HomeMy WebLinkAboutAgenda Statement 1979/06/26 Item 08CITY OF CHULA VISTA
COUNCIL AGENDA STATEMENT .Item No:' s
For meeting of 6/26/79
ITEM TITLE Resolution 9d~l~- Establishing the Rate for the Utility Users'
Tax between July 1, 1979 and January 1, 1980
SUBMITTED BY City Attorney
ITEM EXPLANATION
(4/5TH'S VOTE REQUIRED YES NO X )
The utility users' tax, which was established in June of 1978, set
a tax rate of $.00300 per kilowatt-hour of electricity, $. 01103 per
therm of gas and 6% for telephone based upon gross receipts for the
period from July 1, 1979 onward. The purpose for this tax is to
insure a reasonable level of revenue for city operations during
the period in which governmental reorganization, due to Proposition
13, is being carried out. The ordinance requires the City Council
to review the rate every six months in order to determine whether
it would be appropriate to adjust it downward in order to achieve
the purpose and intent of the ordinance.
It appears that the city will receive retroactive bailout funds for
1978-79 and further receive additional bailout funds for 1979-80.
This being the case, it is appropriate to decrease the rate of the
utility users' tax to $. 00250 per kilowatt-hour of electricity,
$.00919 per therm of gas and 5% for telephone based upon gross
receipts for the period July 1, 1979 to January 1, 1980 in that
adequate revenues for city operations will be available.
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Agreement Resolution X Ordinance Plat Notification List
Other ENVIRONMENTAL DOCUMENT: Attached Submitted on
FINANCIAL IMPACT
STAFF RECOMMENDATION Approval of Resolution
BOARD/COMMISSION RECOMMENDATION
COUNCIL ACTION
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Form A-113 (Rev. 5; 77)
Item No. 8
Agenda 6-26-79
June 22, 1979
To: Honorable Mayor and City Council
From: Lane F. Cole, City Manager ~'"
Subject: Utility Users Tax
The City Council will be considering a resolution at their 6-26-79 meeting
which, if adopted, would retain the utility tax at its present level.
In order to assist the City Council in its deliberations, the following
information is offered.
Retention of the present rate will reduce anticipated income from this
source (if the present rate remains for the entire fiscal year) by approxi-
mately $263,000.
As the budget now stands, before salary adjustments, estimated income and
budgeted expenditures indicate a gap of roughly $800,000 to $850,000. If
we reduce revenue by $263,000 by reason of less utility tax, that gap would
increase to slightly more than $1 million.
Wage negotiations will add about another $700,000 - $750,000 to the one
million dollars plus figure, or an expenditure budget about $1.7 million
more than revised estimated income.
Possible mitigating factors that can be considered in your deliberations
include: 1) the distinct possibility that the City will receive anywhere
from $400,000 to $750,000 in State "bail out" funds for the 78-79 fiscal
year. 2) The possibility the City will receive a yet to be determined
amount for the 79-80 fiscal year. (Neither of these two amounts has been
included in the budget as it now stands.) 3) The $1.7 million short fall
referred to earlier does not take into account $500,000 in Revenue Sharing
monies that will be received in 1979-80 that have not been appropriated at
this time. In absence of State "bail out" monies, some of the June 30,
1980 Revenue Sharing reserve would have to be appropriated to meet in-
creased salary requirements if a reasonable general fund reserve is to be
maintained.
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