At large _________

If formed the City will assume responsibilities for local services including but not limited to law enforcement, land use planning, parks and street maintenance. Parks and other assets that will be transferred to the City are described in LAFCO's resolution of approval, which is enclosed with the ballot naaterials, contains all terms and conditions for the incorporation, and should be read.

The voters within the proposed City will choose a five-member city council, elected at large, to govern the City and make decisions about City operations, levels of service and land use regulation. All County ordinances will remain in effect until the city council enacts ordinances superceding them.

Services that are not changed by this incorporation include schools, fire protection, water supply, sewage disposal and countywide services such as health care, social services and the court system.

LAFCO cannot approve a new city if it is not financially feasible or if the revenue the County loses exceeds the costs of services it no longer provides. LAFCO prepared a Comprehensive Fiscal Analysis that concludes the City will have sufficient revenues to provide public services at current levels, with a reasonable reserve, without increasing taxes or assessments. It is projected that the City, after ten years, can generate fund balances of $3.5 million in the general fund and $3.6 million in the road fund after making all legally required mitigation payments to the County.

City revenues will come primarily from sales taxes, property taxes, fees for service and payments from the State. If the City is not created, current revenues will continue to go to the County.

If the City is created, LAFCO conditions require that (a) the City permanently transfer 50% of its property tax and 3096 of its sales tax revenues to the County for on-going Countywide services, (b) the City transfer, for ten fiscal years, 20% of its sales tax revenues and 40% of its transient Occupancy Tax (from existing facilities) to make State mandated mitigation payments to the County, (c) the County will advance the City $1.5 million to be repaid after ten years, (d) the County will forgive initial year costs of up to $2.5 million for the City general fund and $1.5 for the City road fund, (e) the County agrees to provide contract services to City for not less than five years on terms negotiated between City and County, i.e., law enforcement, public works and park maintenance and (f) the County will transfer to the City all park, transportation, streetlighting and library funds that have been collected for use in the City area.

The boundaries are right: including voters who historically have favored cityhood.

The size is right: the population is midway in size among current cities in this county and in California.

The finances are right: comprehensive, professional, and independent fiscal analyses have repeatedly shown that the city is financially sound and able to provide at least the current level of services--without new or increased taxes.

Goletans have been clear about why they support cityhood. They want local control of decisions that affect them and their neighborhoods. Local control means an elected city council of Goleta residents accessible and accountable to local voters.

The new independent city of Goleta will set priorities for municipal services such as law enforcement, parks, and road maintenance. During the transition period following the election, the county and special districts will ensure continuity of these and other services.

The city of Goleta will direct local tax revenues to meeting the needs of local residents. A locally elected city council will decide what gets built in Goleta neighborhoods and when. For the first time, Goletans will make the decisions on issues affecting their community and have an equal voice in regional issues and planning.

Join the many Goletans who believe that the time is right to empower the people who live in Goleta to make the decisions that affect their community.

Vote YES on Measure H2001 to create the new city of Goleta.

There will never be a better time than Now!

/s/ Catherine E. Sedmar
Founding member GoletaNow! Committee
Administrative Secretary
Old Town resident

/s/ Patricia M. English, Ph.D.
Founding member GoletaNow! Committee
Technical Communicator
El Encanto Heights resident

/s/ Sean S. Halsey
Founding member GoletaNow! Committee
Mechanical/Electrical Technician
El Encantc Heights resident

/s/ Robert E. Wignot, P.E.
Founding member GoletaNow! Committee
Water Agency Manager
North Fairview resident

NOT ENOUGH MONEY MEANS MORE TAXES AND TO MUCH DEVELOPMENT. A city short on cash will be under tremendous pressure to generate tax revenues by the indiscriminate approval of all construction projects.

A UNDER FUNDED CITY CANNOT STAND UP TO OIL COMPANIES OR NATURAL DISASTERS. The city will not have the money to fight Venoco's planned expansion of Oil Drilling and Onshore Operations or to deal with any natural disaster; Earthquakes, Floods or Wild Fire.

THIS PLAN DIVIDES GOLETA. This proposed City of Goleta doesn't include 63% of Goleta Valley, Goleta Beach, or our precious foothills.

WE WILL PAY MORE MONEY FOR LESS SHERIFF PROTECTION. Goletans currently pay $108 (in tax money) per capita per year. Under this plan, the city would contract with the County Sheriff to receive protection for $140-$150 per capita.

If you want to live in a Community that is protected from rampant growth, has adequate public safety, money for recreation, city beautification and is not at the mercy of oil companies or developers then this under funded, inadequate, divided proposal requires a no vote.

VOTE NO ON MEASURE H.

THERE ARE BETTER OPTIONS FOR OUR WHOLE COMMUNITY.

/s/ Norma Geyer
Businesswoman

/s/ David K. Sangster
Environmentalist
Mobile Home Park Resident

/s/ Tamara Cabrera
Concerned Citizen

/s/ R. Steven Jones
Past President, Goleta Chamber of Commerce

/s/ William Gilbert
Airport Commissioner
Concerned Citizen

Why won't the city have enough money?

1. The fiscal analysis that was used to argue for cityhood assumes that the economy will be strong for the next ten years and provide the needed sales tax. Both stock markets and economists across the nation will tell you that isn't going to happen, that a slow-down or a recession is taking place.

2. THE CITY'S FINANCES ARE DEPENDENT ON A HOTEL THAT MAY NOT BE BUILT! To avoid a deficit, the city must have the "bed tax" from the Page Hotel by mid 2004. Without changes to Hwy. 217, which may not happen, the Hotel will not be built. ( This is just one Example )

3. To convince the County, CITYHOOD PROPONENTS AGREED TO GIVE ALL OUR MONEY AWAY: 50% of our area's property tax and 30% of our sales tax -FOREVER, plus 20% sales tax and 40% of the Transient Occupancy Tax for ten years. In total this means we give the County almost $100 million in the first ten years, while they give the proposed city only $3 million.

4. THIS PROPOSAL ADDS ANOTHER LAYER OF GOVERNMENT TO THE VALLEY.

5. The city will contract with the county for the same services you already have, but adds another layer of governmental cost.

There are too many assumptions, too many compromises, and too little money to run a city on!

A city without money, has three bad options:

• Raise taxes on what we already have,

• Reduce services like police protection, or

• Build more hotels and shopping centers.

VOTE NO ON H-01 --- Goleta deserves better.

/s/ Norma Geyer
Businesswoman

/s/ David K. Sangster
Environmentalist
Mobile Home Park Resident

/s/ Tamara Cabrera
Concerned Citizen

/s/ R. Steven Jones
Past President, Goleta Chamber of Commerce

/s/ William Gilbert
Airport Commissioner
Concerned Citizen

Goleta has the money. The fiscal analysis projections are conservative. Revenue estimates are low. Expenditure estimates are high. City finances are independent of any single project. For example, a newly proposed Old Town hotel was not included in revenue projections.

The fiscal analysis projects that the city can generate cumulative surpluses of $3.5 million in the general fund and $3.6 million in the road fund within ten years. A yearly built-in 5% contingency fund provides an additional cushion.

Opponents mischaracterize payments to the county as a giveaway. State law mandates that new cities compensate counties for revenue lost upon incorporation.

Without cityhood, the county receives all Goleta revenues. With cityhood, initially we pay 50% of our city's share of property taxes, 50% of sales taxes, and 40% of transient occupancy taxes to the county. After ten years we continue payments for countywide services such as courts, public health, and social services; but we keep 50% of the property tax share, 70% of sales taxes, and 100% of transient occupancy taxes for Goleta.

Cityhood will not create another layer of government. The locally elected city council, people who live in Goleta, will replace county decision makers and control land use and local services.

The proposed city is financially sound without new growth, reduced services, or increased taxes. Check the numbers in the Comprehensive Fiscal Analysis yourself at the Goleta Library.

Protect your pocketbook and make the Good Land better.

Vote YES on H2001!

/s/ Catherine E. Bednar
Founding Member, GoletaNow! Committee
Administrative Secretary
Old Town resident

/s/ Patricia M. English, Ph.D.
Founding Member, GoletaNow! Committee
Technical Communicator
El Encanto Heights resident

/s/ Jeffrey E. Haight
Member, GoletaNow! Committee
Structural Engineer
Ellwood resident

/s/ Sean S. Halsey
Founding Member, GoletaNow! Committee
Mechanical/Electrical Technician
El Encanto Heights resident

/s/ Robert E. Wignot, P.E.
Founding Member, GoletaNow! Committee
Water Agency Manager
North Fairview resident

RESOLUTION OF THE SANTA BARBARA LOCAL AGENCY FORMATION COMMISSION MAKING DETERMINATIONS AND APPROVING THE INCORPORATION OF THE CITY OF GOLETA SUBJECT TO SPECIFIC TERMS AND CONDITIONS

WHEREAS, a proposal to incorporate the City of Goleta was filed with the Executive Officer of the Santa Barbara Local Agency Formation Commission pursuant to the Cortese/Knox Local Government Reorganization Act (Section 56000 et seq. of the Government Code; and

WHEREAS, at the times and in the manner required by law the Executive Officer has given notice of the Commission's consideration of the proposal; and

WHEREAS, the Executive Officer, pursuant to Government Code section 56833.l prepared or cause to be prepared a Comprehensive Fiscal Analysis of the proposed incorporation and has furnished a copy of this report to each person entitled to a copy; and

WHEREAS, the Executive Officer, pursuant to Government Code section 56833 reviewed the proposed incorporation and prepared a report including recommendations, and has furnished a copy of this report to each person entitled to a copy; and

WHEREAS, the Commission, on April 26, considered the proposed incorporation and the report of the Executive Officer, and considered the factors determined by the Commission to be relevant to this incorporation, including, but not limited to, the factors specified in Government Code section 56841; and

WHEREAS, the Commission heard, discussed and considered all oral and written testimony related to the proposal including, but not limited to, the Executive Officer's report and recommendation, the Comprehensive Fiscal Analysis, the environmental document, spheres of influence and applicable general and specific plans; and

WHEREAS, this Commission heard and received all oral and written protests, objections and evidence which we, and all persons present were given an opportunity to hear and be heard with respect to the proposed incorporation and the report of the Executive Officer; and

WHEREAS, the Local Agency Formation Commission finds the proposal to be in the best interests of the affected area and the total organization of local governmental agencies within Santa Barbara County, and

WHEREAS, this resolution includes as Exhibit A, attached hereto and made a part hereof, the "Revenue Neutrality Agreement by and Between the County of Santa Barbara and the City of Goleta" as approved by the Board of Supervisors on March 20, 2001, ("Revenue Neutrality Agreement") and specific provisions of that agreement in the text of this resolution are denoted by parenthetical references.

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the Santa Barbara Local Agency Formation Commission as follows:

Compliance with CEQA

1. The Commission certifies that pursuant to the California Environmental Quality Act, the Commission revised the project description to reflect the boundaries selected for the proposed City of Goleta and considered the Negative Declaration for the proposed incorporation together with comments received during the public review process.

2. The Commission adopts the Negative Declaration as revised to reflect the boundaries selected for the proposed City of Goleta as attached as Exhibit B. The Commission finds on the basis of the whole record before it, including the initial study and comments received, that there is no substantial evidence that the project will have a significant effect on the environment, that the Negative Declaration reflects the Commission's independent judgment and analysis, and that it is adequate for this proposal. The Commission further finds that changes in the project description added after circulation of the Negative Declaration doe not change its conclusions or require recirculation.

3. The Negative Declaration and other documents and materials that constitute the record of proceedings upon which the Commission's decision is based are located at the office of the Santa Barbara LAFCO, 105 East Anapamu Street, Santa Barbara CA 923101. The custodian of the documents is the LAFCO Executive Officer, Bob Braitman.

Findings for Incorporation

4. The Commission determines pursuant to Government Code sections 56375.1 and 56833.1 I that:

A. The proposed City is expected to receive revenues sufficient to provide public services and facilities and a reasonable reserve during the first three fiscal years following incorporation; and

B. The incorporation of the proposed City is consistent with the intent of the Cortese-Knox Local Government Reorganization Act of 1985, Government Code sections 56001, 56300, 56301 and 56377 and the adopted policies of the Santa Barbara Local Agency Formation Commission; and

C. The Comprehensive Fiscal Analysis has been prepared and reviewed pursuant to Government Code section 56833.1.

Incorporation Boundaries

5. City Boundaries - The Commission approves, subject to the terms and conditions herein, the proposed incorporation of the City of Goleta with boundaries as described on the map attached hereto and included herein as Exhibit C and subject the terms and conditions as contained in this resolution.

Organization of the City Government

6. Name of the City - The new city shall be the City of Goleta.

7. Election of the City Council - The city shall be governed by a five-member city council elected at large.

8. Terms of office - The terms of office of the city council members shall be four years. Of the first elected legislative body, the terms of the three members of the city council with the largest popular votes shall be four years. Of the first elected legislative body, the terms of the two members of the city council with the least popular vote shall be two years.

9. Selection of mayor - It is the intent of the electorate that the term of the office of mayor shall be one year and that position shall be rotated among all members of the city council. It is also intended that the city council candidate receiving the greatest number of votes during the incorporation election shall serve as the first mayor of the city, followed by the candidate who receives the next highest number of votes, and so forth, provided that a member of the city council shall not serve a second term as mayor until all members have served a first term.

10. Appointment of City staff - The city shall have a city manager and the city council shall appoint the city manager who shall fill the positions of city clerk and city treasurer by appointment.

Effective Date of the Incorporation

11. Effective Date - The effective date of the incorporation is February, 2002. (RNA 2.3)

Extension of Services

12. Service Provision - The County shall continue to provide existing municipal services, including but not limited to law enforcement services, to the City from the Effective Date through June 30, 2002 at or above the Current Level of Service provided to the proposed incorporation area. Such services may be extended or truncated by agreement of the parties during this period of time. (RNA 3. 1)

13. Long-Term Contracting for Future Services - The County will extend these services from June 30, 2002 and/or provide an enhanced level of services on terms mutually agreed upon by contract between the City and the County. The City will contract with the County for Sheriff, Public Works and Park services. Such contracts shall be for an initial term of at least five years. (RNA 3.2)

14. Transition Year Costs Waiver - The County will waive reimbursement of Transition Year costs of services that would normally be reimbursed by the City up to a maximum amount of $2,500,000 for costs attributable to general fund resources and up to a maximum amount of $1,500,000 for road fund expenditures. (RNA 3.3)

City Base Year Property Tax

15. Base year property tax - The Commission determines that the amount of base property tax transferred to the new City pursuant to Government Code section 56375(q) and section 56842 shall be $2,503,527 for Option I and $3,728,772 for Option 2.

Revenue Transfers.

16. Set-aside Funds - The County shall provide accounting for the purposes of distribution of all funds set aside for use in the proposed incorporated area, including but not limited to Quimby and park fees, Measure D, GTIP, and County Service Area (CSA) No 3 ) funds, state and federal grant amounts, and fees paid to the County for services not yet delivered. (RNA 4. 1)

17. Mitigation Obligation - In order for LAFCO to make the revenue neutrality findings under Government Code subsection 56845(c) as set forth in Section 30 hereof, the parties understand and agree as follows (RNA 4.2):

A. Ongoing obligations - After incorporation of the City, the County will continue to have ongoing obligations to provide public services to the City and its residents and that such services are reasonably estimated to amount to $3,300,000 during the fist complete fiscal year following incorporation. In order to insure that the effect of incorporation is neutral as to the County, the parties agree to the following allocations of tax revenues in perpetuity (RNA 4.2. 1):

(i) Property tax generated by property located within the City and which would otherwise accrue entirely to the City, commencing on the Effective Date will be shared equally by the parties;

(ii) 30% of the 1% retail sales tax revenues allocable to the City shall be allocated to the County.

B. Mitigation Period Obligations - During the Mitigation Period tax revenues will be allocated as follows (RNA 4.22):

(i) An additional 20% of the 1% retail sales tax revenues allocable to the City shall be allocated to the County;

(ii) 40% of the transient occupancy tax ("TOT") generated by TOT taxpayers which exist within the City and are in existence on the Effective Date at the TOT rate then in effect shall be allocated to the County. All TOT revenues generated by any TOT taxpaying entities whose facilities are constructed after the Effective Date or that is derived from any increase in the TOT rate on existing and future taxpayers shall be allocated 100% to the City.

C. Transition Year revenues - During the Transition Year tax revenues will be allocated in the same manner as during the Mitigation Period, as detailed in paragraph 4.2.2 of this agreement on a pro-rated basis (RNA 4.2.3).

D. Transition Year Payment - During the Transition Year the County will pay to the City $1,500,000. In the eleventh complete fiscal year of the City's existence the City will pay $1,500,000 to the County.

18. Pre-payment - The City may pre-pay the amount deferred to fiscal year 11 as set forth in paragraph 4.2.4 of the Revenue Neutrality Agreement without penalty on terms mutually agreed upon by the City and the County. (RNA 4.3)

19. Treasurer-Tax Collector and administrative services - During the transition period and the mitigation period, County's Treasurer-Tax Collector will collect, allocate and distribute the Transient Occupancy Tax referred to in Paragraph 4.2.2 of the Revenue Neutrality Agreement at no charge to the City. (RNA 4.4)

20. Transfer of real property - The County will transfer to the City all real property currently held by the County within the City boundaries with the following exceptions: (RNA 4.5)

A. Fire Station 11;

B. An easement for Fire Station 14;

C. An easement for a prospective fire station at Santa Barbara Shores Park, should the County Fire District locate a fire station there;

D. All Flood Control District real property.

21. Transfer of park property - Upon transfer of all park real property from the County to the City pursuant to paragraph 4.5 of the Revenue Neutrality Agreement, all fixtures, equipment and personal property located on the park real property shall transfer to the City with that park real property. (RNA 4.6)

22. Home, McKinney and Community Development Block Grant ("CDBG") - The County currently contracts for housing funds with the Home, McKinney and CDBG programs. The City shall participate in the Home, McKinney and CDBG consortia at least through completion of the programs' current contracts. (RNA 4.7)

23. County Service Area No. 3 (CSA 3) - The area within the City shall be detached from CSA3 concurrent with the incorporation and as a result the City shall receive (1) the proceeds from assessments for lighting and library services previously received by CSA 3 together with the obligation to provide those services and (2) the property tax previously received by CSA 3. (RNA 4.8)

24. Goleta Community Center - The County and the City will work cooperatively to obtain a transfer of the sublease of the Goleta Community Center from the County to the City. (RNA 4.8)

25. Santa Barbara Shores Park - Upon transfer of park real property pursuant to paragraph 4.5 of this agreement the City shall assume payment responsibility for the existing County Certificate of Participation associated with Santa Barbara Shores in accordance with Exhibit A attached to the Revenue Neutrality Agreement. The City's first payment will be made on or before March 1, 2002 to the County. (RNA 4. 1 0)

26. Redevelopment agencies - The City shall establish a Redevelopment Agency (RDA). All assets and liabilities of the County's Old Town RDA project area shall transfer from the County RDA to the City RDA. The City shall not expand the boundaries of the Old Town RDA project area, nor shall the City establish any new project arm during the Transition Year or the Mitigation Period. The City shall not be entitled to the property tax increment associated with the real property known as Storke Ranch except upon dissolution of the Isla Vista RDA project area. The City shall assume sole planning authority for the real property known as Storke Ranch. At such time as the Isla Vista REDA project area ceases to exist, the property tax increment associate with the real property known as Storke Ranch shall revert to the City. (RNA 4.11)

27. Change in property tax allocation factors - In the event that the property taxes currently received by Goleta West Sanitary District within boundaries of the City are reallocated, the City and County shall share in the manner set forth in this paragraph. (RNA 4.12)

A. Any increased property tax revenues that may result from a change in the allocation factor ("the revenues") shall be shared, 70% to the County and 30% to the City, so long as the City boundaries do not include Isla Vista.

B. As an incentive for the future annexation of the neighborhood known as Isla Vista, in the event that the City annexes Isla Vista, the City shall be entitled to 70% of the revenues and the County shall be entitled to 30%.

C. County's share of the revenues shall be transferred in its entirety to the County Fire District.

28. Startup loan - Legal and administrative services from the date of the incorporation election to the effective date are legitimate expenses of the City. In order to facilitate the incorporation process, the County shall advance up to $100,000 at the Treasurer's pool interest rate during the period between the incorporation election and the effective date for professional and administrative services necessary to complete the process of incorporation subject to reimbursement from the City during the Transition Year. (RNA 4.13)

29. Equalizing Payme (RNA5.4)

A. Payment to County - Should the calculation of property taxes prepared pursuant to Government Code Section 56842 be modified as a result of a court action brought pursuant to Government Code subsection 56842(h), or as a result of legislative action with retroactive application, to provide that a larger percentage be retained by the County and a smaller percentage transferred to the City than that specified by LAFCO pursuant to Government Code Section 56842 in approving the Incorporation, the City shall transfer the amount of annual property tax resulting from such difference to the County for the purpose of maintaining revenue neutrality pursuant to Government Code Section 56845 and this Agreement

B. Payment to City - Should the calculation prepared pursuant to Government Code Section 56842 be modified as a result of a court action brought pursuant to Government Code subsection 56842(h), or as a result of legislative action with retroactive application, to provide that a smaller percentage be retained by the County and a larger percentage transfer to the City than that specified by LAFCO pursuant to Government Code Section 56842 in approving the Incorporation, the County shall make an equalizing payment to the City.

Revenue Neutrality Findings

30. Revenue neutral - Pursuant to Government Code section 56845, the Commission finds that:

A. Revenues currently received by the County of Santa Barbara for the incorporation area and the expenditures for service responsibilities to be transferred to the new city are not substantially equal;

B. In approving the proposed incorporation, the Commission finds pursuant to Government Code subsections 56845(c)(1) and (2) as follows:

1) That the County has agreed to the incorporation of the City of Goleta on the terms and conditions set forth in the Revenue Neutrality Agreement.

2) That the approval and execution of the Revenue Neutrality Agreement by the County and other terms and conditions set forth therein adequately mitigate the negative fiscal effects of the incorporation on the County,

3) That but for the conditions contained herein, the Commission would be unable to make the required findings under Subsection 56845(c) and approve the incorporation; and

4) That terms and conditions contained herein are integral to the approval of the incorporation under Government Code sections 56851, 56852, 56375, and 56375.1.

5) That terms and conditions relating to revenue neutrality imposed by this Resolution are independent legislative enactments of the Commission.

Provisional Appropriations Limit

31. Provisional appropriations limit - Pursuant to Government Code section 56842.6, the provisional appropriations limit submitted for voter approval shall be $24,100,000.

Continuation of Fees and Charges

32. Continuation of fees and charges - The new city shall have the authority to levy, fix and collect in the same manner previously authorized charges, fees assessments and taxes within the city boundaries, including those provided for County Service Area No. 3, and for County Service Area No. 31 if the Isla Vista area is included within the City.

Sphere of Influence for the City of Goleta

33. The Commission shall adopt a sphere of influence for the City of Goleta within one year of the date of incorporation, as specified in Government Code section 56426.5.

Assessed Value Within the Proposed City

34. The assessed value for property tax calculation purposes within the area of the proposed incorporation is as shown on the Comprehensive Fiscal Analysis.

Registered Voters Within the Proposed City

35. Pursuant to Government Code section 56375(h), the number of registered voters within the proposed incorporation as shown within the Comprehensive Fiscal Analysis.

Consistency With Spheres Of Influence

36. The proposed incorporation is consistent with the spheres of influence of all affected local agencies.

Subsequent Proceedings

37. All subsequent proceedings in connection with this reorganization shall be conducted only in compliance with the approved boundaries set forth in the attachments and any terms and conditions specified in this resolution.

Acceptance of Findings and Recommendations

38. Pursuant to Govemment Code Section 56852.3 the Commission hereby accepts the findings and recommendations made in the Executive Officer's Report prepared pursuant to Government Code Section 56833 and the fiscal analysis prepared pursuant to Section 56833.1, except that the Commission modified the recommendations of the Executive Officer by adding the Westfield parcel (Area E) to the proposed City boundaries. The reason for this change was to avoid splitting the parcel between two jurisdictions, recognizing that access to the parcel would be from the City.

Distribution of this Resolution

39. The Executive Officer is hereby authorized and directed to mail certified copies of this Resolution as provided in Section 56853 of the Government Code.

This resolution was adopted on May 3, 2001, and is effective on the date signed by the Chair.

AYES Campbell, Dewees, Marshall, Orach, Rose, Umenhofer
NOES Fox
ABSTAINS none

See Map in Sample Ballot or Color Map from Proposal.