HomeMy WebLinkAboutCC AG PKT 2011-06-13 #E AGENDA STAFF REPORT
DATE: June 13, 2011
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, Acting City Manager
FROM: Robbeyn Bird, CPA
Director of Administrative Services/ City Treasurer
SUBJECT: UTILITY USERS TAX (UUT) - ANNUAL REVIEW
SUMMARY OF REQUEST:
Staff recommends the City Council receive and file the 2011 Utility Users Tax
report and introduce Ordinance No. 1610 amending Section 4.50.070 of the City
Municipal Code as follows:
"The rates set forth in this chapter shall be reviewed by the City
Council on an annual basis at a regularly scheduled meeting ne
later than April 30th of ouch year in conjunction with the
adoption of the budget."
BACKGROUND AND ANALYSIS:
On March 26, 1973, the City of Seal Beach adopted Ordinance Number 899
imposing a Utility Users Tax at the rate of 5% on telephone, gas, and electricity
services provided to residents. On May 24, 1993, the UUT was increased from
5% to 11%.
Section 4.50.070 of the City's Municipal Code requires that the rates for the
Utility Users Tax be reviewed annually no later than April 30 However, at the
August 10, 2009 City Council meeting, the City Council approved staffs
recommendation to review the UUT in conjunction with the budget process, but
the Municipal Code language was not amended. This report fulfills the
requirement to annually review the UUT and make a recommendation regarding
the rates.
The UUT is the second largest revenue source to the General Fund providing
$5.1 million or 19% of General Fund revenue. It is the most reliable and stable
funding source that the City has due to the fact that it is under local control. The
UUT funds many of the capital improvement projects needed in the City; such as,
street improvements, storm drains, and beaches & pier projects. Without the
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City's UUT, it would be impossible to continue the aggressive capital
improvement program established by the City and maintain the City's core
services at the current levels.
The fiscal year 2011/12 budget projected $26.2 million in revenue and $29.3
million in expenditures. The expenditures include $3.3 million in capital projects.
Therefore, the amount that operating revenues exceed operating expenditures is
approximately $207,000.
FINANCIAL IMPACT:
By reducing the UUT, capital projects funded out of the General Fund and /or City
services would need to be reduced significantly to maintain a balanced budget.
Alternatively, the City would need to use reserves to fund services for the
difference between revenues and expenditures. The latter is a temporary
solution and could not be sustained over time.
RECOMMENDATION:
Staff recommends the City Council receive and file the Utility Users Tax report
and introduce Ordinance No. 1610 amending Section 4.50.070 of the City
Municipal Code directing staff to report annually during the budget adoption
process as to the feasibility of reducing the UUT.
SUBMITTED BY: NOTED AND APPROVED:
Robbeyn`Bird, CPA it . Ingram,
Director of Administrative Services/ Acting City Manager
City Treasuer
Attachments:
A. Ordinance No. 1610
ORDINANCE NUMBER 1610
AN ORDINANCE OF THE CITY OF SEAL BEACH AMENDING
SECTION 4.50.070 OF THE SEAL BEACH MUNICIPAL CODE
REGARDING THE ANNUAL REVIEW OF UTILITY USERS TAX
RATES
THE SEAL BEACH CITY COUNCIL DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Section 4.50.070 of the Seal Beach Municipal Code is hereby
amended to read as follows:
"The rates set forth in this chapter shall be reviewed by the City
Council on an annual basis at a regularly scheduled meeting in
conjunction with the adoption of the budget."
SECTION 2. The City Clerk shall certify to the adoption of this Ordinance and
shall cause the same to be published in the manner prescribed by law.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal
Beach at a regular meeting held on the day of , 2011.
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
1, Linda Devine, City Clerk of the City of Seal Beach, do hereby certify that the
foregoing Ordinance was introduced for first reading at a regular meeting held on
the 13th day of June , 2011 and was passed, approved and adopted by the
City Council at a regular meeting held on the day of , 2011 by the
following vote:
AYES: Council Members:
NOES: Council Members:
ABSENT: Council Members:
ABSTAIN: Council Members:
And do hereby further certify that Ordinance Number 1610 has been published
pursuant to the Seal Beach City Charter and Resolution Number 2836.
City Clerk