City Council
Report
City Council Meeting: January 27, 2026
Agenda Item: 11.A
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To: Mayor and City Council
From: Oscar Santiago, Director, Finance Department
Subject: Authorization of Modification to the Measure YY/GS Master Facilities Use Agreement with the Santa Monica-Malibu Unified School District Recommended Action
Staff recommend that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Authorize the City Manager to execute a modification to agreement 10658, the Measure YY/GS Master Facilities Use Agreement with the Santa Monica-Malibu Unified School District, to extend the term indefinitely.
Summary
The City and the Santa Monica–Malibu Unified School District (SMMUSD) have built a longstanding collaborative partnership that has strengthened educational, cultural, and recreational opportunities for the community. The City has consistently invested in high‑quality programs and facilities that benefit students, while the District has supported residents through strong classroom instruction and shared use of school facilities.
In 2010 and 2016, Santa Monica voters approved local tax measures accompanied by advisory measures recommending that portions of the resulting revenues be dedicated to school facilities and educational programs. To honor that voter intent, the City and SMMUSD formalized their partnership through the Measure YY/GS Master Facilities 2 of 4
Use Agreement, which is currently set to expire on June 30, 2028, with optional ten‑year extensions by mutual agreement.
Staff now seeks Council approval to modify the agreement by extending its term indefinitely, subject to existing termination provisions, and by increasing the required notice of termination from three years to fifteen years.
Discussion
Santa Monica voters approved Measure Y and advisory Measure YY in November 2010. Measure Y established a half‑percent transaction and use tax, and Measure YY recommended allocating half of the resulting revenue to school, educational, and after‑school programs, with the remaining half directed to the City’s General Fund.
In November 2016, voters approved Measures GSH and GS. Measure GSH added another half‑percent transaction and use tax, while advisory Measure GS recommended dedicating half of that revenue to improving and maintaining public school facilities and supporting educational and after‑school programs at District sites in Santa Monica, with the other half allocated to the City’s affordable housing initiatives. These commitments with SMMUSD were formalized in the Measure YY/GS Master Facilities Use Agreement.
The City currently provides approximately $30.3 million annually to SMMUSD: $18.3 million through the Measure YY/GS Master Facilities Use Agreement and $12 million through the Joint Use Agreement. The Measure YY/GS Master Facilities Use Agreement is scheduled to expire on June 30, 2028. In recognition of the strong partnership with SMMUSD, the City Council voted on October 28, 2025, to authorize staff to negotiate an extension beyond 2028. Consistent with that direction, staff now proposes modifying the agreement to extend its term indefinitely unless a majority of the City Council approves issuing a Notice of Nonrenewal, which requires a material 3 of 4
financial change dictating nonrenewal (“Basis for Nonrenewal”), with fifteen years’ notice.
The Joint Use Agreement, which provides SMMUSD with $12 million annually, is set to expire in early 2027. As part of the City’s broader fiscal realignment strategy, staff is evaluating the potential for a citywide parcel tax sized to generate $12 million annually to offset the Joint Use Agreement funding. In a separate staff report, City staff will present findings from a community survey of Santa Monica voters conducted in October 2025 to assess support for a potential City‑initiated parcel tax measure. Under that item, staff seeks Council direction on whether to continue preparing for possible placement of the measure on the November 2026 general election ballot.
Environmental Review
The Measure YY/GS Master Facilities Use Agreement would have no effect on the environment, and therefore, is categorically exempt from CEQA pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The agreement is administrative in nature and would not have any adverse physical effects on the environment.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of recommended action. The projected contribution of $18.3 million to SMMUSD related to the Measure YY/GS Master Facilities Use Agreement is included in the FY 2025-26 adopted budget.
Budget authority for subsequent fiscal years will be requested in each budget for Council approval. Future year funding is contingent on Council budget approval. 4 of 4
Prepared By: Oscar Santiago, Director
Approved Forwarded to Council
Attachments:
A. Attachment A - Existing Executed Agreements
B. Attachment B – April 10, 2018 – Approval of Master Facilities Use Agreement (Web Link)
C. Written Comments