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1984 JUL 25 CC MINX'6310 AINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY OF EL SEGUNDO - July 25, 1984 I. CALL TO ORDER The Ei Segundo City Council convened in adjournea regular session on Wednesday, July 25, 1984, at 1:30 p.m., in the Council Chamber of the E1 Segundo City Hall. II. THE PLEDGE OF ALLEGIANCE was led by Mayor Armstrong. III. ROLL CALL Present: Councilmembers Jacobson, Schuldt, Synadinos, and Mayor Armstrong Absent: Councilman Siadek IV. STUDY SESSION Mayor Armstrong asked Council for their input at this time on budget revenue resources. Councilman Schuldt indicated that in terms of raising funas, regarding the exemptions on business license fees, he felt that this should go from 10 to 2. be- cause of being in a small business and paying a $50 license, they should be excluded. Also, the utility tax would be one of the cleanest ways of collecting funds. It Jarvis IV passes then the City will have to look at trash collection by using private enterprise. He feels we should start the mechanism now instead of waiting. Mayor Armstrong asked for clarification of what the trash collection is currently costing? Mr. Jones stated that currently it is approximately $300,000 and will go to approximately $39U,O00 com- mencing February 1, 1985. That is approximately $462 per person. A $5 trash collection would cover it for two years with no increase. He stated that Manhattan Beach, with a similar service, has a tee of $6.50 or $7.50 per month when you add in the administrative cost of collection. (NOTE: At 1:35 p.m. Councilman Siadek. joined the meeting.) Councilman Siadek indicated that the City has approved ` over the next 5 years, $13 million in capital improve- ment projects. he then asked if those were budgeted for. Mr. Jones stated that technically the City only budgets from year to year but that the City sets out a five year plan which is the goal and tries to match available future revenues over the rive year period. It is ad- justed annually to available revenues and changes and needs in the community. Councilman Siadek then stated that the amount of reserves the City has, the City may need to look at a better means of investment /money management evalua- tions. he suggested the City should look at Security Pacific, where the general operating account is located. Mr. ,zones stated that the City is aware of Security Pacific's money management plan. He has been down to the headquarters and they have offered to sell it to the City and administer it for the City. The Council, upon the staff's recommendation adopted a different money management plan that was designed specifically for smaller cities. This is a computerized system which is effective and gets a very good return on the funds. Councilman Siadek asked for a report from staff on what the percentage return is - annualized and compared over the last four years. Further discussion evolved regarding employee tax versus utility tax versus square footage tax. Councilman Jacobson asked what the current count was for employees this year. Mr. Sanchez said this year's count was 62,000 at per capita (above the 10). They figured an average of 5 employees for the average business that were under the 10. Then the staff came up with a number between 73- 75,000. Mr. Sanchez further stated that the only firm count is the number reported from the business license. Anything beyond that is dust the best guess. Mr. Jones stated that in looking at the community over the past few years, there has been very little growth of employees. There has been alot of development but none of those have been completed in the last few years. Therefore, the 75,000 and the 77,000 from the business license is fairly accurate. Mr. Sanchez stated that contractors were not included in the 13,000 small business firm employees. He went on to state that the figuring was based on 5- 600 businesses registered in the City and the number of businesses that reported 10 or more employees. Then the remaining businesses is what was used for the average of 5 employees. Mayor Armstrong then restated what Council saw as two items needing more information for possible revenue sources: (1) the exploration of lowering the exemptions to 2, U and 5 and see the effects; (2) the sewer tax and if the City can't recover the $378,000, along with the breakout between residential and industry if possible. Mayor Armstrong then moved to Exhibit 14 from Finance (Revenue Sources Suggested by Departments). He indicated that two items he had checked were 44 (Review all current fees for permits and processing of applica- tions to recover actual costs) and #5 (Add a Planning Department service fee to all building permits that require planning review. one percent suggested.) -2- Council Minutes July 25, 1984 X 6311 X63LA'%'# Councilman Siadek stated the he was interested in #b (Consider establishing landing fees for private heliports and helistops in the City). And that #9 (sewer service fee) was already taken care of and #10 (Charges for paramedic transportation service). Councilman Jacobson interjected that he wasn't sure #b was possible. riayor Armstrong asked if there were any legal implica- tions. Mr. Jones indicated that he had severe doubts that it could be done legally. but he would have staff look into it. Discussion then followed regarding the payroll tax. Councilman Siadek asked if the paramedic service is really a part of local government. Mr. Jones stated that there is really no definitive answer. The reason the City is doing it is because of the perception that the ambulance service isn't too good. Councilwoman Synadinos indicated that there was a yes on 410 and #11 with a hold on #12. Mr. Jones then stated that staff would prepare reports for #10 and #11. Councilwoman Synadinos said that she was not in favor of implementing #14 (Eliminate non - resident fees for Library cards in order to qualify for State Universal borrowing Subsidy) but was in favor of implementing #15 (alternatively to No. 14, increase the non - resident fees for Library cards from $10 to $25 or some similar fee). Mayor Armstrong then asked Council to please go through each item on the first page of the Finance handout. 1. Parking tax - insignificant? The argument is that it gets passed on to the owners or tenants of the business. Mr. Jones stated that the parking tax is only for those who are in and out cash parking. It isn't for the tenants of the building, so it's not likely that it's going to get passed onto the owner. he further stated that this tax did not produce a large amount of revenue but that the start up cost would be less than 10% and once it is established and on -going then the amount would be worthwhile. 2. Utility users tax Mr. Jones indicated that the staff had provided a good deal of information and that this tax has alot of flexibility in the way it could be implemented. he went on to state that the staff had included in- formation on caps and that caps could be set at -3- Council Minutes July 25, 1984 various levels and done in various ways. he also said that there could be differention between residents and industry /business. Mr. Jones said that data indicated this is a stable tax, it increases with economic growth and as energy costs rise, the tax can be broadly based to minimize the effect on any one group, the tax can be spread among all the citizens, but can be used to exclude any group of citizens bases a variety of variables. The tax is easy and inexpensive because the utility com- panies do the tax as a part of their monthly billing. There is also an added political benefit because the tax is out on the utility bills not City letterhead. MOTION MADE by COUNCILMAN SIADEK, SECONDED BY MAYOR ARMSTRONG to eliminate the utility user's tax from staff doing further research, at this time. MOTION WAS PASSED by the following vote: Ayes: Councilmembers Jacobson, Siadek, and Mayor Armstrong Noes: Councilmembers Schuldt and Synadinos 3. Increased per capita business registration tax Mr. Jones said that he understood that Council wanted some information on the impact of increases in the per capita tax. It was agreed that the employee business registration tax was eliminated. b. Elimination of exemption on transient occupancy tax. Councilwoman Synadinos indicated that she wished for further staff investigation. Mr. Jones indicated that he did not see this as being worth staff time. He felt this was anti - competitive for a particular area of their business that is sensitive to the price increase. A reduction of 2 cents affects an area of business that is not sensi- tive to price increases as far as competition is concerned. Discussion then ensued in regards to a business z registration tax on lease or rental of office space. however, it was agreed that this should be a business registration tax on office space, eliminating the lease or rental, including square footage. Mayor Armstrong then referred to assessment districts and asked if they were necessary at this point in time. Discussion ensued. It was decided that staff should further investigate assessment districts. Mr. Jones indicated to Council that to investigate these several items, would take several weeks. He said -4- Council Minutes July 25, 1984 6313 X6314 that as tar as implementation with regard to Jarvis, it appears tnat the cnanges in the business tax should be made no later than Uctober 16, by Council, in order to yet those implemented by January 1, 1935. other matters can be implemented at later dates because they are collected incrementally. V. ADJOURNMENT There being no turther business to come before the Council, the meeting was adjourned at the hour of 3:40 p.m. until Tuesday, August 7, 1934 at 7:00 p.m. APPROVED: Charles K. Ar stron , /i'via r Respectfully submitted, Valerie A. burrowes, City Clerk -5- Council Minutes July 25, 1984