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HomeMy WebLinkAboutR 2026-045 65501.00001\44949872.1 RESOLUTION NO. 2026-045 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA, CALLING FOR THE PLACEMENT OF A GENERAL TAX MEASURE ON THE NOVEMBER 3, 2026 GENERAL MUNICIPAL ELECTION BALLOT FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF A PROPOSED ORDINANCE ADDING CHAPTER 3.26 TO TITLE 3 (REVENUE AND FINANCE) OF THE ARROYO GRANDE MUNICIPAL CODE ESTABLISHING A TAX ON CANNABIS BUSINESSES OPERATING WITHIN THE CITY OF ARROYO GRANDE WHEREAS, the City of Arroyo Grande currently prohibits all commercial cannabis sales within City limits, meaning residents are driving across city lines to purchase cannabis and local tax dollars are leaving the community; and WHEREAS, the City maintains a balanced financial foundation, but the demands for services are potentially outpacing what the City has the ability to spend under its Biennial Budget; and WHEREAS, the 2025 Arroyo Grande Community Priorities Survey identified maintaining and repairing streets and sidewalks, promoting economic vitality, and enhancing public safety as the top priorities for the City over the next two to three years, and this measure provides a dedicated revenue stream to meet those priorities; and WHEREAS, neighboring municipalities in San Luis Obispo County, including Grover Beach, Morro Bay, and San Luis Obispo, have already legalized commercial cannabis sales and successfully collect tax revenues from those sales to support their own essential services; and WHEREAS, as part of the Arroyo Grande City Council's Fiscal Year 2025 -27 Goals Workplan, the Council specifically directed staff to pursue new revenue sources and evaluate cannabis operations as a means of economic development; and WHEREAS, the money generated from these sales would remain in Arroyo Grande to invest in local projects and support city services, including public safety, road maintenance, public works projects, and continuing recreational programs; and WHEREAS, the proposed tax would only be levied if the voters pass the measure and the City subsequently permits and regulates local commercial retail cannabis uses; and WHEREAS, the City is committed to the highest standards of fiscal accountability and shall ensure that all revenues generated by this tax are subject to public disclosure and RESOLUTION NO. 2026-045 PAGE 2 independent audit to guarantee they are used for the benefit of Arroyo Grande residents; and WHEREAS, pursuant to California Government Code sections 37100.5 and 37101, the City of Arroyo Grande has the authority to establish a local business tax upon cannabis businesses that engage in business in the City; and WHEREAS, pursuant to Section 9222 of the California Elections Code, the City Council has authority to place propositions on the ballot to be considered at a Municipal Election; and WHEREAS, the City Council desires to submit to the voters an ordinance establishing a maximum 10% local general tax on the gross receipts received by any cannabis business, not including industrial hemp businesses; and WHEREAS, exploring a local cannabis business tax at a rate of 10% could create a steady stream of new revenue, generating an estimated $500,000 annually for the City's general fund; and WHEREAS, the proposed cannabis business tax is a general tax the proceeds of which would be deposited into the City's general fund and which could pay for important City services such as public safety, road maintenance, infrastructure repair, recreational programs, and general municipal services to the public; and WHEREAS, on November 6, 1996, the voters of the State of California approved Proposition 218 (California Constitution, Article XIIIC), an amendment to the State Constitution which requires that all general taxes which are imposed, extended or increased must be submitted to the electorate and approved by a majority vote of the qualified electors voting in the election; and WHEREAS, pursuant to Proposition 218 (California Constitution, Article XIIIC, Section 2(b)) any measure proposing to impose a new general tax, or increase or extend an existing general tax must be consolidated with a “regularly scheduled general election” for members of the City Council, unless the City Council makes certain fiscal emergency findings by unanimous vote to place the measure on a special election at another date; and WHEREAS, the next regularly scheduled general election at which City Council members are to be elected is November 3, 2026; and WHEREAS, pursuant to Government Code section 53724 (“Proposition 62”), a two-thirds (2/3) vote of all members of the City Council is required to place the Measure, as a general tax, on the November 3, 2026 ballot; and WHEREAS, the specific terms relating to the cannabis business tax are provided for in the ordinance to be considered by the qualified voters, attached hereto as Exhibit "A" (the RESOLUTION NO. 2026-045 PAGE 3 "Ordinance" or "Measure") and by this reference made an operative part hereof, and in accordance with all applicable laws. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. Recitals. The City Council hereby finds and determines that the foregoing recitals are true and correct, are incorporated herein and by this reference made an operative part hereof. SECTION 2. Submission of Ballot Measure. The City Council, pursuant to its right and authority as contained in California Propositions 62 and 218 and Elections Code section 9222, by a two-thirds vote of all members, hereby orders the Ordinance attached hereto as Exhibit "A" to be submitted to the qualified voters of the City at the General Municipal Election to be held on Tuesday, November 3, 2026. The proposed Ordinance shall be in the form attached hereto as Exhibit "A" to this Resolution and is incorpora ted by this reference as if fully set forth herein. SECTION 3. Ballot Question. The City Council, pursuant to its right and authority, does hereby order that the Measure shall be presented and printed upon the ballot submitted to the qualified voters in the manner and form set forth in this Section 3. On the ballot to be submitted to the qualified voters at the General Municipal Election to be held on Tuesday, November 3, 2026, in addition to any other matters required by law, there shall be printed substantially the following: “Shall the measure to maintain Arroyo Grande City services, including public safety, road maintenance, infrastructure repair, recreational programs, and other general City services by enacting a tax of up to 10% of gross receipts on cannabis businesses operating in the city if such businesses are permitted, estimated to generate approximately $500,000 annually, with spending oversight and until ended by voters, be adopted?” Yes ☐ No ☐ SECTION 4. Conduct of Election. The City Clerk is authorized, instructed, and directed to procure and furnish, or cause to be procured and furnished, any and all official ballots, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the Election. In all particulars not recited in this Resolution, the Election shall be held and conducted as provided by law for holding municipal elections. RESOLUTION NO. 2026-045 PAGE 4 SECTION 5. City Attorney’s Impartial Analysis. Pursuant to Elections Code section 9280, the City Council hereby directs the City Clerk to transmit a copy of the Measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the Measure, not to exceed 500 words in length, showing the effect of the Measure on the existing law and the operation of the Measure, and transmit such impartial analysis to the City Clerk not later than the deadline for submittal of primary arguments for or against the Measure. The impartial analysis shall include a statement indicating whether the Measure was placed on the ballot by a petition signed by the requisite number of voters or by the City Council. In the event the entire text of the Measure is not printed on the ballot , nor in the voter information guide, there shall be printed immediately below the impartial analysis, in no less than 10-font bold type, the following: “The above statement is an impartial analysis of Ordinance or Measure _____. If you desire a copy of the ordinance or measure, please call the Office of the City Clerk at (805) 473-5418 and a copy will be mailed at no cost to you.” SECTION 6. Notice of Election. Notice of the Election is hereby given and the City Clerk is authorized, instructed and directed to give further or additional notice of the Election, in time, form and manner as required by law. SECTION 7. Placement on the Ballot. The full text of the Ordinance/Measure shall not be printed in the voter information guide, and a statement shall be printed in the ballot pursuant to Section 9223 of the Elections Code advising voters that they may obtain a copy of this Measure at no cost, upon request made to the City Clerk. SECTION 8. Delivery of Resolution to County. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions. The City Council directs the City Clerk to deliver copies of this Resolution, including the Ordinance attached hereto as Exhibit "A", to the Clerk of the Board of Supervisors of San Luis Obispo County and to the Registrar of Voters of San Luis Obispo County. SECTION 9. Public Examination. Pursuant to California Elections Code section 9295, this Measure will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the voter information guide. The Clerk shall post notice in the Cle rk's office of the specific dates that the examination period will run. SECTION 10. CEQA. The City Council hereby finds and determines that the ballot measure relates to organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment, and therefore is not a project within the meaning of the California Environmental Quality Act ("CEQA") and the State CEQA Guidelines, section 15378(b)(5). SECTION 11. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Resolution which can be given effect without RESOLUTION NO. 2026-045 PAGE 5 the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. SECTION 12. Effective Date of Resolution. This Resolution shall take effect immediately upon its adoption. I HEREBY CERTIFY that the foregoing ordinance was adopted by a two-thirds vote of all members of the City Council of the City of Arroyo Grande as required by Revenue and Taxation Code Section 7285.9 and Government Code Section 53724 and submitted to the voters at the meeting of the City Council held on the 9th day of June, 2026, by the following roll call vote: AYES: Mayor Ray Russom, and Council Members Secrest, Loe, Guthrie, Maravi glia NOES: None ABSENT: None _________________________________ CAREN RAY RUSSOM, MAYOR ATTEST: _________________________________ JESSICA MATSON, CITY CLERK Ordinance No. ____ was submitted to the People of the City of Arroyo Grande at the November 3, 2026 General Election. It is hereby certified that this ordinance was passed and approved by following vote of the People of the City of Arroyo Grande: YES: NO: This ordinance was thereby adopted by the voters at the November 3, 2026 General Election and shall take effect as provided by law.