title
CC - CONSENT ITEM: Receipt and Filing of Measure CC and Measure C Sales Tax Status Reports (FY 2023-2024, Fourth Quarter) and Real Property Transfer Tax Status Report (FY 2024-2025, First Quarter), as Approved by the Finance Advisory Committee.
body
Meeting Date: January 27, 2024
Contact Person/Dept.: Lisa Soghor/Finance Department
Phone Number: (310) 253-5865
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Attachments: Yes [X] No []
Public Notification: (E-Mail) Meetings and Agendas - City Council (01/22/2025); (Email) Meetings and Agendas - Fiscal and Budget Issues (01/22/2025)
Departmental Approval: Lisa Soghor, Chief Financial Officer (01/16/2025)
______________________________________________________________________
RECOMMENDATION
Staff recommends the City Council receive and file the attached Measure CC and Measure C Sales Tax Status Reports (FY 2023-2024, Fourth Quarter) and Real Property Transfer Tax Status Report (FY 2024-2025, First Quarter), as approved by the Finance Advisory Committee (FAC) on January 8, 2025.
BACKGROUND/DISCUSSION
In November 2012, Culver City residents voted to adopt Measure Y, a half-cent transaction and use tax to maintain critical City services for 10 years. In March 2020, Culver City residents voted to adopt Measure CC to continue the half-cent tax through 2033.
In November 2018, Culver City voters passed Measure C, a quarter-cent local transaction and use tax to maintain the current level of public safety services, community programs, infrastructure maintenance, and other City services funded through the City’s General Fund. Measure C collections began in April 2019 and will remain in effect until ended by voters. The ballot measure included the stipulation that, if passed, the FAC would provide quarterly reports of fund proceeds to the City Council.
The FAC Fiscal Year 2024-2025 Schedule of Activities/Work Plan includes the review of Measure C and CC proceeds.
The California Department of Tax and Fee Administration (CDFTA) is responsible for administrating sales and other taxes for the entire state. Due to the time that it takes the CDTFA to collect sales tax, reconcile amounts received, remit payment and report quarterly sales tax data, there is a delay in the reporting of sales tax data. As a result, the Measure CC and Measure C reports for review this period cover the Fourth Quarter of Fiscal Year 2023-2024 (April 1 - June 30, 2024) or the second quarter of the calendar year.
The City’s Measure CC and Measure C actual tax receipts were up 1.2% from the same period in 2023 after adjusting for audit corrections, delayed payments, and other reporting modifications. Some business groups such as food and drugs and restaurants and hotels increased from the same period in 2023 while others such as autos and transportation and building and construction, declined. In comparison, Los Angeles County declined 0.5% over the comparable period. The report for Fourth Quarter of Fiscal Year 2023-2024 (April 1 - June 30, 2024) is provided as Attachment 1.
Additionally, the FAC has requested to review and transmit a Real Property Transfer Tax Status Report to the City Council as part of its Fiscal Year 2024-2025 Schedule of Activities/Work Plan. The Real Property Transfer Tax (RPTT) is a one-time tax imposed by the City when property is sold in Culver City. As a result, this revenue source is highly elastic and unpredictable.
RPPT funds are issued directly to the City from Los Angeles County. As a result, the reporting for RPPT data does not have the same delay as the sales tax collected and administered by the state. Therefore, the RPTT report for review this period covers the First Quarter of Fiscal Year 2024-2025 (July 1 - September 30, 2024) or the third quarter of the calendar year.
The results from the first quarter of Fiscal Year 2024-2025 continue to demonstrate the unpredictability of this revenue source. The City received $621,977 in RPPT during this period as compared to $2,611,103 in 2023 and $6,904,326 in 2022. Economic factors including relatively high interest rates and low inventory continue to have a cooling effect on the real estate market. The City budgeted $8 million in anticipated revenue from Measure RE in the Adopted Budget for Fiscal Year 2024-2025, matching the revised amount from Fiscal Year 2023-2024. However, the actual (unaudited) revenue received from Measure RE for Fiscal Year 2023-2024 was closer to $7.4 million. The report for First Quarter of Fiscal Year 2024-2025 (July 1 - September 30, 2024) is provided as Attachment 2.
On January 8, 2025, the FAC reviewed and approved the attached reports on Measure CC, Measure C and Measure RE for transmittal to Council.
FISCAL ANALYSIS
The receipt and filing of these reports do not create a fiscal impact.
ATTACHMENTS
1. 2025_01_27 ATT1 - Measure CC & C Status Report Q4 FY24.pdf
2. 2025_01_27 ATT2 - Real Property Transfer Tax Status Report Q1 FY25.pdf
MOTIONS
That the City Council:
Receive and file the Measure CC, C, and Real Property Transfer Tax Status Reports.