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Resolution No. 2020-023RESOLUTION NO. 2020-23 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AUTHORIZING THE FINANCE DIRECTOR TO EXECUTE AGREEMENTS WITH THE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION FOR IMPLEMENTATION OF A LOCAL TRANSACTIONS AND USE TAX SECTION 1. Recitals. A. On April 14, 2020, the voters approved Measure V, a three-quarter of one percent sales tax increase. B. On April 21, 2020, the City Council certified the results of the election and ratified Ordinance No. 1269 adding Vernon Municipal Code Chapter 20A and providing for a local transactions and use tax. C. The California Department of Tax and Fee Administration (Department) administers and collects the transactions and use taxes for all applicable jurisdictions within the state. D. The Department will be responsible to administer and collect the transactions and use tax for the City. E. The Department requires that the City enter into a "Preparatory Agreement" and an "Administration Agreement" prior to implementation of said taxes. F. The Department requires that the City Council authorize the agreements. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 2. The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct. SECTION 3. The City Council of the City of Vernon hereby approves the Preparatory Agreement, attached hereto as Exhibit A and the Administrative Agreement, attached hereto as Exhibit B. SECTION 4. The City Council of the City of Vernon hereby authorizes the Finance Director to execute said Agreements for, and on behalf of, the City of Vernon and the City Clerk is hereby authorized to attest thereto. SECTION 5. The City Council of the City of Vernon hereby instructs the City Administrator, or his designee, to take whatever actions are deemed necessary or Resolution No. 2020-23 Page 2 of 11 desirable for the purpose of implementing and carrying out the purposes of this Resolution and the transactions herein approved or authorized, including but not limited to, any non- substantive changes to the Agreements attached herein. SECTION 6. The City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions. APPROVED AND ADOPTED this 7th day of July, 2020. ETICIA LOPEZ, Mayor ATTEST: YintPlittLISAPOPE. CitY Cl seal) AST FO 1 ARN D M. ALVA EZ-GLASMAN, I IOEFillITIPifYVVEilleTHE FOREGOING RESOLUTION NO. 2020-23 was passed and adopted by the City Council of the City of Vernon at the regular meeting on July 7. 2020 by the following vote: AYES: 5 Council Members: Davis, Gonzales, Menke. Ybarra, Lopez NOES: 0 ABSENT: 0 ABSTAIN: 0 911YL LISA POPE. City Cl rk seal) EXHIBIT A age 3ResolutionP32of 11 AGREEMENT FOR PREPARATION TO ADMINISTER AND OPERATE CITY'S TRANSACTIONS AND USE TAX ORDINANCE In order to prepare to administer a transactions and use tax ordinance adopted in accordance with the provision of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, the City of Vernon, hereinafter called City, and the CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION, hereinafter called Department,do agree as follows: 1. The Department agrees to enter into work to prepare to administer and operate a transactions and use tax in conformity with Part 1.6 of Division 2 of the Revenue and Taxation Code which has been approved by a majority of the electors of the City and whose ordinance has been adopted by the City. 2. City agrees to pay to the Department at the times and in the amounts hereinafter specified all of the Department's costs for preparatory work necessary to administer the City's transactions and use tax ordinance. The Department's costs for preparatory work include costs of developing procedures, programming for data processing, developing and adopting appropriate regulations, designing and printing forms, developing instructions for the Department's staff and for taxpayers, and other appropriate and necessary preparatory costs to administer a transactions and use tax ordinance. These costs shall include both direct and indirect costs as specified in Section 11256 of the Government Code. 3. Preparatory costs may be accounted for in a manner which conforms to the internal accounting and personnel records currently maintained by the Department. The billings for costs may be presented in summary form. Detailed records of preparatory costs will be retained for audit and verification by the City. 4. Any dispute as to the amount of preparatory costs incurred by the Department shall be referred to the State Director of Finance for resolution, and the Director's decision shall be final. 5. Preparatory costs incurred by the Department shall be billed by the Department periodically, with the final billing within a reasonable time after the operative date of the ordinance. City shall pay to the Department the amount of such costs on or before the last day of the next succeeding month following the month when the billing is received. 6. The amount to be paid by City for the Department's preparatory costs shall not exceed one hundred seventy-five thousand dollars($175,000)(Revenue and Taxation Code Section 7272.) Resolution No.2020-23 Page 4 of 11 7. Communications and notices may be sent first class United States mail. Communications and notices to be sent to the Department shall be addressed to: California Department of Tax and Fee Administration P.O. Box 942879 MIC: 27 Sacramento,California 94279-0027 Attention: Administrator Local Revenue Branch Communications and notices to be sent to City shall be addressed to: City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Finance Director 8. The date of this agreement is the date on which it is approved by the Department of General Services. This agreement shall continue in effect until the preparatory work necessary to administer City's transactions and use tax ordinance has been completed and the Department has received all payments due from City under the terms of this agreement. CITY OF VERNON CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION By By Signature) Administrator Local Revenue Branch Scott Williams Typed Name) Finance Director Title) Rev. I 1/17) 2 EXHIBIT B Resolution No.2020-23 Page 5 of 11 AGREEMENT FOR STATE ADMINISTRATION OF CITY TRANSACTIONS AND USE TAXES The City Council of the City of Vernon has adopted,and the voters of the City of Vernon (hereafter called"City" or"District") have approved by the required majority vote,the City of Vernon Transactions and Use Tax Ordinance (hereafter called "Ordinance"), a copy of which is attached hereto. To carry out the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code and the Ordinance, the California State Department of Tax and Fee Administration, (hereinafter called the"Department")and the City do agree as follows: ARTICLE I DEFINITIONS Unless the context requires otherwise, wherever the following terms appear in the Agreement, they shall be interpreted to mean the following: 1. "District taxes" shall mean the transactions and use taxes, penalties, and interest imposed under an ordinance specifically authorized by Revenue and Taxation Code Section 7261, et seq. and in compliance with Part 1.6, Division 2 of the Revenue and Taxation Code. 2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance referred to above and attached hereto. Ordinance No.1269, as amended from time to time, or as deemed to be amended from time to time pursuant to Revenue and Taxation Code Section 7262.2. ARTICLE II ADMINISTRATION AND COLLECTION OF CITY TAXES A. Administration. The Department and City agree that the Department shall perform exclusively all functions incident to the administration and operation of the City Ordinance. Resolution No.2020-23 Page 6 of 11 B. Other Applicable Laws. City agrees that all provisions of law applicable to the administration and operation of the Department Sales and Use Tax Law which are not inconsistent with Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration and operation of the City Ordinance. City agrees that money collected pursuant to the City Ordinance may be deposited into the State Treasury to the credit of the Retail Sales Tax Fund and may be drawn from that Fund for any authorized purpose. including making refunds, compensating and reimbursing the Department pursuant to Article IV of this Agreement. and transmitting to City the amount to which City is entitled. C. Transmittal of money. 1. For the period during which the tax is in effect, and except as otherwise provided herein. all district taxes collected under the provisions of the City Ordinance shall be transmitted to Cite periodically as promptly as feasible, but not less often than twice in each calendar quarter. 2. For periods subsequent to the expiration date of the tax whether by City's self-imposed limits or by final judgment of any court of the State of California holding that City's ordinance is invalid or void, all district taxes collected under the provisions of the City Ordinance shall be transmitted to City not less than once in each calendar quarter. 3. Transmittals may he made by mail or electronic funds transfer to an account of the City designated and authorized by the City. A statement shall be furnished at least quarterly indicating the amounts withheld pursuant to Article IV of this Agreement. D. Rules. The Department shall prescribe and adopt such rules and regulations as in its judgment are necessary or desirable for the administration and operation of the City Ordinance and the distribution of the district taxes collected thereunder. E. Preference. Unless the payor instructs otherwise, and except as otherwise provided in this Agreement. the Department shall give no preference in applying money received for state sales and use taxes, state-administered local sales and use taxes, and district transactions and use taxes owed by a taxpayer. but shall apply moneys collected to the satisfaction of the claims of the State. cities, counties, cities and counties. redevelopment agencies, other districts, and City as their interests appear. Rev. 10/17) 2 Resolution No.2020-23 Page 7 of 11 F. Security. The Department agrees that any security which it hereafter requires to be furnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it also will be available for the payment of the claims of City for district taxes owing to it as its interest appears. The Department shall not be required to change the terms of any security now held it. and City shall not participate in any security now held by the Department. G. Records of the Department. When requested by resolution of the legislative body of the City under section 7056 of the Revenue and Taxation Code, the Department agrees to permit authorized personnel of the City to examine the records of the Department, including the name, address, and account number of each seller holding a seller's permit with a registered business location in the City, pertaining to the ascertainment of transactions and use taxes collected for the City. Information obtained by the City from examination of the Department's records shall be used by the City only for purposes related to the collection of transactions and use taxes by the Department pursuant to this Agreement. H. Annexation. City agrees that the Department shall not be required to give effect to an annexation, for the purpose of collecting, allocating, and distributing District transactions and use taxes,earlier than the first day of the calendar quarter which commences not less than two months after notice to the Department. The notice shall include the name of the county or counties annexed to the extended City boundary. In the event the City shall annex an area, the boundaries of which are not coterminous with a county or counties, the notice shall include a description of the area annexed and two maps of the City showing the area annexed and the location address of the property nearest to the extended City boundary on each side of every street or road crossing the boundary. ARTICLE III ALLOCATION OF TAX A. Allocation. In the administration of the Department's contracts with all districts that impose transactions and use taxes imposed under ordinances. which comply with Part 1.6 of Division 2 of the Revenue and Taxation Code: 1. Any payment not identified as being in payment of liability owing to a designated district or districts may be apportioned among the districts as their interest appear, or, in the discretion Rev. 10/17) 3 Resolution No.2020-23 Page 8 of 11 of the Department, to all districts with which the Department has contracted using ratios reflected by the distribution of district taxes collected from all taxpayers. 2. All district taxes collected as a result of determinations or billings made by the Department, and all amounts refunded or credited may be distributed or charged to the respective districts in the same ratio as the taxpayer's self-declared district taxes for the period for which the determination, billing. refund or credit applies. B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with respect to vehicles, vessels, or aircraft, the address of the registered owner appearing on the application for registration or on the certificate of ownership may be used by the Department in determining the place of use. ARTICLE IV COMPENSATION The City agrees to pay to the Department as the State's cost of administering the City Ordinance such amount as is provided for by law. Such amounts shall be deducted from the taxes collected by the Department for the City. ARTICLE V MISCELLANEOUS PROVISIONS A. Communications. Communications and notices may be sent by first class United States mail to the addresses listed below, or to such other addresses as the parties may from time to time designate. A notification is complete when deposited in the mail. Rev. 10/17) 4 Resolution No.2020-23 Page 9 of 11 Communications and notices to be sent to the Department shall he addressed to: California State Department of Tax and Fee Administration P.O. Box 942879 Sacramento, California 94279-0027 Attention: Administrator Local Revenue Branch Communications and notices to he sent to the City shall be addressed to: City of Vernon 4305 Santa Fe Avenue Vernon. CA 90058 Attention: Finance Director Unless otherwise directed, transmittals of payment of District transactions and use taxes will be sent to the address above. B. Term. The date of this Agreement is the date on which it is approved by the Department of General Services. The Agreement shall take effect on October 1, 2020. This Agreement shall continue until December 31 next following the expiration date of the City Ordinance, and shall thereafter be renewed automatically from year to year until the Department completes all work necessary to the administration of the City Ordinance and has received and disbursed all payments due under that Ordinance. C. Notice of Repeal of Ordinance. City shall give the Department written notice of the repeal of the City Ordinance not less than 110 days prior to the operative date of the repeal. Rev. 10/17) 5 Resolution No.2020-23 Page 10 of 11 ARTICLE VI ADMINISTRATION OF TAXES IF THE ORDINANCE IS CHALLENGED AS BEING INVALID A. Impoundment of funds. 1. When a legal action is begun challenging the validity of the imposition of the tax, the City shall deposit in an interest-bearing escrow account,any proceeds transmitted to it under Article II. C., until a court of competent jurisdiction renders a final and non-appealable judgment that the tax is valid. 2. If the tax is determined to be unconstitutional or otherwise invalid, the City shall transmit to the Department the moneys retained in escrow, including any accumulated interest, within ten days of the judgment of the trial court in the litigation awarding costs and fees becoming final and non-appealable. B. Costs of administration. Should a final judgment be entered in any court of the State of California, holding that City's Ordinance is invalid or void, and requiring a rebate or refund to taxpayers of any taxes collected under the terms of this Agreement,the parties mutually agree that: I. Department may retain all payments made by City to Department to prepare to administer the City Ordinance. 2. City will pay to Department and allow Department to retain Department's cost of administering the City Ordinance in the amounts set forth in Article IV of this Agreement. 3. City will pay to Department or to the State of California the amount of any taxes plus interest and penalties, if any, that Department or the State of California may be required to rebate or refund to taxpayers. 4. City will pay to Department its costs for rebating or refunding such taxes, interest, or penalties. Department's costs shall include its additional cost for developing procedures for processing Rev. 10/17) 6 Resolution No.2020-23 Page 11 of 11 the rebates or refunds, its costs of actually making these refunds, designing and printing forms, and developing instructions for Department's staff for use in making these rebates or refunds and any other costs incurred by Department which are reasonably appropriate or necessary to make those rebates or refunds. These costs shall include Department's direct and indirect costs as specified by Section 11256 of the Government Code. 5. Costs may be accounted for in a manner, which conforms to the internal accounting. and personnel records currently maintained by the Department. The billings for such costs may be presented in summary form. Detailed records will be retained for audit and verification by City. 6. Any dispute as to the amount of costs incurred by Department in refunding taxes shall be referred to the State Director of Finance for resolution and the Director's decision shall be final. 7. Costs incurred by Department in connection with such refunds shall be billed by Department on or before the 25th day of the second month following the month in which the judgment of a court of the State of California holding City's Ordinance invalid or void becomes final. Thereafter Department shall bill City on or before the 25th of each month for all costs incurred by Department for the preceding calendar month. City shall pay to Department the amount of such costs on or before the last day of the succeeding month and shall pay to Department the total amount of taxes, interest, and penalties refunded or paid to taxpayers, together with Department costs incurred in making those refunds. CITY OF VERNON CALIFORNIA STATE DEPARTMENT OF TAX AND FEE ADMINISTRATION By By Signature) Administrator Local Revenue Branch Scott Williams Typed Name) Finance Director Title) Re' 1 .-} 7 PARTIALLY EXECUTED AGREEMENT SIGNATURE ROUTING FORM CONTRACTOR:California State Department of Tax and Fee Administration CONTRACT PURPOSE: Agreement for Preparation to Administer and Operate City's Transactions and Use Tax Ordinance CONTRACT IS: 0 FEDERAL 0 PREVAILING WAGE COMPETITIVE SELECTION& NOTICED RFP COMPETITIVE BID& NOTICED INVITATION TO BID EXEMPT FROM COMPETITIVE PROCESS (APPROVAL ATTACHED) X SERVICES 0 MATERIALS 0 BUDGETED 0 NOT BUDGETED TOTAL CONTRACT VALUE: $ 175,000 Charge Acct. No(s) 011.1004.401200 Amendment Value$ o Contract is an Amendment to Eden Contract No. if applicable) RESPONSIBLE DEPARTMENT PERSON: Angela Melgar PHONE: ext. 242 AUTHORIZATION: X Approved by Council on 7/07/2020 Check one and attach Resolution No. 2020-23(if applicable) supporting documentation) Approved by City Administrator on Approved by Finance Director on ROUTING SEOUENCE: (Please Follow In Order) Initials Date 1)Responsible Department Person CAA I 4 lCertifiescompliancewithCompetitiveBiddingandPurchasingOrdinance, obtains approval from City Council/City Administrator/Finance Director,and obtains approval as to form from the City Attorney's Office,assembles two(2)originals of contract, obtains proper signatures from contractor/consultant pursuant to the signature requirements, obtains insurance& bond documents,notifies IT to remove related RFP/bid notice from the City's website(if applicable),enters contract into Eden once routing process is complete. 2)Liability and Claims Approves insurance and sureties if bonds required. 3) Finance (Purchasing) 114 / w Checks compliance with Competitive Bidding&Living Wage Ordinances and reflected in current budget. 4) City Attorney Approves contract as to form. 5)City Signatory Signs document on behalf of City. yF/'', 6) City Clerk 7fti'M Attests signatures, numbers and files contract,enters contract documents executed contract, supporting documentation, insurance and bonds,etc.)into Laserfiche, transmits duplicate original to contractor/consultant, notifies Responsible Department Person, and notifies any"consultant"of duties to file Form 700, if applicable. Re..6n.o t 7 AGREEMENT FOR PREPARATION TO ADMINISTER AND OPERATE CITY'S TRANSACTIONS AND USE TAX ORDINANCE In order to prepare to administer a transactions and use tax ordinance adopted in accordance w ith the provision of Part 1.6 (commencing w ith Section 7251) of Div ision 2 of the Revenue and Taxation Code. the ('its of Vernon. hereinafter called City. and the CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION. hereinafter called Dt'p srtment. do agree as follows: 1. The Department agrees to enter into work to prepare to administer and operate a transactions and use tax in conformity with Part 1.6 of Division 2 of the Revenue and Taxation Code which has been approved by a majority of the electors of the City and whose ordinance has been adopted by the City. 2. City agrees to pay to the Department at the times and in the amounts hereinafter specified all of the Department's costs for preparatory work necessary to administer the City's transactions and use tax ordinance. The Department's costs for preparatory work include costs of developing procedures. programming for data processing. developing and adopting appropriate regulations. designing and printing forms. developing instructions for the Department's staff and for taxpayers. and other appropriate and necessary preparatory costs to administer a transactions and use tax ordinance. These costs shall include both direct and indirect costs as specified in Section 11256 of the Government Code. 3. Preparatory costs may be accounted for in a manner which conforms to the internal accounting and personnel records currently maintained by the Department. The billings for costs may be presented in summary form. Detailed records of preparatory costs ‘k ill he retained for audit and verification by the City. 4. Any dispute as to the amount of preparatory costs incurred by the Department shall he referred to the State Director of Finance for resolution.and the Director's decision shall he final. 5. Preparatory costs incurred by the Department shall he billed by the Department periodically. with the final billing within a reasonable time after the operative date of the ordinance. City shall pay to the Department the amount of such costs on or betbre the last day of the next succeeding month following the month when the billing is received. 6. The amount to be paid by City for the Department's preparatory costs shall not exceed one hundred seventy-five thousand dollars($175.000)(Revenue and Taxation Code Section 7272.) 7. Communications and notices may be sent by first class United States mail. Communications and notices to be sent to the Department shall be addressed to: California Department of Tax and Fee Administration P.O. Box 942879 MIC: 27 Sacramento,California 94279-0027 Attention: Administrator Local Revenue Branch Communications and notices to be sent to City shall be addressed to: City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Finance Director 8. The date of this agreement is the date on which it is approved by the Department of General Services. This agreement shall continue in effect until the preparatory work necessary to administer City's transactions and use tax ordinance has been completed and the Department has received all payments due from City under the terms of this agreement. CITY OF VERNON CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION By Signature) Administrator Local Revenue Branch Scott Williams Typed Name) Finance Director Title) Re% I1 17) EST: Ye APP OVED A TO 0 ci.0". Lisa Pope, ity Clerk Arnold H. varez-Glasman, Interim City Attorney Fully Executed Agreement STATE OF CALIFORNIA CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION 450 N STREET, SACRAMENTO, CA PO BOX 942879, SACRAMENTO, CA 94279-0027 1-916-309-5800 • FAX 1-916-322-0986 www.cdtfa.ca.gov January 28, 2021 City of Vernon Attention: Finance Director 4305 Santa Fe Avenue Vernon, CA 90058 Re: Special Taxing Jurisdiction (STJ) – 811 City of Vernon The Department of General Services approved the agreements for the preparation and administration of the City of Vernon’s transactions and use tax. The City’s ordinance sets the tax rate at 0.75 percent (0.0075) and became operative on October 1, 2020. A scanned copy of the fully executed agreements is enclosed for your records. Payments will be transmitted monthly as scheduled. The first two payments of each quarter will consist of an estimated advance payment for quarterly returns plus actual tax collected during the month. The third and final cleanup payment will consist of the actual tax collected during the quarter less the first two payments and administrative fees as provided in the Agreement for State Administration of City Transactions and Use Taxes. The first advance payment to the City is scheduled for December 2020, followed by a second advance payment in January 2021. The final cleanup payment for the 4th quarter 2020 (10/01/2020 – 12/31/2020) will be made in February 2021. This cycle of payments repeats every three months. Please note: Early remittances may be made prior to the first scheduled monthly advance payment. These remittances are generally small in amount and are a result of early sales and use tax payments from taxpayers. Monthly Statement of Distribution may be viewed on the department’s website once available at https://www.cdtfa.ca.gov/taxes-and-fees/local-and-district-taxes.htm. From this screen, scroll down and click on Local Jurisdictions. Choose the link titled Local Tax Statement of Distributions to open the Local Tax Statement Inquiry Page. To request for your statement, click the indicator opposite “District Add-on Code (3 Digits)” and enter your 3- digit code (811) in the box opposite Jurisdiction Code. Click on Submit Request and your statement will be displayed. For your convenience, the Local Tax Statements page also contains a link to the Disbursement Calendar which is the schedule of payment dates. If you have any questions regarding the above, please contact me at (916) 309-5868 or Judy.Wong@cdtfa.ca.gov. Sincerely, Judy Wong Business Taxes Specialist Local Revenue Branch GAVIN NEWSOM Governor MARYBEL BATJER Secretary, Government Operations Agency _______ NICOLAS MADUROS Director AGREEMENT FOR PREPARATION TO ADMINISTER AND OPERATE CITY'S TRANSACTIONS AND USE TAX ORDINANCE In order to prepare to administer a transactions and use tax ordinance adopted in accordance with the provision of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, the City of Vernon, hereinafter called City, and the CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION, hereinafter called Department, do agree as follows: 1. The Department agrees to enter into work to prepare to administer and operate a transactions and use tax inconformity with Part 1.6 of Division 2 of the Revenue and Taxation Code which has been approved by a majority of the electors of the City and whose ordinance has been adopted by the City. 2. City agrees to pay to the Department at the times and in the amounts hereinafter specified all of the Department's costs for preparatory work necessary to administer the City's transactions and use tax ordinance. The Department's costs for preparatory work include costs of developing procedures, programming for data processing, developing and adopting appropriate regulations, designing and printing forms, developing instructions for the Department's staff and for taxpayers, and other appropriate and necessary preparatory costs to administer a transactions and use tax ordinance. These costs shall include both direct and indirect costs as specified in Section 1 1256 of the Government Code. 3. Preparatory costs may be accounted for in a manner which conforms to the internal accounting and personnel records currently maintained by the Department. The billings for costs may be presented in summary form. Detailed records of preparatory costs will be retained for audit and ve►•ification by the City. 4. Any dispute as to the amount of preparatory costs incurred by the Department shall be refer►•ed to the State Director of Finance for resolution, and the Director's decision shall be final. 5. Preparatory costs incurred by the Department shall be billed by the Department periodically, with the final billing within a reasonable time after the operative date of the ordinance. City shall pay to the Department the amount of such costs on or before the last day of the next succeeding month following the month when the billing is received. 6. The amount to be paid by City for the Department's preparatory costs shall not exceed one hundred seventy-five thousand dollars ($175,000) (Revenue and Taxation Code Section 7272.) 7600-20207032 7. Communications and notices may be sent by first class United States mail. Communications and notices to be sent to the Department shall be addressed to: California Department of Tax and Fee Administration P.O. Box 942879 MIC: 27 Sacramento, California 94279-0027 Attention: Administrator Local Revenue Branch Communications and notices to be sent to City shall be addressed to: City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Finance Director 8. The date of this agreement is the date on which it is approved by the Department of General Services. This agreement shall continue in effect until the preparatory work necessary to administer City's transactions and use tax ordinance has been completed and the Department has received all payments due from City under the terms of this agreement. CITY OF VERNON By ~ C .~ (Signature) Scott Williams (Typed Name) Finance Director (Title) TEST: Lisa Pope, ity Clerk '" 2 CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION Administrator Local Revenue Branch APP OVED A TO ORM: Arnold M. varez-Glasman, Interim City Attorney 7600-20207032 JAN 5, 2021 NLR:ts AGREEMENT FOR STATE ADMINISTRATION OF CITY TRANSACTIONS AND USE TAXES The City Council of the City of Vernon has adopted. and the voters of the City of Vernon (hereafter called "City" or "District") have approved by the required majority vote, the City of Vernon Transactions and Use Tax Ordinance (hereafter called '`Oc~dinance"), a copy of which is attached hereto. To car►-y out the provisions of Part 1 .6 of Division 2 of the Revenue and Taxation Code and the Ordinance, the California State Department of Tax and Fee Administration, (hereinafter called the "Depa►-tment'') and the City do agree as follows: ARTICLE I DEFINITIONS Unless the context requi►-es otherwise, wherever the following terms appear in the A~tireement, they shall be interpreted to mean the following: 1 . "District taxes" shall mean the transactions and use taxes, penalties, and interest imposed under' c~Il OCdinance specifically authorized by Revenue and Taxation Code Section 7285.9, et seq. and ire coil~pliance with Part 1.6, Division 2 of the Revenue and Taxation Code. 2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance referred to above and attached hereto, Ordinance No.1269, as amended fi•oin time to time, or as deemed to be amended from time to time pursuant to Revenue and Taxation Code Section 7262.2. ARTICLE II ADMINISTRATION AND COLLECTION OF CITY TAXES A. Administration. The Department and City agree that the Department shall perform exclusively all functions incident to the administration and operation of the City Ordinance. 7600-20207032 B. Other Applicable Laws. City agrees that all provisions of la~v applicable to the c1CI[lll(11Stt'~1tI0i1 c~f1C~ operation of the Department Sales ar~d Use TaY L~l~l ~VIlICI1 at'e tlOt 1t1COtlSlSteilt with Part 1 .6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration and operation of the City Ordinance. City agrees that money collected pursuant to the City Ordinance may be deposited into the State Treasury to the credit of the Retail Sales Tax Fwd and may be drawn from that Fund for an}~ authorized purpose, including making refunds. compensating and reimbursing the Depa►-tment pursuant to Article IV of this Agreement, and transmitting to City the amount to which City is entitled. C. Transmittal of money. 1 . For the period during which the tax is in effect, and except as ot}lerwise provided herein, all district taxes collected ~~nde►• the pcovisio~Is of the Cit}~ Ordinance shall be trans~l~itted to City periodically as promptly as feasible, but not less often than twice in each calendar quarter. 2. For• periods subsequent to the expiration date of the tax whether by City's self-unposed IlI11ltS OC E7)' Ilfl~ll JIICI~llletlt Ot any court of the State of Califiornia IIOIC~III~T that City's ordinance is invalid or void, all district taxes collected under the provisions of the City Ordinance shall be tt•ansmitted to City not less than once i►1 each calendar quarter. 3. Transil~ittals i1~ay be made by 111~1II or electronic t~unds transfer to Zil c~CCOUIII of the City designated and authorized by the City. A statement shall be furnished at least quarterl~~ i~ldicating the c1t110Ut1tS ~V1tI1IleICI pllt•suant to Article IV of this Agreement. I). Rules. The Department shall prescribe and adopt such rules and regulations as in its jt~d~~l~ent are neeessai•}~ or desic•able tot' the c1d1111IlIStT'atlOtl ~[1CI Opel'c~tlOt1 Of t~le City OCCIIilailCe ltld t~le distribution of the district taxes collected thereunder. E. Preference. Unless the payor instructs otherwise, and except as otherwise provided in this Agreement, the Department shall give no preference in applyinv~ money received for state sales and use taxes, state-administered local sales and use taxes, arld district transactions and use taxes owed by a taxpayer, but shall apply ~Z~oneys collected to the satisfaction of the claims of the State, cities, counties, cities and counties, redevelopil~ent age►icies, other districts, aid City as their interests appear. (Rev. 10/17) 7600-20207032 F. Security. The Department agrees that any security which it hereafter requires to be furnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it also wil( be available foc the payment of the claims of City for district taxes owing to it as its interest appears. The Department shall not be required to change the terms of any security now held by it, and City shall not participate in any security now held by the Department. G. Records of the Department. When ►•equested by resolution of the legislative body of the City under section 7056 of the Revenue and Taxation Code, the Department agrees to permit authorized pec•sonnel of the City to examine the records of the Department, including the name, address, and account number of each selle►• holding a seller's permit with a registered business location in the City, pertaining to the ascertainment of transactions and use taxes collected for the City. Information obtained by the City from examination of the Department's records shall be used by the City only for pu►-poses related to the collection of transactions and use taxes by the Department pursuant to this Agreement. H. Annexation. City agrees that the Department shall not be required to give effect to an annexation, for the purpose of collecting, allocating, and distributing District transactions and use taxes, earlier than the first day of the calendar quarter which commences not less than two months after notice to the Depa►•tment. The notice shall include the name of the county or counties annexed to the extended City boundary. In the event the City shall annex an area, the boundaries of which are not cotec•minous with a county or counties, the notice shall include a description of the area annexed and two maps of the City showing the area annexed and the location address of the pc•operty nearest to the extended City boundary on each side of every street or road crossing the bo~indary. ARTICLE III ALLOCATION OF TAX A. Allocation. In the administration of the Department's contracts with all districts that impose transactions and use taxes imposed under o►•dinances, which comply with Part 1.6 of Division 2 of the Revenue and Taxation Code: 1. Any payment not identified as being in payment of liability owing to a designated district or districts may be apportioned among the districts as their interest appear, or, in the discretion (Rev. 10/17) ~ 7600-20207032 of the Department, to all distc•icts with which the Department has contracted using ratios reflected by the distribution of district taxes collected from all taxpayers. 2. All district taxes collected as a result of determinations or billings made by the Department, and all amounts refunded or credited may be distributed or charged to the respective districts in the same ratio as the taxpayel•'s self-declared distc•ict taxes for the period for which the determination, billing, refund or credit applies. B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with respect to vehicles, vessels, or aircraft, the address of the registered owner appearing on the application for registration or on the certificate of ownership may be used by the Depat-tment in determining the place of use. ARTICLE IV COMPENSATION The City agrees to pay to the Department as the State's cost of administering the City Ordinance such amount as is provided for by law. Such amounts shall be deducted from the taxes collected by the Department for the City. ARTICLE V MISCELLANEOUS PROVISIONS A. Communications. Communications and notices may be sent by first class United States mail to the add►•esses listed below, or to such other addc•esses as the parties may from time to time designate. A notification is complete when deposited in the mail. (Rev. 10/ 17) 4 7600-20207032 Communications and notices to be sent to the Department shall be addressed to: California State Depa►-tment of Tax and Fee Administration P.O. E3ox 942879 Sacramento, California 94279-0027 Attention: Administrator Local Revenue Branch Commu►lications and notices to be sent to the City shall be addressed to: City of Vernon X305 Santa Fe Avenue Ve►'11011. CA 90058 Attention: Finance Director Unless other~i~ise directed, transmittals of payment of District transactions and use taxes will be sent to the address above. B. Term. The date of this Agreement is the date o~~ ~vhicll it is approved by the Department of General Services. The Agreement shall take effect on October 1, 2020. This Agreement shall continue until December 31 next following the expiration date of the City Ordinance, and shall thereafter be renewed automatically from year to year until the Depa►~tment c~l»pletes all work necessary to the administration of the City Ordinance and has received and disbursed all payments due under that Ordinance. C. Notice of Repeal of Ordinance. City shall give the Department written notice of the repeal of the City Oc'Cllflc~[1Ce ilOt IeSS tllail 1 10 da}~s prior to the operative date of the repeal. (Rev. 10/17) 5 7600-20207032 ARTICLE VI ADMINISTRATION OF TAXES IF THE ORDINANCE IS CHALLENGED AS BEING INVALID A. Impoundment of funds. 1 . When a legal action is begun challenging the validity of the imposition of the taY, the City shall deposit in an interest-bearinb escrow account, any proceeds transmitted to it under Article II. C., ~ultil a cow•t of competent ju~•isdiction renders a final and non -appealable judgment that the tax is valid. 2. If the tax is determined to be unconstitutional or otherwise invalid. the City shall tra»sil~it to the Department the moneys retained in escrow, including any accumulated interest, ~ti ll~llll ten days of the judgment of the trial court in the litigation awarding costs and fees becomin~~ final and non -appealable. I3. Costs of administration. Should a final judgment be entered in any court of the State of California, holding that City's Ordinance is invalid or void, and requiring a rebate or ►-efund to taxpaye►-s of any taxes collected under the tei'111S Ot tIIIS A~I•eement, the parties »>utually agree that: 1. Department may retain all payments made by City to Depa►-tment to prepa~•e to administer the City Ordinance. 2. City will pay to Department and allow Department to retain Departil~ent's cost of administering the City O~'CII[1c~[1Ce ltl the ~lillOUtltS Set fOt't~l ltl ACIICI~ IV Ot tIIIS AbCeement. 3. City will pay to Department or to the State of California the amount of any taxes plus interest and penalties, if any, that Department or the State of California may be required to rebate or refund to taxpayers. 4. City will pay to Depac-tment its costs for rebating or refunding such taxes, interest, or penalties. Department's costs shall include its additional cost for developing procedw•es for processing (Rev. 10/17) 6 7600-20207032 the rebates or refunds, its costs of actually making these refunds, designing and printing forms, and developing instructions for Department's staff for use in making these rebates or refunds and any other costs incurred by Department which are reasonably appropriate or necessary to make those rebates or refunds. These costs shall include Department's direct and indirect costs as specified by Section 11256 of the Government Code. 5. Costs may be accounted for in a manner, which conforms to the internal accounting, and personnel records currently maintained by the Department. The billings for such costs may be presented in summa►•y form. Detailed records will be retained for audit and verification by City. 6. Any dispute as to the amount of costs incurred by Department in refunding taxes shall be referred to the State Director of Finance for resolution and the Director's decision shall be final. 7. Costs incurred by Department in connection with such refunds shall be billed by Depat•tment on or before the 25th day of the second month following the month in which the judgment of a court of the State of California holding City's Ordinance invalid or void becomes final. Thereafter Department shall bill City on or before the 25th of each month for all costs incurred by Department for the preceding calendar month. City shall pay to Department the amount of such costs on or before the last day of the succeeding month and shall pay to Depa►•tment the total amount of taxes, interest, and penalties refunded or paid to taxpayers, together with Department costs incurc•ed in making those refunds. CITY OF VERNON g y , (Signature) Scott Williams (Typed Name) Finance Director (Title) AT ST: ~~" /y~ Lisa Pope, City Jerk (Rev. 10/17) 7 CALIFORNIA STATE DEPARTMENT OF TAX AND FEE ADMINISTRATION Administrator Local Revenue Branch APP OVED AS 0 FO M: Arnold M. A arez-Glasman, Interim City Attorney 7600-20207032 JAN 5, 2021 NLR:ts ORDINANCE NO. 1269 AN ORDINANCE OF THE CITY OF VERNON ADDING CHAPTER 20A OF THE VERNON MUNICIPAL CODE TO ENACT A TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE STATE BARD OF EQUALIZATION, UPON ADOPTION BY THE VOTERS THE PEOPLE OF THE CITY OF VERNON DO HEREBY ORDAIN: SECTION 1: Chapter 20A, which shall be titled "TRANSACTIQNS AND USE TAX," is hereby added to the Vernon Municipal Code, as follows: CHAPTER 20A TRANSACTIONS AND USE TAX Section 20A.1. Transactions and Use Tax. (a) Purpose . This Section is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes: (1) To impose a retail transactions applied throughout the entire territory of the extent permitted by law and in accordance with 1.6 {commencing with Section 7251} of Division Taxation Code and Section 7285.9 of Part 1.7 0 authorizes the City to adopt this ordinance if electors voting on the measure vote to approve tax at an election called for that purpose. and use tax to be City to the fullest the provisions of Part 2 of the Revenue and f Division 2, which a majority of the the imposition of the (2} 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. (3) 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 Sa an~e~~~at~i~~~~ueandcorrectcopyoftheoriginaldocumentonfi!~ nF ~'E~q~~ in this office consisting of~~ page(s). -~'~>``` ~"" ~ ~'.y I certify under penalty of perjury under the laws of the State of Californ~~ >~; - _; that the foregoing is true ~,~d correct. ,l. ~^ ` '~ ~ City o~ Ve n ,~ ~ ~ ~ ~,~ S 1 `ls~~+'tr M~J ~ ~alQ' • 1 • v7~ ~.1i.. 7600-20207032 (4) 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. (5) To provide transactions and use tax revenue to the City to be used for general purposes. (b) 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. (c) Transactions Tax Rates. 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 three-quarters of one percent (0.75 ) 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 Chapter. {d} Place of Sale . For the purposes of this Chapter, 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. / / / - 2 - 7600-20207032 (e) Qse 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 Chapter for storage, use or other consumption in said territory at the rate of three-quarters of one percent (0.75 ) 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. (f) Adoption of Provisions of State LaN. Except as otherwise provided in this they are inconsistent with the provisions the Revenue and Taxation Code, all of the (commencing with Section 6001} of Divisio Taxation Code are hereby adopted and made though fully set forth herein. Chapter and except insofar as of Part 1.6 of Division 2 of provisions of Part 1 n 2 of the Revenue and a part of this Chapter as (g~ Limitations on Adoption of State Law and Collection of Use Tauces . In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code: (1) 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: (A) The word "State" is used as a part of the title of the State Controller, State Treasurer, State Board of Control, California Department of Tax and Fee Administration, State Treasury, or the Constitution of the State of California. (B) 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 Chapter. (C) 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: (i) Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible - 3 - 7600-20207032 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; (ii) 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. (D) In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code. (2~ 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. (h) 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 Chapter. (i) Exemptions and Exclusions. (1) 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. (2) There are exempted from the computation of the amount of transactions tax the gross receipts from: (A) 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. (B) 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: - 4 - 7600-20207032 (i) 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 (ii) 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. (C) 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 Chapter. (D) 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 Chapter. (E) 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. (3) There are exempted from the use tax imposed by this Chapter, the storage, use or other consumption in this City of tangible personal property: (A) The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance. (B) 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. - 5 - 7600-20207032 (C) If the purchaser property for a fixed price pursuant the operative date of this Chapter. is obligated to purchase the to a contract entered into prior to (D) 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 Chapter. (E~ 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. (F) 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. (G) "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. (4) Any person subject to use tax under this Chapter 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. / / / 7600-20207032 (j) Amen~nt or Repeal. (1} All amendments subsequent to the effective date of this Chapter 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 Chapter, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this Chapter. (2) The City Council may amend this Chapter without voter approval only to make minor technical adjustments consistent with the purposes set forth in this Chapter and applicable laws or as necessary to comply with the law. (k) 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 Chapter, 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. (1) Saverability. If any provision of this Chapter or the application thereof to any person or circumstance is held invalid, the remainder of the Chapter and the application of such provision to other persons or circumstances shall not be affected thereby. (m) Use of Proceeds . The proceeds from the transactions and use tax imposed by this Chapter shall be deposited in the general fund of the City and available for any lawful governmental purpose. (n) Annual Audit . The amount generated by this new general purpose revenue source shall be included in the annual audit of the City's financial operations by an independent certified public accountant. SECTION 2: Any ordinance or parts of ordinances in conflict with this Ordinance are hereby repealed. - 7 - 7600-20207032 SECTION 3: Severability. If any chapter, article, section, subsection, subdivision, paragraph, sentence, clause, phrase, or word in this Ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have adopted this Ordinance and each chapter, article, section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more chapters, articles, sections, subsections, subdivisions, paragraphs, sentences, clauses, phrases or words be declared unconstitutional, or invalid, or ineffective. SECTION 4: Book of Ordinances. The City Clerk shall attest and certify to the adoption of this Ordinance and shall cause this Ordinance and the City Clerk's certification to be entered in the Book of Ordinances of the Council of this City. The City Clerk shall cause this ordinance to be published or posted as required by law. / / / / / / / / / / / / / / / / / / / / / / 1 / / / / / / / 7600-20207032 SECTION 5: Effective Date. This Ordinance shall go into effect if approved by a majority of the voters of the City of Vernon at the general municipal election to be held on April 14, 2020, and shall be executed by the Mayor upon certification by the City Council of the results of the election approving this ordinance. APPROVED AND ADOPTED this 21St day of April, 2020. Name : ~ticia Lo~pet Title: Mayor / '" m~:~ ATTEST: Lisa Pope, Ci y Clerk APP OVED A TO ORM: r old M. lvarez-Glasman, Interim City Attorney ~Z 7600-20207032 STATE OF CALIFORNIA 1 ss COUNTY OF LOS ANGELES I, Lisa Pope City Clerk of the City of Vernon, do hereby certify that the foregoing Qrdinance, being Ordinance No. 1269, was approved by the voters of the City of Vernon, at the general municipal election held in the City of Vernon on Tuesday, April 14, 2020, and thereafter adopted at a meeting of said City Council held on Tuesday, A prit 21, 2020, by the following vote: AYES: Councilmembers: Mayor Lopez, Mayor Pro-Tem Ybarra, Davis, Gonzales, Menke NQES: Councilmembers: None ABSENT: Councilmembers: None ABSTAIN: Councilmembers: None And thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this Z~~day of Maur, 2020, at Vernon, California. l,Y ~ Lisa Pope, City Clerk (SEAL) - 10 7600-20207032 RESOLUTION NO. 2020-10 A RESOLUTION O~ THE CITY COUNCIL OF THE CITY OF VERNQN, CALIFORNIA, RECITING THE FACTS OF THE GENERAL MUNTCIP~L ELECTTON HELD ON APRIL 14, 2020, DECLARING THE RESULTS AND SUCH ETHER MATTERS AS PROVIDED BY LAW WHEREAS, a General Municipal Election was held and conducted in the City of VerrFon, California, on Tuesday, April 1~, 2020, as required by law; and WHEREAS, pursuant to Ordinance No. 1201, the election was conducted entirely by votE-by-mail ballot pursuant to Section 4000, et seq., of the Elections Code of the State of California; and WHEREAS, notice of the election was given in time, form and manner as provided by law; and WHEREAS, an election officer was appointed, vote-by-mail ballots were properly sent to all registered voters, and in all respects the election was held and conducted, the votes were cast, received and canvassed, and the returns were made and declared in the time, form and manner required by the City Charter and the Elections Code of the State of California; and WHEREAS, the City Clerk canvassed the returns or the election and has certified the results to the City Council, which certification and results are received, attached and made a part hereto as Exhibit A. NQW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct. SECTION 2: The City Council of the City of Vernon finds ~;;,~„y „zp< <,,,~ ., u ~;uC aru ~orrect copy of the original document on fi: ~'~ `'~R` in this office consisting of~ pagets). ~~L~~ fI~O~N ~ certify under penalty of perjury under the laws ofi the State of Californ: ' y l . .. ~~~%~. V that the ~oregoin~ is trug #~~ ~orrec~. ~' ~~~f' ,~ ityofVexr~o ~:1~......~ ~. . ~ ~.Zc~ l Y1`. ,.'~Y~'tY iH~J~ Dafe~~ By. 7600-20207032 that this action is exempt from California Environmental Quality Act (CEQA) review, because it is an administrative activity that will not result in direct or indirect physical changes to the environmental, and therefore does not constitute a "project" as defined by CEQA Guidelines Section 15378. SECTION 3: Two (2) voting precincts were established for the purpose of holding said E1e~tion, consisting of the regular election precincts in the City as established for the holding of State and County elections. SECTION 4: The whole number of vote-by-mail voter ballots legally cast in the City for the General Municipal Election held on April 14, 2020, was sixty-six (66), with one (1) provisional ballot cast. SECTION 5: The City Clerk canvassed the returns of the election and certified the results to the City Council, which certification and results are received and accepted, attached and made a part hereto as Exhibit A. SECTION ~: The names of the persons voted for at the General Municipal Election for the office of member of the City Council, in order as they appeared on the official ballot, are as f of 1c:~7s Diana Morales Gonzales Judith Merlo (Qualified Write-in Candidate) SECTION 7: The following are declared to be the results of said General Municipal Election for the office o~ member of the City Council: Diana Morales Gonzales 47 votes Judith Merlo 19 votes - 2 - 7600-20207032 Section 8: The City Council of the City of Vernon hereby aeclares that Diana Morales Gonzales, was elected as member of the City Council for the full term of five (5) years. SECTION 9: The City Clerk shall immediately make and deliver to the person so elected a Certificate of Election signed by the City Clerk and authenticated. SECTION 10: The City Clerk shall also administer to the person elected the bath of Office prescribed in the Constitution of the State of California and shall have him or her subscribe to it and file it in the Office of the City Clerk. The person so elected shall then be inducted into the respective office to which he or she has been elected. SECTION 11: The measures voted upon (Measures U and V) at the April l~, 2020, General Municipal Election ~~ere as follows: MEASURE U: Shall Chapters 3.5 and 3.6 of Article III of the Vernon City Charter be amended to change YES 51 the process for selecting the Mayor and Mayor Pro Tempore from one by which the other Council Members vote to one by which Council Members are appointed according to an NO 14 automatic rotation schedule based an year o~ election? - 3 - 7600-20207032 MEASURE V: To maintain and improve city servicEs including safety, infrastructure, streets and YES 47 housing, shall the ordinance to incrEase the sales tax by three-quarter of one percent, providing up to $6 million annually, be NO 18 adopted? SECTION 12: The City Council does declare and determine that, as a result of the General Municipal Election, a simple majorit;~ of the voters voting on Measure U and Measure V did vote in favor of the measures, and the measures were carried, and shall be deemed approved and adopted. / / l / / / / / / / / I / / / / / / / / / / / / / I / / / / / / / / / / / 1 / / / - ~ - 7600-20207032 SECTION 13: The City Clerk of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the City Clerk of the City of Vernon shall cause this resolution and the City Clerk's certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 21St day of April, 2020. Name: Leticia LopeL Title:e~--~Mayor r' ATTEST: 1 Lisa Pope, Ci y Clerk APPR VE AS 0 F0 Arn ld M. Al arez-Glasman, Interim City Attorney - 5 - 7600-20207032 STATE OF CALIFORNIA } ss COUNTY OF LOS ANGELES ) I, Lisa Pope, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2020-10, was duly passed, approved and adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Tuesday, April 21, 2020, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this ~~D~ day of ~ 2020, at Vernon, California. ~ ~ ~~ ~t Lisa Pope, Ci y Clerk (SEAL) - 6 - 7600-20207032 EXHIBIT A 7600-20207032 EXHIBIT A CITY OF VERNON APRiL 14, 2020 GENERAL MUNICIPAL ELECTIC3N CERTIFICATION OF CANVASS I, Lisa Pope, City Clerk of the City of Vernon, California, do hereby certify that I have canvassed the returns of the General Municipal Election held on Apri! 74, 2020, and find that the number of votes cast were as follows: TO ELECT ONE COUNCIL MEMBER 1S' Count April 14, 2020 2"d Count April 20, 2020 Total Diana Morales Gonzales 44 3 47 Write-In Judith Merlo 19 0 19 Total Votes 63 3 66 BALLOT MEASURES 151 Count 2"d Count April 14, 2020 April 20, 2020 Total YES 50 1 51 Measure U — MayorlMayor NO 12 2 14 Pro Tem Selection Process YES 45 2 47 Measure V —Sales Tax NO 17 1 18 Measure VOTER TURNOUT ~~ Registered Voters 101 Voter Turnout 66% These results are official and reflect all ballots received. The results will be certified and the new Council Member sworn in at the Regular City Council meeting on Tuesday, April 21, 2020. Lisa Pope, City Clerk April 20, 2020 7600-20207032 RESOLUTION NO. 2020-23 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AUTHORIZING THE FINANCE DIRECTOR TO EXECUTE AGREEMENTS WITH THE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION FOR IMPLEMENTATION OF A LOCAL TRANSACTIONS AND USE TAX SECTION 1. Recitals. A. On April 14, 2020, the voters approved Measure V, athree-quarter of one percent sales tax increase. B. On April 21, 2020, the City Council certified the results of the election and ratified Ordinance No. 1269 adding Vernon Municipal Code Chapter 20A and providing for a local transactions and use tax. C. The California Department of Tax and Fee Administration (Department) administers and collects the transactions and use taxes for all applicable jurisdictions within the state. D. The Department will be responsible to administer and collect the transactions and use tax for the City. E. The Department requires that the City enter into a "Preparatory Agreement" and an "Administration Agreement" prior to implementation of said taxes. F. The Department requires that the City Council authorize the agreements. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 2, The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct. SECTION 3. The City Council of the City of Vernon hereby approves the Preparatory Agreement, attached hereto as Exhibit A and the Administrative Agreement, attached hereto as Exhibit B. SECTION 4. The City Council of the City of Vernon hereby authorizes the Finance Director to execute said Agreements for, and on behalf of, the City of Vernon and the City Clerk is hereby authorized to attest thereto. ~ ~ q Y`~~~ SECTION 5. The City Council of the City of Vernon hereby instructs the City ~_ A,. Administrator, or his designee, to take whatever actions ire deemed necessa~ or . ..-..~.. i certi y t at ~~~~i, ;s a t; ua ui~a ~~irect cop f o he original document on fi ~~0~` v~Ry~ in this office consisting of.,,~,.l.~ page(s). ~'~ ``` "~~'; ~y I certify under penalty of perjury under the laws of the State of Califor~'~ that the foregoing is true and correct. i~ •~~ ";,<i ~ -. • 54~: City of V f 9n r~+~•~"~f= ~, ~F ' o~ ~ ~_ ~. ~r Date: ~' 2~ ' 2~ By: ~ (~~t" _.._.__-- 7600-20207032 Resolution No. 2020-23 Page 2 of 11 desirable forthe purpose of implementing and carrying out the purposes of this Resolution and the transactions herein approved or authorized, including but not limited to, any non- substantive changes to the Agreements attached herein. SECTION 6. The City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions. APPROVED AND ADOPTED this 7~"day of July, 2020. ~ETICIA LOPEZ, Mayor ATTEST: ~/ v~ LISA POPE, City Cler (seal) APPR ED AST FO ~ ` ARN D M. ALVAREZ-GLASMAN, ~C~~f~I~~Y ~C~e~HE FOREGOING RESOLUTION NO. 2020-23 was passed and adopted by the City Council of the City of Vernon at the regular meeting on July 7, 2020 by the following vote: AYES: 5 Council Members: Davis, Gonzales, Menke, Ybarra, Lopez NOES: 0 ABSENT: 0 ABSTAIN: 0 lf'~.- /~ LISA POPE, City CI rk (seal) 7600-20207032 Resolution No. 2020-23 EXH I B IT A Page 3 of 11 AGREEMENT FOR PREPARATION TO ADMINISTER AND OPERATE CITY'S TRANSACTIONS AND USA TAX ORDINANCE In order to prepare to administer a t~•ansactions and use tax ordinance adopted in accordance with the provision of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, the City of Vernon, liei•eirlafter called City, and the CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION, hereinafter called Department, do agree as follows: 1. The Department agrees to enter• into work to prepare to administer and operate a transactions and use tax in conformit}~ with Part 1.6 of Division 2 of the Revenue and Taxation Code which has been approved by a majority of the electors of the City and whose ordinance has been adopted by the City. 2. City agrees to pay to the Department at the times and in the amounts hereinafter specified all of the Department's costs for preparatory work necessary to administer• the City's transactions and use tax ordinance. The Department's costs for preparatory work include costs of developinb procedures, pi•ogr•amming for data processing, developing and adopting appropriate c•egulations, designing and printing forms, developing instructions for the Department's staff and for taxpayers, and other appropriate and necessary preparatory costs to administer a transactions and use tax ordinance. These costs shall include both direct and indirect costs as specified in Section 11256 of the Government Code. 3. Preparatory costs may be accounted for in a manner which confoc•ms to the internal accounting and personnel records currently maintained by the Department. The billings for costs may be presented in summary form. Detailed records of preparatory costs will be retained for• audit and verification by the City. 4. Any dispute as to the amount of preparatory costs incurred by the Department shall be referred to the State Director of Finance for resolution, and the Director's decision shall be fi nal. 5. Pt•epac•atory costs incurred by the Department shall be billed by the Department periodically, with the final billing within a reasonable time after the operative date of the ordinance. City shall pay to the Department the amount of sLich costs on or before the last day of the next succeeding month following the month when the billing is received. 6. The amount to be paid by City for the Depa►•tment's preparatory costs shall not exceed one hundred seventy-five thousand dollars ($175,000) (Revenue and Taxation Code Section 7272.) 7600-20207032 Resolution No. 2020-23 Page 4 of 11 7. COI71171L1111Cat(OIIS ~lI1C~ 110tICeS 1717 ' be Se11t ~~` Flt•st class United States mail. Cor~nmLinicatiotls and notices to be sent to the Department shall be addressed to: California Departme►1t of Tax and Fee Administration P.O. I3ox 942879 MIC: 27 Sacramento. California 94279-0027 Atte►ltion: Administrator Local Revenue Branch Communications and notices to be sent to City shall be addressed to: Clty Of VeI'I10I1 X305 Santa Fe AvenLie Vernon, CA 900J 8 Attention: F1I1c~I1Ce DIl~ector 8. The date of this agreement is the date on which it is approved by the Department of General Services. This a~reeine►1t sf1a11 continue in effect until the pi•epat•ator~y ~VOI'k I1eCeSS7I~}~ t0 c~CIt111111S~eI• CIty~S tC~iI1S~1CtlOt1S ~I1C~ L1Se t~1X OI'C~it1~i11Ce ~11S been completed and the Depart~llent has I'eceived all payments due from City tinder the terms of this agreement. CITY OF VERNON C Scott ~~'illiams CALIFORNIA DEPARTMENT OF TAX AND FEE ADiV1INISTRATION By ~S1~IlatUl'e~ ACII111Il1StC'at0t' LOCI ReVe11Ue BI~anch (Tti~ped Nat~~e) Fitlacice Dit•ector (Title) c ~z~, . > > ~ »> 7600-20207032 EXHIBIT B Resolution No. 2020-23 Page 5 of 11 AGREEMENT FOR STATE ADMINISTRATION OF CITY TRANSACTIONS AND USE TAXES The City Council of the City of Vernon has adopted, and the voters of the City of Vernon (hereafter• called '`City' or "District") have approved by the required majol•ity vote, the City of Vernon Transactions and Use TaY Ordinance (hereafter called "Ordinance"), a copy of which is attached hereto. To carry out the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code and the Ordinance, the California State Department of Tax and Fee Administration, (hereinafter called the "Department") and the City do agree as follows: ARTICLE I DEFINITIONS Unless the context requires otherwise, wherever the following terms appear in the Agreement, they shall be iiltet•preted to mean the following: 1. "District taxes" shall mean the transactions and use taxes, penalties, and interest unposed under an ordinance specifically authorized by Revenue and Taxation Code Section 7261, et seq. and in compliance with Part 1.6, Division 2 of the Revenue and Taxation Code. 2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance referred to above and attached hereto, Ordinance No.1269, as amended from time to time, or as deemed to be amended fro~~ time to time pursuant to Revenue and Taxation Code Section 7262.2. ARTICLE II ADMINISTRATION AND COLLECTION OF CITY TAXES A. Administration. The Department and City agree that the Department shall perform exclusively all functions incident to the administration and operation of the City Ordinance. 7600-20207032 Resolution No. 2020-23 Page 6 of 11 B. Other Applicable Laws. City agrees that all provisions of la~v applicable to the administration and operation of the Department Sales and Use Tax Law which are not inconsistent with Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration and operation of the City Ordinance. City agrees that money collected ptirsua►it to the City Ordinance may be deposited into the State Treasury to the cc•edit of the Retail Sales Tax Find and may be drawn from that Fund for any authorized purpose, including making refunds, compensating and reimbursing the Department pursuant to Article IV of this Agreement, and transmitting to City the amount to which City is e►ititled. C. Transmittal of money. 1. For• the pe►•iod dl~ring which the tax is in effect, and except as otherwise provided herein, all district taxes collected tinder the provisions of the City Ordinance shall be transmitted to City periodically as promptly as feasible, but not less often than twice in each calendar quarter. 2. For periods s~ibsequent to the expiration date of the tax whether by City's self-imposed limits or• by final jL~dgment of any court of the State of California holding that City's ordinance is invalid or• void, all district taxes collected under the provisions of the City Ordinance shall be transmitted to City not less than once in each calendar quarter. 3. Tc-ansmittals may be made by mail or electronic fiends transfer to an account of the City designated and authorized by the City. A statement shall be furnished at least quarterly indicating the amounts withheld pursuant to Article IV of this Agreement. D. Rules. The Depac-tment shall prescribe and adopt such rules and regulations as in its jLidgment are necessary or desirable for the administration and operation of the City Ot•dinance and the distribution of the district taxes collected thereunder. E. Preference. Unless the payor instructs otherwise, and except as otherwise provided in this Agreement, the Department shall give no preference in applying money received for state sales and use taxes, state-administered local sales and use taxes, and district transactions and use taxes owed by a taxpayer, but shall apply moneys collected to the satisfaction of the claims of the State, c ities, counties, cities and counties, redevelopment agencies, other districts, and City as their• interests appear. ~rz~~~. ~oi»~ 2 7600-20207032 Resolution No. 2020-23 Page 7 of 11 F. Security. The Department agrees that any security which it hereafter requires to be furnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it also will be available for the payment of the claims of City for district taxes owing to it as its interest appears. The Department shall not be rec~tiired to chan;e the terms of any security now held by it, and City shall not participate in any security now held by the Department. G. Records of the Department. When requested by resolution of the legislative body of the City under section 7056 of the Revenue and Taxation Code, the Department agrees to permit authorized pet•sonnel of the Cit}~ to examine the records of the Department, including the name, address, and account number of each seller• holding a seller's permit with a registered business location in the City, pertaining to the ascertainment of transactions and use taxes collected for the City. Information obtained by the City from examination of the Department's records shall be used by the City only for purposes related to the collection of transactions and use taxes by the Department pursuant to this Agreement. H. Annexation. City agrees that the Department shall not be t•equired to give effect to an annexation, for the purpose of collecting, allocating, and distributinb District transactions and «se taxes, earlier than the first day of the calendar quarter which com►nences not less than two months after notice to the Depai•t~nent. The notice shall include the name of the county or counties annexed to the extended City boundary. In the event the City shall annex an area, the boundaries of which are not coterminous with a county or counties, the notice shall include a description of the area annexed and two maps of the City showing the area annexed and the location address of the property nearest to the extended City boundary on each side of every street or road crossing the boundary. ARTICLE III ALLOCATION OF TAX A. Allocation. In the administration of the Department's contracts with all districts that impose transactions and use taxes imposed under ordinances, which comply with Part 1.6 of Division 2 of the Revenue and Taxation Code: 1. Any payment not identified as being in payment of liability owing to a designated district or districts may be apportioned among the districts as their interest appear, or, in the discretion (~te~. to~~~) 3 7600-20207032 Resolution No. 2020-23 Page 8 of 11 of the Department, to all districts with which the Department has contracted using ratios reflected by the distribution of district taxes collected from all taxpayers. 2. All distt•ict taxes collected as a result of determinations or billings made by the Department, and all amounts refunded or credited may be distributed or charged to the respective districts in the same c•atio as the taxpayer's self-declared district taxes for the period for ~v}Iich the determination, billing, refund ot• credit applies. B. Vehicles, Vessels, ai d Aircraft. For the purpose of allocating use tax with respect to vehicles, vessels, or aircraft, the address of the registered owcler appearing ot1 the application for• registration or on the ce►-tificate of ownership may be used by the Department in detei•miniilg the place of use. ARTICLE IV COMPENSATION The City agrees to pay to the Department as the State's cost of administering the City Ot•dinance such amount as is provided foi• by law. Such amounts shall be ded~icted fi•om the taxes collected by the Department for the City. ARTICLE V MISCELLANEOUS PROVISIONS A. Communications. Communications and notices may be sent by first class United States mail to the addresses listed below, or to such other addresses as the parties may from time to time designate. A notification is complete when deposited in the mail. (Rev. l 0/ 17) 4 ~~~~ ._.. .4¢~:r~~~..~:~t~~ _~...3: ~....~~fi~a~,+s~zrro~.~:~ra~~t c~x`.~~~ ~.. _. ~ :Rs ..~~.~._ s~~s x,~ 7600-20207032 Resolution No. 2020-23 Page 9 of 11 Communications and notices to be sent to the Department shall be addressed to: California State Department of TaY and Fee Administration P.O. Box 942879 Sacramento, California 94279-0027 Attention: Administrator• Local Revenue Branch Comintinications and notices to be sent to the City shall be addressed to: City of Ve►•non 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Finance Director• Unless otherwise directed, transmittals of payment of District transactions and use faxes will be sent to the address above. B. Term. The date of this Agreement is the date on which it is app►•oved by the Department of General Sec•vices. The Agreement shall take effect on October 1, 2020. This Agreement shall continue lentil December 31 next following the expiration date of the City Ordinance, and shall thereafter be renewed automatically from year to year until the Department completes all work necessary to the administration of the City Ordinance and has received and disbu►•sed all payments due under that Ordinance. C. Notice of Repeal of Ordinance. City shall give the Department written notice of the repeal of the City Ordinance not less than 110 days prior to the operative date of the repeal. (Rev. 10/ 17) 5 ,, . ... ; 7600-20207032 Resolution No. 2020-23 Page 10 of 11 ARTICLE VI ADMINISTRATION OF TAXES IF THE ORDINANCE IS CHALLENGED AS BEING INVALID A. IIiI()OUIlCIIIlellt Of fUll(~S. 1 . ~~~hen a legal action is begun challenging the validity of the imposition of the tax, the City s}Zall deposit ii1 an interest-beai~inb esci-o«~ accoLint, all}' pt'OCeECIS tI'~iI1S17]ItteCl t0 It LlT1CieI' A►-ticle lI. C., LII11lI cl COUI't Of C0111~~tellt ~Lll'lSCI1Cl:lOtl 1'et1C~CI'S a flt~~~ and note -appealable judblllellt t~171; t}1e tc~X 1S Va~1C~. 2. If the tax is determined to be 1111CO11StltlltlOtlal or otherwise invalid, the City shall transmit to the Department the moneys retained in escrow, including any accumulated interest, W1tI11I1 tec~ days of the ,jt~d~~llleilt Of t~le tCl~~ COLI('t lIl l~le Il~l~at1011 Z~Vat•ding costs and fees becoming final and non -appealable. I3. Costs of adiiliiiisti•atioii. S1lould a final jLid~ment be entered in any court of tfle State of California, I101CIlI1fJ that City's Ordinance is invalid or void, and requiring a rebate or refund to taxpayers of any taxes collected under the terms oi'this Agreement, the parties mutually agree that: 1. Department may retain all payments made by City to Department to prepare to admirliste►• the City Ordinance. 2. City «rill pay to Department and allow Department to retain Department's cost of administering the Cit}' OT'C~It1~111Ce lit the ZI11011f1tS Set fOT'tIl 111 AI'tICIe IV Of t}11S Abt•eement. 3. City will pay to Depat-tment oi• to the State of Califot-nia the amount of any taxes phis interest and penalties, if any, that Department or the State of California may be required to rebate or 1•efiind to taxpayers. 4. City will pay to Department its costs for rebating or refunding such taxes, interest, or penalties. Department's costs shall include its additional cost for developing procedures for processing ~ R~,~ ~ o~ i ~> 6 :. .. . ~:-c~. .. ~ ~~.~'c ., _ ~9bC . , r .._, ::. ... :...: .. .:issra~`~rcv~~:r~:r~.asa~n 7600-20207032 Resolution No. 2020-23 Page 11 of 11 the rebates or refiinds, its costs of actually making these refunds, designing and printing forms, and developing instructions for Department's staff for• use in making these rebates or• refunds and any other costs incurred by Department which are reasonably appropriate or necessary to make those rebates or refunds. These costs shall include Department's direct and indirect costs as specified by Section 11256 of the Government Code. 5. Costs may be accounted For in a manner, which conforms to the internal accounting, and personnel records currently maintained by the Department. The billings for such costs may be presented in summa►•y form. Detailed records will be retained for audit and verification by City. 6. Any dispute as to the amount of costs incurred by Department in refunding taxes shall be referred to the State Director of Finance for resolution and the Director's decision shall be final. 7. Costs incurred by Department in connection with such refunds shall be billed by Department on or before the 25t1i day of the second month following the month in which the judgment of a court of the State of California holding City's Ordinance invalid or void becomes final. Thereafter Department shall bill City on or before the 25th of each month foi• all costs incurred by Department for the preceding calendar month. City shall pay to Depat-tment the amount of such costs on or before the last day of the succeeding month and shall pay to Department the total amount of taxes, interest, and penalties t•efiinded or paid to taxpayers, together with Department costs incurred in making those refunds. CITY OF VERNON By (Signature) Scott Williams (Typed Name) Finance Director (Title) CALIFORNIA STATE DEPARTMENT OF TAX AND FEE ADMINISTRATION Administrator Local Revenue Branch (Rev. 10/17) 7 7600-20207032 RESOLUTION NO. 2020-24 A RESOLUTION ~F THE CITY AUTHORIZING EXAMINATION TAX RECORDS SECTION 1. Recitals. COUNCIL OF THE CITY OF VERNON OF SALES, USE AND TRANSACTIONS A. Pursuant to Ordinance No. 1269 of the City of Vernon (City) and Section 7270 of the Revenue and Taxation Code, the City entered into a contract with the California Department of Tax and Fee Administration (CDTFA) to perform all functions incident to the administration and operation of the Transactions and Use Tax Ordinance. B. The City deems it desirable and necessary for authorized representatives of the City to examine confidential transactions and use tax records of the California Department of Tax and Fee Administration pertaining to transactions and use taxes collected by the Board for the City pursuant to that contract. C. Section 7056 of the Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of California Department of Tax and Fee Administration records and establishes criminal penalties for the unlawfu{ disclosure of information contained in or derived from, the transactions and use tax records of the Board. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 2. The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct. SECTION 3. The City Council of the City of Vernon hereby appoints the City Administrator, Finance Director, Assistant Finance Director, Economic Development Manager, Deputy City Treasurer, Senior Accountant and any other o~cer or employee of the City designated in writing by the City Administrator to the California Department of Tax and Fee Administration (hereafter referred to as the CDTFA) to represent the City with authority to examine sales, transactions and use tax records of the CDTFA pertaining to sales, transactions and use taxes collected for the City by the CDTFA pursuant to the contract between the City and the CDTFA. The information obtained by examination of CDTFA records shall be used only for purposes related to the collection of the City's sales, transactions and use taxes by the CDTFA pursuant to the contract. SECTION 4. The City Council of the City of Vernon hereby appoints the City Administrator or any other officer yr employee of the City designated in writing by the City Administrator to the CDTFA to represent the City with authority to examine those transactions and use tax records of the Board for purposes related to the following governmental functions of the City: •. ~~~, ,certify that tn~s zs a true a correct copy of the original dceume0t on ti! ,`~~' YFa;~o in this office consisting of~ page(s). .~ I certify under penalty of perjury under the laws of the State of Calitorr~- .. ~ that the foregoing is true and correct, ~'^ff •, ~..,4 fi~' City of Vernon Date: ••~+~• ~By: ~t ~f !~ 7600-20207032 Resolution No. 2020-24 Page 2 of 3 a) City Administration b) Revenue management and budgeting c) Community and economic development d) Business license tax administration e} Transportation Planning fl Forecasting The information obtained by examination of CDTFA records shat{ be used only for those governmental functions of the City listed above. SECTION 5. The City Council of the City of Vernon hereby designates Avenu MuniServices, LLC to examine the sales, transactions and use tax records of the California Department of Tax and Fee Administration pertaining to transactions and use taxes collected for the City by the Department. The person ar entity designated by this section meets all of the following conditions: a} has an existing contract with the City to examine those sales, transactions and use tax records; b) is required by that contract to disclose information contained in, or derived from those transactions and use tax records only fo the officer{s) or employees) authorized under Section 3 or Section 4 of this Resolution to examine the information; c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract; and d) is prohibited by that contract from retaining the information contained in or derived from those transactions and use tax records after that contract has expired. SECTION 6. The information obtained by examination of Board records shall be used only for purposes related to the collection of City's sales, transactions and use taxes by the Board pursuant to the contracts between the City and Board. 7600-20207032 Resolution No. 2020-24 Page 3 of 3 SECTION 7. The City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions. APPROVED AND ADOPTED this 7"'day of July, 20 LETICIA LOPEZ, Mayor ATTEST: LISA POPE, City Cle (seal) APPR VED AS T FORM: ARN LD M. AlV REZ-GLASMAN, Interim City Attorney CERTIFY THAT THE FOREGOING RESOLUTION NO. 202Q-24 was passed and adopted by the City Council of the City of Vernon at the regular meeting on July 7, 2020 by the following vote: AYES: 5 Co~Encil Members: Davis, Gonzales, Menke, Ybarra, Lopez NOES: 0 ABSENT: 0 ABSTAIN: 0 LISA POPE, City Jerk {seal) 7600-20207032 PARTIALLY EXECUTED SIGNATURE ROUTING FORM CONTRACTOR: California State Department of Tax and Fee Administration CONTRACT PURPOSE: Agreement for State Administration of City Transactions and Use Taxes CONTRACT IS: 0 FEDERAL 0 PREVAILING WAGE 0 COMPETITIVE SELECTION&NOTICED RFP 0 COMPETITIVE BID& NOTICED INVITATION TO BID El EXEMPT FROM COMPETITIVE PROCESS (APPROVAL ATTACHED) X SERVICES 0 MATERIALS 0 BUDGETED 0 NOT BUDGETED TOTAL CONTRACT VALUE: $ Charge Acct. No(s) 011.1004.401200 Amendment Value$ Contract is an Amendment to Eden Contract No. if applicable) RESPONSIBLE DEPARTMENT PERSON: Angela Melgar PHONE: ext. 242 AUTHORIZATION: X Approved by Council on 7/07/2020 Check one and attach Resolution No. 2020-23 (if applicable) supporting documentation) 0 Approved by City Administrator on Approved by Finance Director on ROUTING SEQUENCE: (Please Follow In Order) Initials Date 1) Responsible Department Person l&t./(Certifies compliance with Competitive Bidding and Purchasing Ordinance, 1111.E I'L obtains approval from City Council/City Administrator/Finance Director,and obtains approval as to form from the City Attorney's Office, assembles two(2)originals of contract, obtains proper signatures from contractor/consultant pursuant to the signature requirements, obtains insurance&bond documents, notifies IT to remove related RFP/bid notice from the City's website(if applicable),enters contract into Eden once routing process is complete. 2) Liability and Claims Appro\es insurance and sureties if bonds required. 1 3) Finance(Purchasing) Checks compliance with Competitive Bidding&Living Wage Ordinances 1 (t c. z-a and reflected in current budget. 4) City Attorney Approves contract as to form. 7J o2-" 5)City Signatory e2—t(Z-62-6SignsdocumentonbehalfofCity. 6) City Clerk4Attestssignatures,numbers and files contract,enters contract documents executed contract,supporting documentation, insurance and bonds,etc.) into Laserfiche, transmits duplicate original to contractor/consultant, notifies Responsible Department Person, and notifies any"consultant"of duties to file Form 700,if applicable. Rev.6/2017 AGREEMENT FOR STATE ADMINISTRATION OF CITY' TRANSACTIONS AND USE TAXES The City Council of the City of Vernon has adopted.and the voters of the City of Vernon (hereafter called "City" or"District'") have approved by the required majority vote. the City of Vernon Transactions and Use Tax Ordinance (hereafter called -Ordinance). a copy of %%hich is attached hereto. To carry out the pros isions of Part I.6 of Dig ision 2 of the Revenue and Taxation Code and the Ordinance. the California State Department of Tax and Fee Administration. (hereinafter called the"Department-)and the City do ame as follon\.: ARTICLE I DI I lNl Unless the context requires othen\ise. here%er the follox‘im_ terms appear in the Agreement. they shall be interpreted to mean the fbllom in`_: I. "District taxes" shall mean the transactions and use taxes. penalties. and interest imposed under an ordinance specifically authorized by Revenue and Taxation Code Section 7261. et seq. and in compliance%%ith Part 1.6. Di%ision 2 of the Revenue and Taxation Code. 2. "City. Ordinance" shall mean the C'it s Transactions and Use Tax Ordinance referred to above and attached hereto. Ordinance No.1269. as amended from time to time. or as deemed to he amended from time to time pursuant to Revenue and Taxation Code Section 7262.2. ARTICLE II ADMINISTRATION AND COLLECTION OF CITY TAXES A. Administration. The Department and City agree that the Department shall perform exclusively all functions incident to the administration and operation of the City Ordinance. B. Other Applicable Laws. City agrees that all prop isions of law applicable to the administration and operation of the Department Sales and Use Tax Law which are not inconsistent ith Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration and operation of the City Ordinance. City agrees that money collected pursuant to the City Ordinance may be deposited into the State Treasury to the credit of the Retail Sales Tax Fund and may be drawn from that Fund for any authorized purpose. including making refunds. compensating and reimbursing the Department pursuant to Article IV of this Agreement. and transmitting to City the amount to which City is entitled. C. Transmittal of money. I. For the period during_ 'v hich the tax is in effect.and except as others ise provided herein. all district taxes collected under the provisions of the City Ordinance shall be transmitted to City periodically as promptly as feasible. but not less often than mice in each calendar quarter. 2. For periods subsequent to the expiration date of the tax %%hether by City's self-imposed limits or by final judgment of any court of the State of California holding that City's ordinance is invalid or void. all district taxes collected under the provisions of the City Ordinance shall be transmitted to City not less than once in each calendar quarter. 3. Transmittals may be made by mail or electronic funds transfer to an account of the City designated and authorized by the City. A statement shall be furnished at least quarterly indicating the amounts s ithheld pursuant to Article IV of this Agreement. D. Rules. The Department shall prescribe and adopt such rules and regulations as in its judgment are necessary or desirable for the administration and operation of the City Ordinance and the distribution of the district taxes collected thereunder. E. Preference. Unless the pa\or instructs otherwise. and except as otherwise provided in this Agreement. the Department shall gig e no preference in apply ing money received for state sales and use taxes. state-administered local sales and use taxes. and district transactions and use taxes owed by a taxpayer. but shall apply moneys collected to the satisfaction of the claims of the State. cities. counties. cities and counties. redevelopment agencies. other districts,and City as their interests appear. iRe% 10 171 2 F. Security. The Department agrees that any security which it hereafter requires to be furnished by taxpayers under the State Sales and Use Tax Lau will be upon such terms that it also will be available for the payment of the claims of City for district taxes ow ing to it as its interest appears. The Department shall not be required to change the terms of any security now held by it.and City shall not participate in any securit% now held by the Department. G. Records of the Department. When requested by resolution of the legislative body of the City under section 7056 of the Revenue and Taxation Code. the Department agrees to permit authorized personnel of the City to examine the records of the Department. including the name. address. and account number of each seller holding a seller's permit w ith a registered business location in the City. pertaining to the ascertainment of transactions and use taxes collected for the City. Information obtained by the City from examination of the Department's records shall be used by the City only for purposes related to the collection of transactions and use taxes by the Department pursuant to this Agreement. H. Annexation. City agrees that the Department shall not be required to give effect to an annexation. for the purpose of collecting. allocating. and distributing District transactions and use taxes.earlier than the first day of the calendar quarter which commences not less than two months after notice to the Department. The notice shall include the name of the county or counties annexed to the extended City boundary. In the event the Cite shall annex an area. the boundaries of which are not coterminous v ith a county or counties. the notice shall include a description of the area annexed and two maps of the City showing the area annexed and the location address of the property nearest to the extended City boundary on each side of every street or road crossing the boundary. ARTICLE III ALLOCATION OF TAX A. Allocation. In the administration of the Department's contracts with all districts that impose transactions and use taxes imposed under ordinances. w hich comply with Part 1.6 of Division of the Revenue and Taxation Code: 1. Any payment not identified as being in payment of liability o \ing to a designated district or districts may be apportioned among the districts as their interest appear. or. in the discretion fret ( , (') 3 of the Department. to all districts with which the Department has contracted using ratios reflected by the distribution of district taxes collected from all taxpayers. 2. All district taxes collected as a result of determinations or billings made by the Department. and all amounts refunded or credited may be distributed or charged to the respective districts in the same ratio as the taxpayer's self-declared district taxes for the period for which the determination. billing. refund or credit applies. B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with respect to vehicles. vessels. or aircraft. the address of the registered owner appearing on the application for registration or on the certificate of ownership may be used by the Department in determining the place of use. ARTICLE IV COMPENSATION The City agrees to pay to the Department as the State's cost of administering the City Ordinance such amount as is provided for by law. Such amounts shall be deducted from the taxes collected by the Department for the City. ARTICLE V MISCELLANEOUS PROVISIONS A. Communications. Communisations and notices may be sent by first class United States mail to the addresses listed below. or to such other addresses as the parties may from time to time designate. A notification is complete when deposited in the mail. Re, to 17) 4 Communications and notices to be sent to the Department shall be addressed to: California State Department of Tax and Fee Administration P.O. Box 942879 Sacramento. California 94279-0027 Attention: Administrator local Revenue Branch Communications and notices to be sent to the City shall be addressed to: City of Vernon 4305 Santa Fe Avenue Vernon. CA 90058 Attention: Finance Director Unless otherwise directed, transmittals of payment of District transactions and use taxes will be sent to the address above. B. Term. The date of this Agreement is the date on which it is approved the Department of General Sery ices. The Agreement shall take effect on October 1. 2020. This Agreement shall continue until December 31 next following the expiration date of the City Ordinance. and shall thereafter be renewed automatically from sear to year until the Department completes all work necessary to the administration of the City Ordinance and has received and disbursed all payments due under that Ordinance. C. Notice of Repeal of Ordinance. City shall give the Department written notice of the repeal of the C its Ordinance not less than 110 days prior to the operative date of the repeal. iRr To 171 5 ARTICLE VI ADMINISTRATION OF 'FAXES IF THE t tRI)I\ \NCE IS CHALLENGED AS BEING INVALID A. Impoundment funds_ I. \\hen a legal action is begun challencine the validity of the imposition of the tax. the City shall deposit in an interest-bearing escrow account. any proceeds transmitted to it under Article II. C.. until a court of competent jurisdiction renders a final and non-appealable judgment that the tax is valid. 2. If the tax is determined to be unconstitutional or otherwise invalid. the City shall transmit to the Department the moneys retained in escrow. including any accumulated interest. within ten days of the judgment of the trial court in the litivation ayyardin_ costs and fees becoming final and non-appealable. B. Costs of administration. Should a final judgment be entered in any court of the State of California. holding that City's Ordinance is invalid or void. and requiring a rebate or refund to taxpa>ers of any taxes collected under the terms of this Agreement.the parties mutually agree that: I. Department may retain all payments made by City to Department to prepare to administer the City Ordinance. 2. City will pay to Department and alloys Department to retain Department's cost of administering_the City Ordinance in the amounts set forth in Article IV of this Agreement. 3. City %%ill pay to Department or to the State of California the amount of any taxes plus interest and penalties. if any. that Department or the State of California may be required to rebate or refund to taxpayers. 4. City will pa} to Department its costs for rebating or refunJin:_ such taxes. interest. or penalties. Department's costs shall include its additional cost for developing procedures for processing axe% ! ! 6 the rebates or refunds, its costs of actually making these refunds. designing and printing forms, and developing instructions for Department's staff for use in making these rebates or refunds and any other costs incurred by Department which are reasonably appropriate or necessary to make those rebates or refunds. These costs shall include Department's direct and indirect costs as specified by Section 11256 of the Government Code. 5. Costs may be accounted for in a manner, which conforms to the internal accounting, and personnel records currently maintained by the Department. The billings for such costs may be presented in summary form. Detailed records will be retained for audit and verification by City. 6. Any dispute as to the amount of costs incurred by Department in refunding taxes shall be referred to the State Director of Finance for resolution and the Director's decision shall be final. 7. Costs incurred by Department in connection with such refunds shall be billed by Department on or before the 25th day of the second month following the month in which the judgment of a court of the State of California holding City's Ordinance invalid or void becomes final. Thereafter Department shall bill City on or before the 25th of each month for all costs incurred by Department for the preceding calendar month. City shall pay to Department the amount of such costs on or before the last day of the succeeding month and shall pay to Department the total amount of taxes. interest, and penalties refunded or paid to taxpayers. together with Department costs incurred in making those refunds. CITY OF VERNON CALIFORNIA STATE DEPARTMENT OF TAX AND FEE ADMINISTRATION By i By Signature) Administrator Local Revenue Branch Scott Williams Typed Name) Finance Director Title) A ST: APP OVED AS FO Lisa Pope, City lerk A nold M. A arez-Glasman, Interim City Attorney iRe% It) 171 7 STAFF REPORT City Council Agenda Item Report Agenda item No. COV-239-2020 Submitted by: Angela Melgar Submitting Department: Finance/Treasury Meeting Date: July 7, 2020 SUBJECT Implementation of the Citys Local Transactions and Use Tax(April 14, 2020 Measure V) Recommendation: A. Adopt Resolution No. 2020-23 approving and authorizing the Finance Director to execute a Preparatory Agreement and an Administrative Agreement with the California Department of Tax and Fee Administration for the collection and distribution of the Local Transaction Use Tax; and B. Adopt Resolution No. 2020-24 authorizing examination of sales, use and transactions tax records. Background: At the April 14, 2020 General Municipal Election, the majority of voters of the City of Vernon approved Measure V, adopting Ordinance No. 1269, to increase the sales tax by three-quarter of one percent, providing up to $6 million annually, to maintain and improve City services including safety, infrastructure, streets and housing. On April 21, 2020, the Council certified the results of the election and ratified Ordinance No. 1269, adding Vernon Municipal Code Chapter 20A to enact a transactions and use tax rate of three-quarters of one percent (0.75%) of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the incorporated territory of the City. The proceeds from the transactions and use tax shall be deposited in the general fund of the City and available for any lawful governmental purpose. Pursuant to Vernon Municipal Code Section 20A.1.(b), the City shall contract with the California Department of Tax and Fee Administration (CDTFA) to perform all functions incidental to the administration and operation of this transactions and use tax ordinance. Pursuant to Vernon Municipal Code Section 2.17.12 et seq., competitive bidding or competitive selection is not required because the services are provided by a governmental entity, and because the entity is the sole service provider. Resolution No. 2020-23 authorizes the Finance Director to execute an agreement with the CDTFA to administer and operate the Citys Transactions and Use Tax ordinance and an agreement for State administration of the City's transactions and use taxes. Resolution No. 2020-24 authorizes examination of sales, use and transactions tax records. The City deems it necessary for its authorized representatives to examine confidential transactions and use tax records of the CDTFA pertaining to transactions and use taxes collected by the Board for the City pursuant to that contract. Fiscal Impact: The City shall pay the CDTFA for preparatory work necessary to administer the Citys transactions and use tax ordinance. The amount to be paid by the City for the CDTFA's preparatory costs shall not exceed one hundred seventy-five thousand dollars ($175,000) (Revenue and Taxation Code Section 7272). Additionally, the City agrees to pay to the CDTFA as the State's cost of administering the City Ordinance such amount as is provided for by law. Such amounts shall be deducted from the taxes collected by the Department for the City. Attachments: 1. Resolution No. 2020-23 Agreements for Sales Tax Implementation 2. Resolution No. 2020-24 Examination of Tax Records