ADOPTION OF RESOLUTIONS RELATED TO THE CALLING OF A GENERAL MUNICIPAL ELECTION CONSOLIDATED WITH THE STATEWIDE GENERAL ELECTION HELD ON TUESDAY, NOVEMBER 6, 2018, TO SUBMIT A ¾ CENT LOCAL SALES TAX BALLOT MEASURE TO MAINTAIN CITY INFRASTRUCTURE AND ESSENTIAL COMMUNITY SERVICES, AND A RELATED ADVISORY BALLOT MEASURE TO SUPPORT PASADENA PUBLIC SCHOOLS July 16, 2018 Item 16

Background Pasadena provides a high quality of life City provides a wide variety of essential services Fire Police Emergency Medical response with Advanced Life Support Youth programming and after-school services Classes for seniors and dial-a-ride services Increasingly difficult to maintain these services Over $20 million in General Fund reductions Loss of $130,000,000 in redevelopment Elimination of more than 130 staff positions 23 police officer positions with 5 more defunded this year Funding source shown on a later slide

Major Challenges The City is 132 years old and our streets, sidewalks and other infrastructure are deteriorating Approximately 670,000 square-feet of damaged sidewalk ($9m) High-voltage street light system is failing ($21m) Our aging fire stations don’t meet today’s current standards Need to replace five stations and upgrade two others ($120m) 911 emergency radio communication equipment needs replacement ($8m) Funding source shown on a later slide

Major Challenges Pasadena has one of the largest homeless populations in the San Gabriel Valley 18% increase from 2017 to 2018 Pasadena is receiving little funding from Measure H More than 2,100 Pasadena youth rely on the City-run after school and summer programs Further budget reductions would place these programs in jeopardy Without additional revenues, the City must cut millions of dollars over the next few years to balance its budget Resulting in significant service reductions Funding source shown on a later slide

Establishing a local revenue source Local (transaction) sales tax is the preferred option Spread across large tax base Paid by all shoppers, not just residents Over 110,000 people come to Pasadena each day Generate significant additional revenues with small incremental increase in transaction costs - 75 cents for every $100 Numerous cities have established local sales taxes Glendale and Burbank are taking action tomorrow night Cannot be shifted to County or State Government

Pasadena’s Fair Share?

The window of opportunity State limit of 2% for locally assessed sales/transactions taxes L.A. County agencies have existing taxes that equal 1.25% Therefore, there is only 0.75% remaining Other taxing agencies are likely to pursue voter approval for new or increased taxes AQMD pursuing 0.25% sales tax Los Angeles County Based on past history Pasadena would not receive its fair share Eliminate the ability of Pasadena residents to decide for themselves

Resident feedback Residents want to maintain essential services and reinvest in infrastructure The proposed action does not impose any tax, it merely authorizes asking voters to decide

PUSD Advisory Vote Separate non-binding advisory measure A strong public school system benefits the City Maintains measure as a General revenue 50%+1 Opportunity for voters to indicate priority preference City Council maintains decision making

Recommendations It is recommended that the City Council: Conduct first reading and approve by 2/3rds (six members of the Council) agenda item 20 – Transactions & Use Tax Ordinance (second reading scheduled for July 23) Find that the proposed action is not a project subject to California Environmental Quality Act (CEQA) as defined in Section 21065 and Section 15378 of the State CEQA Guidelines and, as such, no environmental document pursuant to CEQA is required for the project; Adopt a resolution of the City Council of the City of Pasadena calling and giving notice of a General Municipal Election of the City of Pasadena on Tuesday, November 6, 2018, for the submission of a 0.75 percent sales tax ballot measure and related advisory ballot measure to support Pasadena public schools; Adopt a resolution of the City Council of the City of Pasadena requesting the Board of Supervisors of the County of Los Angeles authorize and order the consolidation of the City of Pasadena General Municipal Election with the Statewide General Election to be held on Tuesday, November 6, 2018, and requesting the Los Angeles County Registrar-Recorder/County Clerk to administer said election on behalf of the City; Adopt a resolution of the City Council of the City of Pasadena setting priorities for filing written arguments pertaining to a proposed sales tax measure and related advisory ballot measure; and directing the City Attorney to prepare an impartial analysis; and Adopt a resolution of the City Council of the City of Pasadena providing for the filing of rebuttal arguments with respect to the City of Pasadena’s proposed sales tax.

Current Los Angeles County tax rates State General Fund 1 3.9375% City/County General Fund (Bradley Burns) 1 1.0000% Public Safety (Prop 172) 1 0.5000% County Realignment (Mental Health/Welfare/Public Safety) 1 1.5625% Countywide Transportation Fund 1 0.2500% Los Angeles County Transportation Commission (Prop A) 2 Los Angeles County Transportation Commission (Prop C) 2 Los Angeles County Metro Transportation Authority (Measure R) 3 Los Angeles County Metro Transportation Authority (Measure M) 3 County of Los Angeles (Measure H) 2 Total Rate 9.5000%

Use Tax Rules - Vehicles Exclusions and Exemptions (4.42.100.B.2) – Vehicles Sales and Use tax is charged based on the registration address of a vehicle. Vehicles purchased with a registration address in Pasadena will pay the tax, regardless where they are purchased. Vehicles purchased in Pasadena with a registration address outside of Pasadena won’t pay the tax.

Use Tax Rules - Vehicles Examples A person purchases a car from a dealer in Pasadena, but will register their car with a Monrovia address. This person will not pay the tax. A person purchases a car from a dealer in Pasadena and registers the car with their Pasadena address. This person will pay the tax. A person purchases a car in Monrovia and registers the car with a Pasadena address. This person will pay the tax.

Year Approved by Voters LA County Tax Rates City Local Tax % Year Approved by Voters Commerce 0.5 2012 Compton 1.0 2016 Culver City Downey El Monte 2008, 2013, 2017 Inglewood 2006 La Mirada Long Beach Lynwood Pico Rivera 2008 San Fernando 2013 Santa Monica 2010, 2016 South El Monte 2010 Southgate

General Fund Forecast As of 7/16/18