55C - RESO SALES TAX MEASURE - Laserfiche WebLink

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Proposed Add on Sales and Use Tax Measure for Municipal Services for Public Consideration on the November 2018 Ballot July 17, 2018 Page 2 4. Authorize the filing of Arguments and Rebuttals a. Designate up to five (5) Councilmembers to author an Argument and Rebuttal statement. b. Deadline to file Arguments will beset for July 31, 2018 at 5 p.m. 5. Direct the City Attorney to prepare Impartial Analysis. 6. Direct Clerk of the Council to publish legal notices as required by law. DISCUSSION At the July 3, 2018, City Council meeting, the Mayor and Council discussed the sales tax measure staff report (55C). The City Council, by a vote of 4-1-1 (Solorio dissented, Benavides abstained and Martinez absent) supported Recommended Action 1c, which is the option to have the voters of Santa Ana consider a 1% add on sales and use tax. During the discussion, the City Council expressed consideration and further discussion on recommended items 1a and 1b at the July 17, 2018 City Council meeting. Recommended item 1a is the 1.5% add on sales and use tax and recommended item 1b is the 1.5% add on sales and use tax with a sunset on the 0.5% portion of the tax through 2030, thus reducing 1.0% in 2031. Additionally, City Council requested that staff provide options for a Shop Local program. Staff will be presenting options for a Shop Local program for Council consideration at the August 21, 2018 City Council meeting. Background At the February 5, 2018, Special City Council Meeting, Staff identified a structural deficit in the City's proposed 2018-19 General Fund budget and five-year forecast. The City's financial forecast has identified a budget deficit moving into the foreseeable future. This is a result of expenditures outpacing revenue growth. To address these deficits, Staff identified a plan that includes expenditure reductions, transformational program delivery changes and potential revenue enhancements in order to continue to provide programs and services to the community. Given this precarious financial position, and the cuts that were made in staffing following the Great Recession, any changes would almost certainly require significant level of service reductions and or eliminations. This represents a less than desired outcome. In the City's ongoing effort to evaluate costs and revenue, the following actions have taken place: • Contracted out the City's fire department • Contracted out maintenance functions where feasible • Modernized the Utility User Tax • Evaluated and adjusted the City's miscellaneous fee schedule • Reduced all non-essential personnel • Invested in technology enhancements to reduce ongoing costs 55C-2