HomeMy WebLinkAboutCity Council - 99-55 RESOLUTION NO. 99-55
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF HUNTINGTON BEACH
FIXING THE FISCAL YEAR 1999/2000 TAX RATE
WHEREAS, the City of Huntington Beach will be receiving a pro-rata portion of the one
dollar($1.00) Basic Property Tax Rate levied by the County Board of Supervisors as a means of
providing revenue for the operation and support of various city departments, offices and
activities; and
In 1978, the electorate of the City of Huntington Beach approved a City Charter revision
authorizing the City to provide retirement benefits to its employees, and further providing for the
levy of a property tax in excess of 1% of the full cash value of property in order to meet the
obligations of the City to pay for employee retirement benefits; and
In Carman v. Alvord(1982) 31 Cal.3d 318, the California Supreme Court held that a tax
to fund a city's employee retirement obligations is exempt from Proposition 13 (Article XIIIA of
the California Constitution) as voter-approved prior indebtedness; and
Since 1983-84, Revenue and Taxation Code Section 96.31(b) has limited the City to
levying a maximum rate of property taxation at Zero and .04930/100th Dollars ($0.4930)per
$100 of assessed value in the City to pay for employees retirement cost, notwithstanding the fact
that this rate has only generated between 48% and 70% of retirement benefits. Consequently,
each year since 1983-84, the general fund has had to pay for a substantial portion of retirement
benefits, although the City Charter authorizes it to be paid for with a property tax levy; and
The City provides two employee retirement programs: a contract with the Public
Employees Retirement System (PERS) and a Supplemental Retirement Program(SRP) offering
survivor's benefits in addition to PERS. The estimated cost of PERS to the City is $6,100,000
for 1999/2000 and the estimated cost of the SRP is $1,600,000 for 1999/2000. The estimated
total cost of the two programs is $7,700,000.00. The estimated revenue to be generated from the
property tax levy for 1999/2000 is $7,550,000.00; and
In addition, the cumulative total of PERS retirement costs since 1983/84 through 1997/98
paid for with general funds and not by the property tax levy is $41,534,888.00. Imposing a
reasonable interest rate to this amount of 6%,which represents the City's cost of funds, raises the
total to $69,229,190. The purpose of the tax levy is not only to pay for current retirement
benefits, but also to pay for retiring the accumulated general fund debt for retirement benefits
with interest; and
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Said tax does not constitute an extension of an existing tax requiring voter approval under
Proposition 218 (Articles XIIIC-D of the California Constitution)because Section 3(a)(1) of
Proposition 218 exempts from the voter-approval requirement any tax already valid under
Proposition XIIIA; and
The tax rate herein is levied pursuant to Section 96.31(a)(4) of the Revenue and Taxation
Code for the purpose of paying voter approved prior indebtedness of the City of Huntington
Beach;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach that the rate of taxation for said city for fiscal year 1999/2000 be fixed at zero and
.04930/100ths dollars (S.04930) per $100 of assessed property value in said city. The said rate
shall be applied as employee retirement costs.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 16th day of August _, 1999.
�A 9 A am.,
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk ity Attorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
�2n� ")'X� _ L144
City AdmKistrator Iffirector of Administrative Services
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Res. No. 99-55
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-officio 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 resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a regular meeting thereof held on the 16th day of August, 1999 by the following
vote:
AYES: Julien,Bauer, Garofalo, Green, Dettloff
NOES: Harman, Sullivan
ABSENT: None
ABSTAIN: None
City Clerk and ex-officio Clerk of the
City Council of the City of Huntington
Beach, California