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1984 NOV 14 CC MIN641 I. II. MINUTES OF AN ADJOURNED REGULAR MEETING OF THE EL SEGUNDO CITY COUNCIL AND STAFF OF THE CITY OF EL SEGUNDO November 14, 1984 CALL TO ORDER The E1 Segundo City Council convened in an adjourned regular session on Wednesday, November 14, 1984 at 6:30 o'clock p.m., in the Council Chamber of the E1 Segundo City Hall. THE PLEDGE OF ALLEGIANCE was led by Planning Director Romaniello. III. ROLL CALL Present: Absent: City Staff Present: IV. STUDY SESSION Councilmembers Jacobson, Schuldt, Siadek, Synadinos and Mayor Armstrong Councilmembers None Jose R. Sanchez, Director of Finance Nicholas Romaniello, Director of Planning Arthur E. Jones, City Manager Potential Revenue Sources The Mayor advised that there would be no actions made at this meeting. City Manager Jones stated that Council had directed staff to look at additional revenue sources that were identified in the Study Session held in August. Staff has reported to the Council on six potential revenue sources, and have provided back -up data on each. The revenue sources are listed below: 1. business Registration Tax by Floor Area for each 1 cent per Square Foot Levied Mr. Jones reported that the study, based on floor area, indicated there is 20,794,000 square teet of office space in industrial and commercial usage establishments that have about 5,000 minimum square feet, other than those that are used for schools and government buildings. On this basis, staff is projecting that taxes of 1 cent per square foot levied, in addition to the existing business registration taxes would raise $207,940.00. That amount can be multiplied by as much pennies per square foot as is levied to come up with the total amount of revenue to be raised. 2. Per Capita business Registration Tax Without Exemptions In addition, the staff looked at how much revenue could be raised by deleting the 10 employee exemptions in the existing business registration per capita tax the difference equals is $56,720.00 per year. IV. POTENTIAL REVENUE SOURCES (Continued) 3. Parking Tax Mr. Jones stated that regarding the parking tax it has been determined it would raise $51,750.00 if implemented at the rate of .15 cents per parking unit in the City's commercial hourly parking lots. 4. Sewer Service Fees Staff stated that the amount of revenue to be raised by sewer service fees can be varied according to the City's objective. It was calculated that in order to raise enough revenue to pay for all the current sewage treatment and maintenance costs in the existing system and to raise an additional $110,000.00 per year for depreciation and future capital improvement costs, a total of $484,000 would be required. It would require the levy of a fee equal to .24 cents per 100 cubic feet of water consumed for single families and duplexes, .36 cents per 100 cubic feet for apartments and-commercial/industrial users and .60 cents per 100 cubic feet for those firms who have a measured discharge of their sewage. 5. Paramedic Transportation Fee The staff looked at a paramedic transportation fee that would be equivalent to a private ambulance cost for providing paramedic transportation service to the nearest emergency treatment hospital. This service would raise $60,998.00 per year. That figure is based on the assumption that the City would try to raise that and levy the exact same cost as private ambulance companies raise and that we would have a 30% non - collection experience for those fees that are levied. The data that is based on the Fire Light Safety Reports in regard to the number of persons transported within the community. The rates to raise the revenue desired would be $140.00 per trip for residents and $160.00 per trip for non - residents. 6. Helicopter Business Registration Tax There is no question regarding a helicopter business registration tax which could be based on the number of landings or on a flat and rate basis. Presently, we don't know how many helicopter landings there are in the community. Staff suggests taxes be levied equivalent to $10,000.00 for each firm that has its own heliport on its premises and for commercial helicopter landing that the community charge a rate equivalent to 110% of the landing fee at LAX. There is question as to whether a landing fee can be charged. Councilman Schuldt stated that the problem in the community is that of the reserve and what is the practical amount of reserve that we need. He stated, he is in favor of utilizing the reserve for capital improvement projects and it would be irresponsible to raise taxes when there is no definite need. Councilman Siadek suggested that the budget be cut 10% unilaterally. - 2 - Council Minutes November 14, 1984 X 6 1,4A 'u41.4 IV. POTENTIAL REVENUE SOURCES (Continued) Mr. Jones stated we now have commitments for - $1,000,000.00 exactions from developers that will be coming in over the next several years, for funding capital improvements that are not budgeted. It was expressed that all the needs for capital funding had not been met and other sources of funding would continue to be looked into. Councilman Jacobson stated the Fire Light Safety Committee felt that service was based on largely square footage. Councilman Jacobson expressed that to try to make it fair and equitable as possible with business, to make it on a floor area per capita basis like we presently have, and then to add these incentives to try to get sales taxes to reduce the business license fee by a percentage of the sales tax which they have contributed. Councilman Siadek called attention to the resolution introduced by Councilman Jacobson, which listed as an altgrnative to raising taxes, cutting the budget by 10 %. City Manager Jones stated that Council has adopted a resolution which calls for an across the board 10% reduction in this year's budget at mid -year, unless this year's budget is balanced with additional revenue. Further, to meet that minimum objective the City should raise $751,000.00 in new revenue. Any monies needed above that amount would be for new projects, expansion, new personnel or additional money for capital improvement. It was also added, that staff has put together a three year program that called for $1,800,000.00 in additional revenue, which is the ideal, to be raised in this fiscal year and it would make up that $233 from the previous year, if that is the objective and the current $751,000.00 deficit. The balance of the $1,800,000.00 would be for supplemental projects and to go into the capital improvement reserve program. Councilwoman Synadinos asked how the new proposed water enterprise zone affects some of the six potential revenue sources, according to the figures given. Mr. Jones stated he assumed none of that money would be available in this fiscal year so it was not included in the estimates, and that it could raise between $200,000 - $350,000. Finance Director Sanchez stated the amount of interest the City receives on its investments represents 16% in relationship to income sources. Investment interest follows taxes, franchises and property. Councilwoman Synadinos stated 1982 was the first year the City's expenses exceeded its income. An economic base study was established in order to locate the problem areas. The report from the study was to be updated yearly, determining the segment of the community which was putting high demands on the City's services. The intent was to establish the business licenses so that the segments making the highest demands on the services would pay for them. - 3 - Council Minutes November 14, 1984 IV. V. POTENTIAL REVENUE SOURCES (Continued) Councilwoman Synadinos stated she would prefer a registration tax similar to other cities and give a credit to all the industries that pay any kind of tax and take 1/3 off their tax bill. Councilman Jacobson stated he would not suggest increasing the existing reserve but that the accumulating interest should be used for operating income. Councilwoman Synadinos stated that two years ago the reserve was 25% of the budget and to date it is 16 %. CITIZENS INQUIRY Michael Jackson, representative of the El Segundo Chamber of Commerce, distributed a copy of a letter discussed in an earlier meeting. The letter contained the Chamber's position on the City's 1984 -1985 Fiscal Year Budget, and a list of estimated fund balances provided by the City. Mr.'Jackson pointed out an additional source of revenue being the direct payment permits. He stated that these permits will redirect sales tax into the City at a minimum estimate, of $1,000,000.00 a year. Further, Council should consider that money, before making a final decision on tax increase. Mr. Jackson requested an opportunity to make a presentation on another potential revenue income for the City. Councilwoman Synadinos stated she would prefer a businesss license that gave credit to direct taxes that industry pays. Dennis Martin, 836 East Grand Avenue, stated that what is needed is a foundation to the economic policies that the City Council will pass and bring up to date. Mike Wyanti► stated the attitude the Chamber has is That they want to come in and study the budget. The Chamber has outlined a proposal to the Council to consider a Convention Center for E1 Segundo. The center would generate a tremendous amount of funds for the City. RECESS At the hour of 8:15 o'clock p.m., the Mayor declared a 10 minute recess. At the hour of 8:25 o'clock p.m., the Council reconvened, all members being present and answering roll call. Mike Wyant;, suggested that the City of E1 Segundo consider forming their own utility district and to create their own energy from the oil in the ground if Southern California Edison is not going to use it. At this point,.there being no further comments, the Mayor declared the Citizen Inquiry session closed. - 4 - Council Minutes November 14, 1984 X ii�1 j A64lb IV. POTENTIAL REVENUE SOURCES (Continued) Councilman Siadek requested that at the next meeting there be a pro -rata share of what the fiscal impact of 1984 -1985 would be if the Council were to enact the Proposed changes as opposed to the current calendar year impact. Following discussion, the concensus of Council was to favor option #1 of the proposed potential revenue sources, with an exemption of floor area up to 2,500 square feet. VI. ADJOURNMENT There being no further business to come before the Council and the City Staff, the meeting was adjourned at 9:15 o'clock p.m. APPROVED: =�7= City Clerk Council Minutes November 14, 1984