Sales Tax Oversite Board

SALES TAX OVERSIGHT BOARD Sales Tax Oversight Board Minutes MONDAY, NOVEMBER 28, 2022 – 5:30 PM Mr. Newton called the meeting to order at 5:33pm. He provided a brief explanation of what will be discussed and offered that this board is subject to the Brown Act. Roll Call of Councilmembers Present: Tony Ardito, Curtis Bortle, Tom Downing, Rita Heath, Jan Newbold 1. APPROVAL OF AGENDA: Moved by Downing; seconded by Ardito to approve. Motion Carried: 5 - 0 Voting For: Ardito, Bortle, Downing, Heath, Newbold Voting Against: None 2. BUSINESS FROM THE FLOOR: Mr. Newton stated that, as this Board is subject to the Brown Act, a public comment area is required. No public comment received. 3. NEW BUSINESS: A Discussion regarding Sales Tax Oversight Board's responsibilities and expectations Mr. Newton stated that the goal of staff is to have the meeting move forward in two ways. One would be the establishment of the members, to positions, the meeting schedule, etc.. The other goal is to start the review of the budget. Mr. Newton reviewed Resolution No. 22-5970 and mentioned the important notes including how the tax is a general tax, not a special tax, and can be used for any city business. However, the advisory committee was requested to assist in keeping the intent of the tax. The intent includes items such as public safety, streets, and economic development. Mr. Newton stated that items would be brought to the committee to review and then they would provide a report/recommendation to council. Ms. Heath asked if there was a set percentage to each area of intent to which Mr. Newton responded no, being that it is a general tax, it can be spent anywhere; however, it can be reported to council and recommendations can be made for consideration. Mr. Newton stated the money from Measure P funding should be set up to be tracked and shown to the Committee to show transparacy. Mr. Bortle stated that it appears that the advisory board is a watch dog committee for the public. He added that they would be shown the spending that has occurred to review and, if the spending is not done in the way the Board thinks the city should, they would report and make a recommendation to the Council. Mr. Ardito commented that it appeared that this would be reactive instead of proactive and inquired as to why they, as the Board, could not state how they would recommend the money be spent.

Mr. Downing responded that it was his believe that the role of the Board is to verify that enough information is being shared with the public to be transparent and not to state what the funds need to be spent on. Mr. Bortle agreed and added that the Board is in place to show that there is another level of oversite on the spending but, it is the council's place to decide where funds are spent. Mr. Newton responded that this is new right now and the city wants to ensure it is being set up correctly and that something is in place that will remain once staff and board members change. He added that staff envisions two pots of money. He wants to be able to state which pot is which meaning, if there is a surplus, is it in the Measure P pot or the "other" General Fund pot. Chandra Jabbs, Finance Manager, provided a brief overview of what is typically budgeted to different departments specifically mentioning the Fire and Police Departments. Mr. Newton also reveiwed the change of setting up seperate funds for both Police and Fire and talked about the vacancy rate. He added that, when there is a surplus, it stays in their fund and encourages savings. Mr. Newton reviewed the cash report, the restricted funds vs. nonrestricted funds and provided a few explanations. Mr. Bortle inquired about the SB1 funding and details regarding a match of funding requirement to which Mr. Newton responded. Mr. Newton paused to ask if anyone had any questions and stated that all of the attachments can be sent to the board and if there were additional questions, they can reach out to him. No comments. Mr. Newton read the language in Measure Q and asked if there any additional questions regarding the measure. Mayor McCourt addressed the Board from the audience and stated that people will ask them questions and they will be able to respond. He also added that the meetings will eventually be livestreamed which will help with transparancy. Mr. Newton requested to know when to meet again, and who would be the Chair and Vice Chair if that is the terminology the Board is going with. The Board discussed the location and concerns with the meetings being welcoming so the public will attend. It was the consensus of the Board to meet in the Council Chambers but, to create a round table area and not use the dais. Mr. Bortle stated that there will still need to be a Chair and Vice Chair since it's a Brown Act board. Ms. Heath inquired as to who responds to questions from the public.

Mr. Newton responded that, due to the Brown Act, if it is a question related to an agendized item, then the board can respond. However, he will be in attendance at all of the meetings, and they can recommend that he respond. Mr. Bortle stated that the manner in which the Board discusses items will set the tone of the meetings. Mr. Newton recommended that the roles for Chair and Vice Chair be set to make it easier for whoever fills those roles. He added that staff can bring an item back at the next meeting and then go to council to be approved once approved by this Board. Ms. Heath stated that she wanted to avoid bureaucracy and wanted to be able to move things forward. Mr. Newton responded that the city also sees the importance of moving this forward, which is why staff suggested a two spoke approach and is discussing both meeting details and the budget tonight. Mr. Downing inquired about training and what the Board can and cannot talk about and when. Mr. Newton responded that the board cannot talk to more than one other Board member about any topic as an individual member cannot know what the majority of the board is thinking. He stated that he, at the staff level, can know what everyone is thinking but, he cannot share with the board members. Mr. Downing inquired about future meetings. Mr. Newton responded that there is a need to come up with a way to identify the two pots of money. He added that staff and the Board will want to discuss that at the next meeting as there will be changes needed already to the mid-year budget. Mr. Downing inquired as to how the city would suggest the structure to be set up and suggested the Board do so in order to keep moving forward. Mr. Bortle suggested Rosenburg’s Rules of Order. Ms. Heath asked if the Board can choose now, to which Mr. Newton stated yes, and no. Since it is not agendized no action can be taken; however, it can come back at the next meeting to approve as well as the appointment of the chair and vice chair. It was the consensus to meet again on December 19, 2022, at 5:30pm. 22-1035 Tax Measure.pdf 4. CONTINUING BUSINESS: No business. 5. ADJOURNMENT: Moved by Downing; seconded by Ardito to approve adjourning at 6:39pm. Motion Carried: 5 - 0 Voting For: Ardito, Bortle, Downing, Heath, Newbold Voting Against: None

_________________________ Thomas Downing, Chair Respectfully submitted by: ________________________________ Approved on: December 19, 2022 Heidi Whitlock, City Clerk

CALL TO ORDER

ROLL CALL

1. APPROVAL OF AGENDA: (Additions and/or Deletions)

2. BUSINESS FROM THE FLOOR: Any person may address the Board at this time upon any subject

on the agenda or not on the agenda within the jurisdiction of the Board. However, comments on

items on the agenda may be reserved until the item is discussed and any matter not on the agenda

that requires action will be referred to staff for a report and action at a subsequent meeting.

Presentations are subject to a five-minute limit.

3. NEW BUSINESS:

A Discussion regarding Sales Tax Oversight Board's responsibilities and expectations

4. CONTINUING BUSINESS: No business.

5. ADJOURNMENT:

The next meeting of the Board to be determined.

Reports and documents relating to each agenda item are on file in the Office of the City Clerk and are

available for public inspection during normal business hours and at the meeting. These reports and

documents are also available at the City’s website www.cityofsusanville.net, unless there were systems

problems posting to the website.

Accessibility: An interpreter for the hearing-impaired may be made available upon request to the City

Clerk seventy-two hours prior to a meeting. A reader for the vision-impaired for purposes of reviewing

the agenda may be made available upon request to the City Clerk. The location of this meeting is

wheelchair-accessible.

I, Heidi Whitlock, certify that I caused to be posted notice of the meeting scheduled for November 28, 2022 in

the areas designated on November 22, 2022.

CITY OF SUSANVILLE

66 N. Lassen Street • Susanville CA

Tony Ardito • Curtis Bortle • Tom Downing • Rita Heath • Jan Newbold

Sales Tax Oversight Board

Sales Tax Oversight Board • City Council Chambers 66 N. Lassen

Street, Susanville, CA 96130

Monday, November 28, 2022 – 5:30 PM

CALL TO ORDER ROLL CALL 1. APPROVAL OF AGENDA: (Additions and/or Deletions) 2. BUSINESS FROM THE FLOOR: Any person may address the Board at this time upon any subject on the agenda or not on the agenda within the jurisdiction of the Board. However, comments on items on the agenda may be reserved until the item is discussed and any matter not on the agenda that requires action will be referred to staff for a report and action at a subsequent meeting. Presentations are subject to a five-minute limit. 3. NEW BUSINESS: A Discussion regarding Sales Tax Oversight Board's responsibilities and expectations 4. CONTINUING BUSINESS: No business. 5. ADJOURNMENT: The next meeting of the Board to be determined. Reports and documents relating to each agenda item are on file in the Office of the City Clerk and are available for public inspection during normal business hours and at the meeting. These reports and documents are also available at the City’s website www.cityofsusanville.net, unless there were systems problems posting to the website. Accessibility: An interpreter for the hearing-impaired may be made available upon request to the City Clerk seventy-two hours prior to a meeting. A reader for the vision-impaired for purposes of reviewing the agenda may be made available upon request to the City Clerk. The location of this meeting is wheelchair-accessible. I, Heidi Whitlock, certify that I caused to be posted notice of the meeting scheduled for November 28, 2022 in the areas designated on November 22, 2022. CITY OF SUSANVILLE 66 N. Lassen Street • Susanville CA Rita Heath • Jan Newbold • Tom Downing • Curtis Bortle • Tony Ardito Sales Tax Oversight Board Sales Tax Oversight Board • City Council Chambers 66 N. Lassen Street, Susanville, CA 96130 Monday, November 28, 2022 – 5:30 PM 1

AGENDA ITEM NO. A Discussion Item Submitted By: Heidi Whitlock, Administrative Services Action Date: November 28, 2022 SUBJECT: Discussion regarding Sales Tax Oversight Board's responsibilities and expectations PRESENTED BY: Dan Newton, City Administrator SUMMARY: The city of Susanville Sales Tax Oversight Board is an independent advisory committee. The purpose of the committee is to review the expenditure of funds collected pursuant to Measure P. Measure P implemented a one-cent local sales and use tax on retail transactions within the city of Susanville. The Sales Tax Oversight Board is newly appointed and there are not yet any established meeting parameters, organizational structure, or specific meeting protocols. City staff will be providing information to the members of the Sales Tax Oversight Board regarding existing budget documents, budget policy, and the status of Measure P funds. City staff is seeking discussion regarding the expectations of board members regarding their roles and responsibilities. The discussions may lead to the development of an additional ordinance specific to the governance of Sales Tax Oversight Board. However, in the meantime, city staff desires to prepare the Sales Tax Oversight Board to provide a report to the city council on the mid-year budget review scheduled for February 2023. FISCAL IMPACT: None. ACTION REQUESTED: Information Only. SALES TAX OVERSIGHT BOARD AGENDA ITEM ATTACHMENTS: 22-1035 Tax Measure.pdf 2

2 3 4 ORDINANCE NO. 22-1035 AN ORDINANCE OF THE CITY OF SUSANVILLE IMPOSING A TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION Section 1. TITLE. This ordinance shall be known as the City of Susanville Transactions 5 and Use Tax Ordinance. The City of Susanville hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 2. OPERATIVE DATE. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below. Section 3. PURPOSE. This ordinance is adopted to 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 provisrons 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 the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes. D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance. Section 4. CONTRACT WITH STATE. Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. Section 5. TRANSACTIONS TAX RATE. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the 3

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 1. The word "State" is used as a part of the title of the State Controller, State 20 Treasurer, State Treasury, or the Constitution of the State of California. 21 22 23 24 City at the rate of 1 % 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. Section 6. PLACE OF SALE. For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. 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. Section 7. USE TAX RATE. An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 1 % 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. Section 8. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein. Section 9. LIMITATIONS ON ADOPTION OF STATE LAW AND COLLECTION OF USE TAXES. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code: A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when: 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 25 to the exterior boundaries of the State of California, where the result of the substitution would be to: 26 27 28 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; 4

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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. 1. "A retailer engaged in business in the District" shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder. Section 10. PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance. Section 11. EXEMPTIONS AND EXCLUSIONS. A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax. B. There are exempted from the computation of the amount of transactions tax the gross receipts from: 1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government. 2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied: a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and 5

2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 b. With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address. 3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4. A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance. 5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property: 1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance. 2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California. 3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance. 4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance. 5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. 6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer. 6

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City. D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax. Section 12. 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. Section 13. 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 14. 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. Section 15. EFFECTIVE DATE. This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately. Section 16. SALES TAX OVERSIGHT BOARD. The Council will appoint a five-member standing oversight committee to be made up of the Susanville residents to serve up to three (3) two-year (2) terms. Each Councilmember will appoint one of the five (5) members of the advisory committee. These members will serve as the independent Sales Tax Oversight Board to review the expenditure of funds collected pursuant to the tax imposed by this Ordinance. Section 16. TERMINATION DATE. The authority to levy the tax imposed by this Ordinance shall continue until this ordinance is repealed by a majority vote of the voters of the City, or until it is repealed or suspended or by a majority vote of the City Council, in the event that the City Council repeals or suspends the tax, it may resume collection without voter approval as long as the transactions tax rate and use tax rate are not higher than the rates set forth in Sections 5 and 7, respectively. 7

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I hereby certify that the City of Susanville Supplemental Transactions and Use Tax Ordinance was PASSED, APPROVED, AND ADOPTED by the People of the City of Susanville on the 7th day of June, 2022. 8