HomeMy WebLinkAboutOrdinance #3653 ORDINANCE NO. 3653
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
DIRECTING THE CITY ADMINISTRATOR TO APPROVE ALL VALID
TAX REFUND CLAIMS FILED IN CONNECTION WITH THE CASE ENTITLED
HOWARD JARVIS TAXPAYERS ASSOCIATION V.. COUNTY OF ORANGE
AND REAL PARTY IN INTEREST CITY OF HUNTINGTON BEACH,
ORANGE COUNTY SUPERIOR COURT CASE NO. 818780,
AND ESTABLISHING PROCEDURES TO DETERMINE THEIR VALIDITY
WHEREAS the Cityfirst contracted with the California Public Employees Retirement
System("PERS") in 1945 to provide retirement benefits to its police and fire employees.
Pursuant to the City Charter,the CITY has contracted with PERS to provide all City employees
with a retirement program since at least 1966; and
WHEREAS, since at least 1966,the Huntington Beach City Charter has authorized, and
the City Council has levied a separate property tax to pay for City employee retirement benefits
(the"Retirement Tax"); and
WHEREAS,Proposition 13 was adopted in 1978, limiting property taxes to 1%of full
cash value,but also authorizing taxes exceeding the limit to repay"any indebtedness approved
• by the voters prior to July 1, 1978." In the case entitled Carman v. ANord(1982) 31 Cal.3d 318,
the California Supreme Court interpreted"indebtedness"under Proposition 13 to permit the City
and other similar situated cities to continue to levy a Retirement Tax above the 1% limit;and
WHEREAS, prior to 1978,the City was only responsible for paying the employer
contribution to PERS. Although after adoption of Proposition 13,the City agreed to pay for
additional employee retirement benefits, such as paying the employees' contribution to PERS,
the City never used the Retirement Tax to pay for anything other than the employer contribution
to PERS prior to 1997-98; and
WHEREAS, prior to 1981, the Retirement Tax rate fluctuated from year to year. Since
Fiscal Year 1980-1981 through Fiscal Year 2000-2001, City levied the Retirement Tax on all
taxable property within Huntington Beach of at the rate of.0493%; and
WHEREAS, beginning in Fiscal Year 1997-1998, the City's employer contributions to
PERS began to fall. From Fiscal Year 1997-1998 through 2000-2001,the City used a portion of
the Retirement Tax to pay for retirement obligations the City agreed to provide after 1978, such
as the PERS pick-up,the Supplemental Retirement Plan and the Medical Insurance Retirement
Fund; and
WHEREAS, at issue in Howard Jarvis Taxpayers Association v. County of Orange
(Orange County Superior Court Case No. 81 87 80, Court of Appeal, Fourth District, Case No.
G029292)was whether Proposition 13 only permitted the Retirement Tax to pay for retirement
benefits the City agreed to provide before July 1, 1978, or whether it also permitted the
Retirement Tax to pay for benefits authorized after July 1, 1978; and
1
GA0RDItiANC\2004\Extending Time-Tax Refund Claims.doc
4/22/04
Ordinance No. 3653
• WHEREAS, on June 4, 2001,the Superior Court adjudged in Howard Jarvis Taxpayers
Association v. County of Orange that Proposition 13 only authorized the Retirement Tax to pay
for retirement benefits that the City provided prior to July 1, 1978, specifically the City's
employer contribution to PERS. The Court further found that for the period up to and including
fiscal year 1999/2000, that portion of the Retirement Tax used to pay for the PERS pick-up,the.
Supplemental Retirement Plan and the Medical Insurance Retirement Fund was invalid. This
decision was affirmed in HJTA v. City of Huntington Beach, 110 Cal.App.4 h 1375(2003); and
WHEREAS, City passed Resolution 2001-19 on April 16, 2001 stating City's intention to
refund the invalid portion of the Retirement Tax to those taxpayers (or their guardians, executors
or administrators)who file valid claims; and
WHEREAS, on February 17, 2004,the Superior Court ordered that the City pay Plaintiff,
Howard Jarvis Taxpayers Association, attorneys fees in the amount of$250,000.00 from the
common fund of property tax reimbursements to be issued for Fiscal Years 1997/98 to 2001/02.
The Court further ordered that the City shall reduce the tax refunds by the amount of the
claimant's proportionate share of attorneys fees; and
NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby
ordain as follows:
SECTION 1. The City Administrator is directed to approve all valid claims for refund of
the Retirement Tax between 1997-1998 to the present,provided that no refund shall be paid
unless the taxpayer or his or her guardian, conservator; executor or administrator has submitted a
written claim,under penalty of perjury,to the City within four years of the overpayment or
erroneous or illegal collection of said tax, except as provided for at Section 3.
SECTION 2. The City Treasurer shall pay all Retirement Tax claims approved by City.
A payment of a Retirement Tax claim by City will constitute payment in full on such claim.
SECTION 3. Pursuant to Section 5097 of the Revenue & Taxation Code,the City
Administrator shall approve claims for a refund of Retirement Tax if the claim was: (1)verified
by the person who paid the tax, his or her guardian, executor, or administrator, and(2) filed
within four years after making of the payment of the Retirement Tax,provided that no claim for
a refund filed on or before January 4, 2004, shall be treated as untimely. Otherwise,the City
Administrator shall deny the claim and provide written notice to the claimant of the denial and
the time and manner by which the claimant may appeal.
SECTION 4. The City Administrator shall request a claimant to submit a corrected
claim if he determines their claim form is incomplete or additional information is necessary to
verify the claim. The corrected claim/additional information must be mailed and postmarked to
the City, or otherwise delivered to the City within 35 days after the request was dated. If a
corrected claim is not received by the 35th day, it shall be deemed denied.
SECTION 5. Refunds shall be paid according to the amount of Retirement Tax paid.
The percentage of the Tax to be refunded is:
2
GAORDINAN02004\Extending Time-Tax Refund Claims.doc
4/22/04
Ordinance No. 3653
iFY % of tax collected that is to be refunded
1997-98 31.8%
1998-99 41.9%
1999-00 84.5%
2000-01 100%
SECTION 6. Interest shall be paid on Retirement Tax refunds, pursuant to California
Revenue &Taxation Code Section 5151, which specifies that interest is due if at least ten dollars
($10) or more of interest is due. Simple interest shall be paid on all refunds from April 2, 2001,
or the date the Retirement Tax was paid, whichever is later,through 30 days prior to issuance of
the refund checks. The interest rate shall be 3.86% for the one year from April 2001 through
March 2002, and 3%per year thereafter. For purposes of determining if at least $10 in interest is
due,the interest shall be accumulated for all tax years that a single claimant seeks a refund for a
single parcel.
SECTION 7. All refunds shall be reduced by the claimant's proportionate share of the
$250,000 paid in attorneys fees.
SECTION 8. If the claimant was late paying the Retirement Tax for the year claimed,
the proportionate share of any interest or penalties paid to the County associated with the
Retirement Tax overpaid shall be refunded.
• SECTION 9.
(a) Any person aggrieved by any decision of the City Administrator shall be required
to comply with the appeals procedure of this section. Compliance with this section shall be a
prerequisite to a suit thereon. [See Revenue & Taxation Code § 5141.] Nothing herein shall
permit the filing of a claim or action on behalf of a class or group of taxpayers.
(b) If any person is aggrieved by any decision of the City Administrator,he or she
may appeal by filing a notice of appeal with the City Clerk within fourteen(14) days of the date
of the decision.
(c) The matter shall be set for hearing no more than ninety(90) days from the receipt
of the appeal. The appellant shall be served with notice of the time and place of the hearing, as
well as any relevant materials, at least fourteen(14) calendar days prior to the hearing. The
hearing may be continued from time to time upon mutual consent. At the time of the hearing,the
claimant,the City Administrator, and any other interested person may present such relevant
evidence as he or she may have relating to the determination from which the appeal is taken.
(d) Based upon the submission of such evidence and the review of the City's files,the
Hearing Officer shall issue a written notice and order upholding, modifying or reversing the
determination from which the appeal is taken. The notice shall be given within fourteen(14)
days after the conclusion of the hearing and shall state the reasons for the decision. The notice
shall specify that the decision is final and that any suit for judicial review pursuant to Revenue &
Taxation Code § 5141 shall be filed within six months from the date of the decision. If the
3
GAORDINANC\2004\Extendinz Time-Tax Refund Claims.doc
4/22104
Ordinance No. 3653
• Hearing Officer fails or refuses to act on a refund claim within the fourteen (14) day period,the
claim shall be deem do hav ted n th urteenth 14th day.)
ed t e been re�ec o e fo ( ) y
(e) All notices under this section may be sent by regular mail, postage prepaid, and
shall be deemed received on the third calendar day by following the date of mailing,as
established by a proof of mailing-
(f) The City Administrator, in consultation with the City Attorney, shall appoint the
Hearing Officer.
SECTION 10. The City Administrator, in consultation with the City Attorney,may
adopt regulations to implement this Ordinance. The City Administrator may designate in writing
any other person to perform the functions delegated to the City Administrator pursuant to this
Ordinance.
SECTION 11. This ordinance supercedes Resolution No. 2001-19.
SECTION 12. This ordinance shall become effective 30 days after its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 3rd day of May , 2004.
Mayor
APPROVED AS TO FORM:
City Clerk ' Cit Attorney
INITIATED AND APPROVED:
City dministrator
4
GAORDINANC\20041Extending Time-Tax Refund Claims.doc
4/22/04
• Ord. No. 3653
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS:
CITY OF HUNTINGTON BEACH
I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the
City of Huntington Beach, and ex-offcio Clerk of the City Council of said City, do
hereby certify that the whole number of members of the City Council of the City of
Huntington Beach is seven;that the foregoing ordinance was read to said City Council at
a regular meeting thereof held on the 19th day of April, 2004, and was again read to
said City Council at a regular meeting thereof held on the 3rd day of May, 2004, and
was passed and adopted by the affirmative vote of at least a majority of all the members
of said City Council.
AYES: Sullivan, Coerper, Hardy, Green, Boardman, Cook
NOES: None
ABSENT: Houchen
ABSTAIN: None
I,Connie Brockway,CITY CLERK of the City of
Huntington Beach and ex-officio Clerk of the City
Council,do hereby certify that a synopsis of this
ordinance has been published in the Huntington Beach
Fountain Valley Independent on May 13,2004.
In accordance with the City Charter of said City :•/���-/'
Connie B
r
ockway, City Clerk City Clerk and ex-officio erk
XA Deputy City Clerk of the City Council of the City
• of Huntington Beach, California