Meeting Date: July 3, 2012 Prepared by: Jason Stilwell

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City Council Agenda Item Summary

Name: Consideration of: 1) The first reading of an Ordinance imposing a transactions and use tax (sales tax) to be administered by the State Board of Equalization and 2) Consideration of a Resolution giving notice of a special municipal election for the purpose of submitting a proposal to temporarily increase the transactions and use (sales) tax rate 1% for a period of 10 years; finding and declaring an emergency exists that requires the voters to approve a transactions and use tax before the next Municipal Election; and requesting Monterey County provide for consolidation of this proposed sales tax increase election with the November 6, 2012 election. Description: The following Ordinance outlines the terms of the proposed transactions and use (sales) tax increase, that it is intended to be 1%, for a 10-year period and the local services it is meant to help fund. Further, the proposed tax measure to be submitted to the voters is a general tax that can be used for any legitimate governmental purpose; it is not a commitment to any particular actions or purposes, and the specific purposes recited in the ballot measure are non-restricted and non-exclusive example only. The tax is a general tax and shall be approved if the measure receives at least a simple majority of affirmative votes. The companion Resolution provides notice of the special Municipal Election for the purpose of submitting this proposal to the voters; finding and declaring an emergency exists that requires the voters to approve a transactions and use tax before the next Municipal Election in 2014; and requesting Monterey County provide for consolidation of this proposed sales tax increase election with the November 6, 2012 election. Overall Cost: City Funds: N/A Grant Funds: N/A Staff Recommendation: Adopt the first reading of the Ordinance and the Resolution. Decision Record: None Reviewed by:

Jason~ Administrator

Date

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CITY COUNCIL CITY OF CARMEL-BY-THE-SEA ORDINANCE 2012AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA IMPOSING A TRANSACTIONS AND USE TAX (SALES TAX) TO BE ADMINISTERED BY THE STATE BOARD OF EQUALIZATION ________________________________________________________________________________ Recitals/Findings WHEREAS, the depressed economic times have resulted in a decline in City revenues and a crucial immediate need for revenue, jeopardizing the communitys essential services; and WHEREAS, without additional revenue the City cannot maintain the quality of local services that have gradually been deteriorating due to insufficient revenue. Such services include, but are not limited to: maintaining fire, ambulance and police emergency response times; funding capital needs including City streets, the beach, parks, and trails; increasing code compliance to preserve village character; maintaining the Citys libraries and the Sunset Center; addressing long-term CalPERS pension liabilities and managing other debt; and preserving other general City services. Deteriorating services can result in increased potential for significant impact to the health, safety and welfare of the residents and visitors of the City; and WHEREAS, all funds from a local revenue measure must stay in Carmel-by-the-Sea and cannot be taken by the State; and WHEREAS, the City Council has determined that an emergency exists requiring placement of a measure for a temporary general transactions and use (sales) tax before the voters at the November 6, 2012 general election. The tax would be a 1% tax on the sale of tangible personal property and the storage, use, or other consumption of such property for a period of ten (10) years. The tax revenue would be collected by the State Board of Equalization and remitted to the City; WHEREAS, the transactions and use tax to be submitted to the voters is a general tax that can be used for any legitimate governmental purpose; it is not a commitment to any particular actions or purposes, and the specific purposes recited in the ballot measure are non-restricted and non-exclusive example only. The tax is a general tax and shall be approved if the measure receives at least a simple majority of affirmative votes.

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NOW, THEREFORE, THE PEOPLE OF THE CITY OF CARMEL-BY-THE-SEA DO ORDAIN AS FOLLOWS: Section 1. Chapter 3.28 of the Carmel-by-the-Sea Municipal Code is hereby amended to add a new Section IV to read as follows: Section IV. Transactions and Use Tax 3.28.170. Imposition. A temporary Transactions and Use Tax is hereby imposed as a general tax on the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City for a period of ten (10) years, and upon the sales price of tangible personal property stored, used or otherwise consumed in the City as further set forth below. 3.28.180. Purpose. This Ordinance is adopted to achieve the following purposes, among others, and directs that the provisions hereof be interpreted in order to accomplish these 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 72885.9 or part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative is a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose. The tax is a general tax whose proceeds shall be deposited in the Citys general fund and expended for any lawful purpose of the City. 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 the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the State Board of Equalization in administering and collecting the California State Sales and Use Taxes. D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of colleting 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. 3.28.190. Contract with State. Prior to the operative date, which means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, City shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted

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with the State Board of Equalization prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. 3.28.200. Transactions tax rate. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated area of the City at the rate of 1.0% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City on and after the operative date of this ordinance for a period of ten (10) years following the effective date of the tax and shall then be terminated. 3.28.210. Place of Sale. For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges when such charges are subject to the state sales and use tax regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Board of Equalization. 3.28.220. 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 the City at the rate of 1% of the sales price of the property. Such tax shall be imposed for ten (10) years following the effective date of the tax, and shall then be terminated. The sales price shall include delivery charges when such charges are subject to sales or use tax regardless of the place to which delivery is made. 3.28.230. Adoption of provisions of state law. Except as otherwise provided in this Chapter and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxations Code, all of the provisions of part 1 (commencing with section 6001) of Division 2 of the Revenue and Taxations Code are hereby adopted by reference and made a part of this ordinance as if fully set forth herein. 3.28.240. 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 Taxations Code: A. Wherever the State of California is named or referred to as the taxing agency, the name of 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 Board of Control, State Board of Equalization, State Treasury, or the Constitution of the State of California; 2. The result of that substitution would require action to be taken by or against City or any agency, officer, or employee thereof rather than by or against the State Board of Equalization, in performing the functions incident to the administration or operation of this ordinance.

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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 the 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, 6701 (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. 3.28.250. Permit not required. If a sellers permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactors permit shall not be required by this Section. 3.28.260. 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 stateadministered 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 productions, 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

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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 outof-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 pubic 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 63663 and 6366.1 of the Revenue and Taxations Code. 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.

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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 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 person of the property the storage, use or other consumption of which is subject to the use tax. 3.28.270. Amendments. All amendments subsequent to the effective date of this section 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 section, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this section. 3.28.280. 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 of 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. 3.28.290. Annual Audit and Public Report. Annually the City Council retains an indepe3ndent auditor to conduct an audit of and provide audited financial statements for all of the Citys financial activities. The auditor shall include an accounting of the revenue received from the tax and expenditures thereof in the audited financial statements. The auditors report shall be presented to the Council and made available to the public. Additionally, the City Administrator shall annually prepare and present to the Council and the public a report in conjunction with the audit that reviews the status and performance of the programs and services funded wholly or partially with proceeds of the tax. 3.28.300. Severability. If any sections, subsections, sentences, clauses, phrases or portions of this chapter are for any reason held invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The People hereby declare that they would have passed this and each section, subsection, phrase or clause of this ordinance whether or not any one or more sections, subsections, phrases or clauses may be declared invalid or unconstitutional on their face or as applied.

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3.28.310. Effective date. This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately upon approval by the voters. 3.28.320. Termination date. The authority to levy the tax imposed by this ordinance shall expire ten years after the first tax is collected. Section 2. The People of Carmel-by-the-Sea find that all Recitals/Findings are true and correct and are incorporated herein by reference. Section 3. The transactions and use tax to be submitted to the voters is a general tax that can be used for any legitimate governmental purpose; it is not a commitment to any particular action. As such, under CEQA Guidelines section 153789(b)(4) the tax is not a project within the meaning of CEQA because it creates a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. If revenue from the tax were used for a purpose that would have such effect, the City would undertake the required CEQA review for that particular project. Therefore, under CEQA Guidelines 15060, review of this ordinance under CEQA is not required. Section 4. Severability A. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the Ordinance, including the application of such part or provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, provisions of this Ordinance are severable. B. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be held unconstitutional, invalid or unenforceable. Section 5. Publication The City Clerk is directed to publish this Ordinance in the manner and in the time required by law. PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this ____ day of ____________, 2012, by the following roll call vote: AYES: NOES: ABSENT: COUNCIL MEMBER: COUNCIL MEMBER: COUNCIL MEMBER:

ATTEST: _______________________________ Heidi Burch, City Clerk

APPROVED: ______________________________ JASON BURNETT, MAYOR

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CITY OF CARMEL-BY-THE-SEA CITY COUNCIL RESOLUTION 2012A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA CALLING AND GIVING NOTICE OF THE HOLDING OF A SPECIAL MUNICIPAL ELECTION FOR THE PURPOSE OF SUBMITTING A PROPOSAL TO TEMPORARILY INCREASE THE GENERAL TRANSACTIONS AND USE TAX (SALES TAX) RATE ONE PERCENT FOR GENERAL PURPOSES FOR A PERIOD OF TEN (10) YEARS; FINDING AND DECLARING THAT AN EMERGENCY EXISTS THAT REQUIRES ASKING THE VOTERS TO APPROVE A TRANSACTIONS AND USE TAX BEFORE THE NEXT REGULARLY SCHEDULED CITY ELECTION IN 2014, AND REQUESTING THAT THE BOARD OF SUPERVISORS OF MONTEREY COUNTY PROVIDE FOR THE CONSOLIDATION OF THIS PROPOSED SALES TAX INCREASE ELECTION WITH THE ELECTION TO BE HELD ON NOVEMBER 6, 2012
_________________________________________________________________________________________________

WHEREAS, the City of Carmel-by-the-Sea ("City") is experiencing an existing and immediate funding crisis resulting from factors largely outside of its control. Such factors include national, state and international collapse within financial sectors with resultant credit market impacts; declining business development and housing values with resultant reductions in retail and commercial development and revenues as well as property tax revenues; decreased visitors to the area and resultant reductions in sales tax and other revenues; increased costs of employee retirement costs (largely associated with CALPERS investment declines) and increasing health insurance costs; decreases in revenue from various other existing taxes and fees; and unpredictable State revenue sharing allocations and subvention funding for support of local revenue and services. State law changes, particularly the approval of Propositions 62 and 218, leave few options available for increasing General Fund revenues which typically fund a variety of services within this city; and, WHEREAS, the City has taken steps since 2009 to address declining revenues and to reduce its operational costs, including action to eliminate or not fill staff positions, resulting in already reduced services within the City. Quality of local services has gradually been deteriorating due to insufficient revenue. Such services include, but are not limited to, maintaining fire, ambulance and police emergency response times; funding capital needs including city streets, the beach, parks, and trains; increasing code compliance to preserve village character; maintaining the Citys libraries and the Sunset Center; addressing long-term CalPERS pension liabilities and managing other debt; and preserving other general City services; and, WHEREAS, despite reasonable steps to reduce spending, the City remains unable to achieve a budget in which anticipated revenues match currently reduced expenses without implementing further spending reductions that could affect essential public services and result in a potential for significant impacts to the general health, safety, and welfare of the residents, businesses and visitors of the City, thereby increasing need for additional revenue and available new revenue to address general municipal service provision; and, WHEREAS, for the FY 2012-13 budget year, the City is anticipating a serious structural deficit which must be addressed and cannot continue into future years. The City Council directed staff to incorporate cost reduction strategies into the proposed FY 2012-13 budget. Absent sufficient revenue, the City will be required to further reduce City services to achieve a budget balance. Such

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action could compromise public peace, health and safety and quality of life for Carmel-by-the-Sea residents and visitors. Even with such cost reductions, it is clear that the budget imbalance will continue; and, WHEREAS, The City Council has the authority under Elections Code Section 9222, Revenue and Taxation Code section 7285.9, and Government Code sections 53723 and 53724 to place a ballot measure before the voters to establish a local transaction and use tax (sales tax) for general municipal purposes. Article XIII C, section 2(b) of the California Constitution requires that elections to approve general tax measures be consolidated with a City Council election unless an emergency is declared by a unanimous vote of the City Council. The next regular City Council election is scheduled in two years (April 2014). Any new tax revenue from a ballot measure in a 2014 election, even if approved by voters at that time, would not be received until late 2014 and would not address the Citys present and impending budget gap. The need to submit a tax measure to the voters therefore is urgent and constitutes an emergency at this time, and it is imperative that this measure be presented to the voters at the November 6, 2012 election through consolidation of a ballot measure on the General Election at that time; and, WHEREAS, the proposed 1% transaction and use tax (sales tax) would be temporary in nature, lasting for a period of 10 years, and will not be sufficient to restore and maintain all city services and programs already eliminated, and the City Council and the community will still face difficult choices regarding services to be restored, funds to be set aside for cash reserve and capital improvements, and services to be enhanced or reduced; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA: SECTION 1. Call for Election. Pursuant to California Constitution Article XIIIC, section 2(b), Government Code sections 53723 and 53724, Revenue and Taxation Code section 7285.9, and Elections Code section 9222, the City Council of the City of Carmel-by-the-Sea hereby calls an election at which it shall submit to the qualified voters of the City a measure that if approved would adopt a temporary transaction and use (sales) tax as proposed in Section 3 of this Resolution. The election shall be held in the City on November 6, 2012. SECTION 2. Ballot Language. The question to be presented to the voters shall be as follows:
City of Carmel-by-the-Sea Measure ____ "Shall Carmel-by-the-Sea increase transaction and use tax (sales tax) from 7.25% to 8.25% (a 1% increase) for ten (10) years, to protect and maintain essential City services: Maintaining fire, ambulance and police emergency response times; funding capital needs including city streets, the beach, parks, and trails; increasing code compliance to preserve village character; maintaining the Citys libraries and the Sunset Center; addressing long-term CalPERS pension liabilities and managing other debt; and preserving other general City services; with an independent, annual financial audit of all expenditures available for public review?" Yes ( ) No ( )

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This question requires the approval of a majority of qualified electors casing votes. SECTION 3. Proposed Ordinance. The ordinance authorizing the general tax to be approved by the voter is set forth in Exhibit A hereto. The City Council hereby approves the ordinance, the form thereof, and its submission to the voters of the City at the November 6, 2012 election as required by Revenue and Taxation Code section 7285.9. The ordinance specifies that the rate of the sales tax shall be one percent (1%) of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City. It specifies that the rate of the sales tax shall be one percent (1%) of the sales price of tangible personal property stored, used, or otherwise consumed in the City, and that the tax shall be in effect for a period of 10 years, after which time it shall be terminated. The State Board of Equalization shall collect the tax from retailers subject to the tax and remit the funds to the City. SECTION 4. Request to Consolidate, Conduct Election and Canvass Returns. The City Council requests the Board of Supervisors for the County of Monterey to provide for consolidation of the special municipal election called for herein with the statewide election scheduled for November 6, 2012, and to provide within the City of Carmel-by-the-Sea the election precincts, polling places, voting booths, and election officers necessary to conduct the election. The Board is further requested to order the County Clerk to set forth in the voter information portion of all sample ballots to be mailed to the qualified electros of the City, the full text of the Ordinance and to mail with the sample ballots to the electors printed copies of the full text of the Ordinance, together with the primary arguments for and against the measure, and to provide absentee voter ballots for the election for use by qualified electors of the City who are entitled to such ballots in the manner provided by law. The Board of Supervisors is further asked to direct the canvass, or cause to be canvassed, as provided by law, the returns of this municipal election, and to certify the results of such canvass of votes. The City Clerk is authorized, instructed, and directed to work with the County Elections Department as needed in order to properly and lawfully conduct the election, and to ensure that the form and content of the ballots is as required by law, and to certify to the due adoption of this Resolution and to transmit a copy to the Board of Supervisors of the County of Monterey and to file a copy, so certified, with the County Clerk and County Registrar of Voters. The City Clerk and County Registrar of Voters are authorized to print such forms, publish such notices, and provide such information as may be necessary or convenient to assure the orderly holding of the election, and they shall do all other things necessary to facilitate the holding of the election in a manner harmonious and consistent with law. The County Registrar of Voters is authorized to bill the City for costs associated with the election called by this Resolution. SECTION 5. Publication of Measure. The City Clerk shall cause notice of the election to be published once in accordance with Elections Code section 12111. This publication shall occur between July 2, 2012, and July 16, 2012.

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SECTION 6. Submission of Ballot Arguments. The last day for submission of arguments for or against the measure shall be 5:00 p.m. on August 17, 2012. The direct arguments shall not exceed three hundred (300) words, and shall not be signed by more than five (5) persons. The City Council does not adopt the provisions of Elections Code section 9285(a) and therefore there shall be no rebuttal arguments. All submittals of arguments shall be made to the City Clerk in a timely manner. SECTION 7. Council Preparation of Arguments in Support of Measure. Pursuant to Elections Code section 9282, the City Council is hereby authorized to prepare the written argument in favor of the proposed measure, not to exceed three hundred (300) words. The argument may be signed by such members of the City Council that wish to do so. SECTION 8. Impartial Analysis by City Attorney. Pursuant to Elections Code section 9280, the City Clerk is directed to transmit a certified copy of the measure to the City Attorney. The City Attorney shall prepare an impartial analysis of the measure, not to exceed five hundred (500) words in length, outlining the effect and operation of the measure, and transmit that impartial analysis to the City Clerk and Elections Department on or before August 17, 2012. SECTION 9. Implementation. The City Manager and City Clerk, or their designee, are authorized and directed on behalf of the City to take all actions necessary to place the measure on the ballot and to cause the ordinance or measure to be printed, including but not limited to executing documents and appropriating necessary funds to pay the Citys costs of placing the measure on the ballot. City will reimburse Monterey County for the actual cost incurred in conducting the election upon receipt of a bill detailing those costs. The City Clerk is directed to file certified copies of this Resolution with the Board of Supervisors and the County Clerk and the Registrar of Voters, together with the attached ballot measure. Section 10. CEQA. The approval of this Resolution is exempt from the California Environmental Quality Act (CEQA). The sales tax submitted to the voters for approval is a general tax that can be used for any legitimate governmental purpose, and is not a commitment to any particular action or actions. As such, the tax is not a project under CEQA, and CEQA review is not required. SECTION 11. Effect of Resolution. The proposed sales tax is a general tax requiring the approval of a majority of qualified electors casting votes. While the measure lists several of the various municipal purposes potentially funded, the list is illustrative only and the City Council reserves complete discretion to expend the tax proceeds for any lawful purpose of the City.

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SECTION 12.Emergency Findings. In accordance with California Constitution Article XIIIC, section 2(b), the City Council finds that emergency conditions exist necessitating the placement of this tax measure on the November 6, 2012, ballot in order to replenish the Citys general fund as soon as possible, and avoid significant peril to the community that is already suffering due to the sluggish economy currently impacting all levels of federal, state, and local government. The City has taken steps since 2009 to address declining revenues and to reduce its operational costs, including taking action to eliminate or not fill staff positions resulting in already reduced services within the City. Quality of local services has gradually been deteriorating due to insufficient revenue. Such services include, but are not limited to: maintaining fire, ambulance and police emergency response times; funding capital needs including City streets, the beach, parks, and trails; increasing code compliance to preserve village character; maintaining the Citys libraries and the Sunset Center; addressing long-term CalPERS pension liabilities and managing other debt; and preserving other general City services. Deteriorating services can result in increased potential for significant impact to the health, safety and welfare of the residents and visitors of the City. The City Council specifically finds that based on the precarious economic conditions occurring in our local government, resulting in the loss of revenue as set forth above, an emergency exists in the City requiring immediate action to increase tax revenues to enable the City to meet its obligations to its citizens. Any delay in collection of these enhanced revenues would negatively impact City. The next regularly scheduled election of the City Council will not occur until April 2014, and such a delay in holding an election on this proposed tax measure could result in serious delays in receipt of new revenues should the measure pass. It is believed the City will continue to face financial difficulties into the future, and that any delay of this measure would mean that any new tax increase would not result in financial returns until at least 2015, an unacceptably long period of delay. The finding that an emergency exists to impose the taxes set forth in the Ordinance to meet local City expenses is necessary to provide for the immediate preservation of the public health, safety, and welfare of the City. PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA THIS third day of July, 2012, by the following vote: AYES: NOS: ABSENT: COUNCIL MEMBER: COUNCIL MEMBER: COUNCIL MEMBER:

ATTEST: APPROVED: __________________________ Heidi Burch, City Clerk ____________________________ JASON BURNETT, MAYOR