55B - RESO DEPT OF TAX AGMT MEASURE X

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Resolutions Authorizing Execution of Certain Documents Required by CDTFA for Implementation of Voter Approved Transactions and Use Tax and Approval of Second Amendment to MuniServices Agreement January 15, 2019 Page 2 Ordinance and has received and disbursed to the City all payments due under that Ordinance (Exhibit 3). 5. Adopt a Resolution of the City Council of the City of Santa Ana authorizing examination of CDTFA transactions (sales) and use tax records by City employees (designed by position title), and by the City's contracted tax reporting, analysis and recovery services consultant, effective April 1, 2019 (Exhibit 4). 6. Authorize the City Manager and Clerk of the Council to execute a Second Amendment to Agreement with MuniServices, LLC to expressly include Transactions and Use Tax reporting, analysis and recovery services beginning April 1, 2019, and to extend the contract period one and one-half years (1 '/2 ) effective January 1, 2021 through June 30, 2022 (Exhibit 5). On November 6, 2018, City of Santa Ana voters approved Measure X: "Santa Ana Neighborhood Safety, Homeless Prevention and Essential City Services Enhancement Measure" adding a one and one half (1.5) cents increase in the City's local sales tax by the adoption of an add-on sales tax also referred to as a transactions and use tax. The purpose of this measure is aimed to maintain effective 9-1-1 response; retain firefighters and police officers; address homelessness; fix streets; maintain parks, youth and senior services, and other unrestricted general revenue purposes. The effective combined sales tax to be increased one and one half (1.5) cents until 2029 providing approximately $60 million dollars annually, then reduced to one (1) cent providing approximately $40 million dollars annually, until 2039, with requirements for annual audits and citizens oversight committee. On December 11, 2018, the City Council certified the November 6, 2018 election results including the passage of Measure X (City Ordinance NS -2952). To effectuate the intent of the Santa Ana voters' approval of Measure X, the City is required pursuant to state law to enter into contracts with the California Department of Tax and Fee Administration (CDTFA) for implementation of its local Transactions and Use Tax (Sales Tax). Included among these resolutions and attendant agreements are: (1) Resolution authorizing City Manager to execute agreements with the CDTFA for implementation of a local Sales Tax (Exhibit 1). a. Execution of the resolution will allow the City Manager to execute agreements with CDTFA to begin implementation of the revised Sales Tax rate of 9.25% beginning on April 1, 2019. (2) Agreement for Preparation to Administer and Operate District's Transactions and Use Tax Ordinance — CDTFA (Exhibit 2). a. This Agreement authorizes CDTFA to take all preparatory administrative and operational steps necessary to assume administration of the City's new transactions and use taxes, beginning April 1, 2019. (3) Agreement for State Administration of District Transactions and Use Taxes with the CDTFA to perform functions incidental to the administration and collection of local transactions and use taxes (Exhibit3). 55B-2