maintainin firefighter and 2. Maintainin g and enhanc adding police g neighborho g libr ary hours; ing rapid poli pos od police pat itio ns; ce and fire res rols and fire sta tions; 3. Ma inta inin ; local streets potholes and ms; 4. Repairing lities and progra g recreation faci 5. Maintainin ess; and ‐ Provisions hom ele ssn 6. Addressing es. ential servic vide 7. Other ess ient to fully pro es are insuffic jected revenu expect; and rent and pro idents need and ER EA S, the City’s cur leve l our res WH facilities at the n by pal services and local needs, cannot be take these munici l funding for uirements, provides loca ountability req EA S, this tax measure ., and inc ludes strict acc in public, full disclosure WHER D.C must meet Washington, ; annual ‐ Ballot Question California or com mittee that tions in the City the State of ht by a citizen’s er public loca ndent oversig site and at oth and including indepe g available on the City’s web raised be spent locally; spe ndin all fun ds of public ment that rapid police and g fire and a require . Enhancing financial audits; our com munity and maintainin re invests in ice positions ngthen this tax measu fighter and adding pol safety that stre and WHEREAS, ng fire stm ent in pub lic s es by restori s are an inve live, do busines response tim and fire station irable place to police patrols nity a more des neighborhood ke our com mu values and ma local property by tou rists and raise a fam ily; and ars are paid sales tax doll sure that tou rists and of the City’s help to make lusively , app rox imately 25% asu re will the cos t exc WHEREAS tax me ce g area. This nity and not pla the surroundin in our com mu visitors from share to mainta ing their fair visitors are pay and nt locally to ena lic ble ts; re will be spe on City residen by this measu and facilities, including pub a de available es the funding ma general municipal servic a special fun d or for WHEREAS, rov e its dire cted into tore and imp revenue to be the City to res in this measure allows tax g safety. Nothin and e; special purpos 15  Key Dates NEXT: • Action Item: July 18 Council Action Calling for an Election and Adopting the Ordinance • Filing Deadline: August 10 Paperwork MUST be Filed with San Joaquin County Registrar of Voters • Campaign Window: August 10 – November 6 • Election Day: November 6 16  Council Q&A / Discussion REMINDER: Once a measure is FILED… City staff and City Council members can inform/provide factual information to the public on the ballot measure. City staff cannot spend resources to advocate (up or down) on the ballot measure. Paid employees of the City of Lodi CANNOT advocate for/against the measure on “City time.” They may volunteer on their own time. Council Q&A / Discussion 17 2018 City Services Revenue Measure Overview Presentation Presented by: Steve Schwabauer, City Manager June 20, 2018  Attachment 3 Ballot question To make neighborhoods safer, maintain/improve essential City of Lodi services including: reducing crime; maintaining neighborhood police patrols/gang violence intervention/prevention; fixing potholes/city streets; maintaining neighborhood fire stations; enhancing rapid police/fire response times by restoring firefighter and adding police positions; maintaining recreation facilities/programs; and other general fund purposes; shall the City of Lodi measure enacting an ongoing half cent local sales tax, providing $5,400,000 annually, with independent citizen oversight, and funds spent locally, be adopted?  Attachment 4 Chapter 3.30 ‐ 2018 GENERAL RETAIL TRANSACTIONS AND USE TAX 3.30.010 ‐ Title. This ordinance shall be known as the City of Lodi 2018 General Retail Transactions and Use Tax Ordinance. The City of Lodi hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City. (Ord. No. 1953, § 1, 7-18-2018) 3.30.020 ‐ 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.030 ‐ 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 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. 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 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. E. To adopt a retail transactions and use tax for unrestricted general revenue purposes, to remain in effect until the voters amend or repeal it. (Ord. No. 1953, § 1, 7-18-2018) 3.40.040 ‐ 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.050 ‐ 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 one-half percent (0.50%) 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.060 ‐ 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.070 ‐ 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 cent (0.50%) 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.080 ‐ 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.090. ‐ 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 therefore. 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. 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.100. ‐ 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.110. ‐ 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 levied 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 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 levied 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.120. ‐ Amendments to state law. 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.130 ‐ 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. (Ord. No. 1953, § 1, 7-18-2018) 3.30.140 ‐ Annual Accountability Report. The City Council shall cause preparation of an annual accountability report for the benefit of the citizens of the City and in order to assure accountability in the expenditure of tax revenues received pursuant to this ordinance. The annual accountability performance report shall be posted on the City's website and shall include the following information: A. The amount of revenue collected pursuant to the transactions and use tax imposed by this ordinance; B. The amount and general purposes of the expenditures made possible by this ordinance including, where feasible, a categorization of the nature and purpose of the expenditures. These categories may include, among other things: 1. A listing of general fund service expenditures (such as police, fire, parks and recreation, library, youth and senior programs, and other general fund services). 2. A listing of capital facility expenditures (such as streets, police and fire facilities, emergency communication systems, and other general fund capital expenditures). 3. Such other categories of general fund services or capital expenditures as the City Council may from time to time deem necessary and desirable. (Ord. No. 1953, § 1, 7-18-2018) 3.30.150 ‐ Establishment of citizens' oversight committee. A. Committee Established. A Citizens' Oversight Committee is hereby established in the City of Lodi which shall have the duty and responsibility to review the annual accountability performance report and report its findings to the City Council and the citizens of the City. B. Selection of Members. Members of the Citizens' Oversight Committee shall be appointed by the City Council. The Committee shall consist of five members. Members of the Citizens' Oversight Committee shall not be current City of Lodi employees, officials, contractors, or vendors of the City. Past employees, officials, contractors, and vendors shall be eligible to serve on the Committee, provided that there are no conflicts of interest as determined by the City Attorney. To the extent possible at least two members of the Committee shall be certified public accountants or equivalent. Of the members of the Committee first appointed, three members shall be appointed for terms of two years and two members shall be appointed for terms of three years. Their successors shall be appointed for terms of three years. No member may serve more than two consecutive three-year terms. The City Council shall solicit members of the Citizens' Oversight Committee, through an open application process that is promoted through the City's recruiting process for boards and commissions. Any resident of the City is eligible to apply for Committee membership, subject to the restrictions specified above. All applications will be reviewed by the City Council, which will have the authority to make final decisions regarding Committee composition, subject to the guidelines in this ordinance. C. Purposes and Jurisdiction. The Citizens' Oversight Committee shall meet a minimum of three times per year, including conducting an annual review of expenditures of revenue collected pursuant to this ordinance to determine whether such funds are expended for the purposes set forth in this ordinance. Committee members may review the annual financial audit performed by an independent auditor during the review process. The Citizens' Oversight Committee shall issue an annual report on their findings to the City Council and to the citizens of Lodi. The Citizens' Oversight Committee annual report is subject to review and approval of the City Council. The Committee shall confine its review specifically to revenues generated pursuant to this ordinance and the expenditure of those revenues. The Committee shall serve in an advisory-only role to the City Council. Committee members shall not play a formal or informal role in the expenditure of the funds raised by this ordinance. The Committee is not charged with decision-making on spending priorities; schedules; project details; funding source decisions; financing plans; or tax rate assumptions. The Committee shall have no jurisdiction other than that delegated to it by the People pursuant to this ordinance. The Lodi City Manager or the City Manager's designee shall provide reasonable administrative or technical assistance required by the Committee to fulfill its responsibilities or publicize its findings. D. Meetings. The Citizens' Oversight Committee shall meet a minimum of three times per year with specific meeting dates to be determined by Committee members. Citizens' Oversight Committee meetings are subject to the Brown Act. Meetings must be noticed and open to the public. Committee minutes and reports are a matter of public record, and must be posted on the City's web site. Additional meetings may be scheduled by the Committee as necessary. All Committee members shall attend a training and orientation session prior to the first regular Committee meeting. Committee members are expected to attend all regular meetings. Failure to attend two consecutive meetings may result in removal from the Committee at the discretion of the City Council. E. Committee Operations. The Citizens' Oversight Committee will select members to serve as Chair and Vice Chair of the Committee. A City staff person will be appointed by the City Manager, or the City Manager's designee, to serve as Secretary. The Secretary will be responsible for preparing, posting, and distributing agendas and taking minutes at each meeting. Approved minutes shall be made available to the public. Committee decisions, positions, findings, and procedures shall require a simple majority vote of those Committee members in attendance. The quorum requirement for any meeting shall be a minimum of three (3) members. F. Vacancies. Committee members may be removed from the Committee only by the City Council for repeated absences at committee meetings, malfeasance, failure to meet the qualifications set forth in  this Section, or for inability or unwillingness to fulfill the duties of a Committee member. In the event of removal, resignation, or death, the City Council shall appoint a person to fill the vacant seat. G. Miscellaneous. Subject to the restrictions specifically addressed in this Section, the Committee may draft and adopt its own standard procedures and by-laws by majority vote. All Citizens' Oversight Committee procedures and by-laws remain subject to review and approval of the City Council. (Ord. No. 1953, § 1, 7-18-2018) 3.30.160 ‐ Annual audit and review. The revenue from the tax imposed by this ordinance, as well as the expenditure thereof, shall be subject to the annual audit performed by the City's independent auditor of the City's books, records, accounts, and fiscal procedures and which is reported in the City's Comprehensive Annual Financial Report. The audit results may be combined with the audit of other City funds, so long as the proceeds from this ordinance are reported separately. The City Council shall discuss the results of such audit at a meeting of the City Council that is open to the public. The report of such audit shall be posted on the City's website. (Ord. No. 1953, § 1, 7-18-2018) FY 2018/19 Measure L Committee First Meeting Presented by: Andrew Keys, Deputy City Manager July 15, 2019  Agenda • Measure L Review • LMC Section 3.30.030 – Purpose • Committee’s Role • LMC Section 3.30.150 – Establishment of Citizen’s Oversight Committee • Annual Accountability Report • LMC Section 3.30.140 – Annual Accountability report • Brown Act Basics • Measure L to Date • FY 2018/19 Committee Next steps 2  Measure L Review • General Purpose Transactions and Use Tax • Approved by voters November 2018 • Collection and CA FTDBA advances began April 1, 2019 • Contracts with HdL for budgeting, monitoring, reporting and auditing • Similar to General purpose sales tax • As a use tax, items are taxed where they are used not necessarily where sold • e.g., Cars are taxed based on address of registration • No restrictions on use of proceeds • Oversight Committee with a reporting obligation 3  Measure L Review • Ballot Question To make neighborhoods safer, maintain/improve essential City of Lodi services including: reducing crime; maintaining neighborhood police patrols/gang violence intervention/prevention; fixing potholes/city streets; maintaining neighborhood fire stations; enhancing rapid police/fire response times by restoring firefighter and adding police positions; maintaining recreation facilities/programs; and other general fund purposes; shall the City of Lodi measure enacting an ongoing half cent local sales tax, providing $5,400,000 annually, with independent citizen oversight, and funds spent locally, be adopted? 4  Measure L Review • LMC Section 3.30.030 outlines Measure L’s purpose • No mention of specific uses in the adopted ordinance • The purpose is essentially to establish a general tax to be administered similarly to the statewide sales tax already in place 5  LMC Section 3.30.030 3.30.030 ‐ 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 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. 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 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. 6  LMC Section 3.30.030 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 adopt a retail transactions and use tax for unrestricted general revenue purposes, to remain in effect until the voters amend or repeal it. 7  Committee’s Role • LMC Section 3.30.150 Establishment of citizen’s oversight committee • Section A. outlines duty to review the annual accountability report meeting the requirements of section 3.30.140 and report findings to the City Council and citizens of Lodi • Section C. requires the committee to meet at least 3 times each year to review expenditure of Measure L revenue and report findings to Council • Report is subject to review and approval of the Council • Review confined to Measure L only • The Committee is supported with staff time by the City Manager or designee to provide information, technical assistance and to publicize findings • Staff recommendation is for the City’s CFO to staff this committee (currently Deputy City Manager/ISD) • Subject to Brown Act 8  LMC Section 3.30.150 3.30.150 ‐ Establishment of citizens' oversight committee. A. Committee Established. A Citizens' Oversight Committee is hereby established in the City of Lodi which shall have the duty and responsibility to review the annual accountability performance report and report its findings to the City Council and the citizens of the City. B. Selection of Members. Members of the Citizens' Oversight Committee shall be appointed by the City Council. The Committee shall consist of five members. Members of the Citizens' Oversight Committee shall not be current City of Lodi employees, officials, contractors, or vendors of the City. Past employees, officials, contractors, and vendors shall be eligible to serve on the Committee, provided that there are no conflicts of interest as determined by the City Attorney. To the extent possible at least two members of the Committee shall be certified public accountants or equivalent. Of the members of the Committee first appointed, three members shall be appointed for terms of two years and two members shall be appointed for terms of three years. Their successors shall be appointed for terms of three years. No member may serve more than two consecutive three‐ year terms. The City Council shall solicit members of the Citizens' Oversight Committee, through an open application process that is promoted through the City's recruiting process for boards and commissions. Any resident of the City is eligible to apply for Committee membership, subject to the restrictions specified above. All applications will be reviewed by the City Council, which will have the authority to make final decisions regarding Committee composition, subject to the guidelines 9 in this ordinance.  LMC Section 3.30.150 C. Purposes and Jurisdiction. The Citizens' Oversight Committee shall meet a minimum of three times per year, including conducting an annual review of expenditures of revenue collected pursuant to this ordinance to determine whether such funds are expended for the purposes set forth in this ordinance. Committee members may review the annual financial audit performed by an independent auditor during the review process. The Citizens' Oversight Committee shall issue an annual report on their findings to the City Council and to the citizens of Lodi. The Citizens' Oversight Committee annual report is subject to review and approval of the City Council. The Committee shall confine its review specifically to revenues generated pursuant to this ordinance and the expenditure of those revenues. The Committee shall serve in an advisory‐only role to the City Council. Committee members shall not play a formal or informal role in the expenditure of the funds raised by this ordinance. The Committee is not charged with decision‐making on spending priorities; schedules; project details; funding source decisions; financing plans; or tax rate assumptions. The Committee shall have no jurisdiction other than that delegated to it by the People pursuant to this ordinance. The Lodi City Manager or the City Manager's designee shall provide reasonable administrative or technical assistance required by the Committee to fulfill its responsibilities or publicize its findings. D. Meetings. The Citizens' Oversight Committee shall meet a minimum of three times per year with specific meeting dates to be determined by Committee members. Citizens' Oversight Committee meetings are subject to the Brown Act. Meetings must be noticed and open to the public. Committee minutes and reports are a matter of public record, and must be posted on the City's web site. Additional meetings may be scheduled by the Committee as necessary. All Committee members shall attend a training and orientation session prior to the first regular Committee meeting. Committee members are expected to attend all regular meetings. Failure to attend two consecutive meetings may result in removal from the Committee at the discretion of the City Council. 10  LMC Section 3.30.150 E. Committee Operations. The Citizens' Oversight Committee will select members to serve as Chair and Vice Chair of the Committee. A City staff person will be appointed by the City Manager, or the City Manager's designee, to serve as Secretary. The Secretary will be responsible for preparing, posting, and distributing agendas and taking minutes at each meeting. Approved minutes shall be made available to the public. Committee decisions, positions, findings, and procedures shall require a simple majority vote of those Committee members in attendance. The quorum requirement for any meeting shall be a minimum of three (3) members. F. Vacancies. Committee members may be removed from the Committee only by the City Council for repeated absences at committee meetings, malfeasance, failure to meet the qualifications set forth in this Section, or for inability or unwillingness to fulfill the duties of a Committee member. In the event of removal, resignation, or death, the City Council shall appoint a person to fill the vacant seat. G. Miscellaneous. Subject to the restrictions specifically addressed in this Section, the Committee may draft and adopt its own standard procedures and by‐laws by majority vote. All Citizens' Oversight Committee procedures and by‐laws remain subject to review and approval of the City Council. 11  Annual Accountability Report 3.30.140 ‐ Annual Accountability Report. The City Council shall cause preparation of an annual accountability report for the benefit of the citizens of the City and in order to assure accountability in the expenditure of tax revenues received pursuant to this ordinance. The annual accountability performance report shall be posted on the City's website and shall include the following information: A. The amount of revenue collected pursuant to the transactions and use tax imposed by this ordinance; B. The amount and general purposes of the expenditures made possible by this ordinance including, where feasible, a categorization of the nature and purpose of the expenditures. These categories may include, among other things: 1. A listing of general fund service expenditures (such as police, fire, parks andrecreation, library, youth and senior programs, and other general fund services). 2. A listing of capital facility expenditures (such as streets, police and fire facilities, emergency communication systems, and other general fund capital expenditures). 3. Such other categories of general fund services or capital expenditures as the City Council may from time to time deem necessary and desirable. 12  Brown Act Basics • All meetings must be public, agendized and noticed 72 hours in advance • Public comment must be taken at the meeting • No member of the public can be prevented access to the meeting • Quorum (majority) of the committee cannot meet to discuss committee business outside a publicly noticed meeting • Includes a meeting via electronic or teleconference (email, text or other private communications included) • Serial meetings (phone tree) 13  Measure L to Date • Fiscal Year 2018/19 Budget and Year End Estimates • In February 2019, Council approved the following: • $980,720 in expenditures consisting of: • 6 new Police Officers • Three Part Time Community Services Officers • Three new Firefighters • One restored Battalion Chief (was eliminated in FY 2018/19 budget) • Overtime to fully staff Engine 2031 • Four vehicle purchases, including a motorcycle to serve the new police department positions • Equipment related to all the new positions 14 FY 2019‐20 Measure L Expenses $5,200,000 Measure L Expenditures by Function FY 2019‐20 Measure L Expenses $5,200,000 Measure L Expenditures by Type  Measure L to Date • Fiscal Year 2019/20 Budget • In June 2019, Council approved the FY 2019/20 budget • Revenues: $5,200,000 • Expenditures: $4,922,670 • Reserves: $277,330 • Measure L Position Funding: Measure L Funded Approved Requested Moved Moved to Total for Positions Mid Year FY 2019/20 from GF GF FY 2019/20 Cost: Police Officers 6 0 4 0 10 $1,296,360 Firefighters 3 0 5 0 8 $840,000 Fire Battalion Chief 1 0 0 1 0 $0 Librarian 0 1 0 0 1 $98,080 Total 17 10 1 9 1 19 $2,234,440  Measure L to Date • Fiscal Year 2019/20 Budget • In June 2019, Council approved the FY 2019/20 budget • Supplies, Materials and Capital • Police Equipment $523,430 • Two Police Patrol Vehicles $120,000 • Parks Tree Maintenance and Playground Replacements $843,700 18  FY 2018/19 Committee Next Steps • Confirm next two meeting dates • January 13, 2020 • March 16, 2020 • At January 13, 2020 meeting • Review Fiscal Year 2018/19 audited information on Measure L expenditures • Review and comment on draft FY 2018/19 Measure L Report • January/February 2020 • Staff Updates report based on Committee feedback • March 16, 2020 • Committee reviews and approves final Measure L report for FY 2018/19 19