sr-020811-3jCity Council Meeting: February 8,.2010
Agenda Item: .3~
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Resolution to Authorize the City Manager to Execute an Agreement with the
State Board of Equalization for Implementation of Measure Y
Recommended Action
Staff recommends that the City Council adopt. the attached resolution authorizing the City
Manager to execute agreements with State Board of Equalization for collection and
administration of Measure Y.
Executive Summary
On November 2, 2010, 61.22% of Santa Monica voters approved Measure Y, enacting a
half cent transactions and use tax. The State Board of Equalization requires the adoption of
a resolution authorizing the City Manager to execute necessary agreements with the State
to set up and mariage the tax. Execution of the agreements authorizes the State to be
reimbursed up to $175,000 of its preparatory cost to administer the tax. which is withheld
from future payments to the City.
Background
On July 13, 2010, Council approved placing a half cent transaction and use tax on the
November 2, 2010 general election ballot to assist the City in addressing its anticipated
structural deficit which without the tax would is projected to range from $1 - 19 million
between is fiscal year 2011/12 fiscal year 2015/16. On November 2, 2010, 61.22% of voters
approved Proposition Y and 68.26% approved. the complementary Proposition YY which
advises that the City allocate half of the revenue from the transaction and use tax to fund
school programs.
Discussion
The State Board of Equalization administers sales, use and transactions taxes. fn order to
ensure that the transaction and use tax authorized by Proposition Y is collected and
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administered, it is necessary to adopt the attached resolution authorizing the execution of
necessary agreements with the State
Financial Impacts & Budget Actions
The transaction and use tax is expected to generate approximately $11 -12 million annually.
Pursuant to Section 7272 of the State Revenue and Taxation Code, the City must reimburse
the State Board of Equalization up to $175,000 for preparation for administering the tax.
Prepared by: Donald Patterson, Business & Revenue Operations Manager
Approved:
n
Carol Swindell
Director of Finance
Forwarded to Council:
Rod Gould
City Manager
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Reference Resolution No.
10558 (CCS).