title
CC - CONSENT ITEM: Receipt and Filing of Measure CC and Measure C Sales Tax Status Reports (FY 2024-2025, First Quarter) and Real Property Transfer Tax Status Report (FY 2024-2025, Second Quarter), as Approved by the Finance Advisory Committee.
body
Meeting Date: March 17, 2025
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 (03/12/2025); (Email) Meetings and Agendas - Fiscal and Budget Issues (03/12/2025)
Departmental Approval: Lisa Soghor, Chief Financial Officer (03/06/2025)
______________________________________________________________________
RECOMMENDATION
Staff recommends the City Council receive and file the attached Measure CC and Measure C Sales Tax Status Reports (FY 2024-2025, First Quarter) and Real Property Transfer Tax Status Report (FY 2024-2025, Second Quarter), as approved by the Finance Advisory Committee (FAC) on February 12, 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 First Quarter of Fiscal Year 2024-2025 (July 1 - September 30, 2024) or the third quarter of the calendar year.
The City’s Measure CC and Measure C actual tax receipts decreased by 3.2% from the same period in 2023. However, cash comparisons skewed lower due to a large number of statewide missing taxpayer returns and, excluding reporting aberrations, the adjusted figures show only a 0.2% decrease for Measure CC and a 0.1% decrease for Measure C in actual sales. Some business groups such as restaurants and hotels and food and drugs increased from the same period in 2023 while others, such as general consumer goods and building and construction, declined. Automobile purchases by Culver City residents declined by almost 15% and the reduction in both fuel prices and fuel consumption yielded a 7% decline in taxes. In comparison, sales tax for Los Angeles County declined 2.7% and the Southern California region was down 2.3% over the comparable period. The report for the First Quarter of Fiscal Year 2024-2025 (July 1 - September 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 Second Quarter of Fiscal Year 2024-2025 (October 1 - December 31, 2024) or the fourth quarter of the calendar year.
RPPT revenue from the second quarter of Fiscal Year 2024-2025 has remained low due to the soft residential and commercial real estate markets. The City received $756,787 in RPPT during this period as compared to $1,209,764 in 2023 and $1,351,117 in 2022. The City budgeted $8 million in anticipated revenue from Measure RE in the Adopted Budget for Fiscal Year 2024-2025 but, because of the low revenue through the second quarter of the fiscal year, reduced the budgeted amount to $4 million in the revised midyear budget approved by the City Council at the February 24, 2025 meeting. The report for the Second Quarter of Fiscal Year 2024-2025 (October 1 - December 31, 2024) is provided as Attachment 2.
On February 12, 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. 2025-03-17_ATT_1 - Measure CC & C Status Report Q1 FY25.pdf
2. 2025-03-17_ATT_2 - Real Property Transfer Tax Status Report Q2 FY25.pdf
MOTIONS
That the City Council:
Receive and file the Measure CC, C, and Real Property Transfer Tax Status Reports.