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HomeMy WebLinkAboutUtilities Tax 11/28/90 - 8/3/92 STATE OF CALIFORNIA County of Orange I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: PUBLIC NOTICE LEGAL NOTICE ORDINANCE NO.3162 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH 1_g 9 2 MUNICIPAL CODE AurTllSt' 27 , SECTION 3.36.030 PERTAINING TO TELEPHONE TAX-- CHARGES SYNOPSIS: Ordinance No.3162 amended Section 3.36.030 of the Huntington Beach Municipal Code per- taining to telephone tax Charges. The change in language was made to sim- plify.applications to cellular telephone usage. THE FULL TEXT OF THE ORDINANCE IS AVAIL- ABLE IN THE CITY CLERK'S OFFICE ADOPTED by the City Council of the City of-Hun- tington Beach at an regular meeting held Monday, Au- I declare, under penalty of perjury, that the gust 17, 1992, by the fdl- lowmg roll call vote: foregoing is true and correct. AYES: Councilmem- bers: Robitaille, Moul- ton-Patterson, Winch- AugUst 27 2 ell,Green,Kelly Executed on 199 � 'NOES: Councllmem- a;Cos7esa, California I hers:Silva, MacAllister ABSENT: Council- / members:None . CITY OF HUN- TINGTON BEACH, Con- nie Brockway, Clty Signature Clerk ., l Published Huntington Beach-Fountain Valley In- ,l dependent August 27? 1992. f 084-148 I V . PROOF OF PUBLICATION i l I REQUEST FOR CITY COUNCIL ACTION Date July 6, 1992 Submitted to: Honorable Mayor and City Council Submitted by: Michael T. Uberuaga, City Administrato _ Robert J. Franz, Deputy City Administra Prepared by: Utility Users Tax on Telephone Charges Subject: t7N 17 - _�fi.�iL'�j=p. Amov 7 ,440 Consistent with Council Policy? [XI Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments. STATEMENT OF ISSUE: The City's Utility Tax Ordinance was drafted long before the current cellular telephone technology. Some minor changes to dated language within the ordinance would aid in avoiding any ambiguity. RECOMMENDATION: Adopt the Ordinance 316 2- using language appropriate to today' s technology. ANALYSIS: Most cities adopted very similar utility user tax ordinances a number of years ago. Different forms of telecommunication have resulted from current telephone technology. The City' s outside utility tax consultant has suggested that we delete some of the archaic language from our current ordinance. He feels that this minor housecleaning change to the Utility Users Tax Ordinance will simplify its application to cellular telephone usage. Attached is the letter from the consultant, Donald H. Maynor, which explains this request along with the status of cellular telephone' s unique obstacles when determining appropriate utility tax charges. FUNDING SOURCE: Not applicable. ALTERNATIVES: Maintain present ordinance language. ATTACHMENTS: I . Letter from Consultant, Donald H. Maynor 2. Legislative Draft — Ordinance 3. Ordinance WPADSERT:948 P10 5/85 Legislative Draft 3 , 36 . 030 Telephone tax--Charges . As used in this Section, the term "charges" shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due; nor shall the term "telephone-communication services" include dt maritime-mobile services as defined in Section 2 . 1 of Title 47 of the Code of Federal Regulations, dA/JAYN4A.tY/X,�/Z970 or as that section may be amended from time to time. ORDINANCE NO. AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE SECTION 3 .36 . 030 PERTAINING TO TELEPHONE TAX--CHARGES The City Council of the City of Huntington Beach does ordain as follows : SECTION 1. The Huntington Beach Municipal Code § 3 . 36 . 03.0 is hereby amended to read as follows : 3 ,36 ,030 Telephone tax.--Charges . As used in this Section, the term "charges" shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated telephone service is furnished- for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due; nor shall the term "telephone-communication services" include maritime-mobile services as defined in Section 2 . 1 of Title 47 of the Code of Federal Regulations, or as that section may be amended from time to time. SECTION 2 . This ordinance shall take effect thirty (30) days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of 1992 . Mayor ATTEST: APPROVED AS TO F RM: City Clerk 7_5 ity Attor y R.P4EY.ED AND APPROVED- N TED D: City Administrator 61recto r inistrati Se vices sg: 5/92 : 146 r LAW OFFICE DONALD H. MAY-OB A PROFESSIONAL LAW CORPORATION 3220 ALPINE ROAD, SUITE A PORTOLA VALLEY, CALIFORNIA 94028 (41S)8S4-8898 FACSIMILE (41 S)8S4-8774 MEMORANDUM TO: City of Huntington Beach FROM: Donald H. Maynor IWilk SUBJECT: Utility users tax on cellular telephone DATE: June 1, 1992 Some California cities have in the past attempted to collect a utility users tax on cellular telephone services under their existing utility users tax ordinances but either encountered legal opposition from the cellular companies and their customers, or they concluded that it was beyond their taxing authority for various reasons. Relying upon a fairly recent U.S. Supreme Court decision (Goldberg v. Sweet (1989) 109 S.Ct. 583] , I determined that cities do have the legal authority to collect a utility users tax on certain aspects of cellular telephone services under their existing ordinances, but not on others. Basically, I learned there was both a legal and a practical obstacle that a city must overcome to legally impose and collect a utility users tax on cellular telephone services. The legal obstacle occurs because of the mobile nature of cellular telephone. Under the Goldberg case, a taxing agency (eg. a city or state) may only impose a utility users tax if it can demonstrate a nexus between the taxing agency and the service being taxed. In Goldberg, the U. S. Supreme Court found that the taxing agency (i.e. , the state of Illinois) could impose a utility users tax on interstate and international telephone calls provided that the calls originated or terminated in the taxing agency's territory and the customer's billing or service address was also within the taxing agency' s territory. The problem with cellular telephone is that due to its transportable nature there is no way of determining whether a call originated or terminated within the taxing agency's boundary. Since a taxing nexus under Goldberg cannot be 1 established, a city has no legal basis for taxing the cellular telephone calls (i.e. , the toll charges) themselves. In the past, this problem had discouraged cities from pursuing utility users taxes on cellular telephone services, even though their ordinances specifically applied to all telecommunication services, which presumably included cellular telephone services. Based on my research and discussions with other telecommunication experts, I concluded that a city could legally collect a utility users tax on all cellular telephone services other than the telephone calls or toll charges themselves. Such legally taxable services include activation and termination charges, detail billing, voice mail box, access charges, etc. As you know, about two months ago, I advised all two hundred licensed cellular telephone companies operating in California, that your city administratively interprets its utility users tax ordinance to include taxation of cellular telephone services other than toll charges. For the most part, the cellular telephone companies agreed with my application of the Goldberg rule to cellular telephone services, so long as the city's tax was limited in the manner described above. More importantly, most of the cellular telephone companies agreed to collect such taxes if I could solve a practical obstacle: the accurate determination of which of their customers were located within the City of Huntington Beach. Apparently, this is a major problem for both small and large cellular telephone companies. Furthermore, cellular telephone companies are reluctant to make available their highly-confidential computerized address data to outside firms like myself to confirm the accuracy of their computer data regarding the location of their customers. After some considerable. discussion with the cellular telephone companies, it appears that MRC (with whom I associate in my audit projects) and I have been able to overcome the "identification" obstacle with most of the cellular telephone companies, especially the larger ones. They have generally agreed to cooperate with us, and will now allow us to verify the accuracy of their computerized address data, but in a manner that maintains the confidentiality of their valued customer lists. Once that verification takes place, the cellular telephone companies will be able to accurately determine the location of cellular telephone customers within the taxing cities without fear of inadvertently collecting utility users taxes from nonresidents. We have agreed to provide this valuable service at no charge to the companies. 2 Having overcome these two major obstacles, we now hope that within the next few months many cellular telephone companies will be in a position to efficiently collect utility users taxes from cellular telephone customers within your city under your current utility users tax ordinance. Given the current anti-tax climate, however, it is possible that some customers may oppose such taxes (even though all other forms of telecommunications are subject to this tax) . To minimize the risk of litigation, I am recommending that your city make a minor housecleaning change to its current utility users tax ordinance. Most cities adopted very similar utility users tax ordinances a number of years ago. These ordinances typically contain an obscure reference to federal regulations as they existed over twenty years ago regarding the exemption of "land mobile services" . These federal regulations were adopted long before the current cellular telephone technology, and, as I understand, were aimed at much different form of telecommunication. These outdated regulations, therefore, should have no application today. Nevertheless, as a precautionary measure and to avoid any ambiguity in your utility users tax ordinance, I am recommending that you delete this archaic language from your current ordinances at your earliest convenience. I have noticed that some newer utility users tax ordinances no longer include this old language (even though such cities do not collect utility users taxes on cellular telephone services) . To assist you, I have enclosed a draft ordinance amendment that reflects the recommended deletion. If you have any questions on the taxation of cellular telephone services or the suggested ordinance amendment, please let me know. a:\huntington\memo06O1 3 *At I / ' ORDINANCE NO. 3162 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE SECTION 3 .36 . 030 PERTAINING TO TELEPHONE TAX--CHARGES The City Council of the City of Huntington Beach does ordain as follows : SECTION 1 . The Huntington Beach Municipal Code S 3 . 36 . 030 is hereby amended to read as follows : 3 .36 , 030 Telephone tax--Charges . As used in this Section, the term "charges" shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus .any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due; nor shall the term "telephone-communication services" include maritime-mobile services as defined in Section 2 . 1 of Title 47 of the Code of Federal Regulations, or as that section may be amended from time to time. SECTION 2 . This ordinance shall take effect thirty (30) days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 17th day of August 1992 . Mayor ATTEC,Y���'l�G APPROVED AS TO F RM City Clerk WS'��9 ity Attor tey _ J R EW AND APPROV D• N TE D: 'e� City Administrator Directo r inistrati sSi sg : 5/92 : 146 Ord. No. 3162 STATE OF CALIFORNIA ) COUNTY OF ORANGE ss: CITY OF HUNTINGTON BEACH I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach and ex-officio Clerk of the City Council of 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 therof held on the 3rd day of August 19-u_, and was again read to said City Council at a regular meeting therof held on the l-th day of August , 19 92 , and was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council . AYES: Councilmembers: Rnhi t-ai 1 1 Pi Motsl t-on-Patterson_ Wi nohel.T Careen, Kel 1 y NOES: Councilmembers: Silva. MacAllister. ABSENT: Councilmembers: None My Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California REQUEST FOR CITY COUNCIL ACTIO Date August 3, 1992 Submitted to: Honorable Mayor and City Council Submitted by: Michael T. Uberuaga, City Administrato Prepared by: Robert J. Franz, Deputy City Administra o �J / u Utility Users Tax on Telephone Charges Subject: ON /7— -IZ.-rif�7=p. APO MV'r ` Consistent with Council Policy? [X] Yes [ ] New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions, Attachments. Gav STATEMENT OF ISSUE: The City's Utility Tax Ordinance was drafted long before the current cellular telephone technology. Some minor changes to dated language within the ordinance would aid in avoiding any ambiguity. RECOMMENDATION: Adopt the Ordinance 316 2- using language appropriate to today' s technology. ANALYSIS: Most cities adopted very similar utility user tax ordinances a number of years ago. Different forms of telecommunication have resulted from current telephone technology. The City's outside utility tax consultant has suggested that we delete some of the archaic language from our current ordinance. He feels that this minor housecleaning change to the Utility Users Tax Ordinance will simplify its application to cellular telephone usage. Attached is the letter from the consultant, Donald H. Maynor, which explains this request along with the status of cellular telephone' s unique obstacles when determining appropriate utility tax charges. FUNDING SOURCE: Not applicable. ALTERNATIVES: Maintain present ordinance language. ATTACHMENTS: 1 . Letter from Consultant, Donald H. Maynor 2. Legislative Draft - Ordinance 3. Ordinance �i WPADSERT:948 t P10 5/85 Legislative Draft 3 . 36 . 030 Telephone tax--Charges . As used in this Section, the term "charges" shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due; nor shall the term "telephone-communication services" include dt maritime-mobile services as defined in Section 2 . 1 of Title 47 of the Code of Federal Regulations, OA1JAA9XtY1Z'/X978 or as that section may be amended from time to time. LAW OFFICE !! DONALD H. MAYN013 A PROFESSIONAL LAW CORPORATION 3220 ALPINE ROAD, SUITE A PORTOLA VALLEY, CALIFORNIA 94028 (415)854-8898 FAC51MILE (415)854-8774 MEMORANDUM TO: City of Huntington Beach FROM: Donald H. Maynor �Wpk SUBJECT: Utility users tax on cellular telephone DATE: June 1, 1992 Some California cities have in the past attempted to collect a utility users tax on cellular telephone services under their existing utility users tax ordinances but either encountered legal opposition from the cellular companies and their customers, or they concluded that it was beyond their taxing authority for various reasons. Relying upon a fairly recent U.S. Supreme Court decision (Goldberg v. Sweet (1989) 109 S.Ct. 583] , I determined that cities do have the legal authority to collect a utility users tax on certain aspects of cellular telephone services under their existing ordinances, but not on others. Basically, I learned there was both a legal and a practical obstacle that a city must overcome to legally impose and collect a utility users tax on cellular telephone services. The legal obstacle occurs because of the mobile nature of cellular telephone. Under the Goldberg case, a taxing agency (eg. a city or state) may only impose a utility users tax if it can demonstrate a nexus between the taxing agency and the service being taxed. In Goldberg, the U.S. Supreme Court found that the taxing agency (i.e. , the state of Illinois) could impose a utility users tax on interstate and international telephone calls provided that the calls originated or terminated in the taxing agency's territory and the customer's billing or service address was also within the taxing agency's territory. The problem with cellular telephone is that due to its transportable nature there is no way of determining whether a call originated or terminated within the taxing agency's boundary. Since a taxing nexus under Goldberg cannot be 1 established, a city has no legal basis for taxing the cellular telephone calls (i.e. , the toll charges) themselves. In the past, this problem had discouraged cities from pursuing utility users taxes on cellular telephone services, even though their ordinances specifically applied to all telecommunication services, which presumably included cellular telephone services. Based on my research and discussions with other telecommunication experts, I concluded that a city could legally collect a utility users tax on all cellular telephone services other than the telephone calls or toll charges themselves. Such legally taxable services include activation and termination charges, detail billing, voice mail box, access charges, etc. As you know, about two months ago, I advised all two hundred licensed cellular telephone companies operating in California, that your city administratively interprets its utility users tax ordinance to include taxation of cellular telephone services other than toll charges. For the most part, the cellular telephone companies agreed with my application of the Goldberg rule to cellular telephone services, so long as the city's tax was limited in the manner described above. More importantly, most of the cellular telephone companies agreed to collect such taxes if I could solve a practical obstacle: the accurate determination of which of their customers were located within the City of Huntington Beach. Apparently, this is a major problem for both small and large cellular telephone companies. Furthermore, cellular telephone companies are reluctant to make available their highly-confidential computerized address data to outside firms like myself to confirm the accuracy of their computer data regarding the location of their customers. After some considerable discussion with the cellular telephone companies, it appears that MRC (with whom I associate in my audit projects) and I have been able to overcome the "identification" obstacle with most of the cellular telephone companies, especially the larger ones. They have generally agreed to cooperate with us, and will now allow us to verify the accuracy of their computerized address data, but in a manner that maintains the confidentiality of their valued customer lists. Once that verification takes place, the cellular telephone companies will be able to accurately determine the location of cellular telephone customers within the taxing cities without fear of inadvertently collecting utility users taxes from nonresidents. We have agreed to provide this valuable service at no charge to the companies. 2 Having overcome these two major obstacles, we now hope that within the next few months many cellular telephone companies will be in a position to efficiently collect utility users taxes from cellular telephone customers within your city under your current utility users tax ordinance. Given the current anti-tax climate, however, it is possible that some customers may oppose such taxes (even though all other forms of telecommunications are subject to this tax) . To minimize the risk of litigation, I am recommending that your city make a minor housecleaning change to its current utility users tax ordinance. Most cities adopted very similar utility users tax ordinances a number of years ago. These ordinances typically contain an obscure reference to federal regulations as they existed over twenty years ago regarding the exemption of "land mobile services" . These federal regulations were adopted long before the current cellular telephone technology, and, as I understand, were aimed at much different form of telecommunication. These outdated regulations, therefore, should have no application today. Nevertheless, as a precautionary measure and to avoid any ambiguity in your utility users tax ordinance, I am recommending that you delete this archaic language from your current ordinances at your earliest convenience. I have noticed that some newer utility users tax ordinances no longer include this old language (even though such cities do not collect utility users taxes on cellular telephone services) . To assist you, I have enclosed a draft ordinance amendment that reflects the recommended deletion. If you have any questions on the taxation of cellular telephone services or the suggested ordinance amendment, please let me know. a:\huntington\memo06O1 3 H CITY OF HUNTINGTON BEACH CITY COUNCIL COMMUNICATION HUNTINGWW!EACH TO: Honorable Mayor & Fellow City Council Members FROM: Peter Green, City; I! DATE: July 27, 1992 I SUBJECT: Ordiance No. 3162 117 I I respectfully request that the Council consider under new business the above Ordinance with the following title: "An ordinance of the City of Huntington Beach amending the Huntington Beach Municipal Code Section 3.36.030 pertaining to telephone tax - charges." (Amends ordinance using language appropriate to today's technology by simplifying its application to cellular telephone usage. ) Thank you. xc: 'City Administrator City Attorney City Clerk 6-1 -�-9b 7---6 FILE GUIDE Please file this document in: Category: Label : 60 Established file New file — see Other: 0846I DAILY PILOT PUBLISH DATE LEGAL NOTICE ORDINANCE NO. 3162 "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE SECTION 3.36.030 PERTAINING TO TELEPHONE TAX--CHARGES" SYNOPSIS: Ordinance No. 3162 amends the Huntington Beach Ordinance Code to allow the utility tax to be applied to cellular telephone usuage. FULL TEXT OF THE ORDINANCE IS AVAILABLE IN THE CITY CLERK'S OFFICE ADOPTED by the City Council of the City of Huntington Beach at a regular meeting held Monday, k3lyIV14W, by the following roll call vote: AYES: Councilmembers: NOES: Councilmembers: ABSENT: Councilmembers: CITY OF HUNTINGTON BEACH Connie Brockway City Clerk .,� .q CITY OF HUNTINGTON BEACH ka INTER-DEPARTMENT COMMUNICATION HUNnNGTON BEACH TO: COUNCILWOMAN GRACE WINCHELL FROM: GAIL HUTTON, City Attorney DATE: July 28, 1992 SUBJECT: Council Vote on Failed Ordinance Agenda Item 1-B, Ordinance Pertaining to Telephone Tax Charges, City Council Meeting July 20, 1992 FACTS: On July 6, 1992, the council voted 5-2 to introduce Ordinance 3162, "An Ordinance of the City of Huntington Beach Amending Huntington Beach Municipal Code Section 3.36.030 Pertaining to Telephone Tax - Charges. " The proposed ordinance amended the existing code section by using language appropriate to today's technology by simplifying it's application to cellular telephone usage. The principal purpose of this ordinance was to expand revenue under the city's utility tax by including cellular phone service as taxable. Huntington Beach City Charter § 608, Vote Required for Tax Measures, provides as follows: "No tax, property tax, or other measure whose principal Purpose is the raising of revenue, .or any increase in the amount thereof, shall be levied, enacted or established except by ordinance- ad gted by the affirmative vote of at least five (5) members of the City Council. . . " (emphasis added) Since an increase in revenue production is derived from modification of the utility tax to include cellular phones and that action requires five votes. At the regular meeting of July 20, 1992, only six members were present. The motion to adopt received four yes votes, two no votes. Since the ordinance did not receive the required five votes, the ordinance failed adoption. The prevailing side in this instance would be the two "no" votes, which succeeded in defeating the motion to adopt. J COUNCILWOMAN GRACE WINCHELL July 28, 1992 Page 2 QUESTION: You have inquired by what means the city may bring back this item for council consideration. ANSWER• The matter may be brought up in either of two ways, by reconsideration or it may be brought back as new business. ANALYSIS• The matter may be brought back for reconsideration at the same meeting or at the next regular meeting of the city council (August 3, 1992) provided it is brought back to the agenda by motion of a councilmember on the prevailing side. In this instance, since the prevailing side was the two "no" votes, it would be necessary for one of those councilmembers to request reconsideration at the August 3, 1992, meeting. The alternative method would be for any member of the city council to request that the matter be brought back to the agenda as new business (Roberts Rules of Order, Newly Revised 1990 Edition, § 3 p. 26) This could be accomplished by a written request to have . it placed on the agenda as new business by any member of the city council. It will be necessary to go through the introduction period followed by the adoption no sooner than five days thereafter (City Charter § 500(b)) . CONCLUSION: A motion to adopt an ordinance may be brought back as discussed either by a motion to reconsider by the prevailing side, within the appropriate period of time, or as new business. In that instance, . it will require first reading (introduction) and, later, adoption. � l GAIL HUTTON City Attorney GH/rj 1 cc: Mayor Jim Silva and Members of the City Council Michael Uberuaga, City. Administrator Connie Brockway, City Clerk SOUTHERN CALIFORNIA jgds! COMPANY ORANGE COUNTY DIVISION - P. O. BOX 3334, ANAHEW, CAUFORNiA 92803-3334 R. E EMBREY / /I�,.��`/'"�lA General Manager January 10, 19 Connie Brockway City Clerk City of Huntington Beach 200 Main Street Huntington Beach, California 92648 r Dear Ms. Brockway: 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 refunds made in December 1987 . The Gas Company expects to make the refund by credit to bills during February 1991. 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 February 1991. 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 collection's. The refund calculations would be based upon the amount of the utility refund and your City's July 1990 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 January 25, 1991. Sincerely, aj Enclosure ti 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 the Gas Company in implementing tax refunds on behalf of the City. City of Huntington Beach By Position Date Audwimd to Pubbb AdvwdmnWo d aA lords irldtdhp plubfia nodws by Came d do&Wier Coital d olrarps � .�Q• S� Coon%Caff nd% Number A4M4. Sspwnbw 29, 1961.and A,24831 Jurw 11.19M STATE OF CALIFORNIA County of orange I am a Citizen of the United States and a resident of the County aforesaid: I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the OFtANGB COAST DAILY PILOT, a newspaper of general circulation, printed and published In the City of Costa Mesa, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Costa Mesa, Newport Beach, Huntington Beach, Fountain Valley, Irvine, the South Coast communities and Laguna Beach issues of said newspaper to wit PUBLIC NOTICE the issue(s) of: LEGAL NOTICE ORDINANCE NO.3096 " AN ORDINANCE OF THE April 4, 1991 CITY OF HUNTINGTON BEACH AMENDING SEC- TION 3.36.020 OF THE HUNTINGTON BEACH OR- DINANCE CODE RELAT- ING TO A TAX ON TEL- EPHONE COMMUNICA- TION SERVICES SYNOPSIS: 3.36.020 Telephone,TAX_ Imposed.There is imposed a tax upon very, person; in the city, other than;a`tel- ephone corporation, using international, intestate,',and intrastate telephone com- munication services in.the city. The tax imposed by this action shall be_at the rate of 5 percent of all charges made for such services. THE FULL TEXT OF THE ORDINANCE IS AVAILA- BLE IN THE CITY CLERK'S OFFICE ADOPTED by the City Council of the City of Hunt- I declare, under penalty of perjury, that the ington Beach at an ad- journed regular meeting foregoing is true"and correct. held Monday, March 25, 1991, by the following roll call vote: AYES: CounCilmembers: Executed On April 4 t�9 1 MacAllister, winchell, Silva, 7 Green, Kelly, Robitaille, Moulton-Patterson at Costa Mesa. California NOES: CounCilmembers: None ABSENT: Council- members:None CITY OF HUNTING- TON BEACH, Connie Signature Brockway,City Clerk Published Orange.Coast Daily'Pilot April 4,1991 Th212 PROOF OF PUSUCATTON ;ya • 5u 5146j • �2 REQUEST FOR CITY COUNCIL ACTIO March 991 Date Submitted to: Honorable Mayor and City Council Members Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Robert J. Franz, Deputy City Administrato APPROVE NC Subject: Interstate Telephone Utility T x _ 19-W Consistent with Council Policy? p(J Yes V �CaT�YCKIt �� '� Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions,Attachments: Statement of Issue: At present, the City utility tax on telephone billings is applied to calls within the State of California only. If the City's ordinance were modified to include interstate and international calls when applying the tax, additional revenue of $500,000 or more per year would be generated for the General Fund. Recommended Action: Approve Ordinance 30 9 G to add interstate and international telephone usage as being subject to the City's utility tax. (Requires five affirmative votes for passage.) Analysis: Council approved introduction of the attached ordinance at your March 4, 1991 meeting. Second reading was scheduled for Marchl8, 1991 but was continued to March 25, 1991 along with other agenda items that had not been considered prior to 11:45 PM. Attached is the original RCA and analysis on this proposed amendment to our utility tax ordinance. Funding Source: Not applicable. Attachment: 1. Ordinance 30 9 2. Original RCA dated 3/4/91 a Plo 5/85 5146j _3 ' REQUEST FOR CITY COUNCIL ACTION March 4, 1991 Date Submitted to: Honorable Mayor and City Council Members Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Robert J. Franz, Deputy City Administra or Subject: Interstate Telephone Utility Tax 4 Consistent with Council Policy? [ ] Yes [x] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: Statement of Issue: At present, the City utility tax on telephone billings is applied to calls within the State of California only. If the City's ordinance were modified to include interstate and international calls when applying the tax, additional revenue of $500,000 or more per year would be generated for the General Fund. Recommendation: Introduce Ordinance 3096 to add interstate and international telephone usage as being subject to the City's utility tax. (Requires five affirmative votes for passage.) Anal,: In 1970, the City of Huntington Beach adopted a utility tax which applied to use of electrical energy, natural gas, water and intrastate telephone use. At that time, cities were advised that the utility tax on telephone usage could only apply to calls made within the State of California (intrastate use). In 1987, the City of Los Angeles extended their utility tax to include out—of—state calls and international calls. Since that time, other cities have also extended their telephone utility tax to include interstate and international usage. The City of Seal Beach amended their ordinance in 1989. At your February 11, 1991 meeting to review the City's budget problem, Council approved the approach (Option 3) of a combination of expenditure reductions and revenue increases. Attached is the timetable for further review of detailed revenue/expenditure changes. This revenue increase is presented at this time because it is a technical change to our utility tax ordinance that has minor impact on residents and businesses but represents a fairly significant annual revenue increase. Last June, staff recommended this change and Council voted 4-2 in favor of the change. However, since five (5) affirmative votes are necessary, under the City Charter, to modify a city tax, the proposed change failed. The City's revenue from the telephone utility tax should increase, over $500,000 per year, if this amendment is adopted. An estimated $100,000 additional revenue would be received in the 1990/91 fiscal year. 37% of the City's telephone utility tax revenue is derived from phone charges paid by commercial and industrial clients, and 63% is from charges to residential customers. The estimated average monthly increased utility tax payment for residential use would be 620 if this amendment is adopted. Funding Source: Not applicable. Alternative Action: 1. Have utility tax remain unchanged. 2. Request further analysis. Attachment: I. Code Amendment 2. Revenue Increase Timetable Plo 5/85 Authorized to Publish Adverdsemorlts d ail kinds including i Public notices by 0ecree of the superior Court of Orange C4unty. CaUmnia.Number Ar6214. September 29. 1961.and A-24831 June 11, 19M , STATE OF CAUFORNIA County of Orange I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. 1 am a principal cleric of the ORANGE COAST DAILY PILOT, a newspaper of general circulation, printed and published in the City of Costa Mesa, County of Orange. State of California, and that attached Notice is a true and complete copy as was printed and published in the Costa Mesa, Newport Beach, Huntington Beach, Fountain ;PUBClt NOTICE Valley, Irvine, the South Coast communities and ORDINANCE N O. Laguna Beach issues of said news to wit ao9s„ P�r AN ORDINANCE OF the issue(s) of: THE CITY.OF HUNTINGTONIBEACH AMENDING-THE HUNTINGTON BEACHCODE . March 14, 1.991 SECTION 31.36.2 0 PERTAINING TO SENIOR CITIZENS •EXEMPTION SYNOPSIS: Ordinance No. 3095 amends Section 3.36.280 of the Huntington Beach Municipal Code to increase the maximum 1household income for utili- ty tax and trash fee exemp- tion. The income criteria Change from maximum .household income of .3 0,000 to "HUD Income Guidelines - Very Low In- come Category". (Currenty thls category Is $17,200, plus $2,450 for each addi-� tional person In the house hold.) THE FULL TEXT OF THE ORDINANCE IS AVAILA-1 (BLE IN THE CITY CLERK'S OFFICE y declare, under penalty of perjury, that the Co nncil ofDthe City of Hunthe t) foregoing is true and correct, ington Beach d an regular meeting held Monday, March 4, 1991, by the fol- lowing roll call vote: Executed On March 14 AYES: Councilmembers: 199 i- Winchell, Silva, Green, at sta Mesa, Califomia Kelly,Robit u MacAllister NOES: Councilmembers: Noneo&�-*­ - <k., ABSENT: Council- _ members: Moulton- Patterson- CITY OF HUNTING• Signatu TON- BEACH, Connie Brockway,City Clerk- Published O p9p Coast• Daily Pilot March 14,1991 th165 PROOF OF PUBLICATION 5591j REQUEST FOR CITY COUNCIL ACTION (E) Date February 19, 1991 Submitted to: Honorable Mayor and City Council Submitted by: Michael T. Uberuaga, City Administrato gY CITY COUNCIL Prepared by: Robert J. Franz, Deputy City Administrat _ q t9. Subject: Utility Tax and Refuse Charges Exemption Requirement CE,�'- K ep,�Cj - — sj ?Consistent with Council Policy? [ ] Yes [XI New Policy or Exception 5- Statement of Issue, Recommendation, Analysis, Funding Source,Alternative Actions, Attachments: Qt Statement of Issue: Presently, the exemption for utility tax and refuse charges, and the reduced fee for Fire—Med membership, have different criteria. The exemption criteria for utility tax and trash charges is age 60 and a maximum household income of $10,000. The reduced membership fee for Fire-Med is "HUD Income Guidelines - Very Low Income Category" and no age requirements. Currently the HUD income level is $17,200 plus $2,450 for each additional person in the household. Recommendation: Introduce Ordinance #3 0 95 to increase the maximum household income for utility tax and trash fee exemption to the same value used for Fire-Med reduced fee membership. Analysis: The Huntington Beach Municipal Code Section 3.36.280 establishes a complete exemption from utility tax and refuse fees for individuals age 62 or over and a household income of less than $10,000. This income limit was established in December, 1986 Resolution #6093 provides for a reduction of the Fire-Med membership fee to households that meet the "HUD Income Guidelines - Very Low Income Category". This allows the membership fee to be reduced from $36 to $18 per year. By increasing the maximum household income to $17,200 for utility tax and trash fee exemption, the City will lose some revenue. To determine or estimate the amount of revenue reduction, it is necessary to determine how may individuals 60 years or older with a household income between $10,000 and $17,200 live in Huntington Beach. This demographic information is not available from the City, County or State offices. The 1990 census, which is purported to have such demographic information needed will not be available until April, 1991. Staff estimates that the revenue decrease in the General Fund would be between $15,000 and $60,000 if this ordinance is adopted. Other cities vary in the method of addressing an exemption or a reduction of fees for Fire-Med. Anaheim and Fullerton allow an exemption from the Fire-Med fee for individuals eligible for Medical or Medicare. Santa Ana does not allow for any exemption or reduction of fee. None of these cities have a utility tax. Those cities surveyed, who have a utility tax were; Seal Beach, Redondo Beach and Pasadena. Seal Beach allows an exemption for citizens age 65 and household income limit of�$12,500. Redondo Beach allows an exemption to citizens age 62 and household income limit of $12,000 for one person and $12,500 for two people. Pasadena allows an exemption for citizens age 62 and household income limit of $12,000 for one person, $16,000 for two people and $1,000 for each additional person. Funding Source: Not applicable. Alternative Action: I. Wait for census information to provide a more accurate estimate of revenue reduction. -2. Do not change ordinance at this time. Attachments: 1 1. Ordinance No. 2. Income Guidelines as Determined by HUD-1990 NO 5/85 INCOME GUIDELINES AS DETERMINED BY HUD-NEIGHBORHOOD ENHANCEMENT PROGRAM - 1990 TARGETED AREA ONLY Family Very Low Lower Median 120% Median Size Income Income Income Income Type of Loan DPL 3% 6% 8% 1 17,200 25,000 34,400 . 41,280 2 19,650 28,550 39,300 47,160 3 22,100 32,150 44,200 53,040 4 24,550 35,700 49,100 58,920 5 26,500 37,950 53,000 63,600 6 28,500 40,150 57,000 68,400 7 30,450 42,450 60,900 73,080 8 32,400 44,650 64,800 77,760 1. Orange County Median Income for 1990 is $49,100 2. Lower Income is not calculated as 80% of Median ORDINANCE NO. 3095 S-w AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE SECTION 3 . 36 . 280 PERTAINING TO SENIOR CITIZENS - EXEMPTION The City Council of the City of Huntington Beach does ordain as follows : SECTION 1 : The Huntington Beach Municipal Code §3 .36 . 280 is hereby amended to read as follows : 3 , 36 . 280 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 V` 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 does not exceed the "HUD Income Guidelines - Very Low Income Category" currently on file at the City' s Office of the Housing Rehabilitation Administrator, for the calendar year prior to the fiscal year (July 1 through June 30) for which the exemption provided by this chapter is applied. U 1 rt...r:, Y PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting rthe.reof held on the 4th day of March 1991 . \ �� Mayor ATTEST: APPROVED AS TO FORM: 4�q >-�L- �, , -3 City Clerk C' ty Attorney leo REVIEWED AND APPROVED: INI D D P ROVED: Cit Administrator Directo of Admini ra ve Services 2 - Ord. No. 3095 STATE OF CALIFORNIA ) kr<;; s� COUNTY OF ORANGE ss: CITY OF HUNTINGTON BEACH , I , CONNIE BROCKIWAY, the duly elected, qualified City Clerk of the City of Huntington Beach and ex-officio Clerk of +he 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 therof held on the 19th day of February 19 91 , and was again read to said City Council at a regular meeting therof held on the 4th ;lay of March 1991 , and was passed and adopted by the affirmative vote of at least a majority of ail the members of said City Council ,. AYES: Counciimembers: MacAllister, Winchell, Silva, Green, Kelly. Robitaille NOES: Councilmemhers: None ABSENT: Councilmembers: Moulton-Patterson e City Clerk and ex-officit Clerk of the City Council of the City t . of Huntington Beach, California k~r: DAILY PILOT . PUBLISH DATE LEGAL NOTICE ORDINANCE NO. AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE SECTION 3 . 36 . 280 PERTAINING TO SENIOR CITIZENS - EXEMPTION SYNOPSIS: ttie ai,di nanGe /l!e. .301fs amaneh Se etr ° Vve; t-on. eeke YY►un;eipal Code to increase. `ttie -(7^y maXirn u u�r�n household in&orne -� ," u�% It t and trash te 50. e,�►an eJ ��"� ee X ern pt i o rL. TI%t % n C OYY%e c r t 9 .� r►e,o .e, YvloaXirwAYA household int0vVit 9; �vo oa -�o a Ruh I wt �.o�a (v�eorne G�a`te�°"y ' • C Cwrren�t (gtAl defines - Verj ly ea-�e�ory iS ,�1'1, �,00 piers � �., N�So �'o� eael� �eddit�ona! P f-y'S on. ►VL -tine INo%k&t6 Id . THE FULL TEXT OF THE ORDINANCE IS AVAILABLE IN THE CITY CLERK'S OFFICE ADOPTED by the City Council of the Citv of Huntington Beach at an _ regular meeting held rAanI& r�'!lJrGd? ( y the following roll call vote: f AYES: Councilmembers : VJ� v-tp-� O-U, ,$ik_va. &Yee.n, R061t'allle,) Mat 14l111sA . NOES: Councilmembers: �)o n e ABSENT: Councilmembers: A.�oc�/tc/I- s��r�a�'t CITY OF HUNTINGTON BEACH Connie Brockway City Clerk 3 S4o , So FO CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH Connie Brockway, Pat Dapkus,90& To City Clerk From Management Assistant _ JN COUNCIL COMMENT ITEMS Date December 29, 1990 �'r �r Subject JANUARY 7TH MEETING 'S� L)gN Councilwoman Grace Winchell would like to a endize discussion regarding the income �I level at which we allow citizens over 60 to be exempt from the utility tax and trash fee. Would you include the attached material as back up to this item. Mayor. Green would like to agendize approval of his appointments to the City Boards and Commissions. I will have his appointment list to you by Monday's Agenda Review. Thank you. PD:paj xc: Honorable Mayor and City Council Michael T. Uberuaga, City Administrator Rich Barnard, Deputy City Administrator Bob Franz, Deputy City Admin./Chief Admin. Svcs. CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To PAT DAPKUS From ROBERT J. FRANZ Management Aide Deputy City Administrator Subject SENIOR FEE WAIVERS Date NOVEMBER 28, 1990 To change the income limit for the low income senior citizen utility tax exemption, the City would need to change the Huntington Beach Municipal Code, Section 3.36.280. Resolution #6093 established the Fire-Med Program income limit to be the "HUD Income Guidelines - Very Low Income Category". The same language could be used to replace the present language in Code Section 3.36.280. Following is the suggested process to make this change, if desired by Council: 1. Council requests a staff report on financial impact of changing income limits, comparison to exemptions provided by other cities and any other pertinent information. 2. Staff prepares Request for Council Action with complete analysis and recommendation. 3. Council acts on staff recommendation or takes alternative action. ROBERT J. F-RANZ Deputy City Administrator RJF:sd 5538j 0 "INCOME" Code Section 3.36.280 vs. Resolution #6093 The Municipal Code states that combined Federal adjusted gross income for all household members must be less than $10,000. Resolution #6093 states that the "low income household" shall be determined by "HUD Income Guidelines — Very Low Income Category". The present HUD guidelines for "Very Low Income" is $17,200 for a household of one. This amount increases by $2,450 for each additional person within the household.