25B - AGMT - SALES TAX REBATE VOLVO

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Sales Tax Rebate Agreement - Volvo of Orange County October 20, 2015 Page 2 The terms of the proposed agreement provide that the City will rebate a maximum of $1,000,000 over a 10 -year term. The dealer will receive 50 percent rebate of the increase in sales tax generated by the dealer above a base year (July 1, 2015 — June 30, 2016) up to $1,000,000 or 10 years, whichever comes first. Volvo of Orange County will only receive a portion of the increase in the sale tax revenue that this specific dealership generates. Therefore, existing revenues will not be impacted by this agreement. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #3 Economic Development, Objective #3, (Promote a solutions -based customer focus in all efforts to facilitate development and investment in the community), Strategy C (Explore opportunities to encourage a business friendly environment within the City through the reduction of non - essential regulatory requirements, improved coordination between agencies for development review and addition of monetary incentives). FISCAL IMPACT The annual sales tax rebate amount is to be determined per the conditions and terms of the agreement. Payment amounts will be budgeted in future fiscal years and will not exceed $1,000,000 or ten years, whichever is earlier. During the fiscal year the expenditure is incurred, revenues and expenses will be recorded in the following accounts: Revenue: Sales Tax Rebate Agreement — 01102002 -50025 • Recognizing 50 percent of rebate in new sales tax generated over the defined base year Expense: Sales Tax Rebate Agreement — 01118825 -62300 Recording payment of rebate to the above - referenced auto dealer Kelly Reend f#s V �k^ Executive Di ctor Community Development Agency KR/MM /II Exhibit: 1. Agreement APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez SIR, Executive Director Finance and Management Services Agency 25B -2