Title
Adoption of Resolution Authorizing the Interim City Manager to Execute Agreements and All Related Documents with the California Department of Tax and Fee Administration for Implementation of the City’s Half-Cent Transactions and Use Tax (Measure F) Approved by the Voters at the November 6, 2018 General Election. (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
Following the approval of Measure F on November 6, 2018, the City is required to complete certain agreements with the California Department of Tax and Fee Administration (CDTFA) to allow the State to prepare and administer the half-cent transactions and use tax.
BACKGROUND
With the adoption of Resolution 15412 on July 10, 2018, the City placed a half-cent sales tax measure on the November 6, 2018 ballot. On July 10th, the City Council also introduced Ordinance No. 3231 adding Section 3-63 to Division IX (Taxes) of Article II (Taxation) of Chapter III to the City’s Municipal Code to impose the additional transactions and use tax subject to the outcome of the election. Measure F, City of Alameda Essential Services Protection Measure, was approved by a majority of the City of Alameda voters on November 6, 2018.
DISCUSSION
After the passage of the half-cent transactions and use tax known as “Measure F City of Alameda Essential Services Protection Measure”, staff was notified by the CDTFA that the City Council must enter into two agreements with the Department, so they can prepare and administer the collection of the Measure F dollars.
The first agreement (Exhibit 1) sets forth the scope of work required to prepare to administer and operate City’s transactions and use tax. The amount the City will owe the CDTFA for this work will not exceed $175,000.
The second agreement (Exhibit 2) will authorize the CDTFA to exclusively perform all administrative functions related to the ongoing collection of the Measure F transactions and use tax. The agreement requires the City to pay CDTFA for all costs associated with the administration of the tax as determined by law. These costs will be deducted from the taxes collected by the CDTFA on behalf of the City.
FINANCIAL IMPACT
The half-cent transactions and use tax will go into effect April 1, 2019. In order for CDTFA to be able to do the preparation necessary to begin collection of the tax, these documents and the Council’s resolution approving the contracts need to be transmitted by February 1, 2019.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15378 (b) (4) of the CEQA Guidelines, because it involves governmental fiscal activities (executing agreements with the CDTFA), which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Adopt a Resolution Authorizing the Interim City Manager to execute agreements and all related documents with the California Department of Tax and Fee Administration for implementation of the City’s Half-Cent Transactions and Use Tax (Measure F) approved by the voters at the November 6, 2018 General Election. (Finance 2410)
Respectfully submitted,
Elena Adair, Finance Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Agreement for Preparation
2. Agreement for State Administration