Loading...
HomeMy WebLinkAbout19E - RPT - 2018 ELECTION FOLLOW UP RE: BALLOT MEASURESREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: 4, 2018 TITLE: RECEIVE AND FILE NEXT STEPS FOR IMPLEMENTATION OF THE NOVEMBER 2018 VOTER APPROVED BALLOT MEASURES (STRATEGIC PLAN NO. 1 TO 7) 4 RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For_ CONTINUED TO FILE NUMBER Receive and file next steps for implementation of the four municipal ballot measures. DISCUSSION The City Council approved placing four ballot measures for consideration by the voters of Santa Ana on the November 6, 2018 municipal election. While the election results have not yet been certified, the preliminary results indicate that a majority of voters has approved all four measures. Based on the preliminary results, staff wanted to provide the City Council with the anticipated next steps and important information toward implementation. Measure X: Santa Ana Neighborhood Safety, Homeless Prevention and Essential City Services Enhancement Measure Measure X establishes a local sales and use tax of 1.5 cent beginning April 1, 2019 through March 30, 2029, then going down to 1 cent through March 30, 2039, before being restored to the current rate of 7.75 cents for every dollar of qualified purchases. The effective date of the tax is April 1, 2019, as it coincides with the quarterly taxation cycles established by the State of California. The City will need to enter into a local sales tax agreement with the California Department of Tax and Fee Administration to collect and remit the local tax back to the City. This process simplifies collection and reporting to business operators that collect and remit sales tax to the State. In order to complete the agreement, the City Council must also adopt Resolutions that will be presented at a future Council Meeting prior to February 1, 2019. Although the tax will become effective April 1St, we expect there will be a transition period for collection of the tax. Therefore, the impact on FY 18-19 revenue is expected to be relatively insignificant. Moving forward, starting with Fiscal Year 2019/20, the full estimated revenue from the 19E-1 Receive and File Next Steps for Implementation of Voter Approved Ballot Measures December 4, 2018 Page 2 1.5 cent increase, $60 million, should be realized. Staff will continue to work closely with its sales tax consultants to refine the estimated revenue amount. The City Manager will be working with the City Council to establish the process by which these funds will be allocated and prioritized. With current and anticipated expenditures, staff will prepare a more comprehensive economic forecast with the City's new Executive Director of Finance and Management Services to present a holistic approach to the FY 2019/20 budget. It is important to note that the City does have a structural deficit and that funding of new or enhanced programs will need to be closely evaluated. Part of the safe guards that were included into the Ballot Measure for Measure X, was the formation of a Citizens Oversight Committee. Staff will be preparing a comparison of other committees in various agencies and will present a recommendation at a future Council Meeting. This will include the roles and responsibilities of the committee as well the composition and selection of members. The new revenue and expenditures will be audited annually. Staff is evaluating the changes required to highlight the open checkbook portal on the City's website to show the new revenue to the public. Measure Y: Approve Ordinance Regarding a Marijuana/Commercial Cannabis Business License Tax Approval of this business license tax measure for Adult -Use Commercial and Retail Cannabis will not increase revenue for Fiscal Year 2018/19, as the budget includes the revenue estimates in the form of Operating Agreement fees. The implementation of the business license tax will take place on January 1, 2019. Existing Operating Agreements will remain valid for those sections not related to remittance of a fee. Staff has been in communication with the local cannabis industry to discuss the implementation and next steps to issue business licenses in accordance with the approved measure. Following certification of the election, the Ordinance will be codified into the City's Municipal Code. The effective rates established in ordinance approved by the voters are as follows: CornrnercW Cannabis Business Gross Receipts Gross Square !Activity Tax Rate Footage Tax Rake Adutt-use Cannabis Retail Business (including Delivery). 8% $ 25.00 Cultivation 6% $ 10.00 Distribution 6% $ 4.00 Manufacturing 6% $ 10.00 Testing Facility or Tenting 5% $ 1.50 Laboratory 19E-2 Receive and File Next Steps for Implementation of Voter Approved Ballot Measures December 4, 2018 Page 3 Measure Z: City Charter Modernization and Update of Administrative Provisions Measure Z amended the City Charter to remove language regarding gifts, campaign contributions; language regarding boards and commissions; and qualifications, powers and duties for the Finance Director. The Charter Amendment repeals section 425, 1107, 704 and Article IX in its entirety from the City Charter. Staff will bring forward the requisite ordinances to establish the boards and commission in a comprehensive manner at a future meeting. Until such a time, staff will continue to operate the impacted boards and commission as currently provided for in Article IX of the City Charter. Measure AA: Require By -Ward Nomination and Election of Councilmembers and Redrawing of Ward Boundaries to Comply with State and Federal Law The Charter Amendment to section 400 changed to a Ward -Based Election System in which councilmembers are both nominated and elected by electors in their respective Ward. In addition, a minor revision to section 101.2 ensured that ward boundaries are drawn and redrawn to comply with state and federal law, as well as to equalize population. The ward re -boundary process is underway and expected to be approved at the December 4, 2018 City Council Meeting. The change in the method of voting will require an extensive public information campaign prior to the 2020 General Election, to inform the public about the change and what they can expect to see on future council member ballots. In order to effectively communicate the changes, staff will be making a supplemental budget recommendation to fund an outreach campaign as part of the FY 19/20 and FY 20/21 budgets. STRATEGIC PLAN ALIGNMENT This item supports the City's effort to meet the Five -Year Strategic Plan adopted by the City Council. FISCAL IMPACT This is no fiscal impact associated with this item. E. City the City Manaqer 19E-3 19E-4