CC 2024-05-28_12a Local Transactions_Use Tax 2024 Ballot_PP
Consider Placing a Local Transaction and Use Tax (“Sales Tax”) Measure on the November 5, 2024 Ballot
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Background
The 4 major City goals that are incorporated in the Fiscal Year (FY) 2023-25 Biennial Operating Budget are:
Funding
Fire Services
Infrastructure
General Plan Update
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Community Priorities Rankings
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Maintain fire protection services
Maintain 911 response and emergency police services
Repair, pave and maintain 73 miles of roads; fix potholes and damaged sidewalks
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Council Direction
05/28/2024
Reviewed financing options related to top three community priorities on May 14th
Directed staff to bring back an item for consideration to place a one-cent sales tax measure on the November 5th ballot
Include a 10-year sunset
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Sales Tax Revenue
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Approximately $6 Million annually would be allocated towards City services:
Fixing potholes;
Maintaining City streets, sidewalks, parks, aging infrastructure, and community facilities;
Providing local fire protection, police, and 9-1-1 emergency services;
Cleaning up litter/graffiti; and
Addressing homelessness.
The revenue from a new oneItem 12.a. City Council Consider Placing a Local Transactions and Use Tax (“Sales Tax”) Measure on the November 5, 2024 Ballot May 28, 2024 Page 4 cent local
sales tax measure would be deposited into the General Fund and may be used for any lawful purpose, as designated by the City Council, and could be allocated towards City services, such
as: fixing potholes, maintaining City streets, sidewalks, parks, aging infrastructure, and community facilities; providing local fire protection, police, and 9-1-1 emergency services;
cleaning up litter/graffiti, and addressing homelessness. If approved, the proposed sales tax measure would generate approximately $6 million annually and is intended to augment the
existing Measure O 2006 Sales Tax fund created in 2006.
Funding received from a new sales tax measure could allow the City to expand its Capital Improvement Projects (CIP) and public facility maintenance funds including the Fire Service,
the Police Department and the Streets Infrastructure Maintenance, as well as provide funds for other City programs and facilities.
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Structure of Sales Tax Measure
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One-Cent (1%) general sales tax
10-year sunset clause
Requires 2/3 vote (at least 4 members) of the City Council to place on the ballot
Ratified by a majority vote of the qualified voters of the City
In order to place a tax measure on the November 5, 2024, ballot, a 2/3 vote of the City Council (at least 4 members) must approve the proposed Resolutions and Ordinance and has to be
approved by a majority vote of the qualified voters of the City.
The proposed measure includes provisions for citizen review of reported revenue and expenditures to establish accountability and transparency. The proposed measure also includes a 10-year
sunset clause in the ballot language. This clause requires the City Council to come back to the voters in order to renew the measure in the future.
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Proposed Ballot Question
“To provide funding for Arroyo Grande city services, such as: fixing potholes, maintaining city streets, sidewalks, parks, aging infrastructure, and community facilities; providing local
fire protection, police, and 9-1-1 emergency services; cleaning up litter/graffiti, and addressing homelessness; shall City of Arroyo Grande’s ordinance establishing a one-cent sales
tax for 10 years be adopted, providing $6,000,000 annually for general government use that can’t be taken by the State, with citizen oversight, independent audits, and all money locally
controlled?”
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Limited to 75 words.
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Delegation of Argument in Favor
Develop the Measure’s Argument in Favor through a City Council ad-hoc committee and members of the community;
Committee can include two members of the City Council;
City Council will have one of five signatures on the Argument;
Argument is submitted to the City Clerk by July 19th.
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Recommendation
1) Adopt the proposed Resolution ordering the submission to the qualified electors of the City a measure relating to the establishment of a local transactions and use tax (hereinafter
referred to as a "sales tax") at the General Municipal Election to be held on Tuesday, November 5, 2024, as called by Resolution;
2) Adopt the proposed Ordinance adding Chapter 3.23 to Title 3 of the Arroyo Grande Municipal Code regarding a transactions and use tax (to ultimately be considered for approval by the
voters);
3) Adopt the proposed Resolution setting priorities for filing a written argument regarding a City measure and directing the City Attorney to prepare an impartial analysis of the measure;
4) Adopt the proposed Resolution requesting consolidation with the County of San Luis Obispo General Municipal Election to be held on Tuesday, November 5, 2024;
5) Appoint two members of the Council to serve on an ad-hoc committee for creation of the argument to be submitted in favor of the measure; and
6) Determine that adopting the Resolutions and Ordinance 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).
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