measure d update december 2012

7/30/2019 Measure D Update December 2012

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CITY OF CARMEL-BY-THE-SEA

STAFF REPORT

TO: MAYOR BURNETT AND COUNCIL MEMBERS

THROUGH: JASON STILWELL, CITY ADMINISTRATOR

DATE: 4 DECEMBER 2012

SUBJECT: RECEIVE UPDATE ON MEASURE D, PROVIDEDIRECTION AND AUTHORIZE AGREEMENTS WITHSTATE BOARD OF EQUALIZATION TO IMPLEMENTMEASURE D

RECOMMENDED MOTIONReceive an update on the status of Measure D; provide direction to staff; and authorizethe City Administrator to execute agreements with the State Board of Equalization forImplementation of a Local Transactions and Use Tax.

BACKGROUNDOn July 3, 2012, the City Council authorized the placement of a ballot measure on theNovember 6, 2012 election to establish a local transaction and use tax (sales tax) forgeneral municipal purposes. The ballot measure, known as Measure D, authorized atemporary one percent sales tax for ten years to maintain essential services. Non-certifiedresults from Monterey County indicate a 75 percent approval of Measure D. With thepassage of Measure D, the City will need to enter into agreement with the State Board ofEqualization for the administration of the new sales tax. Pursuant to Revenue andTaxation Code 7265, the new sales tax rate will become effective on April 1, 2013.

STAFF REVIEW

The purpose of this agenda item is to authorize the City Administrator to enter into anagreement with the State for administration of the sales tax and to seek directionregarding the funding of services, recognizing the fiscal challenges to the City and theanticipated timeline for the receipt of the additional sales tax.

The receipt of the new sales tax is scheduled to occur in the fourth quarter of fiscal year2012-13. Projected Measure D revenue for this fiscal year is $387,000 and for fiscal year2013-2014 is $2,113,000. The City Council will have the opportunity to allocate a full-years allocation of the sales tax during the fiscal year 2013-2014 budget process. Thefiscal year 2012-2013 budget is tight with general fund expenditures running at 24.74%of budget as of the end of the first quarter. The City Council has several options

regarding the allocation of Measure D funding for this fiscal year. Staff recommends acombination of conservative budget management to help assure year end budget targetsare met and setting aside funding for infrastructure improvement projects:

1. Allocate $29,000 for small scale and visible projects that can be implementedquickly and contribute to Councils objective of Community Character.

A. Beautification of two blocks of Scenic Path ($6,000): irrigation, newplants and mulch, cleanup of pathway, and minor hardscape repairs

B. Mission Trail Nature Preserve sign replacement ($3,000): new entry andtrail signs throughout the Preserve

C. Replace the existing wood stage at Sunset Center ($8,000)

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D. Repair and replace planters and paver walkway at Sunset Center ($12,000)2. Allocate $44,000 for Deferred Maintenance projects.

A. Repainting of Harrison Memorial Library ($28,000)B. Painting of the interior of the Park branch library ($16,000)

3. Allocate $46,000 for Hazardous Mitigation projects.A. Repair and replace 200 block with new sidewalk or with cobblestone curband gutter ($25,000)

B. Replacement of approximately 30 rail fences ($3,000)C. Preventative ground covering at tree squares and park playgrounds ($3,000)D. Outside labor for public works projects ($15,000)

4. Allocate $130,000 to the Non-Departmental budget to offset budgeted but lessthan anticipated salary savings

5. Do not allocate any funding until after June 2013The funding options available to Council are also illustrated in the table below. Staffrecommends that Council consider a package of options (combinations 1-4) totaling$158,000 at this time and consider the allocation of an additional sales tax until June.State projects sales and use tax receipts on a quarterly basis and, in turn, remits anadvance of the receipts to the City on a monthly basis. Typically, the State remittance tothe City is about two months in arrears, so the first payment reflecting the new sales tax islikely to be June 2013. In June, the City will also be receiving an update on fiscal year2012-13 and fiscal year 2013-14 budget. The consideration of additional project fundinguntil June will help to ensure the City ends the fiscal year in a financial strong position.

Table 1: Project Funding Options

Options Project Category Estimated Cost

Combination 1 Community Character $29,000

Combination 2 Deferred Maintenance $44,000

Combination 3 Hazard Mitigation $46,000

Combination 4 Non-departmental $130,000

Total $249,000

FISCAL IMPACTThe Citys current sales tax is 7.25 percent, of which the City receives one percent or

approximately $2 million annually. With the passage of Measure D and Proposition 30,the City sales tax will be 8.50 percent, of which the City will receive an additional $2million annually for ten years. If the City receives an additional $387,000 in Measure Dsales tax for the fiscal fourth quarter (April-June) 2013 tax and allocates $249,000 for therecommended project funding options, it is anticipated that approximately $138,000 willremain available for future uses and to help assure the fiscal year 2012-2013 budgetremains balanced

ATTACHMENTSResolutionSales Tax Agreements

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measure d update december 2012

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