HomeMy WebLinkAboutCity Council - 2000-73 RESOLUTION NO. 2000-73
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF HUNTINGTON BEACH
FIXING THE FISCAL YEAR 2000/2001 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 that
the City levy a property tax in excess of l% of the full cash value of property"sufficient to meet
all obligations of the City for the retirement system in which the City participates"; and
In Carman v. Alvord(1982) 31 Cal.3d 318, the California Supreme Court held that a tax
such as that mandated by the City Charter 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 0.4930/100tt' 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 a portion of the funds necessary to pay for 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 mandated that it be paid entirely with a property
tax levy; and
The City currently provides retirement benefits through a contract with the Public
Employees Retirement System (PERS) at the rates of 7% of miscellaneous employee payroll,
and 9% of safety employee payroll. By comparison, in July 1978, as of the effective date of the
City Charter revision, the City was paying PERS retirement benefits at the rate of 8.695% of
payroll for miscellaneous employees, 18.827% of payroll for safety employees, and an additional
2% for fire employees; and
In addition, the City provides a Supplemental Retirement Program (SRP) offering
survivor's benefits. According to the actuarial valuation of the SRP for the Fiscal Years ending
June 30, 1999, it carries an unfunded liability of$24,438,000; and
The City retirement program today costs the City no more than the program in effect in
1978; and
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Res. No. 2000-73
The estimated revenue to be generated from the property tax levy for 2000/2001 is
$7,900,000. The estimated cost of PERS to the City is $5,000,000 for 2000/2001 and the
estimated operating cost of the SRP is$1,000,000 for 2000l2001. The estimated total cost of the
two programs is $6,000,000. The remainder of the $7,900,000 generated from the property tax
levy will be applied to reducing the $24,438,660 unfunded liability of the SRP; and
The tax levy established pursuant to this Resolution is authorized under Proposition 13,
because it was authorized under the 1978 Charter Revision adopted prior to the effective date of
Proposition 13. Since the 1978 Charter authorizes a tax levy to fund the retirement system, it
authorizes the levy to be used to pay for all the retirement benefits the City is required to pay as
part of its current retirement system; and
The tax levy is exempt from Proposition 13's 1% limitation under Article XIIIA, Section
1(b)(1) of the California Constitution, and 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 2000/2001 be fixed at zero and
.04930/100ths dollars $.04930)per$100 of assessed property value in said city. The said rate
shall be applied as employee retirement costs.
PASSED AND ADOPTED byy the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 17t h day of JulY , 2000.
Mayor
ATTEST: APPROVED AS TO FORM:
av"
City Clerk 07--11 - ao City Attorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
Ci y Administrator Direci&of Administrative Services
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Res. No. 2000-73
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 17th
day of July, 2000 by the following vote:
AYES: Julien, Garofalo, Green, Dettloff, Bauer
NOES: Harman, Sullivan
ABSENT: None
ABSTAIN: None
City Clerk and ex-officio CIG of the
City Council of the City of
Huntington Beach, California