19E - RPT - 2018 ELECTION FOLLOW UP RE: BALLOT MEASURES

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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