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HomeMy Public PortalAbout2008.118 (07-15-08)RESOLUTION NO. 2008.118 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD CALLING AND GIVING NOTICE OF THE HOLDING OF A SPECIAL MUNICIPAL ELECTION ON TUESDAY, NOVEMBER 4, 2008, FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF THE CITY A. PROPOSED ORDINANCE RELATING TO THE CITY'S UTILITY USER'S TAX WHEREAS, the City of Lynwood has enacted Ordinance No. 1352 to create a ten percent tax on utility for the purpose of raising general fund revenue to provide basic City services for residents, including but not limited to, law enforcement, fire protection, graffiti removal, sidewalk and street repair, and maintenance of public parks; and WHEREAS, pursuant to California Constitution Article XIII(D), Section. 3, general taxes previously adopted by cities without a vote of the people must be ratified by the city, and the City of Lynwood is proposing this measure ratifying its utility user's tax to best comply with this statewide mandate; and WHEREAS, the City Council of the City of Lynwood now desires to submit to the voters at a Special Municipal Election a proposed ordinance relating to the City's utility user's tax; and WHEREAS, the City Council is authorized by statute to submit the proposed ordinance to the voters. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Pursuant to the requirement of the laws of the State of California relating to general law cities, there is called and ordered to be held in the City of Lynwood, California on Tuesday, November 4, 2008, a Special Municipal Election for the purpose of submitting to the voters of the City of Lynwood, the measure specified in Sections 2 and 3, below. The continued collection of a utility user's tax as a general tax is hereby proposed pursuant to Article XIIIC, Section 2(b) of the California Constitution and Government Code Sections 53723 and 53724. Pursuant to Government Code Section 53724(d) and Elections Code Section 9222, it is the intent of the City Council that the measure be submitted to the voters of Lynwood at the aforementioned Special Municipal Election. Section 2. The City Council hereby finds and declares by a unanimous vote that a fiscal emergency now exists in the City due to the lack of municipal revenue necessary to provide an acceptable level of municipal services that would ensue if collection of the tax does not continue. As described in the staff report accompanying this resolution, the City currently faces an approximately $5 million shortfall where anticipated expenditures exceed revenue and the utility user's tax represents approximately 20% of all City revenue. Due to the housing market collapse and other recessionary indicators, other City revenue sources, such as property tax and sales tax revenue, are likely to decrease. Furthermore, given the state budget crisis and anticipated cuts in funding for local services, a continuing level of local revenue is immediately needed to fund a level of municipal services required to properly protect the public health, safety, and welfare. There is no scheduled regular municipal election prior to November of 2009. Given the existence of such a fiscal emergency situation and the requirements of the stipulation, pursuant to Article XIIIC Section 2(b) of the California Constitution, the City Council hereby orders that the following measure be submitted to the voters at a special election, rather than the next regular municipal election: Ratification of Existing Utility User's Tax To help preserve the safety and character of the City of YES Lynwood through general City services such as law enforcement, fire protection, street repair, park maintenance, and recreational services, shall the city's utility user's tax be reduced to nine percent, ratified, and NO updated based on changes in technology and laws since it was instituted in 1990; provided that exemptions for senior citizens and disabled person shall also remain? Section 3. The type of tax is a utility user tax, as described in more details in Exhibit "A," attached, which is imposed on users of telephone, electric, gas and water utility services in the City, to the extent permitted by state and federal law. The rate of the tax shall not exceed ten percent and utility service providers shall collect the tax from utility service users on the utility service bills, to be remitted to the City thereafter. The full text of the ordinance to be submitted to the voters, which is currently codified as Chapter 6-5, is attached hereto as Exhibit "A." Section 4. The City Council of the City of Lynwood further does resolve, declare and order: (a) That notice of time and place of holding said election is hereby given and the City Clerk is hereby authorized, instructed and directed to give such further or additional notice of said election in the time, form and manner as required by California law. (b) That the City Council authorizes the City Clerk to administer said election, including but not limited to, contracting with the County of Los Angeles and any consultant necessary to assist with conducting the election, and otherwise take all reasonably necessary steps to ensure the proper handling and conduct of the special election authorized by this resolution, and all reasonable and actual election expenses shall be paid by the City upon presentation of a properly submitted bill. (c) That this resolution shall be effective immediately upon passage and adoption. PASSED, APPROVED, AND ADOPTED this 15th day of July, 2008, at the City of Lynwood, County of Los Angeles. Mayor Maria Teresa Santillan ATTEST: ,- /~ ~ r ~( aria Ouinonez,`Cit Clerk ~ `~ APPROVED AS TO FORM: Fred Galante, City Attorney APPROVED AS TO CONTENT: Roger L. Haley, ity Manager STATE OF CALIFORNIA ) SS. COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 15t" day of July, 2008. AYES: COUNCIL MEMBERS, CASTRO, FLORES, MORTON, RODRIGUEZ, AND SANTILLAN NOES: NONE ABSENT: NONE ABSTAIN: NONE ~ ,~~%~~2 Maria Quinonez, ity Clerk STATE OF CALIFORNIA ) SS. COUNTY OF LOS ANGELES ) I, the undersigned City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. 2008.118 on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 15t" day of July, 2008 ~--, a i EXHIBIT "A" LYNWOOD IViUNICIPAL CODE CHAPTER 6-5 "UTILITY USER'S TAX" TABLE OF CONTENTS 6-5.1 Findings 6-5.2 Purpose 6-5.3 Definitions 6-5.4 Exemptions 6-5.5 Telephone Users Tax 6-5.6 Electricity Users Tax 6-5.7 Gas Users Tax 6-5.8 Service Users Receiving Direct Purchase of Gas or Electricity 6-5.9 Water Users Tax 6-5.10 Cable Television Users Tax 6-5.11 Remittance of Tax 6-5.12 Actions to Collect 6-5.13 Duty to Collect -Procedures 6-5.14 Additional Power and Duties of Tax Administrator 6-5.15 Assessment -Service User Administrative Remedy 6-5.16 Records 6-5.17 Refunds 6-5.18 Severability 6-5-19 Termination Or Suspension Of Utility Users Tax 6-5.20 Operative Date 6-5.1 Findings. The Council of the City of Lynwood finds and declares: a. The City is facing a current budget crisis and must reduce police and fire service, maintenance of the streets, sidewalks, alleys, trees and other property open to the public as well as other community services vital to the preservation of the public peace, health and safety. b. The cost of supplies, materials and other services required to provide necessary City services, increases substantially each year. c. It is the intention and understanding of the people that this measure shall be deemed a "general tax" and that it is not a "special tax" within the meaning of Section 4 of Article XIII A of the California Constitution by virtue of the fact that the proceeds of this tax are to be deposited in the general fund of the City and are to be available to be used for any general governmental purpose that the City Council shall determine. 6-5.2 Purpose. The purpose of this section is to establish the methods for calculating a utility user's tax on users of water, telephone, gas, electricity and cable television services in the City and to establish standards for administration of the taxes. 6-5.3 Definitions. The following words and phrases whenever used in this section shall be construed as defined in this subsection. a. Person shall mean any domestic or foreign corporation, firm, association, syndicate, joint stock company, partnership of any kind, joint venture, club, business or common law trust, society, or individuals. b. City shall mean the City of Lynwood c. Gas shall mean natural or manufactured gas or any alternate hydrocarbon fuel which may be substituted therefor. d. Telephone corporation, electrical corporation, gas corporation, water corporation, and cable television corporation shall have the same meanings as defined in Sections 234, 218, 222, 241, and 215-5, respectively, of the California Public Utilities Code except, "electrical corporation," "gas corporation" and "water ~~ corporation shall also be construed to include any municipality, public agency or person engaged in the selling or supplying of electrical power or gas or water to a service user. e. Tax Administrator shall mean the Finance Director of the City of Lynwood. Service supplier shall mean any entity required to collect or self-impose and remit a tax as imposed by this section. g. Service user shall mean a person required to pay a tax imposed by this section. h. Month shall mean a calendar month. Non-utility supplier shall mean: (a) a service supplier, other than an electrical corporation serving within the City, which generates electrical energy in capacities of at least fifty (50) kilowatts for its own use or for sale to others; or (b) a gas supplier other than a gas corporation, that sells or supplies gas to users within the city. 6-5.4 Exemptions. a. Nothing in this section shall be construed as imposing a tax upon any person when imposition of such tax upon that person would be in violation of the Constitution of the United States or that of the State of California. b. The City Council may, by order or resolution, establish one or more classes of persons or one or more classes of utility service otherwise subject to payment of a tax imposed by this section and provide that such classes of persons or service shall be exempt, in whole or in part from such tax. c. The Tax Administrator shall prepare a list of the persons exempt from the provisions of this section by virtue of this subsection and furnish a copy thereof to each service supplier. 6-5.5 Telephone Users Tax. a. There is hereby imposed a tax on the amounts paid for any intrastate or interstate telephone communication services by every person in the City using such services including commercial mobile radio services. The tax imposed by this subsection shall be at the rate of not more than nine (9%) percent of the charges made for such services and shall be paid by the person paying for such services. b. As used in this subsection, the term "charges" shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due; nor shall the term "charges" include charges for any type of service or equipment furnished by a service supplied subject to public utility regulations during any period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to public utility regulation; nor shall the words "telephone communication services" include land mobile service or maritime mobile services as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, as said section existed on January 1, 1970. The term "telephone communication services" refers to that services which provides access to a telephone system and the privilege of telephone quality communication with substantially all persons having telephone stations which are part of such telephone system. The Telephone Users Tax is intended to, and does, apply to all charges billed to a telephone account having a situs in the City, irrespective of whether a particular communication service originates and/or terminates within the City. c. The tax imposed by this subsection shall be collected from the service user by the person providing the intrastate or interstate telephone communication services, or the person receiving payment for such services. The amount of the tax collected in one (1) month shall be remitted to the Tax Administrator on or before the last day of the following month; or at the option of the person required to collect and remit the tax, an estimated amount of tax collected, measured by the tax bill in the previous month, shall be remitted to the Tax Administrator on or before the last day of each month. d. Notwithstanding the provisions of paragraph a., the tax imposed under this subsection shall not be imposed upon any person for using intrastate or interstate telephone communication services to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under ,~, Division 2, Part 20 of the California Revenue and Taxation Code, or the tax imposed under Section 4251 of the Internal Revenue Code. 6-5.6 Electricity Users Tax. a. There is hereby imposed a tax upon every person other than an electric or gas corporation using electrical energy in the City. The tax imposed by this subsection shall be at the rate of not more than nine (9%) percent of the charges made for such energy by an electrical corporation providing service in the City and shall be billed to and paid by the person using the energy. The tax applicable to electrical energy provided by anon-utility supplier shall be determined by applying the tax rate to the equivalent charge the service user would have incurred if the energy used had been provided by the electrical corporation serving the residents of the City. Rate schedules for this purpose shall be available from the City. Non-utility suppliers shall install, maintain and use an appropriate utility-type metering system which will enable compliance with this subsection. "Charges," as used in this subsection, shall include charges made for: (1) metered energy and (2) minimum charges for service, including customer charges, service charges, demand charges, standby charges and all other annual and monthly charges, fuel or other costs adjustments, authorized by the California Public Utilities Commission or the Federal Energy Regulatory Commission. b. As used in this subsection, the term "using electrical energy" shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by him or her for use in an automobile or other machinery device apart from the premises upon which the energy was received, provided, however, that the term shall include the receiving of such energy for the purpose of using it in the charging of batteries; nor shall the term include electricity used and consumed by an electric utility supplier in the conduct of its business; nor shall the term include the mere receiving of such energy by an electric corporation or governmental agency at a point within the City of Lynwood for resale; nor shall the term include the use of such energy in the production or distribution of water by a water utility or a governmental agency. c. The tax imposed in this subsection shall be collected from the service user by the service supplier or non-utility supplier. The tax imposed in this subsection on use supplied by self-generation or from anon-utility supplier not subject to the jurisdiction of this section, shall be collected and remitted to the Tax Administrator in the manner set forth in subsection 6-5.8. The amount of tax collected by a service supplier or anon-utility supplier in one (1) month shall be remitted by U.S. mail to the Tax Administrator, postmarked on or before the last day of the following month; or at the option of the person required to collect and remit the tax, an estimated amount of tax measured by the tax billed in the previous month, shall be remitted by U.S. mail; to the Tax Administrator, postmarked on or before the last day of each month. 6-5.7 Gas Users Tax. a. There is hereby imposed a tax upon every person in the City other than a gas corporation or electrical corporation, using, in the City, gas which is transported through mains or pipes or by mobile transport. The tax imposed by this subsection shall be at the rate of not more than nine (9%) percent of the charges made for the gas and shall be billed to and paid by the person using the gas. The tax applicable to gas or gas transportation provided by non-utility suppliers shall be determined by applying the tax rate to the equivalent charges the service user would have incurred ,if the gas or gas transportation has been provided by the gas corporation franchised by the City. "Charges" as used in this subsection shall include: (1) that billed for gas which is delivered through mains or pipes; (2) gas transportation charges; and (3) demand charges, service charges, customer charges, minimum charges, annual and monthly charges, and any other charge authorized by the California Public Utilities Commission or the Federal Energy Regulatory Commission. b. The tax otherwise imposed by this subsection is not applicable to: (1) charges made for gas which is to be resold and delivered through mains and pipes; (2) charges made for gas used and consumed by a public utility or governmental agency in the conduct of its business or, (3) charges made by a gas public utility or gas used and consumed in the course of its public utility business; and (4) charges made for gas used in the propulsion of a motor vehicle, as authorized in the Vehicle Code of the State of California. c. The tax imposed in this subsection shall be collected from the service user by the person selling or transporting the gas. A person selling only transportation services to a user for delivery of gas through mains or pipes shall collect the tax from the service user based on the transportation charges. The person selling or transporting the gas shall, on or before the 20th of each month after the effective date of this section 94, make a return to the Tax Administrator stating the amount of taxes billed during the preceding calendar month. At the time such returns are filed, the person selling or transporting the gas shall remit tax payments to the Tax Administrator in accordance with schedules established or approved by the Tax Administrator. The tax imposed on this section on use supplied by self- production or anon-utility supplier not subject to the jurisdiction of this ordinance shall be collected and remitted to the Tax Administrator in the manner set forth in subsection 6-5.8. 6-5.8 Service Users Receiving Direct Purchase of Gas or Electricity. a. Notwithstanding any other provision of this section, a service user receiving gas or electricity directly from anon-utility supplier not under the jurisdiction of this section, or otherwise not having the full tax due on the use of gas or electricity in the City directly billed and collected by the service supplier, shall report said fact to the Tax Administrator within thirty (30) days of said use and shall directly remit to the City the amount of tax due. b. The Tax Administrator may require said service user to provide, subject to audit, filed tax returns or other satisfactory evidence documenting the quantity of gas or electricity used and the price thereof. 6-5.9 Water Users Tax. a. There is hereby imposed a tax upon every person in the City using water which is delivered through mains or pipes. The tax imposed by this subsection shall be at the rate of not more than nine (9%) percent of the charges made for such water ~' and shall be paid by the person paying for such water. b. There shall be excluded from the base on which the tax imposed in this subsection is computed charges made for water which is to be resold and delivered through mains or pipes; and charges made by a municipal water department, public utility or a City or municipal water district for water used and consumed by such department, utility or district. c. The tax imposed in this subsection shall be collected from the service user by the person supplying the water. The amount collected in one (1) month shall be remitted to the Tax Administrator on or before the last day of the following month 6-5.10 Cable Television Users Tax. a. There is hereby imposed a tax upon every person in the City using cable television service. The tax imposed by this section shall be at the rate of not more than nine (9%) percent of the charges made for such water and shall be paid by the person paying for such water. b. The tax imposed in this subsection shall be collected from the service user by the person furnishing the cable television service. The amount collected in one (1) month shall be remitted to the Tax Administrator on or before the last day of the following month . 6-5.11 Remittance of Tax. a. Taxes collected from a service user which are not remitted to the Tax Administrator on or before the due dates provided in this section are delinquent. Should the due date occur on a weekend or legal holiday, the return may be postmarked on the first regular working day following aSaturday/Sunday, or legal holiday. 6-5.12 Actions to Collect. Any tax required to be paid by a service user under the provisions of this section shall be deemed a debt owed by the service user to the City. Any such tax collected from a service user which has willfully been withheld from the Tax Administrator shall be deemed a debt owed to the City by the person required to collect and remit. Any person owing money to the City under the provisions of this section shall be liable to an action brought in the name of the City for the recovery of such amount . 6-5.13 Duty to Collect -Procedures. The duty to collect and remit the taxes imposed by this section shall be performed as follows: a. Notwithstanding the provisions of subsection 6-5-8, the tax shall be collected insofar as practicable at the same time as and along with the charges made in accordance with the regular billing practices of the service supplier. Where the amount paid by a service user to a service supplier is less than the full amount of the service charge and tax which has accrued for the billing period, such amount and any subsequent payments by a service user shall be applied to the utility charge first until such charge has been fully satisfied. Any remaining balance shall be .applied to taxes due. In those cases where a service user has notified the service supplier of his refusal to pay the tax imposed on said energy charges subsection 6-5-14 will apply. b. The duty to collect tax from a service user shall commence with the beginning of the first full regular billing period applicable to the service user where all charges normally included in such regular billing are subject to the provisions of this chapter. Where a person receives more than one billing, one or more being for different periods than another, the duty to collect shall arise separately for each billing . 6-5.14 Additional Power and Duties of Tax Administrator. a. The Tax Administrator shall have the power and duty, and is hereby directed to enforce each and all of the provisions of this section. ~ b. The Tax Administrator shall have the power to adopt rules and regulations not inconsistent with provisions of this section for the purpose of carrying out and enforcing the payment, collection and remittance of the taxes herein imposed. A copy of such rules and regulations shall be on file in the Tax Administrator's office. c. The Tax Administrator may make administrative agreements to vary the strict requirements of this section so that collection of any tax imposed here may be made in conformance with the billing procedures of particular service supplier so long as said agreements result in collection of the tax in conformance with the general purpose and scope of this section. A copy of each such agreement shall be on file in the Tax Administrator's office. d. The Tax Administrator shall determine the eligibility of any person who asserts a right to exemption from the tax imposed by this section. The Tax Administrator shall provide the service supplier with the name of any person who the Tax Administrator determines is exempt from the tax imposed hereby, together with the address and account number to which service is supplied to any such exempt person. The Tax Administrator shall notify the service supplier of termination of any person's right to exemption hereunder, or the change of any address to which service is supplied to any exempt person. e. The Tax Administrator shall provide notice to all service suppliers, at least ninety (90) days prior to any annexation or other change in the City's boundaries. Said notice shall set forth the revised boundaries by street and address, along with a copy of the final annexation order from LAFCO. 6-5.15 Assessment -Service User Administrative Remedy: a. Whenever the Tax Administrator determines that a service user has deliberately withheld the amount of the tax owed by him or her from the amounts remitted to a person required to collect the tax, or that a service user has refused to pay the amount of tax, such person may be relieved of the obligation to collect taxes due under this Section from certain named service users for specified billing periods as set forth below. The notice shall be served on the service user by handing it to him or her personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at the address to which billing was mailed by the person required to collect the tax. ~" b. The service supplier shall provide the City with amounts refused and/or unpaid i along with the names and addresses of the service users neglecting to pay the tax imposed under provisions of this Section. Whenever the service user has failed to pay the amount of tax for a period of two (2) or more billing periods, the service supplier shall be relieved of the obligation to collect taxes due. c. The Tax Administrator shall notify the service user that the Tax Administrator assumed responsibility to collect the taxes due for the stated periods and demand payment of such taxes. The notice shall be served on the service user by handing it to him or her personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at the address to which billing was mailed by the person required to collect the tax; or, should the service user's address change, to the last known address. If a service user fails to remit the tax to the Tax Administrator within fifteen (15) days from the date of the service of the notice upon him or her, which shall be the date of mailing if service is not accomplished in person, a penalty of twenty five percent (25%) of the amount of the tax set forth in the notice shall be imposed, but not less than five dollars ($5.00). The penalty shall become part of the tax herein required to be paid. 6-5.16 Records: It shall be the duty of every person required to collect and remit to the City any tax imposed by this Section to keep and preserve, for a period of three (3) years, all records as may be necessary to determine the amount of such tax as he may have been liable for the remittance to the Tax Administrator, which records the Tax Administrator shall have the right to inspect at all reasonable times . 6-5.17 Refunds: a. Written Claim Required: Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the Tax Administrator under this Section, it may be refunded as provided in this Subsection; provided, however, that a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the Tax Administrator ih compliance with Section 2-7.2 of this Code. The claim shall be made on forms furnished by the Tax Administrator. b. Refund Or Credit: Notwithstanding the provisions of subsection a above, a service supplier may claim a refund; or take as credit against taxes remitted the amount overpaid, paid more than once, or erroneously or illegally collected or received when it is established that the service user from whom the tax has been collected did not owe the tax; provided, however, that neither a refund nor a ~ credit shall be allowed unless the amount of the tax erroneously or illegally collected has either been refunded to the service user or credited to charges subsequently payable by the service user to the person required to collect and remit. A service supplier that has collected any amount of tax in excess of the amount of tax imposed by this Section may refund such amount to the service user and may, with the prior written approval of the Tax Administrator, claim credit for such overpayment against the amount of tax that is due to the City, provided that a claim for such credit is presented within the time and in the manner prescribed by Subsection 2-7.2 of this Code. c. Taxes Refunded: Notwithstanding other provisions of this Subsection, whenever a service supplier, pursuant to an order of the California Public Utilities Commission or a court of competent jurisdiction, makes a refund to service users of charges for past utility services, the taxes paid pursuant to this Section on the amount of such refunded charges shall also be refunded to service users, and the service supplier shall be entitled to claim a credit for such refunded taxes against the amount of tax which is due upon the next monthly returns. In the event this Section is repealed, the amounts of any refundable taxes will be borne by the City . 6-5.18 Severability: If any subsection, subdivision, paragraph, sentence, clause or phrase of this Section or any part thereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this Section or any part thereof. The City Council hereby declares that it would have passed each subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more' subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional 6-5.19 Termination Or Suspension Of Utility Users Tax: The service supplier shall, upon notification, terminate or suspend any utility users tax commencing with the first full billing period which occurs after the effective date of such action by the city council . 6-5.20 Operative Date: Under the provisions of Government Code section 36937, this section shall become effective immediately upon passage of the enacting ordinance. The tax imposed under this section shall apply to bills rendered on or after ninety (90) days or as soon thereafter as the respective utilities are physically and mechanically able to get "on Fine" for the imposition of charges (not more than 60 days). [END OF EXHIBIT "A"]