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Page 2 of 3 <br /> <br /> <br />ANALYSIS <br />Beginning January 1, 2016, AB 1717 will take effect and solve the collection problem by <br />requiring California retailers and on-line sellers to collect the local CUT at the same time <br />that they collect sales tax on other retail products, based on the point of sale (for retail <br />stores in our City). Under this new law, all local jurisdictions are required to contract with <br />the BOE in order to receive CUT imposed on consumers of prepaid wireless phone <br />service. This contract must be in place by September 1, 2015 if the City is to receive <br />prepaid CUT revenue when the new law takes effect on January 1, 2016. <br /> <br />The attached resolutions authorize the City Manager and the City Attorney to execute <br />certain documents required by the BOE to collect the City’s CUT on prepaid wireless <br />service, including the above-mentioned agreement with BOE and the designation of <br />certain City officials and the City’s CUT consultant, MuniServices, as authorized to <br />examine prepaid mobile telephony services surcharge and local charge records. <br /> <br />ALTERNATIVES <br />The Council can direct staff to delay signing the agreement and resolutions, which <br />would cause the City to forego this revenue for the first quarter of 2016. For contracts <br />executed between September 1, 2015 and December 1, 2015, collections will begin <br />April 1, 2016. <br /> <br />FISCAL IMPACT <br />This additional revenue is estimated to be between $200,000 and $280,000 a year, <br />which would be a 15%-20% increase of the City’s 2014 CUT revenues. The City’s share <br />of the BOE’s administrative cost will be netted out of the revenue and is approximately <br />5.5% of the total CUT collected on the prepaid wireless service and remitted to the City. <br />The FY 2015-16 adopted budget earmarked these additional funds for affordable <br />housing purposes. <br /> <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under CEQA as defined in CEQA Guidelines, section <br />15378, because it has no potential for resulting in either a direct or foreseeable physical <br />change in the environment. <br /> <br /> <br />AUDREY SEYMOUR RAMBERG <br />FINANCE DIRECTOR <br /> <br /> <br />6.3.B. - Page 2