HomeMy WebLinkAboutAdministrative Hearing - Appeal Filed By Southern California Council/Agency Meeting Held: r 9�SPA7
Deferred/Continued to:
ff'App ed ❑ Conditio IIy Approved enied City Cle 's Signature
Council Meeting Date: 09/02/97 Department ID Number: AS 97-036
CITY OF HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: MICHAEL T. UBERUAGA, City Ad min istrator� V __,
PREPARED BY: ROBERT J. FRANZ, Deputy City Administrator 0/
SUBJECT: ADMINISTRATIVE HEARING - LATE CHARGE (SOUTHERN
CALIFORNIA EDISON)
F
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environment I Status,Attachment(s)
6-44�
Statement of Issue: To conduct a hearing on the appeal of a late charge applied pursuant
to the Municipal Code.
Funding Source: General Fund.
Recommended Action: Upo conclusion of the Ad inistrative Hearing, phold the
assessment of a penalty for late a ment of utility taxes.
p Y Y Y
Alternative Action(s):
1. Modi the City's 15% pe Ity to 10% or som other percenta e.
2. Modify t penalty to equal t City's lost intere t earnings on t eight (8) day
late paym t ($457).
3. Accept Southern California Edison's proposal to allow Edison to make their
--� monthly payment to the City four (4) days early for two consecutive months
instead of imposing a financial penalty.
Analysis: The City's Administrative Services Department assessed the 15% penalty
required by the Huntington Beach Municipal Code for the late payment of utility taxes by
Southern California Edison. An appeal was filed by Southern California Edison. Following
presentations by Southern California Edison, staff recommends upholding the assessment of
the penalty. The attached report, provides an analysis of the appeal, Recommendations,
Findings of Fact, and attachments.
\I
ATTAC H M E N T #2
City 9 of Huntington Beach
INTER-DEPARTMENT COMMMUNICATION
HUNTINGTON BEACH
TO: MICHAEL T. UBERUAGA, City Administrator
FROM: ROBERT J. FRANZ, Deputy City Administrator
SUBJECT: SOUTHERN CALIFORNIA EDISON - Appeal of Penalty Assessment for
Late Submittal of Utility Tax
DATE: August 19, 1997
INTRODUCTION: In response to a request by Southern California Edison (SCE), the
City has reviewed the financial penalty imposed against the SCE for failing to submit
Utility Tax Proceeds in accordance with City requirements.
ANALYSIS: The purpose of the review is to address Southern California Edison's
appeal to actions taken by the City to assess a 15% penalty for failure to submit Utility
Tax Receipts within the specified time requirement of Huntington Beach Municipal Code,
Chapter 3.36, Utilities Tax, Section 3.36.160. This section reads as follows:
"3.36.160 Filing return and payment. Each service supplier shall make a return
to the Tax Administrator, on forms provided by him, stating the amount of taxes
billed by the service supplier during the preceding month. The full amount of the
tax collected shall be included with the return and filed with the Tax Administrator.
The Tax Administrator is authorized to require such further information as he
deems necessary to determine properly if the tax here imposed is being levied and
collected in accordance with this chapter. Returns must be postmarked with
prepaid postage and properly addressed, or personally delivered to the Tax
Administrator on or before the 20th of each month. Returns are due
immediately upon cessation of business for any reason."
Southern California Edison failed to comply with Section 3.36.160 for their April 1997,
payment. The April 1997, payment from Southern California Edison was not postmarked
until eight (8) days after the payment was due to the City. These facts are not disputed
by Southern California Edison. The payment due dates and penalty provisions of the City
Ordinance have been in place since October, 1970, when the City Council first enacted
Ordinance No. 1598. The City has consistently enforced the penalty provisions of the
Utility Tax Code related to late payments by service providers.
The foundation for Southern California Edison's appeal is based upon the information in
their letter dated July 23, 1997. They have offered to make a four (4) day early payment
0027240.01 08/19/97 1:03 PM
SOUTHERN CALIFORNIA EDISON
APPEAL OF PENALTY ASSESSMENT FOR LATE SUBMITTAL OF UTILITY TAX PROCEEDS
of the next two months utility tax payments to offset the eight (8) day late payment of
April, 1997.
CONCLUSION: The City's 15% late payment penalty is a necessary requirement of
good financial management of tax collections. The late payment penalty is similar to that
imposed by banks, mortgage companies, credit card companies, County government
(property taxes), and State/Federal Government (income taxes). Penalty provisions have
been found to be effective in the administration of collection programs. The City has
more than ninety (90) service suppliers paying utility taxes on a monthly basis, and the
City staff has consistently applied the 15% penalty on late payments.
RECOMMENDATIONS: Uphold the actions of the City's Finance Director (Tax
Administrator) to enforce City of Huntington Beach Municipal Code, Chapter 3.36,
Section 3.36.180, the assessment of a 15% penalty.
FINDINGS OF FACT:
1. Under the City of Huntington Beach Municipal Code, Chapter 3.36, all Utility
Tax proceeds are due and payable to the City by the service supplier (in this
case Southern California Edison) on or before the 20th of each month for the
amount of taxes billed by the service supplier during the preceding month.
2. The April 1997, payment in the amount of $372,173 was postmarked by
Southern California Edison on May 28, 1997, eight (8) days after the actual due
date for payment to the City (Section 3.36.160).
3. The City of Huntington Beach, Accounting Division, imposed a 15% penalty for
failure to comply with Section 3.36.160 of the City Municipal Code.
4. Southern California Edison was aware of the requirements of the Huntington
Beach Municipal Code regarding late payments and the associated penalty
and could have taken steps to prevent the payment from being late.
5. The City of Huntington Beach has consistently enforced the late penalty
section of Huntington Beach Municipal Code, Chapter 3.36, Utility Tax.
ROBERT J. FRANZ
Deputy City Administrator
RJF:skd
0027240.01 -2- 08/19/97 1:03 PM
RCA ROUTING SHEET
INITIATING DEPARTMENT: Administrative Services
SUBJECT: Administrative Hearing - Late Charge (Southern California Edison)
COUNCIL MEETING DATE: I September 2, 1997
. .
RCA ATTACHMENTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Not Applicable
Resolution (w/exhibits & legislative draft if applicable) Not Applicable
Tract Map, Location Map and/or other Exhibits Not Applicable
Contract/Agreement (w/exhibits if applicable)
(Signed in full by the City Attorney) Not Applicable
Subleases, Third Party Agreements, etc.
(Approved as to form by City Attorney) Not Applicable
Certificates of Insurance (Approved by the City Attomey) Not Applicable
Financial Impact Statement (Unbudget, over $5,000) Not Applicable
Bonds (If applicable) Not Applicable
Staff Report (If applicable) Attached
Commission, Board or Committee Report (If applicable) Not Applicable
Findings/Conditions for Approval and/or Denial Not Applicable
......... . . . ......... ........
........ ... ... . .... . . ...... .........
REVIEWED RETURNED`; FOR DED
.... _ ...
_( ) _ ( )
Administrative Staff �-
Assistant City Administrator (Initial) ( ) ( pl )
City Administrator (Initial)
City Clerk ( )
EXPLANATION FOR RETURN OF ITEM
Only)(Below Space For City Clerk's Use
REQUEST FOR COUNCIL ACTION
MEETING DATE: 09/02/97 DEPARTMENT ID NUMBER: AS 97-036
A similar appeal by General Telephone and Electronics was reviewed by the City Council in
1996. At that time, the City Council decided not to impose a 15% penalty and reduced the
penalty to the estimated amount of lost interest. The City Council also requested a review of
the City's Utility Tax Ordinance. A revised ordinance was presented to the City Council on
June 16, 1997 and the first reading of an ordinance reducing the 15% penalty to 10% was
approved. Prior to the second reading of the ordinance on July 7, 1997 one utility company
requested a delay which was granted. A meeting was held with utility company
representatives on August 8, 1997 and revisions to the ordinance were sent to the City
Attorney's Office on August 19, 1997 for preparation of a new ordinance. The revised
ordinance will be presented to the City Council on September 15, 1997 for review and
approval.
Environmental Status: Not applicable.
Attachment(sl:
City Clerk's
Page Number
...... ...... .................. ...... . .....
............................... ........... ....................................... ........ ........................................ ...............
......... ............. ......... ...............
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1. Appeal to dated July 23, 1997
2. Report dated August 15, 1997
0027238.01 -2- 08/26/97 11:21 AM
(9) 09/02/97 -Council/Agency Agenda - Page 9
F-2. (Redevelopment Agency) Solicitation Of Statement Of u ifications From Owner
Participants Block 104/Block 105 Development Strategy Main Pier
Redevelopment Area - PCH/Fifth St/Walnut Ave./Main treet And PCH/Sixth
StreeVWalnut Avenue (410.20)
Communication from the Economic Development Di ctor informing Council that due to
the termination of the Main-Pier II Disposition & D elopment Agreement, the
Redevelopment Agency lacks an approved str gy for staff direction for the future
development/redevelopment of Block 104 an Block 105. (Block 104 bounded by
Pacific Coast Highway/Fifth/Walnut/Main) lock 105 bounded by Pacific Coast
Highway/Sixth/Walnut).
Recommended Action:
Authorize the solicitation of State ent of Qualifications from owner participants who
wish to develop a portion or all Blocks 104 and 105 and direct staff to evaluate the
responses and return to the ency Board with recommendations as to development
strategy options based on t e responses.
[Approved 6-0-1 (Green: bsent)]
F-3. Ci Council A of men Of Ci Council Ad Hoc Committee To Plan Pier Plaza
Grand Opening C bration (120.25)
Communication fr the Community Services Director recommending the appointment
of three Counci embers to a City Council Ad Hoc Committee to plan the Pier Plaza
Grand Openi Celebration.
Recom nde Action: Appoint three Councilmembers to work with staff and
comm ity volunteers to plan and implement the Grand Opening activities for the Pier
Plaz next summer.
[Appoin d Mayor Pro Tem Dettloff, Councilmembers Julien &
Garof o]
F-4. (City Council)Administrative Hearing -Appeal Filed By Southern California Edison -
Penalty Assessment Late Payment-Utility Tax (340.50)
Communication from the Deputy City Administrator-Administrative Services Director.
Administrative hearing to consider the appeal of the assessment of a 15% penalty required by the
Huntington Beach Municipal Code for the late payment of utility taxes by Southern California Edison.
Memorandum from the Deputy City Administrator-Administrative Services Director dated August 19,
1997 regarding the Appeal of the Penalty Assessment for Late Submittal of Utility Tax.
Recommended Action:
0 penalty to 19%
Of
Modify the PeRalty to equal the Gity'S IG-St*AtA-rA-R.t W_RFROR96en the eight(8) day late paymen
(4&7-Y,
or
3. Accept Southern California Edison's proposal to allow Edison to make their monthly payment to
the city four(4)days early for two consecutive months instead of imposing a financial penalty.
[Approved 4-2-1 (Dettloff, Sullivan: NO; Green: Absent)]
(9)
ATTACHMENT # 1
SOUTHERN CALIFORNIA
EDISON
An EDISON INTERNATIONAL"'Company
July 23, 1997
Mr. Michael T. Uberuaga
City Administrator
City of Huntington Beach
P. O. Box 190
Huntington Beach, CA 92648
RE: Southern California Edison - April 1997 Utility User Tax Payment
Dear Mr. Uberuaga:
On May 28, 1997, we discovered that we had inadvertently placed your
May 20t" utility user tax (UUT) return with the returns due on May 30tn.
Upon discovering our error, we immediately mailed your return. We
sincerely apologize for any inconvenience our mistake may have caused.
Please be assured that we have established additional procedures to
prevent this from happening again, including using a monthly log, a sign-
off procedure, and a supervisory review of all UUT packages being mailed.
Edison has acted in good faith to administer the monthly collection of the
UUT on your behalf, and at no cost. In exchange for this long-standing
agency service provided to the city, we respectfully request a waiver of any
penalties associated with the late filing of the UUT return and remittance
of payment. To our knowledge, this is the only time the UUT was actually .
not timely filed.
If you have any questions, please do not hesitate to call Kim Barone at 714-
973-5548.
Sincerely,
Mike Eggers
ME:cn
`moo
1325 S.Grand Ave.
Santa Ana,CA 92705
urn-mar t�:ir -"Old JuL 12116
xust:mtAD G.o. (6002
' N
CITY OF HUNTINGTON BEACH
2000 MAIN STREET CAl1f99N.IA 92648
June 3, 1997 cl
V:L 0�
"=Southern California Edison Company
Post Office Box g00
Rosemead,Califomia 91770
Arm: Dolores A.Sandler
Tax Manager
Rc: Delinquent Utility Tax Remittance
For The Month of April 1997
Dear Ms. Sandler.
Southern California Edison's Utility Tax payment to the City of Huntington Beach
covering the month of April 1997 failed to conform to City requirements governing timely
Postmarked remittance and is now subject to a penalty of 15%or$55,825.94 (See Attachments).
The City's Ordinance does not allow us any discretion in this matter. We would suggest
that a remittance for the above be forwarded without further delay and that necessary
steps be taken to avoid future repetition.
Thanking you in advance for your immediate attention to this item.
Sincerely,
OLD ROSS
Sr.Accountant
Enclosures
07117/97 14:47 a818 302 19T8 y RU51rLEAD G.U.
�uu3
City of Hunch, '-0' B{�ia�ill RLiiAIN FOR AEA:
2000 ,Main Street/P.O. Box 711 O 6/2 4/9 7
Huntington Beach, CA 92648
Municipal Services Statement
Off1R11T CA.0 374-1554 OR 536-S200
34S67a9� CUSTOMER #
6075
c� � t7
SOUTHERN CALIFORNIA EDISON CO ,;.�:.
P 0 BOX S00 Z,".- '`t
ROSEMEAD, CA 91770 ��� 1•''
TAX MGR — DOLORES SANDLER
PREVIOUS CHARGES: •`'c ��;^r'
DATE DESCRIPTIOM AMOUNT
-----------------------------------------------------------
....,10 2.�11 3, PREVIOUS STATEMAN I L.ALA in6.E. 0 . 0G
TOTAL PREVIOUS CHARGES
CURRENT CHARGESt
INVOICE TYPE DESCRIPTION AMOUNT
------------------------------------- --------------
6472S MI APRIL 97 UTILITY TAX 0 . 00
5472S MI POSTMARKED 5/28 0. 00
54725 MI RECEIVED ON 6/3/97 55825.94
--------------
TOTAL CURRENT CHARGES 35582S.94
BALANCE DUE -$55625. 94
AGING:
0 - 30 DAYS 31 - 60 DAYS 61 - 90 DAYS OVER 90 DAYS
------------------------------- •-------------------------
S5825 . 94 0. 00 0 . 00 0. 00
-------------PLEASE-----------:----------------
--TO- AVOID AOOITIONAL FEES PYMT MUST. BE •RECEIVED BY- 07/22/97
00 NOT DELAY PAYMENT s U
RETURN WRH pAYMEIr
�= PLEASE MAKE. CHECKS PAYABLE TO
CITY OF HUNTINGTON BEACH
If there is a question IL A&M
concaming your bill, please payM.ent Stub please pay total amcurrt due i * # S 5 S 8 2 6 . 9 4
call for an explanation.
if an adjustment is in order, City of Huntington Beach
credit will be authorized. 2000 Main Sneer P0. Box>»
Huntington Beach, CA 92648 CUSTOMER
6075
Huntington Beach City Hall SOUTHERN CALIFORNIA EDISON
is the only authorized paying P O Box 800
station. ROSEMEAD. CA 91770 A C C O U N T S
vlake checks payable to the: R E C E I V A B L E
City of Huntington Beach nnnnnnnnP7in-1 en r P a-4-w-- --
SOUTHERN CALIFORNIA Kim Barone
EDI SON
Region Manager
.J Public Affairs
An£DISON INTERNATIONAL"Company
SOUTHERN CALIFORNIA EDISON
City of Huntington Beach Profile
July 1997
a_.
£ST,FRANCHISE FEE PAID (1996) X d '
$525,420.96 (electric) $5,370.31 (pipeline)
U>JEZOAI,L®TMENT (EstArinuall) _
$7247000.00
. u
NEU17`C®NSTRUCTTON a
AUISTANCE/KwhSA�7ED f g
Provide on-going energy solutions/recommendations to City Staff. Inform
Staff of rebate opportunities. SCE regularly reviews project plans
presented to the City by builders and developers.
PR®PER'I'1'TAX (199697})g _
$3,1421485.00
SCE FACIL ES i
Ellis Substation
Huntington Beach Generating Station
1325 S.Grand Ave.
Santa Ana,CA 92705
714-973-5548
Fax 714-973-5752
baronek@sce.com
SOUTHERN CALIFORNIA EDISON
City of Huntington Beach Profile
July 1997
Page 2
REGIONI�I�LEADER,SIiI (1'9921997)
Charitable Donations $627275.00
United Way Employee Contributions $ 449,651.00
Orange County (1993-1996)
Educational Support
Community College Achievement Awards (1) $4,000
Educational Grants (21) $16,000
Employee Childrens Scholarship (3) $2,500
Hine Scholarship (1) $207000
Step-Up Award (1) $4,000
VOICE (employee volunteer hours) 3,477
Economic and Business Development -
Jobs retained 1993-1997 417
Businesses saved 4
SCEEMPI,OYEES WORKINGIN CIT
245
156E HAREHOLDERS INCITY r
27062