CC RESOLUTION 4856RESOLUTION NO. 4856
A RESOLUTION PLACING A BALLOT MEASURE ON THE APRIL 8,
2014 BALLOT PURSUANT TO ARTICLE XIIIC, § 2(B), OF THE
CALIFORNIA CONSTITUTION; ELECTIONS CODE § 9222; AND
GOVERNMENT CODE §§ 53723 AND 53724 REGARDING TRANSIENT
OCCUPANCY TAXES; USER UTILITY TAXES; AN AIRPORT PARKING
TAX; AND BUSINESS LICENSE TAX (COLLECTIVELY, THE
"CONSOLIDATED TAX MEASURE ").
The City Council of the city of El Segundo resolves as follows:
SECTION 1: Pursuant to Article XIIIC, § 2(b), of the California Constitution; Elections
Code § 9222; and Government Code §§ 53723 and 53724, the City Council places an
initiative ( "ordinance ") on the ballot for a special municipal election to be held in the city
of El Segundo on Tuesday, April 8, 2014.
SECTION 2: A copy of the ordinance to be considered by the voters is attached as
Exhibit 'A" and is incorporated by reference. This ordinance is approved by the City
Council through adoption of this Resolution. The ballot measures will be designated as
Measure A on the ballot.
SECTION 3: The City Council finds that additional tax revenue is required based upon
the following facts and circumstances, as well as the written and oral information
presented at the Council Meeting before the time the Council approved this Resolution:
A. The City's general fund expenditures would have exceeded the City's
incoming general fund revenues in fiscal years 2013/2014 by
approximately $8.5 million but for the use of one -time funds by the City. It
is projected that the City's general fund expenditures will exceed the City's
aeneral fund revenues by approximately $3.6 million for fiscal _year
2014/2015 and that this budget shortfall will continue for subsequent fiscal
years. The City's fiscal condition has been negatively impacted by the
unprecedented challenges in the worldwide and national financial markets
and the chronic economic recession in the national, state, regional and
local economies.
B. The recession significantly decreased the City's revenue sources and
negatively impacted expenses requiring the City to institute various
austerity measures including a flexible hiring freeze, elimination of 62 full -
time positions, and expenditure curtailments for critical equipment and
capital projects. Additionally, the City through labor negotiations achieved
short terms savings of an average of $2.1 million per year, but rising
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retirement costs have now eliminated these savings.
C. The City is advised to expect a major increase to its mandated
contribution to the Public Employees Retirement System in fiscal year
2014 -2015.
D. The City has decreased its unreserved /undesignated General Fund
balance by 3% and has decreased its Equipment Replacement Fund
balance by 25% since fiscal year 2009 -2010.
E. The region, state, and nation are underwent one of the worst economic
downturns in the history of our Nation and while financial forecasts have
improved, it is anticipated that it will take several more years of significant
economic growth before the City's financial condition strengthens.
F. The California Constitution prohibits the City from enacting new taxes
without voter approval which prevents the City from generating new
revenues to offset losses.
G. The City Manager has recommended comprehensive action to increase
selected revenues including transient occupancy and utility user taxes,
while controlling expenditures by reducing employee compensation, .
reducing full -time positions, modifying staffing schedules for municipal
services, modifying terms and conditions of employment; reorganizing
departmental functions, reducing equipment expenditures, and curtailing
various capital projects to eliminate an anticipated $3.6 million deficit in
the General Fund.
SECTION 4: Pursuant to Elections Code §§ 9222 and 13119 the exact form of the
question to be voted on at the election as it should appear on the ballot is as follows:
SHALL THE CONSOLIDATED TAX MEASURE WHICH; INCREASES Yes ❑
UTILITY TAXES ON BUSINESSES BY 2.5% AND IMPOSES A 2.5%
UTILITY TAX ON RESIDENTS (BOTH REDUCE BY .5% AFTER 3 No ❑
YEARS); INCREASES TRANSIENT OCCUPANCY TAXES ON LODGING
BY 2 %; REDUCES BUSINESS LICENSE TAX CREDITS; AND IMPOSES
A BUSINESS LICENSE TAX ON COMMERCIALLY OPERATED PARKING
LOTS (EXCEPT OFFICE VISITOR, EMPLOYEE, RESTAURANT, HOTEL,
THEATER, RETAIL, AND VAILIDATED PARKING) FOR ALL CITY
SERVICES BE ADOPTED?
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SECTION 5: The City Clerk is directed to forward a copy of this Resolution to the City
Attorney for purposes of preparing a Title and Summary in accordance with the
Elections Code.
SECTION 6: Pursuant to 42 U.S.C. § 1973aa -1 a., the City Clerk will:
A. Translate all ballot statements into Spanish;
B. Make translated copies of ballot statements publicly available.
SECTION 7: The polls will open at 7 a.m. on electionday and remain open until 8 p.m.
SECTION 8: The City Council Chamber, 350 Main Street, El Segundo, is designated
the Central Counting Place where all ballots of the election will be tallied.
SECTION 9: The City Clerk is authorized to canvass the returns of the Municipal
Election. The election will be held in all respects as if there were only one election, and
only one form of ballot will be used.
SECTION 10: The City Clerk is authorized, instructed and directed to procure and
furnish any and all official ballots, notices, printed matter and all supplies, equipment
and paraphernalia that may be necessary in order to properly and lawfully conduct the
election.
SECTION 11: In accordance with Government Code § 53724 this Resolution must
be adopted upon a two- thirds (2/3) vote and will become effective immediately upon
adoption.
PASSED AND ADOPTED this 11th day of December, 2013.
ill Fisher; Mayor
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AT(TES :
V
Trac Weaver, ity Clerk
APPROVED AS TO FORM:
MARK D. HENSLEY, City Attorn y
Karl H Berger,
Assistant City Attorney
Q
EXHIBIT A
ORDINANCE NO.
A BALLOT MEASURE AMENDING EL SEGUNDO MUNICIPAL CODE
( "ESMC ") § 3-4 -3 AS TO TRANSIENT OCCUPANCY TAXES;
AMENDING ESMC §§ 3 -7 -1, 3 -7 -2, 3- 7 -3(A), 3- 7 -4(A), 3 -7 -5, 3- 7 -6(A)
RELATING TO USER UTILITY TAXES; AMENDING ESMC § 4 -2 -3
RELATING TO BUSINESS LICENSE TAX CREDITS; AMENDING ESMC
§ 4 -3 -34 AS TO BUSINESS LICENSE TAXES FOR PARKING LOTS; AND
ADDING ESMC § 3-4 -16 ALLOWING THE CITY COUNCIL TO SUSPEND,
REDUCE, AND RESTORE IMPOSITION OF TAXES BY RESOLUTION.
The people of the city of El Segundo do hereby ordain as follows:
SECTION 1: This Ordinance may be referred to as the "Consolidated Tax Measure."
SECTION 2: ESMC § 3 -4 -3 is amended to read as follows:
"3-4-3: IMPOSITION; RATE:
A. Tax Imposed: For the privilege of occupancy in any hotel, each
transient must pay a maximum tax of ten percent (10 %) of the rent charged
by the operator."
SECTION 3: A new § 3 -4 -16 is added to the ESMC to read as follows:
"3 -4 -16: TAX REDUCTIONS AND SUSPENSIONS:
The city council may suspend, reduce, and restore imposition of taxes by
resolution following a public hearing."
SECTION 4: The following terms set forth in ESMC s 0- 7-1 are amended and QuuGCA"
as applicable, to read as follows:
"COGENERATOR: Any service user, including an electrical corporation,
employing cogeneration technology for producing power from other than a
conventional power source for the generation of electricity.
RESIDENTIAL SERVICE USER: Any service user that is a natural person
residing within a dwelling unit in the city's jurisdiction.
NON- RESIDENTIALSERVICE USER: Any service user that does not fall
included within the definition of a Residential Service User, including but not
limited to retail, commercial, industrial, and professional and non-
professional office uses.
"SERVICE USER: Except as otherwise provided, any person required to
pay a tax imposed by this chapter."
SECTION 5: The term "commercial or industrial utility user" set forth in ESMC § 3 -7 -1 is
repealed. All instances of the term "commercial or industrial utility user" set forth in
ESMC Chapter 3 -7 are replaced with the term "service user" as defined by this
Ordinance.
SECTION 6: ESMC § 3 -7 -2 is amended to read as follows:
"3 -7 -2 EXEMPTIONS:
A. Nothing in this chapter may be construed as imposing a tax upon any
person when imposition of such tax upon that service user would be in
violation of the constitution of the United States or that of the state or upon
the city or any of its departments, agencies, boards or commissions or
upon the El Segundo unified school district, Centinela Valley union high
school district and the Wisebum school district, or upon any other person
when imposition of such tax upon that person would be in violation of the
constitution of the United States or the constitution of the state. The tax
administrator will prepare a list of the service users exempt from the
provisions of this chapter by virtue of this section and furnish a copy
thereof to each service supplier.
B. The taxes imposed by this chapter do not apply to "lifeline" residential
service users. To qualify as a "lifeline" residential service user, a person
must meet the following criteria:
1. Be a natural person; and
Fie a qualified participant in the California Alternate Rates for
Energy ("CARE") program established by Public Utilities Code §§
739.1 and 739.2 as determined by the most recent California Public
Utility Commission decisions; or
3. Be qualified in accordance with rules and procedures established
by city council resolution following a public hearing. The City
Council is specifically authorized to establish rules and procedures
to implement the intent of this Section.
C. The exemption as a "lifeline" residential service user will first be
recognized on the next full billing cycle after the date of approval.
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D. Persons who would otherwise qualify, but are provided utility services
through a master meter serving multiple housing units, are not eligible for
the "lifeline" residential service user exemption."
SECTION 7: Beginning July 1, 2014, ESMC § 3- 7 -3(A) is amended to read as follows:
"3-7-3: ELECTRICITY USERS TAX:
A. Tax Imposed: A tax is imposed upon every service user in the city using
electrical energy in the city. For non - residential service users, the maximum
tax imposed by this section is at the rate of five and one -half percent (5.5 %)
of the charges made for such energy and must be paid by the service user
paying for such energy. The maximum rate after June 30, 2018 for non-
residential service users is reduced to five percent (5 %). For residential
service users, the maximum tax imposed by this section is at the rate of two
and one -half percent (2.5 %) of the charges made for such energy and must
be paid by the service user paying for such energy. The maximum rate after
June 30, 2018, for residential service users is reduced to two percent (2 %)=
"Charges" includes charges made for: 1) metered energy; and 2) minimum
charges for service, including customer charges, services charges, demand
charges, standby charges and annual and monthly charges, fuel cost
adjustments, etc."
SECTION 8: Beginning July 1, 2014, ESMC § 3- 7 -4(A) is amended to read as follows:
"3-7-4: TAX ON COGENERATED ELECTRICITY:
A. Tax Imposed: A tax is imposed upon every service user in the city
using cogenerated electrical energy in the city. Except for residential service
users, the maximum tax imposed by this section is at the rate of five and
one -half ncwr nt (F Fo/ 1 of thin vali ie of the r_nnanaratPri Pnarnv ThP
maximum rate after June 30, 2018 for non - residential service users is
reduced to five percent (5 %). For residential service users, the maximum
tax imposed by this section is at the rate of two and one -half percent (2.5 %)
of the value of the cogenerated energy. The maximum rate after June 30,
2018, for residential service users is reduced to two percent (2 %). The value
is equal to the price an electrical corporation, serving the city, would pay to
purchase electrical energy from a cogenerator. The cogenerator must install
and maintain an appropriate utility type metering system which will enable
compliance with this section."
SECTION 9: Beginning July 1, 2014, ESMC § 3 -7 -5 is amended to read as follows:
"3-7-5: GAS USERS TAX:
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A. Tax Imposed: A tax is imposed upon every service user in the city, other
than a gas corporation regulated by the Public Utilities Commission that is
engaged in the business of selling natural gas to the public, using natural
gas in the city that is delivered through mains or pipes. For non - residential
service users, the maximum tax imposed by this section is at the rate of
five and one -half percent (5.5 %) of the charges made for such gas and
must be paid by the service user paying for such gas. The maximum rate
after June 30, 2018 for non - residential service users is reduced to five
percent (5 %).For residential service users, the maximum tax imposed by
this section is at the rate of two and one -half percent (2.5 %) of the
charges made for such gas and must be paid by the service user paying
for such gas. The maximum rate after June 30, 2018, for residential
service users is reduced to two percent (2 %). "Charges" includes: 1) gas
which is delivered through mains of pipes; and 2) minimum charges for
services, including customer charges, service charges, and annual and
monthly charges.
B. Excluded from the base on which the tax imposed in this section is
computed are: 1) charges made for natural gas which is to be resold and
delivered through mains or pipes; 2) charges made for natural gas sold for
use in production or distribution of water by a public utility or governmental
agency; 3) charges made by a natural gas public utility for natural gas
used and consumed in the conduct of the business of natural gas public
utilities; 4) charges made for natural gas used in the propulsion of a motor
vehicle, as that phrase is defined in the state vehicle code, utilizing natural
gas; and 5) charges related to late payments and returned checks.
C. Collection; Time For Filing Return: The tax imposed by this section is
collected from the service user by the person selling the natural gas. The
person selling the natural gas, on or before the twentieth of each calendar
month_ commencing on the twentieth day of the calendar month after the
effective date hereof, make a return to the tax administrator stating the
amount of taxes billed during the preceding calendar month. At the time
such returns are filed, the person selling the natural gas must remit tax
payments to the tax administrator in accordance with schedules
established or approved by the tax administrator.
D. The tax imposed by this section is not intended to apply to natural gas not
purchased from third party vendors and natural gas used for nonutility
purposes.
For the purposes of this subsection, the phrase "natural gas not
purchased from third party vendors" means natural gas which is
produced and owned by the same legal entity where ownership is
not the result of a sale or purchase transaction.
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2. For the purposes of this subsection, the phrase "natural gas used
for non - utility purposes" means natural gas which is a component
part of a manufactured product produced by an entity which is
subject to the utility users tax."
SECTION 10:
follows:
Beginning July 1, 2014, ESMC § 3- 7 -6(A) is amended to read as
"3-7-6: WATER USERS TAX:
A. Tax Imposed: A tax is imposed upon every service user in the city
using water which is delivered though mains or pipes. For non - residential
service users, the maximum tax imposed by this section is at the rate of five
and one -half percent (5.5 %) of the charges made for such water and must
be paid by the service user paying for such water. The maximum rate after
June 30, 2018 for non - residential service users is reduced to five percent
(5 %). For residential service users, the maximum tax imposed by this
section is at the rate of two and one -half percent (2.5 %) of the charges made
for such water and must be paid by the service user paying for such water.
The maximum rate after June 30, 2018, for residential service users is
reduced to two percent (2 %)."
SECTION 11: Beginning July 1, 2014, ESMC § 3- 7 -7(A) is amended to read as
follows:
"3-7-7: COMMUNICATION SERVICES USER TAX:
A. Tax Imposed: A tax is imposed upon every service user in the city
using communication services. For non- residential service users, the
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rnaxrrnurn tax imposed uy LII 5ec;LI r5 ruur alru Une -Iran Percen< <4.Z)-/o)
of the charges made for such services and must be collected from the
service user by the communication services supplier or its billing agent. The
maximum rate after June 30, 2018 for non - residential service users is
reduced to four percent (4 %). For residential service users, the maximum
tax imposed by this section is two and one -half percent (2.5 %) of the
charges made for such services and must be collected from the service user
by the communication services supplier or its billing agent. The maximum
rate after June 30, 2018, for residential service users is reduced to two
percent (2 %). There is a rebuttable presumption that communication
services billed to a billing or service address in the city are used, in whole
or in part, within the city's boundaries and such services are taxable under
this chapter. If the billing address of the service user is different from the
service address, the service address of the service user must be used for
purposes of imposing the tax. "Charges" includes the value of any other
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services, credits, property of every kind or nature, or other consideration
provided by the service user in exchange for the communication services."
SECTION 12: A new § 3 -7 -19 is added to the ESMC to read as follows:
"3 -7 -19: TAX REDUCTIONS AND SUSPENSIONS:
The city council may suspend, reduce, and restore imposition of taxes by
resolution following a public hearing."
SECTION 13: ESMC § 4- 2 -3(C) is amended to read as follows:
"4 -2 -3: TAX REDUCTION; TAX CREDIT:
C. Percentage Of Tax: For taxes collected for taxing periods
commencing on or after January 1, 2015, the tax credit referred to in
subsection B of this section, will equal up to ten percent (10 %) of the sales
or use tax generated by the business and received by the city during the
twelve (12) month period ending on June 30 preceding the date the tax is
due. For taxes collected for the taxing period commencing on or after
January 1, 2018, the tax credit referred to in subsection B of this section,
will equal up to five percent (5 %) of the sales or use tax generated by the
business and received by the city during the twelve (12) month period
ending on June 30 preceding the date the tax is due.
*„
SECTION 14: Beginning July 1, 2014, ESMC § 4 -2 -34 is amended in its entirety
to react as fnllnws-
"4 -2 -34: PARKING LOTS.
A business license tax is imposed upon every person engaged in the
business of operating a parking lot in the city for vehicles in the amount of
ten percent (10 %) of the annual gross receipts generated from the operation
of the parking lot. "Gross receipts" means gross income, as defined in the
Internal Revenue Code. "Gross receipts" does not include amounts
received under a commercial lease whether or not received as rent or
separately assessed. The business license tax imposed by this section
does not apply to gross receipts attributable to office visitor; employee;
theater patron; restaurant patron; retail patron; hotel patron; and validated
(whether self or valet) parking , for business establishments located within
the City."
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SECTION 15: INTERPRETATION. This Initiative must be interpreted so as to be
consistent with all federal and state laws, rules, and regulations. If any section, sub-
section, sentence, clause, phrase, part, or portion of this Initiative is held to be invalid or
unconstitutional by a final judgment of a court of competent jurisdiction, such decision
does not affect the validity of the remaining portions of this Initiative. The voters declare
that this Initiative, and each section, sub - section, sentence, clause, phrase, part, or
portion thereof, would have been adopted or passed irrespective of the fact that any one
or more sections, sub - sections, sentences, clauses, phrases, part, or portion is found to
be invalid. If any provision of this Initiative is held invalid as applied to any person or
circumstance, such invalidity does not affect any application of this Initiative that can be
given effect without the invalid application.
SECTION 16: SEVERABILITY. If any portion of this Initiative is held by a court of
competent jurisdiction to be invalid, the remainder of the initiative and the application of
such provision to other persons or circumstances will not be affected thereby. We the
People indicate our strong desire that: (i) the City Council use its best efforts to sustain
and reenact that portion, and (ii) the City Council implement this Initiative by taking all
steps possible to cure any inadequacies or deficiencies identified by the court in a
manner consistent with the express and implied intent of this Initiative, and then
adopting or reenacting such portion as necessary or desirable to permit the planning
and development of the Project.
SECTION 17: CONSTRUCTION. This Initiative must be broadly construed in
order to achieve the purposes stated in this Initiative. It is the intent of the voters that
the provisions of this Initiative be interpreted or implemented by the City and others in a
manner that facilitates the purposes set forth in this Initiative.
SECTION 18: ENFORCEABILITY. Repeal of any provision of the El Segundo
Municipal Code does not affect any penalty, forfeiture, or liability incurred before, or
preclude prosecution and imposition of penalties for any violation occurring before this
nrrlinanr:P'S effective date. Anv such repealed part will remain in full force and effect for
sustaining action or prosecuting violations occurring before the effective date of this
Ordinance.
SECTION 19: VALIDITY OF PREVIOUS CODE SECTIONS. If this entire
Ordinance or its application is deemed invalid by a court of competent jurisdiction, any
repeal or amendment of the ESMC or other city ordinance by this Ordinance will be
rendered void and cause such previous ESMC provision or other the city ordinance to
remain in full force and effect for all purposes
SECTION 20: EFFECTIVE DATE. This Initiative will enact and impose a general
tax. Accordingly, it will be submitted to a general election on April 8, 2014 for voter
approval. If a majority of voters vote in favor of this Initiative, it will become valid and
binding ten days after the date that the City Council certifies the election results in
accordance with Elections Code § 9217.
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binding ten days after the date that the City Council certifies the election results in
accordance with Elections Code § 9217.
The Mayor will sign this Initiative and the City Clerk will attest and certify to the passage and
adoption of this Ordinance if a majority of the voters voting in the City's general election on April
8, 2014 approve the proposition asking whether the voters approve this Initiative.
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