At the July 24, 2018, City Council meeting, the Garden Grove City Council adopted Resolution 9523-18, proposing and submitting to the voters at the general municipal election on November 6, 2018, the Garden Grove Public Safety/9-1-1 and Vital City Services Measure. This ballot measure, also known as Measure O, presented voters with the opportunity to approve or reject an ordinance imposing a, one cent (1%) sales tax (transaction and use). The election occurred and as of the date this report was drafted the measure was approved by more than 63% of the electorate.

In order to comply with state law requirements, in addition to the voters’ approval, the City Council must introduce and subsequently, adopt the ordinance by a two-thirds vote. State law further provides that a new sales tax (transaction and use) will become operative on the first day of the first calendar quarter more than 110 days after the adoption of the ordinance imposing the tax.  In order to meet the 110-day deadline and establish the sales tax by April 1, 2019, the City Council must adopt the ordinance at its regular meeting on November 27, 2018.

Additionally, it is important to note that the proposed tax will not take effect until the final election results have been tabulated by the County and certified by the Mayor and City Council on December 11, 2018. If the final election results should show that Measure O has failed, the proposed tax will not become effective. Nevertheless, the introduction and adoption of the sales tax ordinance is a necessary prerequisite for establishing the tax effective April 1, 2019.

The one cent (1%) sales tax (transaction and use), if established, is anticipated to generate approximately $19 million in revenues to the City’s General Fund during each full year it is collected.

It is recommended that the City Council:

• Conduct the first reading of and introduce the attached Initiative Ordinance of the People of the City of Garden Grove, Adding Chapter 3.09 to Title 3 of the Garden Grove Municipal Code, Imposing a Transactions And Use (Sales) Tax to be Administered by the California Department of Tax and Fee Administration.

By: Shawn Park, Administrative Analyst