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John Sackriston, Executive Director of OCADA there are 10 dealerships in Santa Ana. Provided information about dealers with more expensive cars i.e. BMW will have less rebates than that of less expensive vehicles such as Honda. Westminster $500 was proportion to the sales tax increase on an average vehicle purchase. Leases are 1/3 of all vehicles sold. Make it consistent. The need of the program the majority the sales tax is where you buy not where you live. When the increase of sales tax is increase it affects the consumer. Question and answer period ensued. Bruce Hamlin, Owner of Guaranty Chevrolet implored to approve this program. Most people think that where they buy product is what the sales tax is what sales tax is what they are paying for. Added 33% of sales go to residents of Santa Ana. 20% of sales area leases, the tax is based on the payment. Added that Santa Ana residents tend to lease car more often since the payments are more affordable and a sales tax increase will affect these consumers. Looking at the $500 rebate looks more appealing to the consumers helping the vehicle sales increase. Keeping the business in Santa Ana. Raul Godinez, City Manager mentioned that lease situation is different. Provided an example of the sales tax on a purchase versus a lease. Added that Westminster is only considering the incentive program for purchases. They will look into leases differently. Committee Member Benavides, spoke in support of the incentive as a positive motive to encourage residents to continue shopping in Santa Ana. He would like for the program to re -consider the cap. Asked if the source of funds will come from General Funds. Jorge Garcia, Assistant to the City Manager explained that the source of the fund will come from the General Fund come in as sales tax dollars. The details of how the funds will come in still in the planning stage with the Finance Department. Added that the sales tax increase. The VIP Program will begin on April 1, 2019. Mr. Garcia explained that the dealers with the tax incentives are not similar to purchases. Incentive 1 will benefit residents; Incentive 2 will benefit dealerships. Committee Member Benavides, suggested the cap to be removed or increase if staff sees the need to for a cap. Encourages to include leases into the VIP program. He would like to see the program to extend to 10 years. Steven Mendoza explained that the VIP Program is to benefit the residents of Santa Ana. Other incentive programs are mainly for dealerships to invest in their property. Committee Member Sarmiento, making sure there is no impact on stakeholders. The VIP program will proceed upon passing the sales tax increase. Inquired about the data purchases of new vehicles versus pre -owned, do they lease more. Wants to make sure the measures taken will tailored to our demographics. Asked what happens to the independent dealerships as it is known that the majority of vehicle sales come from the August 20, 2018 1 Economic Development, Infrastructure, Budget & Technology Minutes 13A-5