HomeMy WebLinkAbout2005-02-08 - AGENDA REPORTS - SALES TAX REBATE AGMT (2)Agenda Item: _ R
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CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:
Item to be presented by: Darren Hemdndez
DATE: February 8, 2005
SUBJECT: SALES TAX REBATE AGREEMENT
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
City Council approve the attached agreement with Kolesar & Associates, and direct the City
Manager to execute all documents necessary to implement the agreement, subject to the City
Attorneys approval.
BACKGROUND
Staff recommends entering into a ten-year agreement with Kolesar & Associates. Under this
agreement, the City will share sales tax revenues with Kolesar & Associates after they recruit
and/or relocate a sales tax generating business to the City. The City would keep 35% of the sales
tax Renerated by all recruited companies for the first five years and 40% of the sales tax
generated by all recruited companies during the second five years of the agreement. Kolesar &
Associates specializes in recruiting mid-size to large companies who purchase tangible personal
property for use anywhere in California and thereby are subject to sales tax from which I% goes
to the City. Under a separate agreement between Kolesar & Associates and the recruited
company, a portion of the shared sales tax is rebated to the recruited company.
The City may enter into binding contractual arrangements to share revenues with firms that bring
new retail business to the City when a significant long-term revenue stream will provide for
necessary safety and recreation services and that such business could be a source of employment
for residents. Staff estimates that under the terms of the agreement, if only one business
generated in excess of $30,000,000 in annual sales tax, the City would receive approximately
$1,125,000 over the ten-year period if one firm was retained by Kolesar & Associates.
APPROVED
ALTERNATIVE ACTIONS
Not approve staff s recommendation to enter into the attached agreement.
FISCAL IMPACT
As a result of executing the agreement, staff estimates approximately $105,000 in revenue over a
12 -month period if one company is recruited by Kolesar & Associates. There are no
expenditures associated with this item.
ATTACHMENTS
Kolesar & Associates Agreement