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CC Resolution 2003-117RESOLUTION NO. 2003-117 A RESOLUTION OF THE CITY COUNCIL OF THE ' CITY OF LA QUINTA, CALIFORNIA, APPROVING THE PROPOSED TAX SHARING CONTRACTS OFFERED BY THE CITY OF INDIO FOR THE RELOCATION OF CHAMPION CADILLAC AND CHAMPION CHEVROLET WHEREAS, the Champion Cadillac and Champion Chevrolet dealerships (collectively, "Champion Dealerships") currently operate at 78611 Highway 111 in the City of La Quinta; and WHEREAS, the City of Indio and the Champion. Dealerships have stated their intent to enter into financial assistance agreements in order to relocate the Champion Dealerships to the 1-10 Auto Mall in the City of Indio; and WHEREAS, on November 14, 2003, the City of Indio delivered to the City of La Quinta two tax sharing contracts to the City of La Quinta, which the City of Indio contends comply with Government Code Section 53084; and WHEREAS, the proposed contracts offered by Indio are attached hereto as Exhibit "A" (the Championship Chevrolet contract) and Exhibit "B" (the Championship Cadillac contract); NOW, THEREFORE, BE IT RESOLVED by thte City Council of the City of La Quinta, California, as follows: SECTION 1 The above recitals are incorporated as true and correct and are hereby adopted as the findings by 'the City Council. SECTION 2 The City Council hereby approves the proposed Tax Sharing Contracts for the relocation of the Champion Cadillac and Champion Chevrolet dealerships, subject to the changes and clarifications, if any, deemed appropriate by the Acting City Manager and- the City Attorney, and agreed upon by the City of Indio. SECTION 3 The City Council authorizes the Acting City Manager to execute the contracts on behalf of the City of La Quinta. PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta City Council held on this 2nd day of December, 2003, by the following vote to wit: Resolution No. 2003-117 Approval of Tax Sharing Agreements - Champion Deal erships December 2, 2003 Page 2 AYES: Council Members Henderson, Osborne, Perkins, Sniff, Mayor Adolph NOES: None ABSENT: None ABSTAIN: None ATTEST: Jblqt S. GREEK, CMC, CiiR4rk City of La Quinta, California (CITY SEAL) APPROVED AS TO FORM: i M. kATHIERAE JENSO , City Attorney City of La Quinta, California AONA'�LD ADO LPHI May City of La Quinta, California TAX SHARING CONTRACT This contract is made this day of , 2003, by and between the City of Indio ("Indio') and the City of La Quinta ("La Quintal) in compliance with Govt. Code Section 53084. Recitals A. The purpose of this contract is to apportion the sales tax generated from the relocated Champion Chevrolet dealership ("Dealership's between Indio and La Quinta after the relocation of such Dealership as required by Govt. Code Section 53084 as it was in effect on December 31, 2003. B.This Conract shall be executed by the City of La Quinta on or before December 15, 2003. Now, therefore, the parties agree as follows. 1. Recitals. The Recitals set out above are true and correct. 2. Definitions: As used herein, the following words shall have the following meanings. a. Fiscal Year. "Fiscal Year" shall mean each city's fiscal year, which commences on July 1 and ends on June 30. b. Oualified Business. "Qualified Business" shall mean the operation of the Dealership. c. Ouarter. "Quarter" shall mean any one of the three (3) month Periods commencing July I. October 1, January 1 or April 1. d. "Relocation." "Relocation" shall mean the date on which Dealership reopens to the public and commences the sale of vehicles after physically removing its operations from La Quinta and reopening in Indio. It shall not include such time as both locations remain open. e. Sales Tax. "Sales Tax" means, for each Quarter during the term of the Indio's tax sharing obligations hereunder, that portion of taxes received by Indio from the imposition of the Bradley -Burns Uniform Local Sales and Use Tax Law (commencing with Section 7200 of the California Revenue & Taxation Code) directly from the operation of the Qualified Business on the Property, prorated in the first and last Quarters during the term of this Agreement based upon the number of days in such partial Quarters. For .purposes of this Agreement, the term "Sales Tax" shall not include the State Board of Equalization's administrative and processing fee attributable to Indio's portion of such taxes (calculated at the same percentage of such taxes as applies citywide). In addition, "Sales Tax" shall not be deemed received by Indio until the Indio is able to confirm receipt of such taxes from the State Board of Equalization. If California state law changes during the term of this Agreement so as to materially alter the method by which sales tax revenues are allocated among jurisdictions, then the parties shall negotiate in good faith modifications to this Agreement to carry out its intended economic costs and benefits to each party. 3. Term: The term of this contract shall commence on the date of Relocation; the fiscal year in which Relocation occurs shall be the first fiscal year hereof and this contract thereafter shall continue for a total of 10 fiscal years, after which time it shall terminate and be of no further force and effect. (By way only of example, if the contract commences on July 1, 20051, it will terminate on June 30, 2015). The contract may be extended on the same terms and conditions by the written agreement of both parties. The contract shall terminate immediately, before the end and regardless of the 10-year term, if the Dealership closes or otherwise ceases to sell vehicles to the public. 4. Determination of Tax Sharing: a. Amount of Sales Tax. In June of each fiscal year, and annually thereafter for the term of this contract, commencing with the fiscal year in which the Relocation occurs, Indio shall determine the amount of Sales Tax. b. Financial Assistance Amount. Indio then shall subtract from the amount of Sales Tax the amount of financial assistance provided to __the Dealership pursuant to the Financial Assistance Agreement between Indio and Dealership dated December 30, 2003 for that fiscal year. (the "Financial Assistance Amount"). C. Sales Tax Share. The Sales Tax remaining after the calculation in (A) shall be divided evenly between Indio and La Quinta. The amount to be paid to La Quinta's share shall be compared to the amount of sales tax that La Quinta received from the Dealership in the 2003-2004 year (the fiscal year prior to Relocation) (the "base sales tax.') La Quinta shall receive a share of the Sales Tax which is the same as or less than the base sales tax (the "Sales Tax Share"). Prior to the first fiscal year in which the Sales Tax Share will be determined, La Quinta shall provide to Indio the amount of base sales tax for the fiscal year prior to Relocation and supporting documentation therefore. d. Payment of the Sales Tax Share. The Sales Tax Share shall be paid to La Quinta promptly and shall be accompanied by a summary of the formula used to reach the amount paid. e: Notwithstanding anything herein to the contrary, in no event shall Indio be required to pay La Quinta any amount from any funds other than from Sales Tax or any amount of any kind in any fiscal year in which no Sales Tax is received or the amount of the Sales Tax minus the Financial Assistance Amount is zero (0) or less. 6. Miscellaneous. a. Headings and Captions. The headings and captions in this contract are for convenience only and shall not be referred to in the interpretation of this Agreement. b. Waiver. The failure of any Party to exercise any power given it hereunder or to; insist upon strict compliance with the terms of this contract shall not constitute a waiver of that Party's right to demand exact compliance with the terms hereof. Waiver by a Party of any particular default by the other shall not affect or impair its rights with respect to any subsequent defaults of the same or of a different kind; nor shall any delay or omission by a Party to exercise any rights arising from any default affect or impair its right as to such default or any future default. Any consent or waiver by a party with respect to a breach by the other party, whether express or implied, shall not constitute consent to, waiver of, or excuse for, any other different or subsequent breach. Failure by a party to enforce a provision of this contract at any time shall not be construed as a waiver of that provision. C. Severance. Should any part of this Agreement be declared invalid or unenforceable for any reason, it shall be adjusted rather than voided, if possible, to achieve the intent of the Parties. If such part is determined to be invalid and/or unenforceable any remainder of such provision, and of the entire Agreement, shall remain in full force and effect. d. Entire Agreement. This contract contains the entire agreement between the Parties. Any and all verbal or written agreements made prior to the date of this Agreement are superseded by this Agreement and shall have no further effect. No modification or change to the terms of this contract will be binding on a Party unless in writing and signed by an authorized representative of that Party. f. Authorization. The persons executing this Agreement on behalf of the Parties hereby warrant that they have the authority and are duly authorized and are duly authorized to execute this Agreement on behalf of the Party they purport to represent and can bind that Party to this Agreement. IN Witness Whereof, the parties have executed this Agreement effective as of , 2003. - TAX SHARING CONTRACT r-- r This contract is made this day of , 2003, by and between the F City of Indio ("Indio') and the City of La Quinta ("La Quinta") in compliance with Govt. Code Section 53084. Recitals A. The purpose of this contract is to apportion the sales tax generated from the relocated Champion Cadillac dealership ("Dealership's between Indio and La Quints after the relocation of such Dealership as required by Govt. Code Section 53084 as it was in effect on. December 31, 2003. B.This Conract shall be executed by the City of La Quintaon or before December 15, 2003. Now, therefore, the parties agree as follows. 1. Recitals. The Recitals set out above are true and correct. 2. Definitions: As used herein, the following words shall have the following meanings. a. Fiscal Year. "Fiscal Year" shall mean each city's fiscal year, which commences on July 1 and ends on June 30. b. Oualified Business. "Qualified Business" shall mean the operation of the Dealership. C. :._ er. "Quarter" shall mean any one of the three (3) month periods commencing July 1, October 1, January 1 or April 1. d. "Relocation." "Relocation" shall mean the date on which Dealership reopens to the public and commences the sale of vehicles. after physically removing its operations from La Quinta and reopening in Indio. It shall not include such time as both locations remain open. e. Sales Tax. "Sales Tax" means, for each Quarter during the term of the Indio's tax sharing obligations hereunder, that portion of taxes received by Indio from the imposition of the Bradley -Bums y Uniform Local Sales and Use Tax Law (commencing with Section 7200 of the California Revenue & Taxation Code) directly from the operation of the Qualified Business on the Property, prorated in the first and last Quarters during the term of this Agreement based upon the number of days in such partial Quarters. For purposes of this Agreement, the term "Sales Tax" shall not include the State Board of Equalization's administrative and processing fee attributable to Indio's portion of such taxes (calculated at the same percentage of such taxes as applies citywide). In addition, "Sales Tax" shall not be deemed received by Indio until the Indio is able to confirm receipt of such taxes from the State Board of Equalization. If California state law changes during the term of this Agreement so as to materially alter the method by which sales tax revenues are allocated among jurisdictions, then the parties shall negotiate in good faith modifications to this Agreement to carry out its intended economic costs and benefits to each party. 3. Term: The term of this contract shall commence on the date of Relocation; the fiscal year in which Relocation occurs shall be the first fiscal year hereof and this contract thereafter shall continue for a total of 10 fiscal years, after which time it shall terminate and be of no further force and effect. (By way only of example, if the contract commences on July 1, 2005, it will terminate on June 30, 2015). The contract may be extended on the same terms and conditions by the written agreement of both parties. The contract shall terminate immediately, before the end and regardless of the 10-year term, if the Dealership closes or otherwise ceases to sell vehicles to the public. 4. Determination of Tax Sharing: a. Amount of Sales Tax. In June of each fiscal year, and annually thereafter for the term of this contract, commencing with the fiscal year in which the Relocation occurs, Indio shall determine the amount of Sales Tax. b. Financial Assistance Amount. Indio then shall subtract from the amount of Sales Tax the amount of financial assistance provided to the Dealership pursuant to the Financial Assistance Agreement between Indio and Dealership dated December 301, 2003 for that fiscal year (the "Financial Assistance Amount"). c. Sales Tax Share. The Sales Tax remaining after the calculation in (A) shall be divided evenly between Indio and La Quinta. The amount to be paid to La Quinta's share shall be compared to the amoun es tax that La Quinta received from the Dealership in the 03-200 year (the fiscal year prior to Relocation) )(the "base sales tax:") a Quinta shall receive a share of the Sales Tax which is the same as or less than the base sales tax (the "Sales Tax Share"). Prior to the first fiscal year in which the Sales Tax Share will be determined, La Quinta shall provide to Indio the amount of base sales tax for the fiscal year prior to Relocation and supporting documentation therefore. d. Payment of the Sales Tax Share. The Sales Tax Share shall be paid to La Quinta promptly and shall be accompanied by a summary of the formula used to reach the amount paid. e. , Notwithstanding anything herein to the contrary, in no event shall Indio be required to pay La Quinta any amount from any . funds other than from Sales Tax or any amount of any kind in any fiscal year in which no Sales Tax is received or the amount of the Sales Tax minus the Financial Assistance Amount is zero (0) or less. 6. Miscellaneous. a. Headings and Captions. The headings and captions in this contract are for. convenience only and shall not be referred to in the interpretation of this Agreement. b. Waiver. The failure of any Party to exercise any power given it hereunder or to insist upon strict compliance with the terms of this contract shall not constitute a waiver of that.Party's right to demand exact compliance with the terms hereof. Waiver by a Party of any particular default by the other shall not affect or impair its rights with respect to any subsequent defaults of the same or of a different kind; nor shall any delay or omission by a Party to exercise any rights arising from any default affect or impair its right as to such default or any future default. Any consent or waiver by a party with respect to a breach by the other party, whether express. or implied, shall not constitute consent to, waiver of, or excuse for, any other different or subsequent breach. Failure by a party to enforce a provision of this contract at any time shall not be construed as a waiver of that provision. C. Severance. Should any part of this Agreement be declared invalid or unenforceable for any reason, it shall be adjusted rather than voided, if possible, to achieve the intent of the Parties. If such part is determined to be invalid and/or unenforceable any remainder of such provision, and of the entire Agreement, shall remain in full force and effect. d. Entire Agreement. This contract contains the entire agreement between the Parties. Any and all verbal or written agreements `made prior to the date of this Agreement are superseded by this Agreement and shall have no further effect. No modification or change to the terms of this contract will be binding on a Party unless in writing and signed by an authorized representative of that Party. f. Authorization. The persons executing this Agreement on behalf of the Parties hereby warrant that they have the authority and are duly authorized and are duly authorized to execute this Agreement on behalf of the Party they purport to represent and can bind that Party to this Agreement. IN Witness Whereof, the parties have executed this Agreement effective as of 2003