75B - PH - VEHICLE INCENTIVE PROGRAM

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Resident Vehicle Incentive Program (VIP) Agreement March 19, 2019 Page 4 Program Terms The proposed terms of the agreement are outlined in the table below: VIP Terms Term 2 years with 1 two-year extension and an additional 1 year extension for a total of 5 years. Rebate Amount New Cars $500 Rebate Amount Leased Cars $500 Rebate Amount Used Carso) $500 Effective Monday, April 1, 2019 Structure Dealer reimbursed for rebate Rebate Budget $1,700,000 City Administration Budget $25,000 TOTAL ANNUAL BUDGET $1,725,000 Participating Dealers (10) Audi South Coast Crevier BMW Crevier Mini Freeway Honda Guaranty Chevrolet Lincoln South Coast Subaru Orange Coast Tom's Truck Center Volkswagen South Coast Volvo of OC (7) Minimum Used Car Purchase price of$15,000 Staff is recommending that the rebate is applied towards the final purchase/lease of the vehicle and not offer a resident's choice to receive a check from the City. Staff has evaluated the options and determined that if the City issued an individual check to a resident, this would create a significant processing, auditing and an administrative burden to manage. Additionally, residents would also have to wait to receive a check from the City instead of receiving the instant incentive. The first term of the VIP shall be for two years from April 1, 2019 to March 31, 2021. Prior to the end of the first term, City staff will evaluate the effectiveness of the program, and if determined effective, make a recommendation to continue the program for an additional two-year term with the option of a final one-year extension. The program is for a maximum of five years. If after five years, the City Council may approve to continue the program for additional years if determined that the VIP has been a successful buy local program for the City. Government Code Section 53083 requires that the City Council must hold a noticed public hearing and, prior to the public hearing, provide information to the public through the City's website regarding the proposed economic development subsidy in a report (Exhibit 2). An "economic development subsidy" is any expenditure of public funds or loss of revenue of $100,000 or more, for the purpose of stimulating economic development. The aggregate expenditure of public funds by the City for the VIP is anticipated to be over $100,000. Although no subsidy will exceed $500 to any one individual, out of an abundance of caution, staff is going through the necessary steps related to Californail Government Code 53083. An economic subsidy report has been prepared, 75B-4