HomeMy WebLinkAboutUtilities Tax Revenue, Ordinances, and Exemptions 1970-1988 _ /o 6
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Shell Western E&P Inc.
A Subsidiary of Snell Oil Company -
P.O. BOX 191
June 27, 1988 D `� G C Huntington Beach. CA 92648
' f
Mr. Paul Cook VTY OF HUN- 11VGT0rq 9E1Uq S/ �c�-'^��P"' A16
City Administration `ppryry� ` NpISTRA.
City of Huntington. Beach C Kph✓
2000 Main Street wt
Huntington Beach, California 92648
Dear Mr. Cook:
SUBJECT: CITY OF HUNTINGTON BEACH
COGENERATION TAX ORDINANCE NO. 2933
PROPOSED 2ND READING JULY 5 , 1988
At the City Council meeting of June 20 , 1988, it was mentioned
by your staff that they would like Shell Western E&P Inc. (SWEPT)
to furnish written comments of why we thought proposed Ordinance
No. 2933 might not be in order.
As a point of interest: If this Ordinance was activated because
SWEPI staff has been talking with the City about our wishing to
install a cogeneration facility, then you should know it will only
be after we .obtain a Conditional Use Permit from the. City. If
we do decide to go forward with permitting, we would not do so
for at least another year, and we figure the permitting process
will take another year.
As the Ordinance is currently drafted, it reads there must be
a charge for such electrical energy, and there must be a sale.
Should SWEPI build a cogenerated facility, we will use the major-
ity of its cogenerated electricity on the lease, however, some
energy may be sold to Southern California Edison Company for
local use. Thus it appears from the language of the statute that
the 5% . Utility Tax will apply only to the electrical energy sold
to Edison of SWEPI ' s excess electricity, but would not apply
against the electricity produced by SWEPI and used by SWEPI on
the lease.
There are five (5) independent arguments which we include herewith
as an attachment for your consideration on why Cogeneration may
not be subject to taxation.
After you have had an opportunity to review our comments and should
you have any questions, our Tax Counsel has indicated he would be
glad to discuss the same with your legal staff.
City Council
July 14, 1988
Page 2
represent more than 20 railroads . The defendants include the State
Board of Equalization, represented by the California Attorney Gen-
eral, 51 counties, including the County of Orange, and most of the
cities located within those counties.
Under the California Constitution, the State Board of
Equalization is responsible for assessing all railroad property.
The State Board then allocates the assessment between the counties
which levy taxes at the local rate.
Collectively, the cases seek recovery of a portion of taxes
levied for fiscal years 1978-79 through 1985-86 .
State Court Cases
All of the railroads' state court actions claim that the State
Board improperly valued and assessed their properties throughout
the state. Of these cases, one has gone to trial in San Francisco
County Superior Court, and judgment was granted in favor of plain-
tiffs and against all defendants. The court determined that, of
the total judgment of $1,864,153.43, the County-wide liability, in- .
cluding all taxing entities who take a proportionate share of the
taxes collected in Orange County, is $115,860 . 73 . It is an-
ticipated that the.-Attorney General will appeal this judgment, and
that the counties and cities will join in the appeal.
Depending on the outcome of the appeal, it can be expected
that a similar determination will be made in each of the remaining
six state court cases . While we can only approximate, it is not
unlikely that the County-wide liability will be roughly the same
$115,000 for each of the remaining cases .
Federal Court Cases
These actions arise under the Railroad Revitalization and
Regulatory Reform Act of 1976, commonly know as the 114-R" Act. The
Act makes it unlawful for an assessing authority to assess railroad
transportation property at a value which bears a higher ratio to
the true market value of such property than the ratio which the as-
sessed value of other commercial industrial property in the assess-
ing jurisdiction bears to the true market value of such commercial
industrial property. All of the plaintiffs contend that due to
Proposition 13, their railroad transportation property is assessed
at a higher assessment to market value ratio than the assessment to
market value ratio of other commercial and industrial property as-
sessed under Proposition 13. Plaintiffs also contend that their
property has improperly been overvalued by the State Board, the
same issue raised in the state court cases .
chaffee/037
City Council
July 14, 1988
Page 3
Because these actions involve issues relating to local assess-
ment, rather than just state-wide assessment by the State Board,
the various county defendants have heretofore taken an active role
in these actions through outside counsel, Howard, Rice, Nemerovski,
Canady, Robertson & Falk. The Orange County Board of Supervisors
has authorized such representation.
Since 1982 the court has enjoined the counties from collecting
approximately 40% of the taxes levied on the State Board assess-
ments. The court ultimately made a determination that the rail-
roads' property was impermissibly assessed at a market value ratio
approximately 40% higher than that of other commercial and indus-
trial property assessed under Proposition 13. Because of the
court's injunction prohibiting collection of 40% of the taxes lev-
ied since 1982, the County of Orange and its co-defendant cities
have little, if any, liability for those years. Still pending is
the County and City liability for tax years 1978-79 through 1981-
82.
Pursuant to a ruling of the Ninth Circuit Court of Appeal, the
Federal District Court may still consider whether the State Board
has also improperly overvalued the railroads' property. However,
it appears that the federal court will abstain from that determina-
tion pending determination of the state court cases.
Appearances in Future Proceedings
As previously mentioned, the State Board of Equalization per-
formed all of the assessment work related to plaintiffs'
properties . The State Board has been, and will continue defending
those assessments through the office of the Attorney General.
That portion of the federal cases relating to local assess-
ments has now been resolved, and it is unlikely that the
plaintiffs' will be granted much more relief, as the federal court
has chosen to abstain from hearing the valuation issues pending
resolution of the state court cases.
In view of the fact that virtually all of the remaining issues
in all of these cases relate to the State Board's valuation of the
railroads' property, it is clear that the State Board and its coun-
sel, the Attorney General, must carry the burden of defense.
Therefore, we have proposed, and the Orange County Board of
Supervisors has approved, entering the following stipulations to be
filed in the various courts where the Railroad Cases are pending:
chaffee/037
City Council
July 14, 1988
Page 4
1 . The plaintiffs shall not be required to serve any further
Pleadings on Orange County defendants, and service on the Attorney
General is sufficient;
2 . - The Orange County defendants shall not be required to
make any further appearances or submit any further Pleadings in the
action; and
3. . The Orange County defendants agree to be bound by any fi-
nal judgment ordered and approved by the court including, if appli-
cable, the payment of refunds in proportion to the taxes allocated
to the County.
In entering these stipulations, it is our understanding that
the State Board and the Attorney General will continue their de-
fense of the assessments to, and including, appeal from the re-
cently entered judgment in the first state court case in San Fran-
cisco. As a practical matter, Orange County's interests, and the
interests of the cities located therein, will be defended by the
Attorney General. However, the Attorney General will not spe-
cifically appear for, or represent, the County or the Cities .
In view of the foregoing, it is our intention to prepare and
enter the foregoing stipulations pursuant to our prior authoriza-
tion from the Orange County Board of Supervisors . However, prior
to entering such stipulations, as a matter of professional
responsibility, we wish to notify you of this proposed action.
In view of the short time remaining in which to file the pro-
posed stipulations, we must request that any objection to the pro-
posed action be received by this office prior to August 1, 1988.
If you have not responded by that date, we will assume your City's
approval of this action. In the event of objection, or if there
are any questions, we will be happy to discuss the matter with your
City Attorney.
Very truly yours,
ADRIAN KUYPER, COUNTY COUNSEL
By
David R. Chaffee, Depu
DRC:rer
chaffee/037
REQUE4 FOR CITY COUNCIL ACTION
Date October 28, 1986
Submitted to: Honorable Mayor and City Council Member
Charles W. Thompson, City Administr r
Submitted by: P � Y
Prepared by: Robert J. Franz, Chief of Administrative Ser
Subject: Utility User Tax Exemption
Al
OQ�
Consistent with Council Policy? [x] Yes [ ] New Policy or Exception
Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments:
Statement of Issue: Council requested this subject be scheduled for review at your
November 3, 1986 regular meeting.
Recommended Action: Review current provisions and advise staff if any changes are
desired.
Analysis: Following is the current provision for exemption of senior citizens from utility
users taxes:
"Senior Citizens - Exemption
The tax imposed by this chapter shall not apply to any individual service user
sixty-two years of age or older who uses telephone, electric, water or gas
services, in or upon any premises occupied by such individual, provided the
combined adjusted gross income as used for Federal income tax reporting
purposes of all members of the household in which such service user resides
was less than eight thousand dollars ($8,000) for the calendar year prior to
the fiscal year (July 1 through June 30) for which the exemption provided by
this chapter is applied.
The exemption granted by this section shall not eliminate the duty of the
service supplier to collect taxes from such exempt service users or the duty
of such exempt service users to pay such taxes to the service supplier unless
an exemption has been applied for by the service user and granted in
accordance with the provisions of this chapter."
This provision was adopted October 15, 1980 by City Ordinance No. 2452.
Funding Source: Not applicable
Alternative Action: Not applicable
Attachments: None
2819j
P10 5/85
REQUES ll FOR CITY COUNCIL ACTION
Date October 28, 1986
Submitted to: Honorable Mayor and City Council Member _.'
Submitted by: Charles W. Thompson, City Administr r �!/ V l
Prepared by:
Robert .1. Franz, Chief of _ydministrative Ser ,
Subject: - Utility User Tax FYempi:ion j
Consis€ent with Council Policy? (.t] Yes ( ) New Policy or Exception
Statement of issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:
Statement of Lssue. Council requested this subject be scheduled for review at your
November 3, 1986 regular :meeting.
Recommended _Action: R-view current provisions and advise staff if any changes are
de`ired.
nalvsis: Following .is the current provision for exemption of senior citizens from utility
users taxes:
"Senior Citizens - Exemption
The tax imposed by this chapter shall not apply to any individual service user
sixty-two years of age or older who uses telephone, electric, water or gas
services, in or upon any premises occupied by such individual, provided the
combined adjusted gross income as used for Federal income tax reporting
purposes of all members of the household in which such service user resides
was less than eight thousand dollars ($§,OW for the calendar year prior to
the fiscal year (July 1 through June 30) for which the exemption provided by
this chapter is applied. . �f a C
The exemption granted by this section shall not eliminate the duty of the
service supplier to collect taxes from such exempt service users or the duty
of such exempt service users to pay such taxes to the service supplier unless
an exemption has been applied for by the service user and granted in
accordance with the provisions of this chapter."
This provision was adopted October 15, 1980 by City Ordinance No. 2452.
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AP 6PO
NOI1nN1Sf;dlWQ7 AlMNS 7nnnc j
Authorized to Publish Advertisements of all kinds including public
notices by Decree of the Superior Court of Orange County.
California, Number A-6214, dated 29 September. 1961, and
A-24831. dated 11 June, 1963.
STATE OF CALIFORNIA
County of Orange Pvotpc No,pu AorK7tlMng covwoa
Dy thH •rtlo&ten H wi rn 7 t)Dtn1
with 10 DKt1 column width
I am a Citizen of the United States and a resident of
PUBLIC NOTICE
the Count aforesaid; I am over the age of eighteen LEGAL NOTICE
y g g ORDINANCE
NO.2886
years, and not a party to or interested in the below "AN ORDNANCE OF THE
CITY OF HUNTINGTON
entitled matter. I am a principal clerk Of the Orange BEACH AMENDING THE
HUNTINGTON BEACH MU-
Coast DAILY PILOT, with which Is combined the NICIPAL CODE BY AMEND-
ING 80 EN-
NEWS-PRESS, a newspaper of general circulation, T T LEE DON,'SENIOR
2
rimed and y CITIZENS-EXEMPTION"
p published in the City of Costa Mesa, SYNOPSIS: Ordinance
County of Orange. State of California, and that a S.3.36.280 entitled""Seniors
Notice of Legal Notice Ordinance #2886 as
Citizens-Exemption" read
as follows:
3.36.280 Senior
Citizens—Exemption. The
tax imposed by this chapter
shall not apply to any indi-
vidual service user sixty-two
of which copy attached hereto is a true and complete years of age or older who
uses telephone, electric,
copy, was printed and published in the Costa Mesa, water or gas services, in or
upon any premises occupied
Newport Beach, Huntington Beach, Fountain Valley, by such individual,provided
the combined adjusted
Irvine, the South Coast communities and La gross income as used for
g Una Federal Income Tax report-
Beach issues of said newspaper for one time ing purposes of all members
of.the household in which
such service user resides
S��Lr 1d IX� t: to wit the issue(s) Of was less than ten thousand
(10,000) dollars for the
calendar year prior to the fis-
cal year(July 1 through June
30)for which the exemption
provided by this chapter is
December 17 �gg6 allied.
THE FULL TEXT OF THE
ORDINANCE IS AVAILABLE
IN THE CITY CLERK'S OF-
1 98 FICE
ADOPTED by the City
Council of the City of Hunt-
Ington Beach at an ad-
198 journed meeting'held Mon-
day, December 1, 1986, by
the following roll call vote:
AYES,:Councilmen:
198 Winchell,Mays,Finley,Kelly,
Erskine,Green,Bannister
NOES:Councilmen:None
ABSENT: Councilmen:
198 None
CITY OF HUNTINGTON
BEACH, Alicia M.
Wentworth,City Clerk
Published Orange Coast
1 declare, under penalty of perjury, that the 1986 Pil°t December 99
foregoing is true and correct. w4 ;
Executed on December 17 198 6
at Costa Mesa, California-
_ In ,
Signature
PROOF OF PUBLICATION
Mr. Paul Cook 2 .
June 27, 1988
I thank you for providing the opportunity to present this material
and to meet with Mr. D. Villila on June 29, 1988 .
Bruce G. Kerr
Production Administration
West Coast Production Division
BG K/ts
e
Attachments
cc: Honorable Mayor John Erskine, City of Huntington Beach
Councilman Jack Kelly
Mr. Richard Barnard, Assistant City Administrator
1. Preemption
Article XI, § 7 of the California Constitution authorizes a city to make
regulations (ordinances) that "are not in conflict with general laws". A
city which adopts "home rule" however, in its charter is exempt from the
"conflict with general laws" restriction cited above. See Cal Const.
Article II,§ S. In the present case CN8 has adopted home rule in section
103 of its Charter.
Notwithstanding the "home rule" exemption, as to matters which are of
statewide concern charter cities remain subject to and controlled by
general state laws regardless of the provisions of their charters if it
is the intent and purpose of such general laws to occupy the field to the
exclusion of municipal regulation. See Pacific Tele hone and
Tele ra h Co. v. City and Count of San rancisco, 51 Cal . Zd 766, 768-69
T1959) . Where there is a con ict between state and municipal law, a
determination is made as to whether the issue. is of a statewide concern.
Galvan v. Superior Court,. 70 Cal . 2d 851, 855-856 (1969); Pacific Tel .
and Tel . Co.., supra.
Specifically, in the area of taxation, a city's authority to tax is never
at issue unless "the city ordinance is in direct and immediate conflict
with a state statute or statutory scheme". Weeks v. City of Oakland, 21
Cal . 3d 386, 392 (1978).
In the present case, it may be argued that the City's attempt to tax a
cogeneration project. is in conflict with state legislation that is .
designed to promote cogeneration technology. Specifically, the state
enacted Public Resources Code (PRC) section 25000 et. seq. with the
following intent:
The Legislature finds that it is necessary and essential that
the state. . . use all practical and commercially feasible means
to promote the prompt and efficient development of. energy
sources which are renewable or which more efficiently utilize
and conserve scarce energy resources. Furthermore, the
Legislature finds that the promotion of energy sources which
reduce the degradation of the environment and which protects
the health, welfare, and safety of the people of this state is
in the public interest and serves a public purpose.
PRC § 25000, titled 'Energy Conservation and Development" was enacted to
encourage new energy resources as provided in sections 25001 - 25005 as
follows:
§ 25001. Legislative Finding and Declaration
The Legislature hereby finds and declares that electrical
energy is essential to the health, safety, and welfare of the
people of this state and to the state economy, and that it is
the responsibility of state government to ensure that a
reliable supply of electrical energy is maintained at a level
consistent with the need for such energy for protection of
public health and safety, for promotion of the general
welfare, and for environmental quality protection.
I
§ 250Q2. Elimination of Waste
The Legislature further finds and declares that the present
rapid rate of growth in demand for electric energy is in part
due to wasteful , uneconomic, inefficient, and unnecessary uses
of power and a continuation of this trend will result in
serious depletion or ,irreversible commitment of energy, land
and water resources, and potential threats to the state's
environmental quality.
25004.2. Legislative Finding
The Legislature further finds that cogeneration technology is
a potential energy resource and should be an important element
of the state's energy supply mix. The legislature further
finds that cogeneration technology can assist meeting the
state's energy needs while reducing the long-term use of
conventional fuels , is readily available for immediate
application, and reduces negative environmental impacts. The
Legislature further finds that cogeneration technology is
important with respect to the providing of a reliable and
clean source of energy within the state and that cogeneration
technology should receive immediate support and commitment
from state government.
§ 25005. Expanded Authority and Technical Capability Within
-State Government
The Legislature further finds and declares that prevention of
delays and interruptions in the orderly provisions of
electrical energy, protection of environmental values , and
conservation of energy resources require expanded authority
and technical capability within state government.
JAs such the legislature has clearly stated that the growth and
I encouragement of cogeneration is both in the public interest and is 'a
public purpose. To the extent that taxing cogeneration technology makes
:( such development any less economic and any less feasible, such tax is in
i conflict with the state and public purpose. Further, that the
development of electricity is a statewide concern is evidenced by the
above referenced statutes. CHB's attempt to tax cogeneration may result
in the elimination of a new source of energy that would benefit the state
as a whole. Finally, it may be implied from the state legislature's
above referenced intent, purpose, findings and declarations that the
I state has occupied this area of the law excluding local jurisdictions.
Therefore, it may be concluded that the area of law concerning
cogeneration has been preempted by the state and that any tax on
cogeneration technology is in conflict with the state and public purposes
and as such cannot stand.
2. Taxable Event
The tax law requires that in order to levy a tax there must first be a
taxable event or transaction. For example in Yells Fargo Bank v. Cory,
167 Cal . Rptr. 778 (Cal . App. 1980) the court ruled that the making or
creating of a demand loan was not a taxable event or transaction, as
there was no economic benefit to the borrower. Further, with respect to
a lessor who is subject to use taxes with respect -to leasing a particular
-property, it is the actual creation of the lessee's use through the lease
that is a taxable event, i.e. , the lease transaction. Debtor
Reor anizers, Inc. v. State Bd. of Equalization, 130 CaT:-Vptr. 64 (Cal .
App. n SuQarman v. St. 5d. of Equalization of the St. of Cal . ,
the court ruled that in the c_a_s_e7`5T goods imported through oreign
-commerce (which are exempt from sale and use taxes while in transit) the
taxable event or transaction that gives rise to the tax is taking the
imported goods out of foreign commerce and holding them for sale in the
state.
In the present case there is no taxable event or transaction for the CHB
to tax. SWEPI is generating electrical power for its own use. For the
tax to be valid, the tax proposed by the city imputes a transaction or
sale from SWEPI to itself. As there is no measure of the gross receipts
that would have resulted from such an imputed sale which would be subject
to the tax, the City must also impute a value of the sale.
Both presumptions are precluded under the law without a transaction, and
the mere use of your own facilities on private property is not a taxable
transaction, as discussed below. In the present case there is no
economic benefit (other than reduce costs of operation) , taxable use, and
no other event or transaction that would place the use of SWEPI 's
self-generated electricity in the stream of commerce subject to tax.
3. Energy Resources Surcharge
The CHB may argue that the ordinance in question is an energy surcharge.
The State has also occupied the area of tax law surrounding energy
resource surcharges by enacting Cal . R&T. Code § 40001 et. seq.
The Energy Resources Surcharge Law imposes a tax "on the consumption of
electrical energy purchased from an electrical utility on and after
January 1, 1975, at the rate of one-tenth mill ($0.0001) per
kilowatt-hour.' Similar to the CHB ordinance, the tax is imposed on the
. consumer, collected and paid over to the State by the utility. Similar
to the CHB -ordinance, the statute requires a purchase, i .e. , the taxable
event, in order to levy the tax.
Section 40010 defines "Electric Utility" to mean any person engaged in
producing, generating, transmitting etc. electrical energy for sale.
However, § 40010 specifically states that "Electric Utility" does not
include a person who "generates electrical energy or redistributes
electrical energy solely for his own use or .for the use of his tenants
and not for sale to others.'
As such a party which produces electrical energy for his own use is
exempt form the application of any electrical energy surcharge. As such
CBAT88O8SO3 _- 0005.0.0
the CHB is prohibited from enacting an electrical energy surcharge tax,
and even if enacted self-generated electricity not held for sale would be
exempt. See Century Plaza Hotel Co. v. Los Angeles, 282 P. 2d 36 (Cal .
Sup. Ct. , 1955) .
4. Privilege Tax
'The CHB may argue that the cogeneration utility is a tax on the privilege
of operating in the City. As a general rule, a city may not require a
taxpayer to pay tax on the privilege of using its plant or facilities
operated on private property located in the city. Pacific Tel . 3 Tel .
Co. v. City. of Los Angeles, 282 P.2d 36 (Sup. Ct. 1955).
n this case
the court, sitting n Bank, was concerned with a tax on the privilege of
operating its equipment on its own property. The court stated that a
city has no power to extract a fee or a tax from taxpayers for the use of
the taxpayer's own equipment which is not located on public property.
a
In the present case, it may be argued that the CHB's attempt to tax
cogeneration, as a privilege, would be an attempt to tax the use of
private equipment on private-property. A tax on any privilege of this
nature is prohibited and as such could not be maintained by the City.
A privilege tax is more commonly known as a franchise tax. Local
governments may impose a franchise tax on public utilities, however, as
discussed, cogeneration is not considered a public utility. Further, a
local franchise tax is inapplicable to the construction and use of
private facilities on private property, where the facility is not
generating electricity for sale. People v. Monstad, 289 P. 84 (Sup. Ct.
1930), as contrasted by Ocean Park Pier Amusement
Corporation v. Cit of Santa Monica, 104 P. 2d 698 (Cal . App. 1940)
(facilities on both private and public property erected for profit) .
5. Sales and Use Tax
Because the City's attempt to levy a utility tax on the electricity from
the cogeneration plant may fail , the City may attempt to recharacterize
the tax as a use tax on electricity.
Cal . RAT. Code § 6353 provides an exemption for "exhaust steam, waste
steam, heat, or resultant energy, produced in connection with
cogeneration technology, as defined in § 25134 of the Public Resources
Code", from sales and use taxes in the State of California. Section
25134 of the Public Resources Code defines cogeneration as "the
sequential use of energy for the production of electrical and useful
thermal energy".
At the time Cal . R&T. Code § 6353 was enacted, PRC § 25134 defined
cogeneration technology as "the use for the generation of electricity of
exhaust steam, waste steam, heat, or resultant energy from an industrial ,
commercial , or manufacturing process, or the use of exhaust steam, waste
steam, or heat from a thermal power plant for an industrial , commercial ,
CBAT8808503 - 0006.0.0
or manufacturing plant or process. .. Cogeneration technology shall not
include steam or heat developed solely for electrical power generation."
(emphasis added) . PRC section 25134 prior to Amendment, Stats. 1981 Ch.
952 Sec. 5. In State Board of Equalization (SBE) Ruling 275.0500
(12/29/83) , -the SBE ruled that the revised definition of cogeneration in
PRC § 25134 has no impact on Cal . RAT. Code § 6353 Stating as follows:
The rule of statutory construction applicable here is that a statute
(Sec. 6353) , which adopts by reference another statute (Sec. 25134) ,
is unaffected by amendment or repeal of the latter statute (Sec.
25134) in the absence of express or implied legislative intent -to
the contrary in the 1981 amendment (Stats. 1981 Ch. 952 Sec.5).
As such the SBE would review the CHB ordinance in light of the prior
definition of, cogeneration technology.
However, regardless of which definition is applied electricity produced
from SWEPI Huntington Beach cogeneration plant would be exempt from both
state and local sales and use taxes. Cal .- RAT. Code § 6353 exempts from
tax "resultant energy" from a cogeneration plant. Resultant energy is
not specifically defined either through statutory, administrative, or
judicial authority. However, the prior definition defines cogeneration
technology as the use of steam etc. to produce electricity. Additionally
PRC § 25109 defines energy as any "work or heat" produced from any fuel
or source. In this case the cogeneration plant is a gas fired turbine
that produces both "work and "heat". The "heat" is transferred into
steam for steam drives in oil field production (the steam
also drive a second turbine which produces "work"). The "work" (i .e. a
mechanical shaft from the turbine to a generator) results in electricity
from the generator.
As such, electricity can be considered a resultant energy from the
cogeneration plant. Under the later definition the generation of
electricity and steam are clearly the resultant energies. It may be
argued that although the prior definition is controlling the later
definition is merely a clarification of legislative intent. With respect
to the �"so�lel for electrical power generation" exception, SWEPI turbines
are installed-primarily for steam drives in the oil field. Further under
the "PUPRA" 16 U.S.C. § 2601 et. seq. "qualified congeneration
facilities", which SWEPI faciT ties are permitted as, must be for the
purposes of producing both steam and electricity.
The conclusion that the electricity production from the cogeneration
plant in exempt from sales and use taxes is supported by the legislative
history to PRC § 25000 et. seq. , which includes the same section that
defines cogeneration. stated previously, the legislative history
states as follows:
The Legislature finds that it is necessary and essential that
the state. . . use all, practical and commercially feasible means
to promote the prompt and efficient development of energy
CHAT88085003 - 0007.0.0
sources which are 'renewable or which more efficiently utilize
and conserve scarce energy resources. Furthermore, the
Legislature finds that the promotion of energy sources which
reduce the degradation of the environment and which protects
the health, welfare, and safety of the people of this state is
in the public interest and serves a public purpose."
See Sonoma City v. St. Bd of Equalization, 241 Cal . Rptr. 215 (Cal . App.
1987) . In Sonoffia SLtj, the city sought to levy a sales tax on the sale
of geothermaT steam. The court cited Cal . R&T. Code 5 6353 as
prohibiting such a tax, also citing the above legislative history as the
public policy in supporting that holding. See also, Rivera v. City
of Fresno, 98 Cal . Rptr. 281 at 284 (Sup. Ct. 9 I .
or O�'9 OFFICES OF
AD Y THE COUNTY COUNSEL COUNT COUNSEL
u M CHIEF
COUNTY OF ORANGE MJ. McCOURT
C� Q• 10 CIVIC CENTER PLAZA CHIEF ASSISTANT
ti ARTHUR C.WAHLSTEDT, JR.
1po MAILING e�1iS:P.O.BOX 1379 LAURENCE M. WATSON
SANT*�P CAL"RNIA 92702-1379
C
Writer's Direct Dial Number f .r''t ' ASSISTANTS
. .
C\'S7aate�ay-s3p15:«.
NV *^1 VICTOR T.BELLERUE DAVID BEALES
7141 8 3 4-.4 3 7 9 JOHN R.GRISET TERRY C.ANDRUS
11988 EDWARD N.DURAN CLAUDIA L.COWAN
IRYNE C.BLACK JAMES L.TURNER
J RICHARD D.OVIEDO PETER L.COHON
BENJAMIN P.DE MAYO NICHOLAS S.CHRISOS
HOWARD SERBIN DAVID G.EPSTEIN
DANIEL J.DIDIER THOMAS F.MORSE
GENE AXELROD WANDA S.FLORENCE
ROBERT L.AUSTIN HOPE E.SNYDER
DONALD H.RUBIN THOMAS C.AGIN
City Council DAVID R.CHAFFEE SHERIE A.CHRISTENSEN
City of Huntington Beach CAROL D.BROWN SUSAN M.NILSEN
Y g BARBARA L.STOCKER SARA L.PARKER
JAMES F.MEADE ADRIENNE K.SAURO
STEFEN H.WEISS KARYN J.DRIESSEN
SUSAN STROM
Re: Southern Pacific Transportation Co. , et al. DEPUTIES
v. Board of Equalization, et al. ; No. 281434
Atchison, Topeka & Santa Fe Railways Co. , et al.
v. Board of Equalization, et al. ; No. 778986
Atchison, Topeka & Santa Fe Railways Co. , et al.
v. Board of Equalization, et al. ; No. 855589
Southern Pacific Transportation Co.; et al. v.
-Board of Equalization, et al. ; 810433
Southern Pacific Transportation Co. , et al. v.
Board of Equalization, et al. ; 877359
Dear Council Members:
Pursuant to your designation and request for representation
(under the provisions of former Revenue and Taxation Code Section
5149 ) , this office has represented your City, as well as the County
of Orange, as parties defendant in one or more of the above- en-
titled actions . As these cases represent similar and/or identical
legal and factual issues, they are commonly referred to as the
"Railroad Cases. " For convenience of communication, we have listed
all of the cases generically called Railroad Cases without indicat-
ing if your City is a party thereto. Your City Attorney should
confirm which cases are applicable to your City. By this letter we
wish to update you on the status of these cases, and to apprise you
of impending actions and stipulations which we anticipate entering
shortly.
The Railroad Cases currently include seven separate state
court cases (six of which are pending in San Francisco County Supe-
rior Court;- three of which have been consolidated; and the seventh
is pending in Sacramento County. Superior Court) and four federal
court cases (all of which have been consolidated for hearing in the
U.S. District Court in San Francisco) . Plaintiffs in these cases
chaffee/037
�. ail Iota
CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
April 9, 1985
J. J. Alilovich, Division Manager
SOUTHERN CALIFORNIA GAS COMPANY
P. O. Box 3334
Anaheim, California 92803
Dear Mr. Alilovich:
In response to your letter of April 3, 1985 the City of Huntington Beach has decided not to
allow Southern California Gas Company to make certain credits against utility taxes for
refunds received by the Gas Company from its interstate suppliers. This is consistent
with our position in the past as we are unaware of the refund amount, which would reduce
future revenues, and the refunds would not necessarily be distributed equitably.
Should you need any additional information, please contact Mr. Dan T. Villella or
Mr. Wayne Lee at (714) 536-5228.
Sincerely,
OB J./MANZLJOhief
Administra ive Services
RJF:skd
0955j
To Charles Thaimson, City AdIdn- Date I IV �1
f At rom tacha� is a comounicatian & letter- agmt So Calif-
"-G V)any raqardinq refunding of Utililty User's Tax
correspond inq to the So. Calif. Gas Com?any's refund.
1r. Bonnic-k, District Mam4jer, said that if the City
wishles to refund they must A'-.e advised by 12/2(,)/83.
Pla-mse infom us if you plan to schedule this for the-
12/19(/33 agenda.
GIT-',' GLERK'S 9FFIGF-
Connie Brockway, Deputy
" cc: Jeri Chanelle
RETURN TO Signed
"A Date Signed
Redifrm
45 465 SEND PARTS I AND 3 WITH CARBONS INTACT.
Poly Pak 150 sets)4P465 PART 3 WILL BE RETURNED WITH REPLY.
SOUTHERN CALIFORNIA gas COf�PAIv;
ORANGE COUNTY DIVISION P. O. BOX 3334, ANAHEIM, CA 1. 92003',
November 29, 1983 }o`�
9 -Z
Ms. Alicia Wentworth
City Clerk
2000 Main Street
Huntington Beach, California 92648
Dear Ms. Wentworth:
The Southern California Gas Company is requesting authorization
from the California Public Utilities Commission to refund certain
amounts to its customers relating, primarily, to refunds received
by the Gas Company from its interstate suppliers. The refund
plan is similar to that used for the refund made in April 1982.
The Gas Company expects to make the refund by credit to bills
during January 1984.
Should your City wish to consider refunding the Utility Users'
Tax corresponding to this refund amount, the Gas Company is
willing to assist your City by passing that tax refund on to
eligible city residents, including it with the Gas Company
refund during our regular billing operation in January 1984.
However, we are prepared to assist in making utility users'
tax refunds only if the amount of the tax refund is calculated
and distributed uniformly and the Gas Company is expressly
authorized by your City to offset the tax refunds through a
credit against current utility users' tax collections. The
refund calculations would be based upon the amount of the
utility refund and your City's February 1982 Utility Users'
tax rate.
If your City agrees to the above approach, please indicate
agreement by having the appropriate City official sign the
enclosed copy of this letter in the space provided, attaching
a Resolution of your City Council formally authorizing this
agreement and returned to me by December 20.
Sincerely,
J. J. Alilovich
Division Manager
JJA/lg
Enc.
Southern California Gas Company is authorized to proceed with
the tax refunds as outlined above and shall be allowed credits
against current tax collections of all tax amounts so refunded.
It is agreed that the City shall defend and indemnify the.-Gas
Company as to any loss or liability arising from any act or
omission by Gas Company in implementing tax refunds on behalf of
the City.
City of
By
Position
Date
r
NEWS RELEASE
:WS BUREAU 24-Hour Hotline (213) 689-2171
SAM 13ONNICK
DISTRICT MANAGER J ' / (�'7
,{{A gac CrJr���ar�sY
355 THIRD,LAGUNA BEACH,CALIFORNIA 92651
(714) 494-4622,834-J206,661-2Bt2
FOR IMMEDIATE RELEASE
- - - _ Nov. 3 , 1983
GAS COMPANY PROPOSES $35 MILLION
REFUND TO ITS CUSTOMERS
Southern California Gas Co. today announced it has sent to
the state Public Utilities Commission (PUC) a proposal to refund
about $35 million to its customers in January.
Assuming the plan is approved by the commission , the gas
company' s average residential customer will receive a refund of
$3 . 15 by way of credit on his or her January gas bill.
The refund reflects the rebates the gas company has received
from its out-of-state suppliers , primarily E1 Paso Natural Gas
Co, and Transwestern Pipeline Co. Under the federal regulatory
process , these suppliers implement proposed rate increases
subject to final approval by the Federal Energy Regulatory
Commission (FERC) . During this approval process , adjustments
were made to the suppliers ' rates , resulting in refunds to the
gas company and now to its customers.
MORE
Add 1 x x x to its customers .
Included in the total refund is the interest that has
accrued on the refunds from suppliers and for the time monies
were held by the gas company.
"We are very pleased to announce this refund plan to our
customers , " said Robert M. McIntyre, gas company president. "The
refund is the result of efforts, including ours and those of the
PUC, to intervene in our suppliers ' rate cases before the FERC. "
The PUC is the agency responsible for assuring that
consumers receive quality service from public utilities -- at
rates that are fair to both customers and utilities. In
addition, the commission participates in federal proceedings to
protect the interests of California consumers.
"We will continue to work at the federal level, both in rate
cases and other natural gas related proceedings , to assure that
natural gas costs are kept as low as possible, " said McIntyre.
Although the average refund to residential customers is
$3 . 15, the actual amount will depend on the amount of natural gas
used by the customer during the 12 months ending this month, gas
company officials stated. Refunds will be calculated in the same
way for small commercial customers.
Refunds to large commercial and industrial customers will be
based on their usage during the period covered by the suppliers '
refunds.
LKG: cjb
83-436
REQUEST FOR CITY COU ACTION
Submitted by Vincent G . Moorhouse Department Community Services
Date Prepared December 12 , 19 80 Backup Material Attached 0 Yes No
Subject Ordinance Amending Municipal Code .Section 3 .36 . 310 Relating
to Billings by utility Service Suppliers
City Administrator's Comments
Approve as Recommended
'Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions: /
STATEMENT OF ISSUE U
It is. necessary. to revise Section 3 . 36.. 310 of the Huntington .Beach
Municipal Code in order to make. it more workable for the utility
service providers .
RECOMMENDATION
.Adopt Ordinance attached which amends HBMC Section 3 . 36 . 310 by
deleting the second . paragraph thereof.
ANALYSIS
The utility tax exemption. for senior citizens meeting certain
requirements has been .in .effect since October 15 , 1980 . However,
a portion. of Section 3 . 36 . 310 makes certain demands upon the
service provide.r . which cannot be accomplished. The removal of
the second paragraph of that . section does .not. alter the intent
of the exemption.
FUNDING SOURCE
None required.
ALTERNATIVE ACTIONS
Do not adopt the Ordinance .
VGM:VB : cs
rj
POO 3n8
1977 - 1978
LESSEE Rent Gross
Paid Income
Christensen, Ella - Smith, Joy (dba Neptunes
Locker $ 12,280 $ 81 ,872
Christensen, Ella (dba Captains Gallery) 8,763 58,419
Gustafson, John (dba Fisherman Grotto) 9,507 63,374
Guzzardo, Guy P. 5,400 Unknown. - monthly
rent only
Huntington Lmtd 96,000 Minimum rent @
$8,000 - gross
unknown
E1 Don Liquor No charge None
LRC Corporation (Maxwell 's) 86,211 560,146
Irvine, .Joseph A. & Evala Rue 7,598 70,505
Wheat, Cecil (2 concession's) 23,560 198,398
Clapp, Jack K. (2 concessions) 29,672 2419986
Nitzkowski , Kenneth M. & La Rue 11 ,766 99,918
Huntington Central Park 11 ,146 40,360
Sully Miller Contracting Co. 12,000 Flat Rate
Golf of Southern Cal . Lmtd. 150,000 Gross Unknown
Minimum .@ 12,500
per month
Harold Butler Enterprises #130 1 ,200 Flat Rate
Curzio, Frederick H. Unknown to Finance
Unknown to Harbor & Beaches 1 ,500 Flat Rate
Christensen, Ella (Tackle Shop) 9,064 60,421
`3
City of Huntington Beach
A P.O. BOX 190 CALIFORNIA 92646
OFFICE OF THE CITY CLERK
,.,1
April 16, 1979
Mr. Bradley L. Jacobs
County Assessor
P. 0. Box 10
Santa Ana, CA 92702
Attention: Mr. D. James Bell
Supervising Appraiser
Re: Possessory Interest
Dear Sir:
Attached please find a list of rent and gross revenues of lessees of the City
per your request.
If we can be of further service, please feel free to contact my office.
Sincerely,
Alicia M. Wentworth
City Clerk
AMW:es
Enclosure
Yr e
CITV OF HUNTINGTO CH CA 77-68
• COUNCIL-ADMINISTRATOR COMMUNICATION /-d »"
HUNTINGTON BEACH
To Honorable Mayor and From Floyd G. Belsito
City Council Members City Administrator
Subject UTILITY TAX DELINQUENCY Date July 13., 1977 1 h�
As presently worded, the ordinance pertaining to the payment Sf
utility taxes requires that taxes collected by the utility companies
are to be remitted to the City by the 20th of each month. Attached
is an ordinance which would change the wording to specify their
returns must be postmarked on or before the 19th of each month.
This change to the ordinance should have no practical effect on the
utilities as far as their timing in remitting the utility taxes
which they collect for the City. The City Attorney' s Office has
indicated that the word "remittance" is insufficiently clear to allow
the City to impose a delinquency penalty in a case where the utility
tax is not received by the 20th of the month.
The utility companies have been notified that this ordinance change
is being recommended. -
RECOMMENDATION:
Adopt the attached ordinance .
Respectfully submitted,
Floyd G Belsito
City A ministrator
FGB :DLC:bb Drx
Attachments
l
rI
AL
MAR 2 3 1977
CITY OF HUNTINGTON
ADMINISTRATIVE OFFBEECFI'
OFFICE OF THE CITY ATTORNEY
OPINION'-NO.- 77-5
17 March 1977
SUBJECT: Utility Taxes - When Delinquent
REQUESTED BY: Arnold Ross, Internal Auditor
PREPARED BY Don P. Bonfa, City Attorney
James Georges, Deputy City Attorney
QUESTION 1: If a due date for payment of taxes falls on a week-
end or a holiday, would the due date then be deemed
to be the day before or after the weekend or holiday?
ANSWER 1 : The taxes would be due the next business day after
a weekend or a holiday.
QUESTION 2: Is the due date for payment of taxes met when the
payment is postmarked on the due date, or when the
payment is received at city hall?
ANSWER 2 : The payment of taxes must be received at city hall
on or before the due date. Payments received after
the due date are delinquent and are subject to a
penalty of 15 percent of the total tax imposed.
QUESTION 3: Municipal code section 3.36. 160 provides that the
full amount of the tax collected shall be remitted
to the tax administrator. Does "remitted to the
tax administrator" mean the same thing as "remit-
tance received by the tax administrator?"
ANSWER 3 : Yes, because the return must be filed at city hall,
and the tax must be .paid at the same time as the
return is filed.
DISCUSSION:
{ Huntington Beach Municipal Code Section -3.36.160 states in full:
113. 36.160 Reporting and remitting. Each service
Office of the City Attorney 17 March 1977
Opinion No. 77-5 Page 2
supplier shall, on or before the twentieth of each
month, make a return to .,th-e ,tax administrator, on forms
provided by him, stating the amount of taxes billed by
the service supplier during the preceding month.
At the time the return is filed, the full amount
of the tax collected shall be remitted to the tax
administrator. The tax administrator is author-
ized 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 and re-
mittances are due immediately upon cessation of
business for any reason."
Note that the section uses the words "At the time the return is
filed, the. full amount of the tax collected shall be remitted to
the tax administrator. " The return can only be filed when it is re-
ceived by the tax administrator. Even ,when a return is mailed, it
cannot be filed until it is received. Therefore, the tax remitted
to the tax administrator must mean that it is paid at the time the
return is filed, and the return can. only be filed when it is re-
ceived
If a specified time of performance falls on a holiday, the law ex-
tends such time to the next business day (California Civil Code
Section 11, CheneZ v. Canfield (1910) 111 P 92, Restatement Con-
tracts Section 53 Holidays are Sundays and days specified as
holidays in the California Government Code (California Civil Code
Section 7) . Since Saturday is not a business day at city hall,
then the next business day would be the following Monday.
It is suggested that municipal code section 3. 36 .160 be amended to
read as follows :
"3. 36. 160 Reporting and remitting. Each service
supplier shall, on or before the twentieth of each
month, 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.
At the time the return is filed, the full amount
of the tax collected shall be remitted to the tax
administrator. The tax administrator is author-
ized to require such further information as he deems
necessary to determine properly if the tax here im-
posed is being levied and collected in accordance
with this chapter. Returns and remittances are due
w immediately upon cessation of business for any reason.
Office of the City Attorney 17 March 1977
Opinion No. 77-5 Page 3
Returns and remittances -not received by the tax
administrator at the finance department of the City
of Huntington Beach on or before the due date shall
be delinquent and subject to penalties . "
JAMES GEORG5 and DON P. BONFA
Deputy City Attorney City Attorney
DPB:JG:ahb
cc: Finance Director
CITY OF HdlNTINGTON BEACH CA 7 7-76 T
COUNCIL-ADMINISTRATOR COMMUNICATION'
HUNTINGTON BEACH
To Honorable Mayor and From Floyd G. Belsito
City-Council Members City Administrator
Subject CIVIC IMPROVEMENT FUND/ Date June 1 , 1977
UTILITY TAX REVENUES
Councilman Shenkman has requested my office to investigate the possi-
bility of reducing the City' s utility tax to an amount needed to
cover only lease payments eliminating transfers to the General Fund.
At the present time , our lease payments total $1 ,253,900 annually.
This is broken down to $854 ,900 for the Civic Center complex and
$399,000 for our Central Library.
Mr. Shenkman has specifically requested information as to what per-
centage utility tax rate would cover our lease obligations and what
procedure would need to be followed if we were to eliminate Civic
Improvement Fund transfers to the General Fund.
For your information, I have attached the original study done on
this matter from Erich Matthews of my staff. This report outlines
a general history of the utility tax, the amounts we have collected,
and basic alternatives to our present allocation of Civic Improvement
Fund revenues .
In response to further inquiry on this subject by Councilman Shenkman,
the following information is being provided to the full Council .
For FY 1978 our lease obligations will total 42 . 4% of our projected
revenues of $2 , 965, 000. Based on this data, a utility tax of 2 . 12%
would cover our lease payments , but at the same time would eliminate
a transfer to the General Fund of $1 , 711 ,100 . Since the utility tax
was levied, there have been new programs added and others expanded
which are dependent upon these transfers for funding. Among such
programs the private collection of refuse which was added without a
fee upon adoption of the utility tax, maintenance of the Civic Center
(FY 78 cost : $406 ,145) has been substantially increased since the new
facility was built . The Paramedic program (FY cost : $473 ,253) while
never specifically intended for funding under the utility tax transfer,
was nonetheless added, taking these increased revenues into account ..
These three programs , totalling nearly two million dollars must
therefore be considered at least partially dependent on utility tax
transfers . The refuse collection service clearly necessitates such
revenue or else a refuse collection fee. If the Council chooses
to eliminate this transfer of funds , the following items should be
considered:
1) The utility tax would have to be readjusted annually based on
projected utility tax receipts . It would probably decline slightly
each year based on increased usage. This assumes that transfers to
the General Fund would be eliminated on a permanent basis .
CA 77-76 -2- June 1, 1977
2) If General Fund transfers are eliminated during FY 1978 , our pre-
sent cut-off line at program priority #220 would be moved up to #160 .
This would have a drastic effect on the provision of City services
as they presently exist.
3) If we eliminate all Civic Improvement Fund transfers to the
General Fund and reinstate a trash fee to cover our Rainbow Disposal
contract ($1 , 092 ,083) , we still would be forced to move our cut-off
line back to program #192 .
4) If we eliminate transfers to the General Fund, reinstate a trash
collection fee, and assessed valuation comes in at a 20% increase , we
would maintain our present cut-off point at program #220. This assumes
that the property tax rate would be left unchanged at $1 . 62 per
hundred.
5) Finally, if we leave Civic Improvement Fund transfers to the
General Fund as is , and assessed valuation comes in at 20% , the Council
could reduce the present property tax rate of $1 . 62 per hundred by
about 7� to $1 . 55 per hundred.
Recommendation:
Based upon the five alternatives available to the City Council, I
recommend that Alternative #5 be followed.
Respectfully submitted,
Floyd Belsito,
City Administrator
FGB/GH:p
Attachment
•
CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
11UN I INf.10N-81 ACIf
To Floyd G. Belsito From Erich Matthews �
City Administrator Administrative Assistant
Subject UTILITY TAX Date March 18 , 1977
Councilman Shenkman requested a report on the City ' s Utility Tax.
1.
llTTLITY TAX HISTORY The City ' s Utility Tax was adopted on 9/8/70 ,
Ordinance 159 . Prior to the adoption of the Utility Tax the City was
charging $1 . 50 trash fee per residence per month. Historical records and
conversations with present personnel indicate that the City was seeking
additional sources of revenue to fund a major Capital Improvements Program ,
i . e . ; Civic Center , Central Library , Fire Stations , etc . To meet the
demands of this program the City Council adopted the 5% Utility Tax and
dropped the $1 . 50 Trash Collection Fee. I assume the rational was that
the Utility Tax would generate money to cover both the Capital Improvements
Program and the trash collection contract .
To (late , the Civic Improvement Fund has been used to finance the con-
struction of. the Civic Center , Central Library, Corporate Yard, and Edison ,
e"44urdy, and Gothard Fire Stations . The fund was also used in the early
70 ' s to meet principal and interest payments on our 1970 Park Bonds . This
ceased when the property tax rate was increased to cover 1970 Park Bond
expenses as approved by the voters of the City.
Since its inception, the Utility Tax has gone into a fund category called
the Civic Improvement Fund. Ideally, the Civic Improvement Fund should
.have been used to meet the lease payments on the Civic Center and Central
Library and finance a continuing Capital Improvement Program. However ,
economic conditions have forced the City to reconsider its capital
Improvement Program and use the excess revenue (that amount over and above
the funds required for lease payments) for General Fund operations .
Presently , staff is working on a preliminary Capital Improvements Program
for future City Council consideration. Such a program would be heavily
dependent upon the continuation of the City' s present utility tax.
AMOUNTS COLLECTED- The Civic Improvement Fund has generated the following
revenues since FY 1972 :
Amount Trans-
$ Increase % Increase ferred to
Fiscal Year Amount Received Over Prior Yr. Over Prior Yr. General Fund
1972 1 , 321 , 910 - - - - 460 , 752
1973 1 , 606 , 096 284 , 186 21 . 4 % 460 , 752
1974 1 ,993 , 241 387 , 145 24 . 1% 460 , 752
975 2 , 255 , 509 262 , 268 13 . 1% 645., 75-1
r 1976 2 , 684 , S41 429 ,032 19 . 00, 1 ,u�S , lli
- 1977 2 , 839 , 000 (est) 154 ,459 5 . 70 1 , 585 , 000 (cst.
1978 2 ,965 , 000 (proj ) 126 ,000 4 . 4% 1 , 711 ,000 (fro.
3
UVI1,ITY TAX -2- March 18 , 1977
r
Some question has arisen as to the percentage breakdown of residential tc
commercial/industrial contributions to the Civic Improvement Fund. Our
best information (the most recent annual report of Southern California
Edison submitted to the Public Utilities Commission for calendar year
.197S) indicates the following :
Commercial/Industria.l
Residential Properties Properties
1975 Revenues $12 , 252 , 297 $1.3 , 632 , 808
o I' Tot,alRevenue 47 . 33 0 52 . 67 0
Ncjmher of Accounts 49 , 349 3 , 040
of' Total Accounts 94 . 200 5 . 800
Ilased upon this data , the average household payed $12 . 41 to the City
annually for usage of electrical energy in 1975. Commercial/Industrial
accounts paid $224 . 22 for 1975 .
Percentage usage and tax payments for other utilities should be roughly
consistent with those for electrical usage with the possible exception
of telephones .
ALTERNATIVE FUTURES - Several courses of action are open to the City Council
with respect to the Civic Improvement Fund. The following alternatives
arc offered for your review and comment :
1 . Ctit buck Civic Improvement Fund receipts to an amount equal only to
the sum needed to cover lease payments ($1 , 253 , 900) : This could be
dpne. by reducing the 5 percent tax on all utilities , or by eliminating
the tax on selected utilities . This would require an in-depth study
of utility tax receipts to determine the rate at which tax funds would
equal the amount needed for our lease obligations . It will require
r1ie close cooperation of the various utilities involved (i . e . , changing
billing forms , etc. ) .
2 . 1,eavc the utility tax unchanged and reduce the property tax by the
amount the Civic Improvement Fund exceeds the sum needed for our lease
payments . This would 'require an adjustment to the property tax rate
on an annual basis .
2 . Usc the- funds over and above that needed for lease payments for early
retirement of PFC bonds . This would require further study to determine
the correct procedure for early retirement of the bonds .
4 . Leave the Civic Improvement Fund and the utility tax rate unchanged.
RFCOMMUNDED ACTTON - I estimate that the "average" Huntington Beach
resident pays anywhere from $SO to $7S in combined utility taxes yearl.v .
By many standards the utility tax is .a fair and equitably: tax. first ,
is a regularly increasing source of revenue to the City. Second , because.
consumption rates of utilities is under the consumers control , the taxes
paid by users are also subject to their control . Third , the utility tax
is on excellent source of income because the City incurs little , if any ,
cost in administering the tax . Fourth , the tax is borne by nearly all
ll'I'll,ITY TAX -3- March 18 , 1977 .
r 1
tit i I it.y users , whether they he homeowners., renters , commercial ists , or
manulacturers . Finally , the utility tax is an cyuitable tax in that
there is a direct. relationship between charges levied and benel'its
received .
II' the City Council decides to reduce the Utility Tax several impacts ,
both direct and indirect , should be considered. Specifically, how will
the City replace. the 5o to 60 of General Fund revenues the Civic Tmprovemelt
Funds provides? Would such a move necessitate the reinstitution of a
trash collection fee? Ilow will the City finance capital improvements in
I-uture years ? Where will we get funds for maintenance of our present
civic facilities?
It is difficult to tie the monies transfered to the General Fund from
the Civic Improvement Fund to a single program or City service . The
Council needs to be made aware , however , that if they were to cut back
the present Utility Tax one of two choices has to then be made . Either
the City finds some new or increased source of revenue to replace lost
utility tax receipts or the service level now provided must be reduced to
balance expenditures to revenues .
I recommend that the City Council continue with the present S% utility
tax rate .
�1
I:IIM/GLII/dc
ion
�- CiTy of "upairipaGirom iamacH CA 77 76
COUNCIL-ADMINISTRATOR COMMUNICATION
HUNTINGTON 5WH
n
To Honorable Mayor and From Floyd G. Belsito
City Council Members City Administrator
Subject . CIVIC IMPROVEMENT FUND/ Date June 1 , 1977
UTILITY TAX REVENUES
Councilman Shenkman has requested my office to investigate the possi-
bility of reducing the City' s utility tax to an amount needed to
cover only lease payments eliminating transfers to the General Fund.
At the present time , our lease payments total $1 ;253, 900 annually.
This is broken down to $854 ,900 for the Civic Center complex and
$399,000 for our Central Library.
Mr., Shenkman has specifically requested information as to what per-
centage utility tax rate would cover o,ur lease obligations and what
. procedure would need to be followed if we were to eliminate Civic
Improvement Fund transfers to the General Fund.
For your information, I have attached the original study done ' on
this matter from Erich Matthews of my staff. This report outlines
a general history of the utility tax , the amounts we have collected,
and basic alternatives to our present allocation of Civic Improvement
Fund revenues .
In response to further inquiry on this subject by Councilman Shenkman ,
the following information is being provided to the full Council.
For FY 1978 our lease obligations will total 42 . 40 of our projected
revenues of $2, 965, 000. Based on this data, a utility tax of 2 . 120
would cover our lease payments , but at the same time would eliminate
a transfer to the General. Fund of $1 , 711 ,100 . Since the utility tax
was levied, there have been new programs added and others expanded
which are dependent upon these transfers for funding. Among such
programs the private collection of refuse which was added without a
fee upon adoption of the utility tax, maintenance of the Civic Center
(FY 78 cost : $406 ,145) has been substantially increased since the new
facility was built . The .Paramedic program (FY cost : $473 , 253) while
never specifically intended for funding under the utility tax transfer,
was nonetheless added, taking these- increased revenues into account .
These three programs , totalling nearly two million dollars must
therefore be considered at least partially dependent on utility tax
transfers . - The refuse collection service clearly necessitates such
revenue or else a refuse collection fee . If the Council chooses
to- eliminate this transfer of funds , .the following items should be
considered:
1) The utility tax would have to .-be readjusted annually based on
projected utility tax receipts . It would probably decline slightly
�. each year based on increased usage. This assumes that transfers to
the General Fund would be eliminated on a permanent basis .
03
• 1
CA 77 - 76 - 2 - June 1 , 1977
2) If General Fund transfers are eliminated during FY 1978 , our' pre-
sent cut -off line at program priority #220 would be moved up to # 160 .
This would have a drastic effect on the provision of City services
as they presently exist .
3) If we eliminate all Civic Improvement Fund transfers to the .
General Fund and reinstate a trash fee to cover our Rainbow Disposal
contract ($1 , 092 ,083) , we still would be forced to move our cut-off
line back to program #192 .
4) If we eliminate transfers to the General Fund, reinstate a trash
collection fee, and assessed valuation comes in at a 20% increase , we
would maintain our present cut-off point at program #220 . This assumes
that the property tax rate would be left unchanged at $1 . 62 per
hundred.
5) Finally , if we leave Civic Improvement Fund transfers to the
General Fund as is , and assessed valuation comes in at 20% , the Council
could reduce the present property tax rate of $1 . 62 per hundred by
about 7� to $1 . 5S per hundred.
Recommendation:
Based upon the five alternatives available to the City Council , I
recommend that Alternative #5 be followed.
Respectfully submitted,
_Floyd Belsito ,
City Administrator
FGB/GH:p
Attachment
:t
JE CITY OF HUNTINGTON BEAC
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
To PAUL E. COOK From ROBERT J. FRANZ IV�i����
City Administrator Deputy City Administrator
Subject UTILITY TAX FUNDING Date OCTOBER 21, 1988
OF CAPITAL IMPROVEMENTS
When the Council adopted the refuse collection fee of $5 per month, they indicated a desire
to allocate 100% of the City's Utility Tax revenues to Capital Improvements, to be phased
in over the next three years. Attached is'an analysis of this approach, which also assumes
increasing the refuse fee gradually over the next three years to fully cover the refuse
collection costs.
This approach would result in significant deficits in the General Fund since the utility tax
being transferred ($10 million in 1991/92) is much greater than the new revenue from the
refuse collection fee ($5.4 million in 1991/92). As indicated, a deficit of $8.1 million in
1991/92 would have to be addressed by reducing the General Fund budget by that amount.
Please let me know if any further information is needed.
R ERT . FRANZ
Deputy City Administrator
RJF:sd
Attachment
4106j
ANALYSIS OF USE OF UTILITY TAX REVENUES
FOR CAPITAL IMPROVEMENTS
ASSUMPTIONS:
1 . BY FISCAL YEAR 1991 /92 100% OF UTILITY TAX REVENUES WILL BE USED FO
CAPITAL IMPROVEMENTS WITH PHASE IN TO OCCUR OVER 3 YEARS
2 _ REFUSE: COLLECTION FEE WILL BE GRADUALLY INCREASED OVER THE NEXT 3
YEARS TO FULLY COVER THE CITY ' S REFUSE COLLECTION COSTS
3. GENERAL FUND EXPENDITURES WILL GROW AT A 5% ANNUAL RATE
4 . GENERAL FUND REVENUES WILL GROW AT A 4% ANNUAL RATE PLUS NEW
. REVENUE FROM REFUSE COLLECTION FEES
CURRENT
1988/89 1989/90 1990/91 1991 /92
ESTIMATED UTILITY TAX REVENUE 9 , 400 , 000 9 , 600 , 000 9 , 800 , 000 10 , 000, 000
ESTIMATED REFUSE FEE REVENUE* 1 , 675 ,000 31500, 000 4 , 300 , 000 5 , 400, 000
XMONTHLY RESIDENTIAL RATE 5 . 00 6 . 50 8 . 00 10 . 00
CURRENT
J988/89 1989/90 1990/91 1991 /92
GENERAL FUND REVENUE 78, 615 , 000 81 , 750 , 000 85 , 000 , 000 88 , 500 , 000
PLUS REFUSE FEE REVENUE 1 , 675 ,000 3 , 500, 000 4 , 300 , 000 5 , 400 , 000
LESS UTILITY TAX TRANSFER 1 , 000 , 000 -3 , 200 , 000 -6 . 500 , 000 - 10 . 000 , 000
(TO CI FUND)
NET GENERAL FUND REVENUE 79 , 290 , 000 82 ,050,000 82 , 800 , 000 83 , 900 , 000
GENERAL FUND EXPENDITURES 79 , 291 , 000 83 , 250, 000 87 , 500 , 000 92 , 000 , 000
SURPLUS/DEFICIT -1 , 000 -1 , 200, 000 -4 , 700 , 000 -8 , 100, 000
-ce: City t rat or'• .'ff"tie CIVIC IMPROVEMENT PROGRAM Date: 5-1-7G
PROJECT STATUS REPORT
SITE LOC.TA
A/E FIRM b I COMPL. PRESENT EST.CONSTR. EST.CONSTR.
'ECT .TITLE $ SIZE . CQ DATE SITC COST AWARD DATE 1 DATE PHASE NEXT PHASE DATE COST 'REMARXS
_c Center Main 6 1't - 9-70 3S, 0 urt Meyer f ;4- I-�I ,Schematic Des-
MainDev. 7-1-71' 55,995,040 A/E F'ee Est,
?ce Bldg. (13 Acres) j Associates ! j ,o 7���10 90 / $419,000 (711
I . 9-3-69 ,
- :)oration Gothard b 3- 5-70 $215,779 'Done �4- 1-71 � - 7-1-71 $ 880,000
rd� Slater i (Select A/E
(14.4 Ac. ) 10-1-7011 j
tral Goldenwest 1- 3-69 5225,000 Neutra 6 4 1-?1 ` Schematic i Schematic 1 7-1-71 $2,119,350 !A/E Fee Est.
a5r. 6 Talbert ! I Associates $115,000(8 1/2',
�- (18.6 Ac. ) I 1 5-4-7-3
f I i
' itorium Atlanta 6 � Not - - - Unknown - Economic
l :ference" Lake i Acquired Feasibility
:ter 1 (10 Acres) I ` �• : Required
-a Stations: I �'
ir Indust. Gothard 6 2-15-67 S 57,000 •,Anthony 6 6-30-70 Design Constr. 8-1-70 1 $ 250,000 'A/E Fee Est.
station Murdy Cir. Langford Dev. Documents ! $lS,S00 (7t)
j (1 Acre) + ! 12-9-69
I 1
:)thard Sta. Gothard 6 ' 1-16-69 $128 765 Anthony '& 3-19-70 ': Design Constr. 8-1-70 S 2S0 000 . A/E Fee Est.
Frain. Ctr. ! Ellis i Langford 3-19-70 Dev. Documents 8-1-70 � S .300,000 $15,500)�oamun.Fac. (.47 Ac.) ( i 12-9-69 6t
+ I 521,000)
_r Sta. Warner $ 7- 1-70 Exchange - - - - - ( - Execute Agree.
Sunset Under ` t
otia- w/Huntary our
Sanit.Plat Ne
8 � i � � $ Sanitary Dis•
(2.3 Ac.) tion
agnolia Magnolia f, 7- 1-70 - i - _ - _ _ - -Property to be
Station Hamilton ( Acquired from
(.8 Acres) ' -County
pringdale Springdale j - Dependent on
Station on Peck Pr.
Development of
' y Ind. Park
hFA,�1H r .EFUSE COLLECTION & DISPO!zj%, S . 3250
ARTICLE 325
FEES
S . 3250 Liability of occupants for fees ; billing landlord.
S . 3250.1 The City Council finds that the periodic collection of
refuse from all places and premises in the City benefits
all occupants of places and premises in the City and, therefore, all
occupants receiving the benefit of the basic level of refuse service
are made liable for refuse collection fees prescribed by this article .
S . 3250.2 The case of premises in which the occupant does not receive
the billing for refuse collection but the landlord does ,
such landlord shall collect such fees levied against the occupant_ of
the dwelling unit or place or places of business located on such
premises , and shall transmit the amount. to be collected . to the City.
S . 3250.3 In the event the landlord fails to collect such fees from
any such occupant and remit the same to the City, the
landlord shall be liable to the city for payment of such fees .
S . 3251 Refuse Collection Charges . The charge for the basic level
of service is hereby established as $1.50 per month.
S . 3252 Fee. Debt.
S . 3252.1 A fee or charge imposed by this Chapter shall be a civil
debt owing the city from the occupant of the property to
which the basic level of service is made available whether such ser-
vice is used or not.
S . 3252. 2 Discontinuation of refuse service by forms and procedures
prescribed by the Director of Finance due to vacancy or
pursuant to Section 3242.1 shall not excuse payment of all sums that
have accrued under this article prior to such discontinuation.
S .. 3253 Payment and Billing. The charges provided for in this ,
chapter shall be combined with the charges presently
included in the water billing and hereafter shall be called the
Utility Billing of the City of Huntington Beach. Whether the water
charges alone, or the water and refuse charges together, or the refuse
charge alone constitute the total of said utility bill. Said Utility
Bill shall be for the same period as the present water bill and shall
be payable in the same manner. Failure to pay the full utility bill
shall result in discontinuation of all services included in such bill .
S . 3254 Accounting System.
S . 3254.1 The Finance Department as collection agency for the City
shall institute and maintain a system of accounting adequate
and sufficient to provide complete records of refuse operations for
which charges are imposed by this chapter.
ORDINANCE NO . 1618
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
AMENDING THE HUNTINGTON BEACH ORDINANCE CODE
BY REPEALING ARTICLE 325 THEREOF
The Ci.ty Council of the City of Huntington Beach does
ordain as follows :
SECTION 1. The Huntington Beach Ordinance Code is
hereby amended by repealing Article 325 thereof, entitled
"Fees ," effective January 1 , 1971 .
SECTION 2 . No fees shall be collected under said
Article 325 on or after January 1 , 1971 .
SECTION 3 . The City Clerk shall certify to the passage
of this ordinance and cause same to be published within fif-
teen days after its adoption in the Huntington Beach News , a
weekly newspaper of general circulation, printed and published
in Huntington Beach , California.
PASSED AND ADOPTED by thUgotyrn��uncil of the City of
Huntington Beach at .a regular/meeting thereof held on the
23rd day of November, 1970 .
Mayor
ATTEST :
it G rk
APPROVED AS TO FORM:
City to
'' 4/�t F/L�t,✓z
REQUES i FOR CITY COUNCIL ACTION
Date November 6, 1986
Submitted to: Honorable Mayor and City Council Member
t c
Submitted by: Charles W. Thompson, City Administra o
Prepared by: Robert J. Franz, Chief of Administrative Services
Subject: Senior Citizen Utility Tax Exemption
Consistent with Council Policy? [x] Yes [ ] New Policy or Exception2 S Sv
an
Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: vg,1—
Statement of Issue: The City of Huntington Beach currently exempts qualifying senior
citizens from utility tax. The qualifications have not been changed in six years.
Recommendation: Increase the maximum income requirement from $8,000 to $10,000.
Analysis: The City adopted a senior citizen utility tax exemption ordinance (2452) in 1980.
The ordinance contains the provision that the combined household adjusted gross income as
determined for Federal income tax purposes must be less than $8,000. This amount has not
been adjusted for changes in cost of living. The recommended increase of $2,000 would
represent a 25% increase in the maximum income allowable. At present, we have 93
households which currently have senior citizen utility tax exemptions. This is approximately
.2% (1/5 of 1 %) of the total utility accounts within the City of Huntington Beach.
Funding Source: Utility tax Revenue (decrease).
Alternatives:
1. Set other maximum income amount.
2. Direct staff to study and prepare further analysis.
Attachments:
1. Fiscal Impact Statement
2. Amended Ordinance Section 3.26.280
2832j
Plo 5/85
CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
To CHARLES W. THOMPSON From ROBERT J. FRANZ
City Administrator Deputy City Administrator
Subject FINANCIAL IMPACT OF Date NOVEMBER 7. 1986
SENIOR CITIZENS EXEMPTION
REQUIREMENT, FIS 86-43
As directed under authority of Resolution 4832, a fiscal impact report has been prepared and
submitted relative to the proposed modification to the maximum income requirement base
for senior citizens claiming the Utility Tax Exemption. Anticipations by the requesting
entity are that an annual reduction of approximately $3,887 in revenues would result over
the course of a complete fiscal year, were the modification to be enacted.
An affirmative response by the City Council would reduce the balance of the City's
unappropriated general fund to $1,685,234.
OBERT ANZ
Deputy City Administrator
RJF:AR:skd
2833j
� y
ORDINANCE NO. 2886
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE
'• BY AMENDING SECTION 3. 36. 280 ENTITLED "SENIOR
CITIZENS-EXEMPTION"
The City Council of the City of Huntington Beach does ordain
as follows :
SECTION 1 . The Huntington Beach Municipal Code is hereby
amendea by amending section 3/36/260 to read as follows :
3 . 36 . 280 Senior Citizens--Exeription. The tax imposed by this
chapter shall not apply to any individual service user sixty-two
years .of age or older who uses telephone, electric , water or gas
services, in or upon any premises occupied by such individual ,
provided the combined adjusted .gross income as used for Federal
income tax reporting purposes of all members of the household in
which such service user resides was less than ten thousand
( 10, 0(10 ) aollars for the calendar year prior to the fiscal year
( July 1 through June 30 ) for which the exemption provided by this
chapter is applied .
SECTION 2 . This ordinance shall take thirty days after its
passage .
PASSED AND ADOPTED by the City Council of the City of
Huntington Beach at a regular meeting thereof held on the 1st day
of December 1986 .
� A
• r or
ATTEST: APPROVED AS TO FORM:
City Clerk ;emu -r y 1c City Attorney
REVIE AND APPROVED: IN AND, AP 'RO D
City minist ator ief ol--" in strative '
Services
1711L
11-7-86
{
Oro_ No.
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, ALICIA M. WENTWORTH, the duly elected, qualified City
Clerk of the City of Huntington Beach and ex-officio Clerk of the
City Council of the 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 day of
19 and was again read to said City Council at a regular
meeting thereof held on the day of 19 and
was passed and adopted by the affirmative vote of more than a majority of
all the members of said City Council.
AYES: Councilmen:
NOES: Councilmen:
ABSENT: Councilmen: -
City Clerk aA:ex-offi�ioler
of the City Council of the City
of Huntington Beach, California
V
REQUES i" FOR CITY COUNCIL 'AC ION
7/8
Date February 10, 1988
Submitted to: Honorable Mayor and City Council Members
Paul E. Cook City Administrator
Submitted by: Y
Prepared by: Robert J. Franz, Chief of Administrative Services
Subject: Amendment to Utility Tax Ordinance
iS T ee�,47 y 3���
Consistent with Council Policy? [ ] Yes [X] New Policy or Exception
Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: r2
Statement of Issue: At present, the City's Utility Tax Ordinance does not specifically
address cogeneration of electricity.
Recommendation: Approve the attached amendment to the City's Utility Tax Ordinance.
Analysis: It has been brought to our attention that some large companies in the City may
consider the development of cogeneration plants for producing electricity rather than
purchasing it from the Southern California Edison Company. Since this is not specifically
addressed in our present ordinance, we believe we should have the language of the ordinance
clarified. This change will prevent any potential loss of revenue from an inappropriate
interpretation of the present ordinance.
Funding Source: Not applicable.
Alternative Action: Allow for exclusion of cogenerated energy.
Attachments: Ordinance COLDCII,
CIT LZRI
3640j
PIO 5/85
e
ORDINANCE NO. 2933
# AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE
BY AMENDING SECTIONS 3 .36 .010 , 3 .36 .050 AND
3 .36 .130 RELATING TO UTILITIES TAX
The City Council of the City of Huntington Beach does ordain
as follows:
SECTION 1 . The Huntington Beach Municipal Code is hereby
amended by amending sections 3 .36 .010, 3 .36 .050 and 3 .36 . 130 to
read as follows:
3 .36 .010 Definitions . Except where the context otherwise
requires , the definitions given in this section ggvern the
construction of this chapter :
(a ) "City" means the city of Huntington Beach .
(b) "Month" means a calendar month.
(c ) "Person" means any domestic or foreign corporation,
firm, association, syndicate, joint stock company, partnership
of any kind, joint venture, club, Massachusetts business or
common law trust, society, individual or municipal corporation.
(d ) "Service supplier" means any entity which receives
taxes paid and remits same as imposed by this chapter .
(e ) "Service user" means a person required to pay a tax
imposed by this chapter .
( f ) "Tax administrator" means the finance director of the
city.
(g ) "Telephone corporation, electrical corporation, gas
corporation, and water corporation" shall have the same meanings
as defined in sections 234 , 218 , 222, and 241 respectively, of
the Public Utilities Code of the state of California, as said
sections existed on January 1, 1970 . "Electrical corporation"
and "water corporation" shall be construed to include any
organization, municipality or agency engaged in the selling or
supplying of electrical power or water to a service user;
however , as specified by Public Utilities Code section 218 , does
not include a corporation or person employing cogeneration
technology or producing power from other than a conventional
power source for the generation of electricity.
_1_ 2933
3 .36 .050 Electricity tax . There is imposed a tax upon
every person in the city using electrical energy in the city.
` The tax imposed b this section shall be at the rate of 5
P Y
+ =� percent of the charges made for such energy and shall be paid by
the person paying for such . energy. "Charges" as used in this
section shall include charges made for :
(a ) Metered energy; and
(b) Minimum charges for service, including customer
charges, service charges, demand charges , standby charges and
annual and monthly charges .
In the case of a service user employing cogeneration
technology, the tax imposed by this section shall be based upon
the legal rate per kilowatt cogenerated, as charged by the
applicable public utility.
3 .36 . 130 Collection of tax . The amount of tax imposed by
this chapter shall be collected from the service user by the
service supplier .
SECTION 2 . This ordinance shall take effect thirty days
after its adoption.
j PASSED AND ADOPTED by the City Council of the City of
Huntington Beach at a regular meeting thereof held on the 5th
day of July 1988 .
AT ST:
City Clerk Mayot Fro Tem
RE E D A RO E APPROVED AS TO FORM:
,&-.A� �4= ,
City Administrator o2-��e8 City Attorney
A
Chief, d ni trative
Ser ices
rf
-2- 2933
01 No. 2933
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
Y-
I, ALICIA M. WENTWORTH, the duly elected, qualified City
Clerk of the City of Huntington Beach and ex-officio Clerk of the
City Council of the 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 7th day of March
19 88 , and was again read to said City Council at a regular
meeting thereof held on the 5th day of July 1988 and
was passed and adopted by the affirmative vote of more than a majority of
all the members of said City Council.
AYES: Councilmen:
Kelly, Green, Finley, Mays, Winchell
NOES: Councilmen:
Bannister
ABSENT: Councilmen:
Erskine
ity Clerk and ex-officio Clerk
of the City Council of the City
of Huntington Beach, California
2933
;I
wo 6
6'
I
October 26, 1972
I
Michael D. Goyer
Assistant City Manager
City of Cerritos
19400 Pioneer Blvd.
Cerritos, CA 90701
Dear Sir:
DEnclosed is a copy of Article 176 of the Huntington Beach
1. Municipal Code covering Utilities Tax as requested by you.
I
j We are happy to supply .this material. If you wish any
further information, please feel free to contact us.
I� Sincerely,
4
f
Paul C. Jones CMC
City Clerk
I PCJ:p
Encls.
�� l9 Y El
F 1 ;J� I S%
19400 PIONEER BOULEVARD, eegRlr8s, QAUF19C1,NIA, 90701•P.O.BOX 7 PHONE: (213)860-0311
October 241, 1972
City Clerk
City of Huntington Beach
417 Fifth Street
Huntington Beach, California 92648
Dear City Clerk:
Would you please send us a .copy of your ordinance
on utility users tax.
We are considering the imposition of such a tax
in our City and would like to have a copy of your
ordinance for reference.
Thank you.
Very truly yours ,.
(Mrs. ) Jackie Stetson
Secretary .to-
Michael D. Goyer
Assistant City Manager
jss
BARRY A. RABBITT FRANK D. LEE DENNIS G. BRADSHAW JAMES S. REDDICK ROBERT J. WITT
MAYOR MAYOR PROTEM COUNCILMAN COUNCILMAN COUNCILMAN
FNI OF
T
10
p 70
x OFFICE OF THE SECRETARY OF THE TREASURY
4t789 WASHINGTON. D.C. 20220
S EP 10 1971
Dear Mr. Jones:
Thank you for your letter to the Commissioner of Internal
Revenue enclosing a copy of a resolution adopted by the City
Council of Huntington Beach, California, urging that utility
users taxes be deductible from adjusted gross income for Federal
individual income tax purposes. Your correspondence was sent to
the Treasury Department for reply.
The deduction of state and local telephone taxes, and a num-
ber of other state and local excises, by individuals was denied
by the action of the Congress in the Revenue Act of 1964. This
change was supported by the Treasury Department as is indicated
by the enclosed excerpt from the comments on the bill (as passed
by the House of Representatives) by former Secretary Dillon be-
fore the Senate Finance Committee on October 13, 1963. In view
of the fact that the Congress specifically decided to narrow the
scope of the deductibility of state and local taxes in 1964, and
the Treasury supported the action, I feel that a reversal of the
position is doubtful.
We appreciate your interest in sending the resolution, how-
ever, and will give it consideration in our continuing work toward
the general improvement of the tax structure.
*Gerar/dM.
Sincerely yours,
Brannonssociate Director
Office of Tax Analysis
Mr. Paul C. Jones
City Clerk .
City of Huntington Beach, California 9264
OR
Enclosure .It N1ATI
' pN 0NC y..'.,
' flR�ES Tp CoIj
/37>
••. �`....-.�.............».. ...... ...... _ �... ._ ._.._�.....� .._ .r.•...r.s•.l:w•va:Y�tiG...w...:L+.-sa .:-.s'a.drJ..�.a...... ....._.._La:;id3_�fv...a..
110 Itl•wENUI: ACT Oh IOG3
Income are permitted for contributions to churches, educational institution9,and shareholders.
inedic'al and re.:earch facilities. : 2 million tilers
S The bill would 'also make the p'1'esent limitation snore uniform and more (ire dividends
literal, extending: the 10 percent adcliliun:rl deelnc:Lion to donations to tconprofit would have tc
r organizations which are pttblicl.% Supported and controlled. Such (jr;, ions ) f,
r (•, 0) Mould
Nvolild irlOwle. cmlwairlily chest-. health ur;;:uciz;ttinns such as the Career So- 1 yield of 3.9 lie
- ; ciety, the lied Crops, 1nuseuuts, symphony Orchestras, etc. It Would not include represents a si:
i coilLribut.ions to prival.e fonudations:uul Lrust funds. In addition t
Although Very important to many philanthropic organizations, the revenue # tax free under
cast of this provision is expected to be nominal. FttF tax relief front
3. L'asc broadening and equity t they do from
The remaining provisions affecting the individual income tax are ones _Which � ex:lrnple, divid
i
_ 5 � would rare revenue. 'L'he rnc'asures are vital to the Lill, for without the $1 no longer bene
3 1 billion they would raise, rate reduction's of Lhe nla;uitude proposed would not Couple
v
' be possible within the limits Of fiscal I-trttdence. hurlhernlorc, these provisions t couple firing jc
iutprove tax ectuity, so vital Lo our system of Voluutnry Compliance, by reulovilig 1101dil:;s Valued
' uutt:u'r;ulre<l special provisions:end nnnecCssary coniplexities and inequities. 3 Even for tag
i (a.) Restriction of the dMuctin,t for Siaie and local foxes paid.—Under the ` dividend credit
single largest.base-broadeniu.. Measure contained in ILR. ;;ti:; the deduction for =
income tax rate
} nonbusiness taxe. Ipaid would. be limited to State, local, and foreign income and rlitidcnd payn:e
1 real property tales, and `rate and local ipersou:rl property and general sates � insure nn lucre
trues, includin ciun pens:it.ing use taxes. The provision would not nfl'ect taxes betterotTundcr
Incurred in carryiw; on a business Or producing income, which would remain The 4-perc at
fully dedueribly, double t:ix:iti n
1 1 '1 he hit,in effect, ..rnhiLits the deduction of State av:d local. taxes on cigarettes, thus promote zr
I dividend credit
1 } liquor. and gasoline. iiconse fees on im-tor vehicles and operators' permits, and R
1 t ntiseellaneollS taxes ::uc•h is adulissinns or occupancy taxes. although elfin-
E of equity to long
1 :
iuntiu^ the deduction for these items Will produce a relatively Inr;;e amount of in IWO. Since
3 revenue+.it will have aminor impact on the average taxpayer because the burden As for the dt
i is widely dispersed. accrue to taxpa,
1 ' Millitilig the deduction for taxcg as provided would be an important step for- c table 3 of the a
! , ward in tag equity. Under present law fire deductibility of special tales often { alleg:et obtains
depends on the form rather than the substance of the tax. Cigarette taxes, for ) allegectly iwpOse
example, are only deductible if they are levied directly on the consumer, or sep- ing dividend era
l acutely stated anti passed o;t to him at the retail level. As a result, cigarette Victuals. The. =1=
+ taxes are currently deductible for relict^ 7.7 percent of Illnts of _n States and are not deductible It is a much mo
# in°L States. Three States have no cigarette taxes. c
i
This pros isima would sinap measure of tax rc
lifc preparation of returns because the tales in The rev euue,a
i question are typically estimated nu the basis of incomplete records or no records
at all. IL would eliminate present coufusiutl over the relation between the legal (c) The side ):
1, form of fire lax and its dcdueliLilih•. The imprecise ❑altar of tile deductions i of illness or hJur
- claimed for these taxes not auly mikes it dithertilt for taxpayers to derive fair financed Rage or
l benefits from the dednctiel, it also ❑takes it difficult for the Internal Revenue Present late u:ay c
Service to audit elaints. ! so received. `.'he
Certain excise taxes not%- deductible are, in effect, payments for special ben- are excluded trot,
expense dedun—op
' efits provided the users of special facilities. For example, fn 10G1, OG percent the first day _?u:
f1 of the$`.5 bilk():l collected frcrll Mate motor fuel taxes was allocated to highway tiday t.(la � ?10
1 ! coustrmction and maintenance. Like the Federal gasoline tax, which is non- ' As the late:,oty
1 deductihlq tle_se State motor fuel taxes furni part of the price for the use of } truru incene beca
i the hi�Lways. In the same naanncr that toll charges on highnays and Pecs i strays at home be
? paid-for the use of State parks are not now deductible, gasoline taxes paid for aryl still gets ilis
`t the i)cn�onal use of highways should not be cieduetible. i Of his pay. His<
( + This provision of the bill would provide ,20 million in additional revenues, 1
l .t , i no such cxclu-foil.
e �hfch hakes it the largest singlo base-broadeuin; provision in ILIt. SM. The Iexclufonse bill
} (b) Repeal of dividend credit and increase of dicid and r.:rrlusion.—Present loaned and;hhree
.• + t lair prevido -ill exchision from taxable i:rc•nnw of the lir�t $50 of dividends in- i Si 1 would cousin
Collie (c1D0 fur a -riot! coalplc where each has$•-,0 or more of dividend income) work for .',0 caiem
alit a credit a„aiast Lax liability of 4 percent of dividends which exceed $50. The revenue g, i
The IIonsc hill would rednee the tax credit to 2 percent, effective in 1064, and
(cl) .lfirvor Casa.
elinifnnte it in 1t 65. The bill tyottld increase the :uu+nuat of exclusion to the ( ilrilrvtion is sivail:
1 first. "lot) of dividend ii,vowP ($200 for a married couple), effective in 106-1. al,ility to
i The• l lnn.<c ;i:sir a is noressary to jn lify tile. rates adoi,(ed for middle and ir,se• pay for I
i upper incorna Lraci:ets. The net ret•enue ;Hill front sire ITonsa action is esti- of :t type 1i
mated at cl (t million in 7`.l:;l and ''00 million in SOG�i. The reseal of the credit 1i:trclship on the ta'.
j to everyone's ex le
wotttd ,^,aiu �a,0 tllillion hat would be offset somewhat by the higher exclusion r'xPctpce�. i
!f Ile f::r.
i whi,1t would conk c70 million. ; rninur IosseS is well
The 150 CSCIURIoil was enacted it, 1954 primarily for the benefit of very small tnsur:uuc policies.
t }' 01_532-0
—i
rt
- 4
August 30, 1971
Peggy Moore, City Clerk
City 'of Long Beach
205 W. Broadway
Long Beach, CA 90802
Dear Peggy:
The City Council of Huntington Beach, at its regular
adjourned meeting held August 23, 1971, adopted Res-
olution No. 3354 urging that the Utility Users TPa.xes
❑ be made deductible from adjusted gross income fox° Fed-
eral individual income tax purposes .
Enclosed is a certified copy of said resolution which
is being sent to you as a Director of The League of
California Cities, with a request that this matter be
presented to the League in resolution form for their
consideration.
Sincerely yours,,
Paul C. Jones
City Clerk
PCJ: pj
Encl.
August 30, 1971
Robert Wilson, Mayor
City of Costa Mesa
c/o The Awning Man
2000 Aliso
Costa Mesa, CA
Dear Bob.
The City Council of Huntington Beach, at its regular
adjourned meeting held August .23, 1971, adopted Res-
olution No. 3354 urging that the Utility Users Taxes
be made deductible from.adjusted gross income for
Federal individual income tax purposes .
Enclosed is a certified copy of said resolution which
is being sent to you as a Director of The League of
California Cities, with a request- that this matter be
presented to the League in resolution form for their
consideration.
Sincerely yours,
Paul C. Jones :f
City Clerk
_ J
PCJ: pj
Encl.
LEAGUE OF CALIFORnIR CITIES
MEMBER NATIONAL LEAGUE OF CITIES
(Formerly—American Municipal Association)
"WESTERN CITY" OFFICIAL PUBLICATION
Sacramento 95814 . . 1108 "0" Street . . 444-5790 . . Area Code 916
Berkeley 94705 . . Hotel Claremont . 843-3083 Area Code 415
Los Angeles 90017 . . 702 Hilton Center . . 624-4934 . . Area Code 213
Sacramento, Ca.. 95814
September 10, 1971
Mrs. Margaret L. Moore
City Clerk
City of Long Beach
City Mall
Long Beach, Ca. 90802
Dear Peggy:
Thanks for sending us a copy of the Huntington beach
resolution on utility users taxes. This resolution has
been included in those which will be considered at the
Annual Conference. While your letter indicates that it
should be placed on the Board agenda, it actually will
he on the agenda for the General Resolutions Committee.
We look forward to seeing you in San Francisco.
Sincerely,
-Richard Carpenter
Executive Director
and General Counsel
SRC c mvb
cc: Mayor Robert M. Wilson
Paul C. Jones ;.�
i
CRAIG HOSMER COMMTT7EE8:
V�
MEMBER OF CONGRESS - - JOINT COMMITTEE ON
CALIFORNIA ATOMIC ENERGY
INTERIOR AND INSULAR AFFAIRS
�Co grey of the Eniteb Otato
joouze of Repregentatibe.0
Wabington,O.C. 20515
August 31, 1971
Dear Mr. Jones:
In the absence of Congressman Hosmer, who
is out of the city during the summer recess of
the Congress, I am acknowledging receipt of your
recent letter.
You may be assured as soon as Congressman
Hosmer returns to Washington the resolution
adopted by the Huntington Beach City Council with
regard to the utility users tax will be brought
to his attention. I am confident Mr. Hosmer will
be happy to have the views of the Council on this
matter.
Very truly yours,
%.1abeth Finlayson 7-
Legislative Assistant to
CRAIG HOSMER
f Member of Congress
Mr. Paul C. Jones, City Clerk
City of Huntington Beach
P. 0. Box 190
Huntington Beach, California 92648
R
August 25, 1971
Winston Updegreff, Executive Secretary
League .of Cities, orange County Division
635-A Ramona
Laguna Beach, CA 92651
Dear Winston:
The City Council of Huntington Beach, at its regular adjourn-
ed meeting held August 23, 1971, adopted Resolution No. 3354
urging that the. Utility Users Taxes be made deductible from
adjusted gross income for Federal individual income tax
purposes*
Enclosed in a certified copy of said resolution urging that
administrative and legislative action, as necessary, ba
taken to authorize such deduction.
Sincerely yours,.
Paul C. Jones
City Clekk
PCJ:aw
Enc.
r
August 25, 1971
League of California Cities
110 '0 Street *
Sacramento, GA 95814
Attention: Richard Carpenter
Executive Director
Gentlemen.-
The City Council'of Huntington Beach, at its regular adjburne
ed meeting held ;A st 23, 1971, adopted Resolution No. 3354
urging that the Uf- lity Users Taxes be made-deductible from
adjusted gross income for Federal individual income tax
purposes,.
Enclosed is a certified cop of said resolution urging that
administrative and legislative action, as necessary, be
taken to authorize such deduction.
Sincerely yours,
Paul C: Jones
City Clerk
PCJ:aw
Enc.
I
August 25, 1971
City of Fresno
2326 Fresno Street
Fresno, CA 93721
Attention: Jacqueline L. Ryle
City Clerk
Bear Mrs. Ryle:
The City Council of Huntington Beach, at its regular adjourn-
ed meeting held August 23, 1971, adopted Resolution No. 3354E
urging that the Utility Users Taxes be made deductible from
adjusted gross income for Federal individual income tax
purposes.
Enclosed is a certified copy of said resolution urging that
administrative and legislative action, as necessary, be
taken to authorize such deduction, for your information.
Sincerely yours,
Paul C. Jones
City Clerk
PCJ:aw
Enc.
August 24, 1971
The Honorable Alan Cranston
Senate Office Building
Washington, D.C., 205
Dear Senator Cranston:
The City Council of Huntington Beach, at its regular adjourn.
ed meeting
held August 23* 1971 adoppted Resolution No. 3354
ur i.ng that th6- Utility users Taxes be made deductible from
adjusted gross income for Federal individual income tax
❑ purposes, ,
Enclosed is a certified copy of said resolution urging
that administrative and legislative action. as necessary,
be taken to authorize such deduction.
Sincerely yours,,
Paul C. Jones
City Clerk
PCJ.aw
Enc
August 240 1971
The Honorable John G. Schmitz
House Office Building
Washington, D:C� 20915
Dear Congressman. Schmitz:
The City Council of Huntington Beach,, at its regular adjourni=
ed meeting held A ust 23, 1971, ado p ted ?resolution No. 3354
urging that thw UC lity Users Taxes be made deductible from
adjusted gross income for Federal individual income tax
purpoeee;
Enclosed is a certified copy of said regolution urging
that administrative and legislative actIons, as necessary,
be taken to authorize such deduction:
Sincerely yours,
Paul. C, ;Tones
City Clerk
PC3aw
Enc.
E
R
Ault 249 1971
The Honorable Richard T. Hanna
U06 Office NA14
washingtou'v DX.. 15
Dear Congressman Ranow
The Cit Council of Huntington Beach, at its regular adjourn-
ed meet held A t 30 19710 adopted Resolution No. 3354
urging that theUt
lity Users Taxes; be made deductible from
ad, u sted g%*ss iuceme 'r Federal individual imome tax
purposes.
Enclosed is a certified copy of said resolution urging
that administrative and, legislative action, as necessary,
be tam to authorize such deduction,
Sincerely yours,
Paul C. Jones
City Claris
PCJ:aw
Eno.
August 24, 1971
The Honorable Jahn Vo Tunny
Senate Office Building
Washington, D.C. 20510
Dear Senator Tunneys
The City Council of Huntington Beach, at its regular adjourned
meeting held AUt 23. 1971, adopted Resolution No. 3354
urging that Uti, ity Users Taxes be made deductible from
adjusted gross ;income for Federal individual income tax
❑ purposes.
Enclosed is a certified copy of said resolution urging
that administrative and legislative action, as necessary,
be- taken to authorize such deduction.
Sincerely yours;
Paul C. Jones
City Clerk
PCJzaw
Enc..
r
August 24, 1971
The Honorable Craig Hosmer
House Office Building
Washington, D.C. 205151
Dear Congressman Hosmer:
The City Council of Huntington Beach, at its regular adjourned
meeting held August 23, 1971, adopted Resolution No. 3354
ur ingg that Utility users Taxes be made deductible from
adjusted gross income for Federal individual income tax
purposes.
Enclosed is a certified copy of said resolution urging
that administrative and legislative action, as necessary,
be taken to authorize such deduction.
Sincerely yours,
Paul C,. Janes
City Clerk
PCJ:aw
Enc.
r _
August 24, 1971
commissioner of Internal Revenue
Washington,, D.C.
Dear Sit:
The City Cbuhcil of Huntington Beech, at its regular adjourn-
ed meeting held 'Auguat 23 p ,1971 g adopted Resolution Wo p 3354
urging that utility Users Taxes be made deductiblb from
,adjusted Bross income for, Federal individual income tax
purposes.:
ncic ed is a certified copy of said resolution urging
that administrative and legislative action,. as necessary
be taken to authorize such deduction.
Sincerely youts.q
Paul C s Jones
City Clerk
PCJ-'."aw
Enc
August 24, 1971
The Honorable B. F. Sisk
House Office Buildin
Washington, D.C. 20115
Dear Congressman Sisk:
The City Council of Huntington Beach, at its regular adjourn-
ed meeting held August 23, 1971, adopted Resolution No. 3354
urging that Utility Users Taxes be made deductible from
adjusted gross income for Federal individual intone fax
purposed.
Enclosed is a certified copy of said resolution urging
that administrative and legislative action, as necessary,
be taken to authorize such deduction.
Sincerely yours,
Paul C. Jones
City Clerk
PCJsaw
Enc.
.`)
4
RESOLUTION NO. 3354
A RESOLUTION OF THE CITY COUNCIL OF. THE CITY OF
HUNTINGTON BEACH URGING THAT UTILITY USERS TAXES
BE MADE DEDUCTIBLE FROM ADJUSTED GROSS INCOME FOR
FEDERAL INDIVIDUAL INCOME TAX PURPOSES
RESOLVED BY THE COUNCIL OF THE CITY OF HUNTINGTON BEACH
that:
WHEREAS, the City of Huntington Beach and more than forty
, other California cities levy a utility users tax upon users of
intrastate telephone service, gas and electricity; and
. The Internal Revenue Service has ruled that under the pro-
visions of the Internal Revenue. Code taxes paid under said u®
tility users tax levy are not deductible on the Federal income
tax returns of individual taxpayers, although such taxes are
deductible as a business expense when incurred in the carrying
.. on of a trade or business; and
The nondeduc slit tib y of the utility users tax on individual
returns is a matter of substantial public interest in that tax-
payers now numbering in the millions in Cali-fornia alone are now
paying this tax; and
a The Internal Revenue Code specifically permits the deduc-
tion of general sales taxes and state and local taxes on gaso-
line and other motor fuels, and it would appear that the utility
users tax, being similarly imposed on necessities and having the
same final incidence, should also be deductible,
u, NOW, THEREFORE, this Council, on behalf of the individual
income taxpayers of this city, hereby urges that administrative
j or legislative action, as shall be necessary, be taken to author-
i4e the deduction of utility users taxes on Federal individual
..ncome tax returns . *
4
t
,A IJESOLVEP. FURTHER that certified aopges of, this resolution
be transmitted by the ..01ty " Clerk to the Commiaoioner of Internal
Revenue, Washington, D. C. , to Congressman B: F. Sisk, 16th
Congressional Distrivt;. ,and to California,'Senators Alan Cranston
M
and- John V. Tunney. .
k • PASSED AND ADOPTFD by the City Council of the City of
E. Huntington Beach at an adjourned regular meeting thereof held
u, on the 23rd dray of August, 1971.
4 day or
ATTEST:
1'>4 I'G y4o2n rk
APPROVED AS TO FORM
r
F My Attorp6y
r
4
4
141.
`Y
ti y
2.
, M
Res. No® 33
STATE OF CALIFORNIA
{ COUNTY OF ORANGE ss:
' CITY OF HUNTINGTON BEACH ).
I, FAUL C. JONES, the- duly .elected., qualified and
acting 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 Nptington Beach is `sieven; that the foregoing
i ` resolution was passed- and adopted by the affirmative vote of
mare than a majority of all the members of said City Council
at a ,regutlar �urned_._ meeting thereof held on the ,2
day of Auk, _, 19 71 t by the .following vats
AYES: councilmen:
Sh3 le B&rtlett Green Coen McCracken
NOES Councilmen:
None
ABSENT: Counoilmen:
}; GMej MItney
Ci y C1erk and -officio Clerk
s of the Clay Council. of the City
' of Huntington Beach, Califernia.
p ,
(O
LE UE OF CALIFORRIA dRES
MEMBER NATIONAL LEAGUE OF CITIES
"WESTERN CITY" OFFICIAL PUBLICATION
Sacramento 95814 , , 1108 "O"Street . , 444-5790 , , Area Code 916
Berkeley 94705 Hotel Claremont 843-3083 Area Code 415
Los Angeles 90017. . 702 Hilton Center. . 6244934 . , Area Code 213
OFFICERS
President:
CLIFFORD F.LOADER
Mayor,Delano
First vice President Sacramento, Ca. -95814
RAY D.PRUETER
Mayor,Port Hueneme August -27, 1971
Second Vice President-Treasurer
THOMAS J.MELLON
Chief Administrative Officer
San Francisco
Past President:
EDWIN W.WADE
Mayor,Long Beach
Executive Director and
General Counsel:
R I CHARD CARPENTER Mr. Paul C. Jones
DIRECTORS City Clerk
ALFRED A.AFFINITO City of Huntington .Beach-
City Councilman,Pittsburg P. 0. BOX 190
RICHARD COLEMAN Planning Director,Pomona Huntington Beach, Ca. 92648
FRANK CURRAN
Mayor,San Diego Dear Paul:
LEE H.DAVIES
Mayor,Modesto This will acknowledge receipt of the City Council's
ALLEN GRIMES
City Attorney,Beverly Hills Resolution 3354 proposing personal income tax deduction
HAROLD M.HAYES for the utility users tax. The resolution will be in-
Mayor,Montclair cluded with those submitted at the Annual Conference
JACK D.MALTESTER and will be referred to the Mayors' and Councilmen's
Mayor,San Leandro
Department for consideration.
JAMES McCARTY
Director of Public Works,Oakland -
MARTIN C.MCDONNELL Sincerely,
Chief of Police,San Mateo
REGINALD E.MOORBY
Fire Ghlef,Burlingame
MARGARET MOORE A/(�/-�((/
City Clerk,Long Beach
ERNEST J.PAAUWE William G. Holliman, Jr.
City Councilman,Salinas Assistant Legal Counsel .
FRANCIS P.PACELLI
Mayor Pro Tem,Daly City
HELEN PUTNAM
Mayor,Petaluma
EDWARD H.RADEMACHER
Mayor,Calipatria
JAMES SNAPP
Mayor,El Cajon -
ALBERT J.TALKIN
City Councilman,Sacramento
JAY M.VER LEE
Director of Parks&Recreation -
Oaklarld
H.DOUGLAS WELLER WGH:mvb
City Manager,Alameda
HOWARD H.WIEFELS
Mayor,Palm Springs
ROBERT M.WILSON
Mayor,Costa Mesa
SAM YORTY
Mayor,Los Angeles
Cable Address— LEAGUECAL,Berkeley,U.S.A.
14 August 1970
TO : City Council
FROM: City Attorney
SUBJECT : Ordinance Imposing Utilities Tax
Ordinance No. . 1598
The attached ordinance imposing a tax on certain
utilities was prepared at Council direction, and
is submitted herewith for Council approval.
Respectfully submitted,
DON P. BONFA
City Attorney
/ahb
Attachment
Huntington Center Merchants Association
OyU/Itl/19t0/1 �ie/It®r 24 Huntington Center, 7777 Edinger Avenue
Huntington Beach, California 92647
Phone (714) 897-2533
,l
September 2, 1970
The Mayor and City Councilmen,
City of Huntington Beach, E•_ r. ,5; 1
Huntington Beach Calif.
-----------------
...:...
Gentlemen, �, r r
By unanimous vote of the Board of Directors- of the Huntington
Center Merchants Association, the center office has been
directed to inform city councilmen of the grave concern
of the membership relative to the proposed 5% utilities tax.
Application of the tax in its present form would result
in an extreme hardship in additional business expense for
most of the merchants of the Association, increasing
taxes in some cases by 8 to 10 times the present business
license tax.
The council is advised that- passage of this legislation
could have a very detrimental effect upon business in
Huntington Center, resulting in commensurate cut backs in
personnel employed, diminished utility usage and curtailment
in promotional activities.
Sincerely,
Howard* N. Whittaker
Center Manager.
cc(: Paul Jones, City Clerk cc:Board Members:
-
Ben Arguello,Finance Director H.Matheny, Mont Wards
Doyle Miller, City Administrator, G.West Penneys
Don Bonfa, City Attorney A. Hanner. Broadway
.Forsman Bonds
Ralph Kiser, Chamber of Commerce E. Hindson Leeds
E. Quick Trend OFashion
C. Waterman,Deweys _
K.Appleman,Harris and
Frank
J.Schumacher,Center.
HUNTINGTON BEACH CHAMBER of COMMERCE
• 18582 BEACH BOULEVARD. SUITE 224 HUNTINGTON BEACH.CALIFORNIA 92646
September 3, 1970 1'EL tiONE1714Yes2 .----
HUNTINGTON BEACH
TO: Honorable Mayor and City Council �' . b
7
------
SUBJECT: Proposed City Tax
The Huntington Beach Chamber of Commerce on 1 September 1970 convened a
meeting of representatives of the City's business community to consider pro-
posed City Tax actions, dealing most specifically with a Utility Tax, the
business license tax, and other tax matters.
The consensus of the Chamber is summarized as follows:
1. In recognition of growing City needs, the business community would con-
Sider the following tax increases as the maximum, reasonable and proper
at this time:
a. A 50% increase in business license fees which should provide
the City about $100,000 per year in increased revenue.
b. The application of a 2% Utility Tax which should provide the
City about $500,000 per year in increased revenue of which
the business community would provide about two thirds or
about $330,000 per year.
c. Application of an apartment tax of $5-per-unit which should
produce about $50,000 per year intitially and average over
$70,000 per year over the next five years.
Under this plan the needs of the City, as understood by the Chamber, would be
met for at least the next five years. In fact, the plan should accumulate a sur-
plus a.-:Tfic,- total average annual revenue increase would amount to abaft $670,000.
Of this the business community would provide about $430,000 or almost 65%.
The Chamber believes it would be inappropriate to suspend the trash collection
fee, which is essentially a fee for service rendered, and substitute a true tax.
The Chamber also believes it would be unwise to levy an unnecessarily large
tax in any form (such as a 5% Utility Tax) at this time. It is considered more
prudent to allow for increases in tax levies in the future if expenditure require-
ments so dictate.
2. The business community continues to be concerned about the rapidly grow-
ing costs of City government. City expenditures have grown more than
40% in the past two years while City population and total assessed value
have grown less than 20%. The high costs necessarily associated with
the rapid growth of our City in the past decade are recognized. However,
the City must protect it's long-term economic viability. It must establish
a spending pattern nnmpatihle with it's ability to tax and this, in turn, will
a � -
4 - 2 -
depend upon the continued growth in assessed value and business
activity. If tax rates in the near term become excessive, the rate
of growth of business, industry and home ownership could suffer.
It is particularly important at this juncture to very carefully evaluate
the costs of the contemplated capital improvement program. The Cham-
ber is in complete agreement with the desirability of providing a new
City Hall and Library facility and with the need for adequate Police and
Fire facilities. However, it is clear that good judgement must be exer-
cised in planning these programs lest their cost become overly burden-
some. The present economic environment is not conducive to unrestrained
spending. Consideration should be given to a phased program of con-
struction which would limit initial expenditures and yet permit subsequent
expansion to meet the City's needs and ability to pay.
3. The Chamber reiterates its previous recommendation regarding the devel-
opment of a five-year financial plan for the City. Such a plan would
provide a basis for projecting needed expenditures and establishing an
equitable plan of taxation to provide the needed revenue. The Chamber
would remind the Council that it has endorsed the preparation of such a
plan.
The Chamber of Commerce requests an opportunity to present its views to the
City Council prior to final action by the Council on any tax revisions.
Pete Horton
President
PH/jw
cc: City Administrator Doyle Miller
City Clerk Paul Jones
Page #4 -- Counci, .inutes - 9/8/70
RECESS
Mayor Shipley called a recess of the Council at 5:55 P. M. The meet-
ing was reconvened at 7:30 P. M. by the Mayor.
REPORT'I'ItADOWLARK AIRPORT
Mr. Robert Dingwall, Chairman of the Meadowlark Airport Committee
addressed Council regarding their investigations of the safety situa-
tion at.the airport. He informed Council of a telegram received from
the State Department of Aeronautics stating that safety of operations
had been improved at the airport, notably, the paving of runway overrun
and the installation of lights for night operations. .
Mr. Dingwall then presented film slides of the airport property includ-
ing the approach and descent patterns and the position of the powerlines
to the runway approach of. the airport. . He stated that more information
must be obtained by the committee before a final report and recommenda-
tion is presented to Council.
Mr. Arnold Kessler-; State. Department of Aeronautics .Consultant; addressed
Council and discussed night operations at the airport ind .plans to under-
ground the utility poles lying in the airport's approach pattern.
Discussion was held by Council regarding possible. methods that the City
could use to insure the observance of safety regulations at the airport,
and the City Administrator was requested to investigate .this matter.
Mr. Lionel .Graves, Technical.Appraiser of Dahl Graves Realty, addressed
Council regarding the necessity of strengthening the safety precautions
at the airport.
Mr. Dan Swartz, representing the members of "Residents Against Airport
Hazards:', addressed Council regarding ,-the legality of the installation
of lights to permit night operations at Meadowlark Airport.
Mayor Shipley called a brief recess of the Council- at 9:15 P. M.
Council was reconvened at 9:25 P. M. by the Mayor. .
A motion was made by Councilman Green, to continue the nori-implementa-
tion of the existing Cease and Desist Order until the meeting of
September 21, 1970. When voted on, the motion was unanimously carried.
CENTRAL PARKACQUISITION & DEVELOPMENT PROGRAM,
The City Administrator informed Council that Mr. Thomas Severna., Develop-
ment Coordinator was prepared to report on the Central City Park Acquisi-
tion and Development Program.
Mr. Severns stated .that Phases .I.and II of. the. Central Park acquisition
program was. proceeding on. schedule and that 205 acres of property
would be available for primary development by July 1, 1971. He also
presented a report regarding the, funding of. the project and the total
Federal grants received for the. project by the City.
The City Administrator. presented recommendations to 'Council for the
filing of acquisition. grants, .authori-zation for increase in the area
designated for primary construction and authorization for.the supplemen-
tal schematic design for Phase III grants, incorporating recommendations
by Federal Grant Administrators.
On motion by Matney, Council approved the, recommendations of the City
Administrator and authorized the filing for acquisition grants .for the
balance of Phases II and III of the central Park project and the
supplemental schematic design for Phase III grants incorporating uses
ecommended.by Federal Grant Administrators, together with an increase
in area from 145 acres to 205 acres. for primary construction in 1571.
Motion carried.
ORDINANCE Ny. 1598 - ADOPTED - UTILITIES :TAX .
The Clerk presented_ Ordinance No. 1598 for a. second reading.by title -
"AN ORDINANCE OF THE CITY OF HUNTINGTON_BEACH AMENDINO. CHAPTER.177 OF
THE HUNTINGTON BEACH ORDINANCE CODE BY ADDING THERETO ARTICLE 176 PER-
TAINING TO A UTILITIES TAX."
Page N5 - Councr- minutes - 9/8/70
The Clark read communications from the Huntington Center Merchants
Association and the Huntington Beach Chamber of Commerce stating their
opposition to the proposed Utilities Tax.
Mr. Al Hanner, Manager of the Broadway Department Store, City, addressed
Council and. stated that passage of a utilities tax.could have a.detri-
mental effect upon the business community resulting in personnel cut-'
backs, diminished. utility usage and curtailment in promotional actiVitles.
Mr. George :West, manager. of .J. C. Penny Department Store, City, addressed
Council and stated that he.was strongly opposed to the proposed utilities
tax, based on the effect it would have on- the economy of local businesses
in competing with. businesses in other communities.
Mr. Dick Crowl, Newport Beach- City Councilman addressed Council regard-
ing this matter and the proposed increase in the.business license fees
for apartment dwellings.
Considerable discussion on the matter was held by Council..
Following reading. by title, on motion,by Green, Council,waived further
reading of Ordinance No. 1598 by the following roll call vote:
AYES: Councilmen: Green, Bartlett, McCracken, Gibbs, Matney, Shipley
NOES: Councilmen: None
ABSENT: Councilmen: Coen '
On motion by Green, Council passed and adopted Ordinance No. 1598,
by the following roll. call vote:
AYES: Councilmen: Green, Gibbs, Matney, Shipley
NOES: Councilmen: Bartlett, McCracken
ABSENT: Councilmen: Coen
ADDITIONAL ORDINANCES FOR ADOPTION
The Clerk informed Council of a correction on Section 9242 (d) of
Ordinance No. 1599 pertaining to the minimum site area.
On motion by Green, Council directed the Clerk to read Ordinance
Nos. 1599, 1600, 1601, and 1602 by title, waived further reading and
passed and adopted same by the following roll 'call'vote:
AYES: Councilmen: Green, Bartlett, McCracken, Gibbs, Matney, Shipley
NOES: Councilmen: None
ABSENT: Councilnieni Coen
ORDINANCE N0. 1599 ADOPTED - MOBILEHOME PARKS REGULATIONS .
"AN .ORDINANCE OF THE CITY OF HUNTINGTON BEACH. AMENDING THE HUNTINGTON
BEACH ORDINANCE CODE BY ADDING THERETO ARTICLE 924 OF CHAPTER 92
ESTABLISHING REGULATIONS FOR MOBILEHOME PARKS."
ju .uo
ORDINANCE.NO. 1600 - ADOPTED -. MOBILEHOMES & MOBILEHOME PARKS PROVISIONS
"AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON
BEACH ORDINANCE CODE BY AMENDING SECTIONS 9250 9251.1, 925.1•,2 -AND
9251.2.1 OF ARTICLE 925 AND SECTIONS 9471.. ., ;472, 9472.1 AND -9473,
ARTICLE 947 TO DELETE PROVISIONS PERMITTING MOBILEHOMES AND MOBILE-
HOME PARKS.t
ORDINANCE NO. 1601 —ADOPTED - ERECTION OF SIGNS ON PUBLIC PROPERTY
AN ORDINANCE -OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON
BEACH ORDINANCE CODE -BY AMENDING SECTION.9762.6 PERTAINING TO ERECTION
OF SIGNS ON PUBLIC PROPERTY OR PUBLIC RIGHTS OF WAY."
ORDINANCE NO. 1602 - ADOPTED - PERMITTED USES - C2 AND C3 DISTRICTS
"AN-.ORDINANCE OF T1IE CITY OF HUNTINGTON. BEACH AMENDING THE HUNTINGTON
BEACH ORDINANCE CODE BY AMENDING CERTAIN:SECTIONS. PERTAINING TO PER-
MITTED USES IN THE C2 AND. C3 .DISTRICTS, .AND. PROVIDING. FOR.THE HOLDING
OF PUBLIC HEARINGS IN CONNECTION WITH COMPLAINTS FILED WITH THE BOARD
OF ZONING ADJUSTMENTS CONCERNING HOME OCCUPATIONS."
a
MINUTES
Administrative Annex, Civic Center
Huntington Beach, California
Tuesday, August 18, 1970
Mayor Pro Tempore Matney called the regular adjourned meeting of the
City Council of the City of Huntington Beach to order at 7:00 P. M.
The Pledge of Allegiance was given by all present in the Council Chamber.
ROLL CALL
Councilmen Present: Green, Bartlett, McCracken, Matney,
Coen (arrived at 7:05 P. M.)
Councilmen Absents Gibbs, Shipley
MEADOWLARK/fIRPORT STUDY
Mayor Pro Tempore Matney stated that at the Council meet of August 17,
1970, the Home Council had been requested to form a commie to
explore and report on the situation at Meadowlark Airport, and that
Mr. Robert Dingwall would give a preliminary report for Councills
Information.
Mi.. Robert Dingwall.stated that his committee had discussed .the problems
at Meadowlark Airport with representatives of the Businses.and Trans-
portation Department of the.State of California. He said that the
State engineers had .conducted a survey..of Meadowlark Airport. to check
their compliance with State and Federal requirements and that their
report and recommendations regarding this matter would be transmitted
to Council as soon as possible.
Mayor Pro Tempore Matney stated that he would work with Councilman
McCracken and .Mr. Dingwall, and continued the matter to the September 8,
1970 Council meeting.
iob
UTILITIES ORDINANCE NO. 1598
The City Administrator stated that the .Firuimce Director was prepared to
discuss the proposed Utilities Tax Ordinance for Councill's information.
Mr. Arguello, City Finance Director, addressed-Council arid. explained
the various provisions of the Utility Tax and its relationship "to the
funding of the Capital Improvement Program.
Mr. Jack Feehan, District Manager. of Southern California Gas Company,
addressed Council and stated that his company. was in general agreement
with the provisions of the proposed Ordinance but suggested that charges
for gas used in water'pumping by water corporations and .gas used in
propelling motor vehicles be excluded from the base on which the tax
is imposed.
Following considerable d5.scussion, Council directed that S.1763 (b) be
amended to exempt that gus used in water pumping by water corporations.
The City Clerk was direc,ed to. give Ordinance..No, 1598"a first reading
by title - "AN ORDINANCE OF.THE CITY. OF HUNTINGTON BEACH AMENDING
CHAPTER 17 OF THE HUNTINGTON BEACH ORDINANCE CODE BY ADDING THERETO
ARTICLE 176 PERTAINING TO A UTILITIES TAX."
.On motion by Green, Council iraived further reading of Ordinance No. 1598,
as amended, by the following unanimous roll call vote:
AYES: Councilmen: Green, Bartlett, McCracken, Matney, Coen
NOES: . Councilmen: None
ABSENT: Councilmen: Gibbs, Shipley
RESOLUTION NO. a209 - SPECIAL MUNICIPAL ELECTION - ADOPTED
The Clerk presented Resolution No. 3209 for Council consideration .- "A
RESOLUTION OF THE CITY CODUNCIL OF THE CITY OF HUNTINGTON.BEACH, ORDERING,
CALLING PROVIDI.NG FOR AND GAPING NOTICE OF A SPECIAL MUNICIPAL ELECTION
TO BE aLD_ IN SAID_CITY ON NOVEMBER 3, 1970, FOR THE PURPOSE OF SUBMIT-
TING TO THE QUALIFIED VOTERS OF SAID CITY VARIOUS AMENDMENTS TO THE .
CITY CHARTER AND CONSOLIDATING SAID ELECTION WITH THE STATEWIDE GENERAL
ELECTION TO BE HELD ON SAID.DATE." ,C
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Page #5 - Council Minutes - 8/17/70
ORDINANCE No: 595 - ADOPTED - GAS FRANCHISE - PACIFIC LIGHTING
The Clerk gave Ordinance No. 1595 a second reading by title - "AN
ORDINANCE OF THE CITY .OF HUNTINGTON BEACH GRANTING TO PACIFIC LIGHTING
SERVICE COMPANY, A CORPORATION., THE RIGHT, PRIVILEGE AND FRANCHISE'TO
LAY AND USE PIPES AND APPURTENANCES FOR TRANSMITTING AND DISTRIBUTING
GAS FOR ANY AND ALL PURPOSES UNDER, ALONG, ACROSS OR UPON THE PUBLIC
STREETS, WAYS, ALLEYS .AND PLACES AS THE SAME NOW OR MAY HEREAFTER
EXIST, WITHIN SAID MUNICIPALITY '
On motion. by McCracken, Council waived further reading of -Ordinance
No. 1595 by the following roll call vote:
AYES: Councilmen: Green, Bartlett, McCracken, Matney, Coen
NOES: Councilmen: None
ABSENT: Councilmen: Gibbs, Shipley
On motion by McCracken, Council passed and adopted Ordinance No. 1595,
by the following roll call vote:
AYES: Councilmen: Bartlett, McCracken, Matney, Coen
NOES: Councilmen: Green
ABSENT: Councilmen: Gibbs, Shipley .
ORD. N0. 14Jd� ADOPTED - AMENDS ARTICLE PARK & REC. FACILITIES
The Clerk gave Ordinance No. 1596 a second reading by title - "AN
ORDINANCE OF THE CITY OF'HUNTINGTON.BEACH A14ENDING -THE HUNTINGTON
BEACH ORDINANCE CODE BY.AMBNDING ARTICLE 974 THEREOF PERTAINING TO
PARK AND RECREATIONAL FACILITIES."
On motion by Green, Council waived further reading of Ordinance No. 1596
and passed and adopted same by the following roll call vote:
AYES: Councilmen: Green, Bartlett, McCracken, Matney, Coen
NOES Councilmen: None
ABSENT: Councilmen: Gibbs, Shipley
ORD. NO. . §T - ADOPTED - AMENDS. ARTICLE 998 - PARK & REC. FACILITIES
The Clerk gave Ordinance No. 1597 a second, .reading by title. - "AN
ORDINANCE OF THE CITY OF HUNTINGTON. BEACH AMENDING THE HUNTINGTON BEACH
ORDINANCE CODE BY AMENDING ARTICLE 998 THEREOF PERTAINING TO PARKS AND
RECREATIONAL FACILITIES."
On motion by Green, Council waived further reading of Ordinance No. 1597
and passed and adopted same by the following roll call vote:
AYES: Councilmen: Green, Bartlett, McCracken, Matney, .Coen
NOES: Councilmen: None
A133ENT: Councilmen: Gibbs, Shipley
ORD. NO. 15` 8 - UTILITIE:, TAX - DEFERRED
Th•: Clerk pri!sented Ordinance No. 1598 fit a first. reading by title -
"AN ORDINANCE OF THE CIT"..OF HUNTINGTON MACH,. AMENDING CHAPTER 17 OF
Tlis HUNTINGM)N BEACH ORDINANCE CODE BY A)DING THERETO ARTICLE 176 PER-
TAINING TO A UTILITIES TAX."
Mayor Pro Te-apore Matney directed that c3nsideratior of Ordinance No.
11;98 be deferred to the adjourned meeting of August 18, 1970.
REPORTS - COUNCIL COMMITTEES
s9 L
Route #59 Freeway Committee
Ccuncilman Matney requested that the City Administrator send a letter
to Mr.. Larry Soloman. o.f the Jr. Chamber of Commerce; informing him of
his appointment to the Riute #57 Freeway Committee.
Request For Report - Hom: .Council - Meadowlark Airport
Councilman McCrac•ven stated that he believed the safety conditions at
Meadowlark Airport should be investigated and stated that the Home
Ccuncil might form a committee to study and report on this ma1:ter.
' Page '12 - Council Ites 8/3/70
REQUEST FOR INSECT CONTROL
Mr. Flower, a resident of the area near the Central City Park Site
addressed -Council and requested that steps be taken to abate the
weed problem, as large numbers of rodents and insects are ente ring the
homes in the area.
Mayor Pro Tempore Natney referred this matter to the City Administrator.
UPTILITY TAX
Mayor Pro Tempore Matney informed Council that the Director of Finance
was prepared to present a report pertaining to a five percent Utility
Tax.
The Finance Director addressed Council and'stated that he believed a
utility tax .of five percent would be more equitable and preferable
to the present refuse collection charge:
On motion by Green, Council direated that the City Attorney prepare
an ordinance establishing a 5% utility tax, by the following roll
call vote:
AYES: Councilmen: Green, Bartlett, McCracken, Gibbs, Natney, Coen
NOES: Councilmen: None
ABSENT: Councilmen: Shipley y
ADJOURNMENT
.On motion by Coen; the regular meeting of the City Council of the City
of Huntington Beach adjourned to,Wednesday, August 5i 19TO, at 7:00 P.K.,
in the Council Che:mber. Motion carried.
Paul r.Arones
City Clerk and ex-officio Clerk
of the city Council of the. .City
of Huntington Beach, California
9- CN
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ATTEST: y r P
�e gl-
a ies
City lerk
ce: City i t: razor 'ff CIVIC IMPROVEMENT PROGRAM - Date: S-?-70
PROJECT STATUS REPORT
RESENT
p - EST.CONSTR. EST.CONSTR. -
SITE LOC. A/E FIRM
I 1hi 'L.
7ECT TITLE $ SIZE ACQ DATE SITE COST AWARD DATE C1,0DATE PHASE NEXT PHASE � DATE COST REMARKS
-.-_.- _. Dev. 7- 1-71 �� $5 ,995 ,040 A/1 Fe, Esc.
i ` Center Main '1't�, 1- 9-70 335 000 urt Meyer 6�4- I -71 # Schematic ! �esigr►
ic.e Bldg . ( 13 :acres ) Associates 1 $419 ,000 (73)
9-3-69 ! ,
,)oration Gothard y 3- 5-70 $215 , 779 j r None �4- 1-71 . ! - I - 1 7-1 -71 $ 880,000
rd Slater ► (Select A;E y -
(14 . 4 Ac.
t.r21 Goldenwest 1- 3-69 $225 ,000- iiNeutra r 4 - 1 -771 ' Schematic Schematic ' 7-1- 71 $2 , 119 , 350 A/E Fee Est .
br I. 0 Talbert ; ) Associates f ! $175 ,000(8 1/21
�- (18. 6 Ac. ) 1 ► 5-4 - 70
iitorium'a Atlanta 6 j Not - - - Unknown - ( Economic
►.ference' Lake f Acquired I ` f Feasibility i
iter I (10 Acres) i (, I Required
-e Stations . f I ( II
irdy Indust. ± Gothard & 2-lS-67 $ S79'000 ;Anthony >a 6-30 -70" Design Constr. 8-1-70 I $ 250 ,000 ' A/E Fee Est .
Station Murdy Cir. Langford Dev. Documents i $15 ,500 (7%)
(1 Acre) i j 12-9-69 i
:)thard Sta. Gothard $ 1-16-69 $128,765 ;Anthony -$ 3-19-70 ' Design- Constr. 8-1-70 $ 250,000 : A/E Fee Est .
Train.. Ctr. i Ellis Langford 3-19-70 Dev. Documents 8-1-70 300 ,000 $ 15 ,500) 6%
;,ommun.Fac. ' (. 47 Ac. ) j 12-9-69 1 $Z1 ,000)
i I
-_r Sta. Warner & 7- 1-70 Exchange - - ' - - - - Execute Agree .
Sunset Under w/Hunt .Harbour
Sanit. Plat Negotia- I i { F Sanitary Dis'
(2. 3 Ac. ) tion j
t
agnolia Magnolia & 7- 1- 70 - - - - - - Property to be
Station Hamilton f Acquired from
( A Acres) ► ' e - County
ringdale Springdale Dependent on
p
Station on Peck Pr. Development of
Ind. Park