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HomeMy WebLinkAboutcc min 1977/04/14 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF TttE CITY OF CHULA VISTA, CALIFORNIA Held T~ursday - 4:00 p.m. April 14, 1977 An adjourned regular meeting of the City Council of the City of Chula Vista was held on the above date beginning at 4:00 p.m. in the Council Conference Room, City Hall, 276 Fourth Avenue, with the following Councilmen present: Mayor Scott, Councilmen Hyde, Cox, Egdahl, Hobel Councilmen absent: None Staff present: City Manager Cole, Assistant City Manager Asmus, Assistant City Attorney Beam 2. DISCUSSION OF Mayor Scott reported that the purpose of the meeting UTILITY USERS TAX was initiated by the request of the Chula Vista Taxpayers Association in their letter dated March 1,1977. At this time, the Council will discuss all aspects of the tax with the main emphasis on changing from a percentage basis to a unit basis. Will B. Johnstone Mr. Johnstone, President of the Chula Vista Taxpayers 647 Myra Avenue Association, reiterated their reco~tmendations (made Chula Vista in their letter of March 1, 1977): 1. Abolish the tax, or 2. Modify it 5o that each increase in utility rates would not be reflected in increased take from the tax. Mr. Johnstone added that the Taxpayers Association suggested this could be brought about by: 1. Adjusting the 5% rate that would compensate for the rate increases that have been granted since the taxes' inception. This could be applied to ail three utility services. 2. Apply the tax to utility sales units such as kilowatt hours and therms. This would not be applicable to telephone service and is therefore less acceptable than the first suggestion. 3. Stop all tax collection once the budgeted amount has been collected. The Tax,avers Association feels this is less desirable than either of the above two suggestions as it would create different tax rates for users in different time areas of use. Mr. Johnstone stated that their first recommendation is the best - modify the tax rate. Joseph Scannicchio Mr. Scannicchio remarked that the Chamber has had a President, Chula Vista series of meetings on this subject in order to find a Chamber of Commerce more equitable solution to provide sufficient general funds, to be fair to the business community and to the largest user of gas and electric services and the provider of jobs. Mr, Scannicchio said the Chamber was not clear on several items and they were not able to finalize their report to the Council. For this reason, they are requesting a two weeks' continuance of this matter. They requested the following information: Adjourned Regular Meeting -2- April 14, 1977 1. Restate the intent of the utility users tax. 2. The total amount of revenue this tax will generate. 3. Have the Council assign Gordon Grant (Director of Finance) or someone from his particular staff to meet with the Chamber Committee on this matter during the next two weeks. Discussion of request Mayor Scott indicated his disappointment of the request for continuance inasmuch as this matter has been before the Council since the letter received from the Taxpayers Association on March 1. Councilman Hobel remarked that the staff is using the figure of $991,000 as the estimate of the utility users taxes (based on the current tax rate of 4.5%) for fiscal year 1977-78. A general discussion followed as to the reason for the utility tax - an equitable method to raise needed revenue for the City without having to increase the property tax. Mayor Scott noted that there has never been an intent to limit the total tax to $350,000. The total amount of tax to be collected would have to be determined by the community, and the Council, as the legislative body, would make this policy decision at budget time when it determines the amount of money needed to run the City. Energy Crisis Councilman Hobel commented that, at the inception of the tax, the Council felt it would probably go to $500,000 - but that was before the energy crisis and inflationary rates. The Council discussed going to units rather than percentages. Motion to change tax It was moved by Councilman Hyde and seconded by structure Councilman Egdahl that the Council proceed in the direction of revising the tax procedure for the utility users tax to base it on the consumption of units of energy consumed rather than the present percentage method. Discussion of motion Councilman Egdahl remarked that some utility users would find their tax increased based on therms and kilowatts rather than a percentage of their tax bill. He suggested the staff look into this. Councilman Egdahl asked the A~sistant City Attorney about the legality of ggt~ing a l~mlt of the tax bill for one individual tax user. Assistant City Attorney Beam said he believed it may not legally be possible to set a limit for one business entity; however, he had not researched this question. Adjourned Regular Meeting -3- April 14, 1977 Attorney Beam questioned whether the Council motion contemplated a linear relationship between units of energy consumed and a rate, or whether it contemplated a relationship such as when the number of units consumed goes up, the rates may change one way or the other. Amendment to motion Councilman Hyde moved that the motion include the staff looking into the possibility of variable tax rates depending upon consumption for analysis purposes. No second to amendment The amendment died for lack of second. Glen White Mr. White said he is involved in the Data Systems San Diego Gas & Electric Department with computers and assessment billings. He referred to the letter sent to the Mayor (February 15, 1977) from San Diego Gas & Electric in which they related their feasibility study to a cap being placed on the utility users tax. They did not address their response to a sliding scale, a different percentage amount, or a different factor figure based on kilowatt hours. Mr. White stated that they presently have in excess of 50 different rates, and what the Council is discussing would be a very complicated program. Nell Arthur Mr. Arthur noted that Rohr is the largest consumer Rohr Industries (of gas and electricity) and based on the motion on the floor (units instead of percentage), their bill would increase substantiall7. Last year they paid $112,000 tax, and they can foresee that chis will go up next year. Mr. Arthur asked for the two weeks' continuance as requested by the Chamber of Commerce so that they can prepare and submit a report to Council. Property Taxes Mayor Scott questioned the cost to Rohr and other users if the funds needed were raised by increasing the property taxes. Mr. Arthur felt that increasing the property taxes would be extremely unpopular. He added that the utility users tax was a necessary tax - he can see the purpose of it. Added to motion Mayor Scott asked that the motion include having the staff look at the five top users. Councilman Hyde included this in his motion; Councilman Egdahl agreed to the second. Time element added to the Councilman Egdahl asked that a time certain be motion stipulated in the motion. Councilman Hyde set the date as Thursday~ May S, 1977 at 4:00 p.m. Councilman Egdahl agreed to the second. Motion carried The motion, with the additions, directing staff to investigate the change from percentage to units and report back to the Council at the Conference scheduled on May S carried unanimously. Adjourned Regular Meeting -4- April 14, 1977 Motion for staff report It was moved by Councilman Cox and seconded by Councilman Egdahl that the staff, at this May 5 meeting, come back with any information they can gather on (1) instituting the utility users tax with a cap; (2) with a graduating rate; (3) with different rates for business versus residential. Discussion of motion Mr. Bob Green, member of the Chula Vista Taxpayers Association, stated that both motions leave out the alternative of eliminating the tax altogether. }te asked that the Council consider this, and that his petition to get this on the ballot will occur,at which time the people would state their preference of having it go on their property tax. Amendment to motion Councilman Cox moved that the staff include in their report another alternative: what it would do to the property tax. Councilman Egdahl agreed to the second and the amendment carried unanimously. 3. Del Mar Frog Mayor Scott reported that Chula Vista has accepted Jumping Contest the challenge of Del Mar to enter this contest which will take place on Saturday, April 16 at 2:00 p.m. None of the members of the Council stated they could attend the event. Councilman Cox said he would be willing to try to get a Jaycee member to enter the frog. Assistant City Manager Asmus said he would try to attend, if possible. REPORT OF THE CITY ~NAGER None MAYOR'S REPORT None COUNCIL CO~qENTS Discussion ensued as to a procedure to fill the vacancy caused by the election of Councilman Hyde as Mayor. Motion for City Attorney's It was moved by Councilman Cox that the City Attorney statement prepare another statement indicating the procedure by which the Council can select a replacement. No second to motion The motion died for lack of a second. Attorney's statement Mr. Beam explained that the Council would follow the same procedure as the appointment of a Mayor - 30 days in which to make the appointment or call a special election. Motion for appointment It was moved by Councilman Egdahl and seconded by Councilman Hyde that the Council fill the vacancy by appointment as opposed to a special election because of the cost factors and limited time. Amendment to motion It was moved by Councilman Egdahl to amend the motion by stating "it is the intent of the Council to fill the vacancy by appointment." Councilman Hyde agreed to the second and the amendment carried unanimously. Adjourned Regular Meeting ~5- April 14, 1977 Main motion carried The main motion, as amended, carried unanimously. Applications to be It was moved by CounciLman Hyde, seconded by Councilman considered Egdahl and unanimously carried that the Council indicates its willingness to consider applications submitted for the vacancy no later than April 20. Clarification of motion Councilman Hyde suggested the Council accept applications, and that each member of the Council submit as many name of candidates as they choose to, and from that list, (by April 20), the Council will screen the list down to not more than ten and then decide whether or not they wish to conduct interviews. ADJOURNMENT The Mayor adjourned the meeting at 5:05 p.m. to the regular meeting scheduled for Tuesday, April 19, 1977 at 7:00 p.m. in the Council Chambers.