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HomeMy WebLinkAboutCA State Board Equalization3. b Agenda Item No: Meeting Date: December 2, 2013 A A:4 Z I P71WA11 v:4 wei 'Mal ;F Prepared by: Lisa Goldfien, Asst.. City Attorney City Manager ApprovaI;1q//"J--& SUBJECT: CONSIDERATION OF A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AGREEMENTS WITH THE STATE BOARD OF EQUALIZATION FOR IMPLEMENTATION OF THE CITY'S TRANSACTIONS AND USE TAX. RECOMMENDATION: Staff recommends that the City Council adopt the Resolution approving and authorizing the Mayor to execute the two agreements with the State Board of Equalization in order to implement the City's transactions and use tax (Measure E). BACKGROUND: The County Registrar has certified the results of the November 5, 2013 election, showing that Measure E, the new 0.75% transactions and use tax adopted by the City Council in Ordinance No. 1913, passed with a majority vote of the City electors voting at the election. The new transactions and use tax will go into effect on April 1, 2014. Under the State Revenue and Taxation Code, prior to the operative date of the Ordinance the City is required to contract with the State Board of Equalization ("BOE") to perform all the functions incident to the administration and operation of the Ordinance. The BOE has provided the City with two forms of agreement containing the provisions required by law. In addition to a contract providing for BOE administration of the transactions and use tax (the "Administration Agreement"), there is a second agreement covering the activities required of the BOE in its preparation to administer the transaction and use tax (the "Preparatory Agreement"). The BOE is authorized to assess a separate fee for these activities, which include computer programming for data processing, developing and adopting regulations, developing procedures, updated publications, notifications to taxpayers and other direct and indirect costs as permitted under Government Code section 11256. Under the terms of the agreement, the costs to be assessed are the actual cost to BOE, and, in no event shall BOE's costs exceed $175,000.00. 11 CouncilMeeting: .45, Disposition: ile 's, 0'r.- U T/tw 1.3 6 t* G EATZTAA� Implementation of the City's new transactions and use tax requires that the City execute the Administration and Preparatory Agreements with the State Board of Equalization. The City will comply with the BOE requirement if the Council adopts the Resolution approving and authorizing the Mayor to execute these agreements. Any delay in the approval of these agreements may delay the implementation and collection of the new tax. FISCAL IMPACT: The State Board of Equalization will charge its actual costs for the preparation to administer the tax (not to exceed $175,000.00) and will charge an on-going administration fee calculated based upon the gross tax revenue collected. These costs will be deducted from the gross ta.N- revenue and the net tax revenue will be dispersed to the City. �01;1 1. Adopt the Resolution. T. Decline to adopt the Resolution. Staff recommends against this action as it will conflict with the mandates of Measure E and the procedures of the BOE. T-rey ROOM ATTACHMENTS: ! RESOLUTION OF THE CITY COUNCIL OF THE CITY OF 1 RAFAEL AUTHORIZING MAYOR AGREEMENTS STATE BOARD EQUALIZATION ' IMPLEMENTATION OF ! LOCAL TRANSACTIONS 1 1 WHEREAS, on August 5, 2013 the City Council approved Ordinance No.#amending th City's Municipal Code and providing for a local transactions and use tax; and i WHEREAS, Ordinance No. 1913 was submitted to the voters as Measure E on the ballot for the general municipal election on November S, 2013, and was approved by a majority of the voters voting at that election; and WHEREAS, the State Board of Equalization (Board) administers and collects the transactions and use taxes for all applicable jurisdictions within the state, and WHEREAS, the Board will be responsible to administer and collect the transactions and use tax for the City; and WHEREAS, the Board requires that the City enter into a "Preparatory Agreement" and an "Administration Agreement" prior to implementation of said taxes, and WHEREAS, the Board requires that the City Council authorize the agreements; NOW, THEREFORE BE IT RESOLVED by the City Council of the City of San Rafael that the "Preparatory Agreement" attached as Exhibit A and the ".Administration Agreement' attached as Exhibit B are hereby approved and the Mayor is hereby authorized to execute each agreement. L ESTHER C. BEIRNE, City Clerk of the City of San Rafael, hereby certify that the foregoing / duly # regularly introduced I adopted +/ I regular meeting of AYES: COUNCILMEMBERS: Bushey Lang, Colin, Connolly, McCullough & Mayor Phillips ,50fJj:j- ,JZ e . Re, e&AA ESTHER C. BEIRNE, City Clerk