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HomeMy WebLinkAboutcc min 1977/05/12 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA Held Thursday ~ 4:00 p.m. May 12, 1977 An adjourned regular meeting of the City Council of the City of Chula Vista, California, was held on the above date beginning at 4:06 p.m. in the Council Conference Room, City Hall, 276 Fourth Avenue. ROLL CALL Councilmen present: Mayor Hyde, Councilmen Hobel, Cox, Egdahl, Scott (Councilman Scott assumed Seat No. S after he was sworn in by the City Clerk) Councilmen absent: None Staff present: City Manager Cole, Assistant City Manager Asmus, Director of Finance Grant OATtl OF OFFICE City Clerk Fulasz administered the Oath of Office to newly-appointed Councilman Frank A Scott (Seat No. 3). DISCUSSION OF City Manager Cole referred to the written report submitted UTILITY USERS TAX by Director of Finance Grant in which the following questions asked by the Council at the meeting of May 11, 1977 were answered: maximum tax limits; graduating rate; different rates for business versus residential; the top five consumers who are subject to the utility users tax; property tax rate that would be necessary to offset total revenue collected from utility taxes. (Based on the 1977-78 revenue estimate of $991,000, it would take an additional .3244¢ in the prop- erty tax rate to offset the elimination of the utility tax). City Manager's It was the recommendation of the City Manager that the recommendation Council withhold any action that would reduce the revenue from this source until after budget deliberations. Letter from Rohr Mayor Hyde noted the letter received from Mr. E. Neal Arthur, Legislative Coordinator, Rohr Industries, in which he stated that the firm paid $111,000 in utility tax last year based on the 4-1/2% method. If the consumption method was used, Rohr's bill would have increased by $4,000. Mr. Arthur stated that if the consumption method were to be used, a ceiling provision would have to be established in order to provide any relief to Rohr. Presentation by Mr. Arthur elaborated on his letter by presenting charts E. Neal Arthur showing the amount of cost and consumption for Rohr. He indicated it might be cheaper for the company to develop their own utilities. Councilman Scott remarked that the Public Utilities Company is in the process of changing the commercial rate of "the more you use, the less you pay." Discussion ensued on this question. Mr. Grant said he talked to the SDG&E Company and they indicated that the large commercial users would be going on "a time of day" method -- they can schedule their consumption on off-peak periods, and their rates will vary depending on what time of day their electrical energy will be used. This system will be going in effect in July or August of this year. Adjourned Regular Meeting -2- May 12~ 1977 Ernest Andrade Mr. Andrade explained how the rate system would work and SDG&E informed the Council that it is now under discussion and will probably be mandated in the next two or three months. Residential versus Councilman Cox questioned having different rates for resi- commerical dential and commercial. Larry Peoples, Mr. Peeples commented that the reason for the cheaper rate Rohr of gas and electricity for the larger users was not neces- sarily charitable on the part of the utility companies, but was due to the cost of service in delivery of the killowatts and therms. Will T. Johnstone, J~. Mr. Johnstone asked that the Taxpayers Association's letter President be made a part of the record. The letter recommended (1) Taxpayers Association, abolishment of the tax; or (2) in the event it is not abol- Inc. ished, it should be modified in such a manner that each increase in utility rates should not be reflected in in- creased take from the utility users tax. E. NeaI Arthur Mr. Arthur made reference to the $20,000 which SDG&E would have to charge the City for handling the tax. He suggested a ceiling on the tax be determined at the beginning of the year (for Rohr), and they would pay this amount in a lump sum at the beginning of the year, or in any way most con- venient for the City. This would save the City money by not having to put Rohr on the SDG&E computer. Joseph Scannicchio Mr. Scannicchio stated that from 1970 to the present time Chamber of Conunerce there has been a difference of about $600,000 increase in this tax fund. Mr. Scannicchio suggested that at budget time, the City look at what this money is being spent on, and if no limit were put on the tax, what would the City be spending the money on in the future. He added that the City is looking toward future commercial and industrial developments in the City, and he felt a "reasonable amount" should be set for large users and not penalize them for creating the climate prevalent in the City today -- jobs. A1 Araiza Mr. Araiza said his company would like to take the simplest SDG&E stand possible on this, which would be to leave the billing as it now exists. If there is a change to the consumption method, SDG&E would prefer a singular rate for gas and a singular rate for electric. There are near insurmountable problems going beyond that would be difficult for SDG&E to accomplish due to the other priorities that have been set for their data system. Motion not to It was moved by Councilman Hobel,seconded by Mayor Hyde reduce revenue and unanimously carried that the City Manager's recommen- at this time dation -~ "withhold any action that would reduce the revenue from this source until you have reviewed the budget with the City Manager and Department Heads," be approved. Adjourned Regular Meeting -3~ May 12, 1977 Will T. Johnstone, Jr, Mr. Johnstone remarked that under the present public util- ity tax, the two largest users in town do not pay any tax (gas ~ electric company and the telephone company). He questioned ~hether the City would tax these companies if it went on a unit basis. Mr. Johnstone felt that the tax should be based on comparative rates of the three services: gas, electric and telephone. The customers that have been using this service have had different increases in cost. The City skould figure out the amount of dollars it wants and the three rates be set to meet that amount of money. The rates should be based on consideration of what those rates will be and on increases in the cost 6f the service from the time the tax is put into effect. Council discussion Discussion followed wRth ~egarding tobasing the utility tax on eonStanp%ion: kiltowa~tg and thrums used. Mr. Araiza CSDG&E) said the company would need some lead time (about one month) if the consumption method were used to set up the system. It would take 5 months lead time if the City decided to put a cap on the larger users. Council- man Egdahl suggested the Council not determine, at this time, whether or not a cap can be put on the tax, but re- view this at budget time. Motion to change It was moved by Councilman Cox, seconded by Councilman utility tax to Scott and unanimously carried that the utility tax be based consumption method on amounts of energy consumed, that is,killowatt hours and gas therms. Motion for one unit It was moved by Councilman Egdahl, seconded by Councilman charge Scott and unanimously carried that there be one unit charge for gas and one unit charge for electricity. RESOLUTION NO. 8629 Mayor Hyde explained that this resolution was continued APPROVING AGREEMENT AND from the last meeting. He raised the objection of the APPROPRIATING FUNDS FOR City being required to pay $5,000 for its share of the THE NATIONAL INSTITUTE litigation cost. OF MUNICIPAL LAW OFFICERS LITIGATION FUND TO TEST City Manager Cole said he called the Washington office THE CONSTITUTIONALITY OF today (NIMLO) to see if this City could get a more equita- THE UNEMPLOYMENT COMPENSA- ble rate. Mr. Cole said that they are trying to get those TION ACT OF 1976 cities 25,000 and under to get together on a state-wide basis and become a participating client to the suit and put up $25,000. There was nothing for any cities above that. If Chula Vista is to be a participating client in this suit, it will have to put up the $5,000. If NIMLO files the suit and is able to get an injunction to stop payment of unemployment insurance, only those participating in the suit can take advantage of that injunction. Assistant City Manager Asmus commented that the staff does not agree with the way NIMLO put the package together. They should have anticipated more than 60 cities participating nationwide and then the rates could have been lower for everyone. They are now saying that they will refund any monies that they don't need. In answer to the Council's query as to whether or not the City would be in the suit if it sent NIMLO $2}500,!C!ty Manager Cole said he didn't know - he couldn't answer that. Mr. Asmus felt they would not accept anything less than Ss,000. Adjourned Regular Meeting -4- May 12~ 1977 Motion for $2,500 It was moved by Councilman Egdahl and seconded by Council- man Scott that $2,500 payment be sent as a possible first installment. Motion failed The motion failed by the following vote, to-wit: Ayes; Conncilmmn Egdah~, Hyde, Scott NOES: Councilmen Hobel, Cox Absent: None City Manager's Mr. Cole recommended that the City be part of the suit. He recommendation felt the litigation would be successful. Councilman Hobel's Councilman Hobel discussed having this item come to the remarks Council within the past three or four days, stating that staff knew about this pending litigation sometime back. Resolution offered Offered by Mayor Hyde, the reading of the text was waived ($5,000) by unanimous consent. The resolution failed by the following vote, to-wit: Ayes: None NOES: Mayor Hyde, Councilmen Hobel, Cox, Scott, Egdahl Absent: None Resolution offered with Offered by Councilman Cox, amended to $1,000, reading of amendment ($1,000) the text was waived by unanimous consent, passed and adopted by the following vote, to-wit: AYES: Councilmen Cox, Hyde, Scott, Egdahl Noes: Councilman Hobel Absent: None CITY MANAGER'S REPORT No report MAYOR'S REPORT Mayor Hyde reported that he contacted Assemblyman Deddeh regarding the rumor that Senator Wilson was going to sponsor a bill for superior courts in E1Cajon. Mr. Deddeh explained that this was not so - the Bill is for 6 more superior court judges: 2 for E1Cajon; 2 for South Bay and 2 for San Diego. Councilman Hobel said he talked to Assemblyman Deddeh's office this morning and they were going to go to Sacramento to find out about this. Mayor Hyde said he would be meeting with Mr. Deddeh shortly and will discuss this further. COUNCIL COMMENTS Councilman Scott questioned whether the budget sessions would be held in the new Library and televised. Mayor Hyde answered that the Library was considered, but because of the monitoring problems, PA system, vote recording, relocating all materials and facilities, it was felt that the deliberations should be held in the Council City Manager Cole explained that the sessions would not be televised since the TV people felt it could not be made interesting enough to get the people to watch it. Adjourned Regular Meeting ~5- May 12, 1977 PUBLIC HEARINGS - Mayor Hyde remarked that at the meeting of May 10, the PREZONING, REZONING Council continued the public hearings on these items to AND SPECIFIC PLAN FOR May 24 when a full Council was expected to be present. 8.7 ACRES ON SOUTH Councilman Egdahl has now stated he would not be present SIDE OF BONITA ROAD at that meeting. BETWEEN BONITA GLEN DRIVE AND 1,805 It was moved by Mayor Hyde, seconded by Councilman Hobel and unanimously carried that the public hearings be post- poned to the meeting of June 7 and all parties so notified. ADJOURNMENT ~.layor Hyde adjourned the meeting at 5:33 p.m. to the regular meeting scheduled for Tuesday,May 17, 1977 at 7:00 p.m.