HomeMy WebLinkAbout06-05-2012 b2 direction regarding timing measure Yrenewal & consideration utility user stax ordinance modernization ballot measurecounci l
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Meeting Dat e
June 5, 201 2
Item Number B 2
C I T Y O F S A N L U I S O B I S P O
FROM :
Charles Bourbeau, Finance and Information Technology Directo r
Michael Codron, Assistant City Manage r
Prepared By :Rachel McClure, Administrative Analys t
SUBJECT :CONSIDERATION OF POSSIBLE BALLOT MEASURES FOR TH E
NOVEMBER 2012 GENERAL ELECTION REGARDING UTILITY USER TAX
ORDINANCE MODERNIZATION AND MEASURE Y REAUTHORIZATIO N
RECOMMENDATIO N
1
Provide direction regarding placement of a measure on the November 6, 2012, genera l
election ballot for an ordinance modernizing the City's existing Utility Users Tax (UUT) t o
reflect changes in technology and state and federal law, and to reduce the tax rate o n
telecommunications services from 5% to 4 .8%.
2 .
Direct staff not to pursue reauthorization of Measure Y during the 2012 general election .
REPORT-IN-BRIE F
The City Council adopted a Major City Goal as part of the 2011-13 Financial Plan for th e
Preservation of Essential Services and Fiscal Health . This goal includes an action plan that direct s
staff to (1) ensure the stability and diversity of the City's revenue sources, and (2) work wit h
Council and the community to renew Measure Y . To implement the action plan, staff is asking th e
Council to consider two items to include as measures for voter consideration on the 2012 Genera l
Election ballot .
The Council is scheduled to officially call the November 2012 General Election at its June 5 th
meeting . The City has until August 10, 2012, to place additional measures on the ballot for vote r
consideration .
Staff is recommending Council provide direction to bring a resolution before the Council in Jul y
2012 to place a UUT modernization ordinance on the November ballot . The modernized ordinanc e
would protect UUT revenues from legal challenges and ensure that all forms of communication s
technology are treated equally .
After reviewing the merits and timing regarding seeking voter approval of a ballot measure to rene w
the City's /2 cent sales tax, known as Measure Y, on the November 2012 ballot, staff i s
recommending that the November 2012 is not optimal timing . A matrix that presents pros and con s
for both 2012 and 2014 ballot measures and used by staff in analyzing this issue is attached .
UUT Ordinance Modernization Page 2
Measure Y Reauthorizatio n
DISCUSSION
Situation
As part of the 2011-13 Financial Plan, the City Council adopted a Major City Goal with th e
objective of sustaining the City's short and long-term fiscal health . There are a number of item s
identified in the action plan to achieve this goal . Two key tasks contained within this work progra m
follow .
Ensure the stability and diversity of the City's revenue sources Date
Examine threats to the City's Utility Users Tax revenue from federal and state
July Dec . 201 1
legislation. Identify actions and develop plan to address problems as needed .
Work with Council the to Measure Yandcommunityrenew Dat e
1 .Hire consultant to conduct public opinion research July 201 1
2 .Present survey results and analysis to Council October 201 1
3 .Determine optimal timing of ballot measure November 201 1
4 .Initiate public information/outreach program January 2012
City staff has been working on these work program items and is now recommending that th e
Council consider the information developed since July 2011, when the process began . Th e
following discussion provides an overview of the recommendation to modernize the City's UU T
ordinance first, and then provides an overview of the public information and outreach program
conducted by City staff
UUT Backgroun d
Since 1973, the City's UUT ordinance has imposed a 5% tax on users of gas, electricity, telephone ,
water, and cable television to be collected by utility providers with customers within the City . Th e
tax generates approximately $4 .8 million each year for the General Fund, used to fund a wide rang e
of critical General Fund services . Given its age, the UUT ordinance is out of date in several ways .
In particular the telecommunications portion of the ordinance needs to be modernized due to th e
significant evolution of communication services over the years and changes to federal legislatio n
and IRS rulings that have created ambiguity over outdated language and, in some cases, have led t o
litigation against local governments .
Because the UUT represents such a significant revenue source—the telecommunications portio n
alone represents approximately $1 .1 million in annual revenue—the City recently contracted with
Mr . Donald Maynor to provide "protective legal services," which includes assistance in developin g
a thoroughly updated, legally defensible UUT ordinance to be placed before the City's voters . This
action will protect the City's existing UUT revenues from erosion due to new legislation, litigatio n
UUT Ordinance Modernization Page 3
Measure Y Reauthorizatio n
risks that can result from ambiguities created by outdated language, new technologies, and obsolet e
language .
Current Ordinanc e
Consistent with other California cities, the City's Utility User Tax on telephone services has bee n
historically applied in a manner similar to the application of the Federal Excise Tax (FET) on loca l
and long distance telecommunication services . The basic structure of the FET on telephone servic e
was established in the 1930's . With the growth of wireless communications, a national dispute aros e
regarding the application of the FET to telecommunications services . In 2006, the Internal Revenu e
Service (IRS) issued a Notice that it intended to stop applying the FET on nearly all telephon e
communication services, except local exchange services .
Since that time, the City of Los Angeles lost a case that gave some insights into how the court s
likely would rule on the FET issue (against the cities) and make clarification and updating of loca l
ordinances desirable . In addition, there has been recurring discussion at the federal level o f
repealing the FET . To protect against these external legal ambiguities and legislative risks ,
numerous public agencies with UUT ordinances have successfully secured voter approval to updat e
the telecommunications component of their UUT ordinance, to close loopholes and include moder n
definitions that avoid the FET controversy and other potential legal issues . Most all of these types o f
measures have received voter approval, because they simply "modernize" the telecommunication s
definitions so that all taxpayers are treated the same regardless of their choices o f
telecommunication services . In addition, many successful measures have included a modest
reduction in the telecommunications tax rate to achieve a revenue neutral result . More than 7 0
public agencies in California with UUT ordinances have successfully secured voter approval t o
update the telecommunications component of their UUT ordinance .
Proposed Changes to the Ordinanc e
When the UUT ordinance was first enacted nearly 40 years ago, telephone service was muc h
simpler, highly regulated and usually offered by only one provider in a jurisdiction . The intent o f
updating or "modernizing" the UUT ordinance is to treat all users of telecommunications service s
the same regardless of the type of technology used, whether traditional land line, wireless, or mor e
recent advances such as "private network service" and VoIP (Voice over Internet Protocol).
If the City does not seek voter approval of a modern telecommunications tax, then adverse litigatio n
or adverse federal legislation could cause the City to lose the vast majority, if not all, of its annua l
$1 .1 million revenue from the telecommunications component of the UUT . Approval of UU T
ordinance would require a majority vote plus one, because the UUT is a general tax imposed fo r
general governmental purposes . If the ballot measure were to fail, then the curren t
telecommunications tax would continue at its current 5% rate, subject to the risks of litigation an d
future legislation,as mentioned above .
Mr . Maynor has provided a draft revised ordinance which includes modern definitions that hedg e
against preemptive state or federal law by addressing most risks presented by changes i n
technology, litigation, and federal legislation under consideration in the telecommunications arena .
UUT Ordinance Modernization Page 4
Measure Y Reauthorizatio n
The revised ordinance also modernizes language throughout the ordinance . The following is a brief
summary of the amendments included in the proposed change :
•Includes a modern, functional definition of telecommunication and video services that i s
technology-neutral, and includes VoIP (voice over internet protocol) telephone service, IP-T V
(broadband cable services), paging, and private communication services that provide data, vide o
and voice services .
•Specifically excludes internet services such as email and digital downloads such games,music ,
and software etc .
•Incorporates definitions of "ancillary telecommunication and video services" that are commonl y
recognized by the industry as being part of such services .
•Assures that the telecommunications tax will be properly collected and that all revenues will b e
properly expended through the use of third party independent audits .
•Anticipates the possibility of new technologies and services to provide telecommunication and
video services (such as VoIP and IP-TV) so that all taxpayers will be treated the same .
Provides other administrative tools for addressing telecommunication tax issues, such as ne w
legislation, litigation and new technologies . These tools include allowing the City to issue
administrative rulings regarding sourcing, bundling, and nexus guidelines that will protect th e
City's ability to impose and/or collect the tax on all applicable uses within the City .
•To assure that the new ordinance is as "revenue neutral" as possible, the proposed ordinanc e
reduces the tax rate on telecommunications services from 5% to 4 .8%. The tax rate on other
utilities, such as gas, electricity and water remains at the existing 5% rate .
•Includes several administrative changes, such as clarifying roles and operating procedures, an d
gives Council the authority to exempt certain types of services or classes of users from the tax .
The revised ordinance would keep in place an existing refund provision for operators of lo w
income retirement homes where the operators pay for utilities subject to UUT .
In conclusion regarding the UUT, ensuring the stability and diversity of the City's revenue sources ,
particularly in relation to UUT, was identified in the work program for the Preservation of Essentia l
Services and Fiscal Health Major City Goal . Amending the City's UUT ordinance, which wil l
protect this vital revenue source, is a critical step in accomplishing this task in the work program .
Therefore, staff is recommending that a revenue neutral UUT modernization measure be placed o n
the November 2012 ballot.
Measure Y Reauthorizatio n
On November 7, 2006, the citizens of the City of San Luis Obispo passed Measure Y, the Essentia l
Services Measure . The measure passed with support from 64% of the voters . Measure Y is a genera l
purpose measure that provides the City with over $5 million annually to maintain and restor e
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UUT Ordinance Modernization Page 5
Measure Y Reauthorizatio n
essential services like street paving, traffic congestion relief, public safety, flood protection, senio r
citizen services and facilities, neighborhood code enforcement, open space preservation and othe r
vital general purpose services . Measure Y was approved for a period of eight years and will sunset
on March 31, 2015 . By law, Measure Y must be renewed during a general election when voter s
will also considering candidates for City Council . Therefore, reauthorization can be placed on the
ballot for consideration in November 2012 and November 2014 .
A Citizen Satisfaction Survey was conducted in October and November of 2011 and presented t o
the City Council in December 2011 . At that time, the City Council directed staff to continue t o
evaluate placing the reauthorization of Measure Y on the general election ballot in November 2012 ,
and return to the Council with an update . As a result, staff initiated an education and outreac h
program consisting of presentations to community groups and advisory bodies to gain feedback f
regarding Measure Y reauthorization . The feedback received from the community has assisted staf f
in the development of this report .
Measure Y Presentations Dat e
The presentation included an overview of Measure Y, a general purpose tax, how Measure Y relate s
to the overall budget, citizen accountability measures built into Measure Y, how Measure Y fund s
have been budgeted and spent, and requirements for reauthorization . In addition to this overview ,
the following three key questions were posed to each group for discussion .
(1)Is Measure Y a good value to the community ?
(2)Is Measure Y serving the purpose it was intended for ?
(3)What should the City Council consider when evaluating the timing for reauthorization ?
Staff did not quantify the feedback received ; the questions served as a starting point for discussion .
Regarding the first two questions, some of the key themes raised by multiple voices included :
1.Planning Commission
2.Architectural Review Commissio n
3.Parks and Recreation Commissio n
4 Chamber of Commerce (Issues and Economic Development)
5.Residents for Quality Neighborhoods
6.Downtown Association Economic Activities Committe e
7.Cultural Heritage Committe e
8.Downtown Association Boar d
9.Land Conservancy of San Luis Obispo Count y
10.San Luis Obispo Business and Property Owners Association
March 2 8
April 2
April 4
April 1 2
April 1 8
April 1 9
April 2 3
May 8
May 8
May 17
UUT Ordinance Modernization Page 6
Measure Y Reauthorizatio n
1.General satisfaction, and in many cases enthusiasm for the expenditures made throug h
Measure Y .
2.There was a sense of value shared by participants, particularly because of the hig h
percentage of the tax paid by non-residents .
3.Concern (and in some cases a frustration) that not enough Measure Y funding went t o
projects that participants found important . For instance, supporters of using Measure Y
for neighborhood code enforcement and bicycle infrastructure valued the expenses mad e
in those areas, but also thought more should be done .
4.There was discussion about the future of Measure Y in terms of expanding the scope o f
projects that could be supported with this revenue source . Examples include cultural an d
historic resource preservation and additional bicycle transportation improvements .
5.Concerns were expressed about Measure Y funding going to employee compensation ,
particularly in relation to the coincidence of timing with the 2008 binding arbitratio n
decision .
6.Even though there was acknowledgement that "The Essential Services Measure" ha d
been dedicated to maintaining core services that might not have survived in light of th e
worst recession since the Great Depression ,
7 Concerns were expressed that Measure Y expenses were not additive to the base budget ,
and that as revenues dropped due to the recession, Measure Y was used to backfill fo r
ongoing expenditures .
8 . There was also feedback that for a general purpose measure, the City has done a good jo b
of meeting the requests for expenditures .
The third question, regarding issues for council to consider when assessing the timing o f
reauthorization, also received a substantial amount of discussion . Some of the items tha t
participants thought the City Council should consider when deciding about the timing o f
reauthorization follow .
1.The City should wait to develop a complete eight-year track record before asking th e
voters to consider reauthorization .
2.There may be other revenue measures on the 2012 ballot, which may result in push bac k
from voters that would otherwise support a local sales tax measure .
3.Measure Y is too important to the community to risk waiting until 2014, when voter
turnout will be lower than is expected for the Presidential election in 2012 .
4.The City should go in 2012 because the current survey shows that it has well over 50 %
support and according to the City's consultant, the 2012 Presidential election will turn ou t
more voters likely to support a local sales tax measure .
5.The City should wait until 2014 to provide time to develop a vivid picture of what th e
budget would look like if Measure Y was not renewed .
6.Waiting until 2014 gives the City an opportunity to continue to highlight the benefits
associated with Measure Y expenditures .
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UUT Ordinance Modernization Page 7
Measure Y Reauthorizatio n
7.Approval is 2012 will provide certainty in the budget process and make the 2013-1 5
Financial Plan a more accurate and realistic plan for expenditures .
8.The City should wait until 2014 when the economy is likely to be better and voters ma y
be more optimistic and favorable towards tax measures .
Staff has considered this input in relation to the specific task related to this Major City Goal wor k
plan item which directs staff to work with the Council and Community . to "determine optima l
timing for ballot measure ." As a tool for developing a recommendation on this issue, a matrix wa s
developed listing the pros and cons associated with reauthorization in 2012 versus 201 4
(Attachment 3). In addition, staff has considered the formal input provided by the Downtow n
Association and the Chamber of Commerce (Attachments 4 and 5) and the informal input fro m
several Advisory Bodies and the Land Conservancy that informally opined about 2012 versus 2014 .
In consideration of all the input received, including the impacts of having two local revenu e
measures on the ballot in November, the lack of an organized network of support to promot e
reauthorization, and the potential for competing State revenue measures, staff is recommendin g
that the City Council not place Measure Y reauthorization on the 2012 general election ballot .
There are good reasons for the Council to consider regarding both options ; however, 2012 does not
appear to be the "appropriate "nor optimal time for this important ballot measure .
CONCURRENCE S
The City Attorney concurs with the recommendation to modernize the City's UUT ordinance .
FISCAL IMPAC T
Modernization of the existing Utility Users Tax will assure continued receipt of approximately $4 .8
million in annual revenue used to fund vital City services . Failure to modernize the City's UU T
relative to telecommunication services could place this a portion of this significant General Fun d
revenue source at risk. The telecommunications portion of the UUT represents approximately $1 .1
million in annual revenue .
There is no immediate fiscal impact associated with a decision not to place reauthorization o f
Measure Y on the 2012 general election ballot . Reauthorization may be pursued in November 2014 ,
which is prior to the expiration of the '/2 cent sales tax schedule to occur on March 30, 2015 .
Holding a renewal vote in 2014 will necessitate some form of contingency planning for th e
possibility that renewal is not authorized by the voters but a specific plan or fiscal impact cannot b e
estimated at this time . It is likely that additional costs (historically about $25,000) for public opinio n
research will be incurred in order to gather information concerning a Measure Y renewal in 2014 .
Should the council decide to place one or two measures on the November 2012 ballot, there is a n
additional direct cost . According to an estimate from the County, the total incremental cost of eac h
measure added to the ballot is $2,310 .
UUT Ordinance Modernization Page 8
Measure Y Reauthorizatio n
ALTERNATIVE S
1 . Do not approve moving forward with a ballot measure to modernize the UU T
ordinance .Given the importance of this revenue source to the City and the current lega l
and legislative environment, this option is not recommended .
Determine that reauthorization of Measure Y should be placed on the 2012 genera l
election ballot .This alternative is not recommended because of the "collide" with othe r
revenue measures on the ballot, the lack of broad-based support in the community for earl y
renewal, and the need to focus on the proposal to modernize the City's UUT ordinance .
ATTACHMEN T
1.City's current UUT ordinance
2.Draft of proposed UUT ordinanc e
3.Measure Y Reauthorization pro and con matri x
4.Letter from Downtown Association regarding Measure Y reauthorizatio n
5.Letter from Chamber of Commerce regarding Measure Y reauthorizatio n
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ATTACHMENT 1
Chapter 3 .1 6
UTILITY USERS TA X
Sections :
3 .16 .010 Title .
3 .16 .020 Purpose .
3 .16 .030 Definitions .
3 .16 .040 Exemptions .
3 .16 .050 Telephone users tax .
3 .16 .060 Electricity users tax .
3 .16 .070 Gas users tax .
3 .16 .080 Water users tax .
3 .16 .090 Cable television users tax .
3 .16 .100 Operative date .
3 .16 .110 Collections .
3 .16 .120 Reporting and remitting .
3 .16 .130 Administrative agreements .
3.16 .140 Interest and penalties .
3 .16 .150 Actions to collect .
3 .16 .160 Refusal of service supplier to collect and report tax—Determination of tax by ta x
administrator .
3 .16 .170 Nonpayment tax by service user—Administrative remedy .
3 .16 .180 Appeal .
3 .16 .190 Recordkeeping .
3 .16 .200 Refunds—Overpayments .
3 .16 .210 Refunds—Low-income retirement homes .
3 .16 .220 California Public Utilities Commission jurisdiction .
3 .16 .010 Title.
This chapter shall be known as the "utility users tax ordinance" of the city . (Prior code § 6600 )
3 .16 .020 Purpose .
The taxes imposed and levied by the provisions of this chapter are solely for the purpose o f
providing revenue for the usual and current expenses of the city . The provisions of this chapter
are not enacted for regulatory purposes . (Prior code § 6618 )
3 .16 .030 Definitions .
Except where the context otherwise requires, the definitions given in this section govern th e
construction of this chapter :
A."City" means the city of San Luis Obispo .
B."Month" means a calendar month .
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ATTACHMENT 1
C."Person" means any domestic or foreign corporation, firm, association, syndicate, joint stoc k
company, partnership of any kind, joint venture, club, Massachusetts business or common la w
trust, society, individual or municipal corporation .
D."Service supplier" means a telephone, electrical, gas, water or cable television corporatio n
required to collect and remit a tax imposed by this chapter, and shall include the city's wate r
department.
E."Service user" means a person required to pay a tax imposed by this chapter .
F."Tax administrator" means the director of finance of the city of San Luis Obispo .
G."Telephone corporation," "electrical corporation," "gas corporation," "water corporation" an d
"cable television corporation" shall have the same meanings as defined in Sections 234, 218 ,
222, 241 and 215 .5, respectively, of the Public Utilities Code of the state, as the sections existe d
March 4, 1972, and shall include governmental agencies or entities . (Prior code § 6601 )
3 .16 .040 Exemptions .
Nothing in this chapter shall be construed as imposing a tax upon (1) the city, or (2) any perso n
when imposition of such tax upon that person would be in violation of the Constitution of th e
United States or that of the state of California, or (3) the state, any county, municipa l
corporation, city and county, district or any political subdivision of the state . (Prior code § 6602 )
3 .16.050 Telephone users tax .
A.There is imposed a tax upon every person, other than a telephone corporation, using intrastat e
telephone communication services in the city . The tax imposed by this section shall be at the rat e
of five percent of all charges made for such services and shall be paid by the person paying suc h
charges .
B.As used in this section, the term "charges" shall not include charges for services paid for b y
inserting coins in coin-operated telephones except that where such coin-operated telephon e
service is furnished for a guaranteed amount, the amounts paid under such guarantee plus an y
fixed monthly or other periodic charge shall be included in the base for computing the amount o f
tax due ; nor shall the term "telephone communication services" include land-mobile services o r
maritime-mobile services as defined in Section 2 .1 of Title 47 of the Code of Federa l
Regulations as such section existed on January 1, 1970 .
C.Notwithstanding the provisions of subsection (A) of this section, the tax imposed under thi s
section shall not be imposed upon any person for using intrastate communication services to the
extent that the amounts paid for such services are exempt from or not subject to the tax impose d
by Section 4251 of Title 26 of the United States Code, as such section existed on January 1 ,
1972, without regard to subsection (b) thereof . (Prior code § 6603)
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ATTACHMENT 1
3 .16.060 Electricity users tax .
A.There is imposed a tax upon every person, other than an electrical corporation or a ga s
corporation, using electrical energy in the city . The tax imposed by this section shall be at th e
rate of five percent of the charge made for such energy and shall be paid by the person payin g
such charges . "Charges," as used in this section, includes charges made for (1) metered energy ,
and (2) minimum charges for service, including customer charges, service charges, deman d
charges, standby charges, and annual and monthly charges .
B.As used in this section, the term "using electrical energy" shall not be construed to mean th e
storage of such energy by a person in a battery owned or possessed by him or her for use in a n
automobile or other machinery or device apart from the premises upon which the energy wa s
received ; provided, however, that the term includes the receiving of such energy for the purpos e
of using it in the charging of batteries . The term shall not include electricity used in wate r
pumping by water corporations ; nor shall the term include the mere receiving of such energy b y
an electrical corporation or governmental agency at a point within the city for resale . (Prior cod e
§ 6604)
3 .16 .070 Gas users tax .
A.There is imposed a tax upon every person, other than a gas corporation or an electrica l
corporation, using gas in the city which is delivered through mains or pipes . The tax imposed b y
this section shall be at the rate of five percent of the charges made for such gas and shall be pai d
by the person paying such charges .
B.There shall be excluded from the base on which the tax imposed in this section is computed :
1.Charges made for gas which is to be resold and delivered through mains or pipes ;
2.Charges made for gas to be used in the generation of electrical energy by an electrica l
corporation ;
3.Charges for gas used in water pumping by water corporations ; an d
4.Charges made for gas utilized to propel motor vehicles . (Prior code § 6605 )
3 .16 .080 Water users tax .
A.There is imposed a tax upon every person using water in the city which is delivered throug h
mains or pipes. The tax imposed by this section shall be at the rate of five percent of the charge s
made for such water and shall be paid by the person paying such charges .
B."Charges" as used in this section, includes minimum charges for service, including custome r
charges, service charges, standby charges, and annual and monthly charges .
ATTACHMENT 1
C . There shall be excluded from the base on which the tax imposed in this section is compute d
charges made for water which is to be resold and delivered through mains or pipes and charge s
made for water used in the generation of electrical energy by an electrical corporation . (Prior
code § 6606 )
3 .16 .090 Cable television users tax .
There is imposed a tax upon every person using cable television service in the city . The tax
imposed by this section shall be at the rate of five percent of the charges made for such servic e
and shall be paid by the person paying such charges . (Prior code §6607)
3.16 .100 Operative date .
The utility users taxes provided for herein shall be operative from and after January 1, 1973, or at
the beginning of the first regular billing period for each service user after January 1, 1973 ,
whichever is later . (Prior code § 6608 )
3 .16 .110 Collections .
A.Every service supplier receiving payment of charges from a service user shall collect th e
amount of tax imposed by this chapter from the service user .
B.The tax shall be collected insofar as practicable at the same time as and along with th e
collection of charges made in accordance with the regular billing practice of the service supplier.
If the amount paid by a service user is less than the full amount of the charge and tax which ha s
accrued for the billing period, a proportionate share of both the charge and the tax shall b e
deemed to have been paid .
C.The duty to collect the tax from service users shall commence upon the operative date of the
tax as set forth in Section 3 .16 .100 .
D.Notwithstanding other provisions of this section, whenever a service supplier, pursuant to a n
order of the California Public Utilities Commission or a court of competent jurisdiction, makes a
refund to service users of charges for past utility services, the taxes paid pursuant to this code o n
the amount of such refunded charges shall also be refunded to service users, and the servic e
supplier shall be entitled to claim a credit for such refunded taxes against the amount of tax
which is due upon the next monthly returns . The service supplier shall notify the city in writin g
of its intent to issue the refund and estimated amounts thereof prior to the refund date . In the
event this code is repealed, the amounts of any refundable taxes will be borne by the city . (Ord.
1049 § 1, 1985 : prior code § 6609 )
3 .16 .120 Reporting and remitting .
Each service supplier shall, on or before the last day of each month, make a return to the ta x
administrator, on forms provided by him or her, stating the amount of taxes billed by the servic e
supplier during the preceding month . At the time the return is filed, the full amount of the tax
collected shall be remitted to the tax administrator . The tax administrator is authorized to require
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ATTACHMENT 1
such further information as he or she reasonably deems necessary to determine if the tax impose d
by this chapter is being levied and collected in accordance with this chapter . Returns an d
remittances are due immediately upon cessation of business for any reason . (Prior code § 6609 .1 )
3 .16 .130 Administrative agreements .
The tax administrator may make administrative agreements to vary the strict requirements of thi s
chapter so that collection and remittance of any tax imposed by this chapter may be made in
conformance with the billing procedures of a particular service supplier so long as the overal l
result of the agreements result in collection of the tax in conformance with the general purpos e
and scope of this chapter . A copy of each such agreement shall be on file and available for publi c
examination in the tax administrator's office . (Prior code § 6609 .2 )
3 .16.140 Interest and penalties .
A.Taxes collected from a service user by a service supplier which are not remitted to the tax
administrator on or before the due date are delinquent .
B.Interest and penalties for delinquency in remittance of any tax collected shall be assessed a s
follows :
1.Any service supplier who fails to remit any tax imposed by this chapter within te n
days after receipt of written notice from the city of such failure shall pay a penalty of te n
percent of the amount of the tax .
2.If the tax administrator determines that the nonpayment of any remittance due is du e
to fraud, willfulness or inexcusable neglect, a penalty of twenty-five percent of th e
amount of the tax shall be added thereto in addition to the penalty stated in subdivision 1
of this subsection .
3.In addition to the penalties imposed in this subsection,any service supplier who fails
to timely remit any tax imposed by this chapter, shall pay interest at the rate of one-hal f
of one percent per month, or fraction thereof, on the amount of the tax, exclusive o f
penalties, from the date on which the remittance first became delinquent until paid .
4.Every penalty imposed upon a service supplier, and such interest as accrues, under th e
provisions of this subsection shall become a part of the tax required to be remitted . (Prio r
code § 6609 .3 )
3 .16.150 Actions to collect .
Any tax required to be paid by a service user under the provisions of this chapter shall be deeme d
a debt owed by the service user to the city . Any such tax collected from a service user which ha s
not been remitted to the tax administrator shall be deemed a debt owed to the city by the servic e
supplier . Any person owing money to the city under the provisions of this chapter shall be liabl e
to an action brought in the name of the city for the recovery of such amount . (Prior code § 6610 )
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ATTACHMENT 1
3 .16 .160 Refusal of service supplier to collect and report tax—Determination of tax by ta x
administrator .
If any service supplier shall refuse to make within the time provided in this chapter any repor t
and remittance of the tax or any portion thereof required by this chapter, the tax administrato r
shall proceed in such manner as he or she may deem best to obtain facts and information on
which to base his or her estimate of the tax due . As soon as he or she procures such facts an d
information he or she shall estimate the tax and shall assess against such service supplier the tax,
interest and penalties provided for by this chapter. The tax administrator shall give a notice of th e
amount so assessed by serving it personally or by depositing it in the United States mail, postag e
prepaid, addressed to the service supplier so assessed at his or her last known place of address .
Such service supplier may within ten days after the serving or mailing of such notice, make
application in writing to the tax administrator for a hearing on the amount assessed . If application
by the service supplier for a hearing is not made within the time prescribed, the tax, interest an d
penalties, if any, determined by the tax administrator shall become final and conclusive an d
immediately due and payable . If such application is made, the tax administrator shall give no t
less than five days written notice in the manner prescribed in this section to the service supplie r
to show cause at a time and place fixed in the notice why the amount specified therein should no t
be fixed for such tax, interest and penalties . At such hearing, the service supplier may appear an d
offer evidence why such specified tax, interest and penalties should not be so fixed . After such
hearing, the tax administrator shall determine the proper tax to be remitted and shall thereafte r
give written notice to the service supplier in the manner prescribed in this section of suc h
determination and the amount of such tax, interest and penalties . The amount determined to b e
due shall be payable after fifteen days unless an appeal is taken as provided in Section 3 .16 .180 .
(Prior code § 661 I )
3 .16 .170 Nonpayment tax by service user—Administrative remedy .
A.Whenever the tax administrator believes that a service user has deliberately failed to pay th e
amount of any users tax imposed by this chapter, he or she may relieve the service supplier of th e
obligation to collect the tax from the service user for specified billing periods ; provided, that if a
service user has failed to pay the amount of the tax to a service supplier for a period of four
consecutive billing periods, the tax administrator shall relieve such service supplier of th e
obligation to collect the tax from the service user for the billing periods .
B.The tax administrator shall notify the service user that he or she has assumed responsibility t o
collect the taxes due for the stated periods and demand payment of such taxes . The notice shal l
be served on the service user by handing it to him or her personally or by deposit of the notice i n
the United States mail, postage prepaid thereon, addressed to the service user at the address t o
which billing was made by the service supplier, or, should the service user have changed his o r
her address, to his or her last known address . If a service user fails to remit the tax to the ta x
administrator within fifteen days from the date of the service upon him or her, which shall be th e
date of mailing if service is not accomplished in person, a penalty of ten percent of the amount o f
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ATTACHMENT 1
the tax set forth in the notice shall be imposed, but not less than ten dollars, and shall becom e
part of the tax required by this chapter to be paid . (Prior code § 6612 )
3 .16 .180 Appeal .
Any person aggrieved by any decision of the tax administrator may appeal to the city council b y
filing a notice of appeal with the city clerk and the tax administrator within fifteen days of th e
service or mailing of the decision . The council shall fix a time and place for hearing such appeal ,
and the city clerk shall give notice in writing to such person at his or her last known place o f
address . Any amount found by the council to be owed by the service user shall be due an d
payable in full at once . (Prior code § 6613 )
3 .16 .190 Recordkeeping.
It shall be the duty of every service supplier required to collect and remit to the city any ta x
imposed by this chapter to keep and preserve, for a period of three years, all records as may b e
necessary to determine the amount of such tax as such service supplier may have been require d
to collect and remit to the city, which records the tax administrator shall have the right to inspec t
at all reasonable times . (Prior code § 6614 )
3 .16 .200 Refunds—Overpayments .
A.Filing Claim . Whenever the amount of any tax, interest or penalty has been overpaid or pai d
more than once or has been erroneously or illegally collected or received by the city under thi s
chapter, it may be refunded as provided in subsections B and C of this section, provided a clai m
in writing therefor, stating under penalty of perjury the specific grounds upon which the claim i s
founded, is filed with the tax administrator within three years of the date of payment . The clai m
shall be on forms furnished by the tax administrator .
B.Refund to Service Supplier . A service supplier may claim a refund or take as credit agains t
taxes collected and remitted an amount overpaid, paid more than once, or erroneously or illegall y
collected or received, when it is established that the service user from whom the tax has bee n
collected did not owe the tax ; provided, however, that no such refund or a credit shall be allowe d
unless the amount of the tax so collected has either been refunded to the service user or credite d
to charges subsequently payable by him or her .
C.Refund to Service User. Any service user may obtain a refund of taxes overpaid, or paid more
than once, or erroneously or illegally collected or received by the city, by filing a claim in th e
manner provided in subsection A of this section, but only when service user having paid the ta x
to the service supplier establishes to the satisfaction of the tax administrator that the service use r
has been unable to obtain a refund from the service supplier who collected the tax .
D.Proof Required . No refund shall be paid under the provisions of this section unless th e
claimant establishes his or her right thereto by written records showing entitlement thereto . (Prior
code § 6615)
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ATTACHMENT 1
3 .16 .210 Refunds—Low-income retirement homes .
A.If a billing for utility services includes charges for two or more households situated withi n
nonprofit retirement facilities (1) which are operated solely for the accommodation of person s
with low incomes and (2) which qualify for the welfare exemption set forth in the Californi a
Revenue and Taxation Code, and if the charges for such se, vices are paid by the operators of th e
retirement facilities, the operators shall be entitled to an annual refund of all taxes paid under th e
provisions of this chapter .
B.The procedure for obtaining such refunds shall be established by the tax administrator in
substantial conformance with the applicable provisions of Prior Code Section 6616 . The ta x
administrator may require whatever proof he or she deems necessary to establish an operator's
qualifications for a refund, and he or she shall deny a refund if such qualifications are no t
established to his or her satisfaction .
C.Nothing in this section shall be construed to prohibit persons residing in the retirement
facilities from obtaining a refund under the provisions of Prior Code Section 6616 for utilit y
services which are billed through separate billings applicable only to the household in whic h
such person resides, the charges for which are paid by such person . (Prior code § 6616 .1 )
3 .16 .220 California Public Utilities Commission jurisdiction .
Nothing contained in this chapter is intended to conflict with applicable rules, regulations an d
tariffs of any service supplier subject to the jurisdiction of the California Public Utilitie s
Commission . In the event of any conflict, the provisions of the rules, regulations and tariffs shal l
control . (Prior code § 6617 )
a
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ATTACHMENT 2
ORDINANCE NO . 2012-??
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO, CALIFORNI A
AMENDING TITLE 3, CHAPTER 16 OF THE SAN LUIS OBISPO MUNICIPA L
CODE WITH RESPECT TO UTILITY USER'S TAX .
THE PEOPLE OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA D O
ORDAIN AS FOLLOWS :
SECTION 1 .Title 3, Chapter 16 of the San Luis Obispo Municipal Code i s
hereby amended, and it shall read as follows :
Chapter 1 6
Utility Users' Ta x
3 .16 .010 Short Titl e
3 .16 .020 Definitions
3 .16 .030 Constitutional, Statutory, and Other Exemption s
3 .16 .040 Telecommunication Users' Tax
3 .16 .050 Electricity Users' Ta x
3 .16 .060 Gas Users Ta x
3 .16 .070 Collection of Tax from Service Users Receiving Direct Purchase of Gas o r
Electricity
3 .16 .080 Video Users' Tax
3 .16 .090 Water Users' Tax
3 .16 .100 Bundling Taxable Items with Nontaxable Item s
3 .16 .110 Substantial Nexus/Minimum Contact s
3 .16 .120 Duty to Collect – Procedure s
3 .16 .130 Collection Penalties – Service Supplier s
3 .16 .140 Actions to Collec t
3 .16 .150 Deficiency Determination and Assessment – Tax Application Errors
3 .16 .160 Administrative Remedy – Nonpaying Service User s
3 .16 .170 Additional Powers and Duties of the Tax Administrator
3 .16 .180 Record s
3 .16 .190 Refund s
3 .16 .200 Appeal s
3 .16 .210 No Injunction/Writ of Mandat e
3 .16.220 Notice of Changes to Chapte r
3 .16 .230 Future Amendment to Cited Statut e
3 .16.240 No Increase in Tax Percentage or Change in Methodology without Vote r
Approval
3 .16 .250 Independent Audit of Tax Collection, Exemption, Remittance, and Expenditur e
3 .16 .260 Remedies Cumulativ e
3 .16 .270 Interaction with Prior Tax
ATTACHMENT 2
3 .16 .010 Short Title
This Chapter 16 shall be known as the "Utility Users' Tax Law of the City of Sa n
Luis Obispo".
3 .16 .020 Definition s
The following words and phrases whenever used in this Chapter 16, shall b e
construed as defined in this Section .
(a)
"Ancillary telecommunication services"means services that ar e
associated with or incidental to the provision, use or enjoyment of telecommunication s
services, including but not limited to the following services :
(1)"Conference bridging service"means an ancillary service that links tw o
(2) or more participants of an audio or video conference call and may include th e
provision of a telephone number . Conference bridging service does not include th e
telecommunications services used to reach the conference bridge .
(2)"Detailed telecommunications billing service"means an ancillar y
service of separately stating information pertaining to individual calls on a customer's
billing statement .
(3)"Directory assistance"means an ancillary service of providing telephon e
number information, and/or address information .
(4)"Vertical service"means an ancillary service that is offered in connectio n
with one or more telecommunications services, which offers advanced calling feature s
that allow customers to identify callers and to manage multiple calls and call connections ,
including conference bridging services .
(5)"Voice mail service"means an ancillary service that enables the custome r
to store, send or receive recorded messages . Voice mail service does not include an y
vertical services that the customer may be required to have in order to utilize the voic e
mail service
(b)
"Ancillary video services"means services that are associated with o r
incidental to the provision or delivery of video services, including but not limited t o
electronic program guide services, recording services, search functions, or othe r
interactive services or communications that are associated with or incidental to th e
provision, use or enjoyment of video services .
(c)
"Billing address"shall mean the mailing address of the service use r
where the service supplier submits invoices or bills for payment by the customer .
(d)
"City" shall mean the City of San Luis Obispo .
2
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ATTACHMENT 2
(e)"Gas" shall mean natural or manufactured gas or any alternat e
hydrocarbon fuel which may be substituted therefor .
(f)"Individual Service"shall mean utility service at a single contiguou s
location . A service user with more than one meter or billing invoice per utility service a t
a single contiguous location may combine all billings for purposes of calculating th e
maximum tax amount .
(g)"Mobile telecommunications service"has the meaning and usage as se t
forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124)and th e
regulations thereunder .
(h)"Month"shall mean a calendar month .
(i)
"Non-Utility Service Supplier"means :
(1)a service supplier, other than a supplier of electric distribution services to al l
or a significant portion of the City, which generates electricity for sale to others ,
and shall include but is not limited to any publicly-owned electric utility, investor-
owned utility, cogenerator, distributed generation provider, exempt wholesal e
generator (15 US. C Section 79z-5a),municipal utility district, federal powe r
marketing agency, electric rural cooperative, or other supplier or seller o f
electricity ;
(2)an electric service provider (ESP), electricity broker, marketer, aggregator ,
pool operator, or other electricity supplier other than a supplier of electri c
distribution services to all or a significant portion of the City, which sells o r
supplies electricity or supplemental services to electricity users within the City ; o r
(3)a gas service supplier, aggregator, marketer or broker, other than a supplier o f
gas distribution services to all or a significant portion of the City, which sells o r
supplies gas or supplemental services to gas users within the City .
(j)"Paging service"means a "telecommunications service" that provides
transmission of coded radio signals for the purpose of activating specific pagers ; such
transmissions may include messages and/or sounds .
(k)"Person"shall mean, without limitation, any natural individual, firm,
trust, common law trust, estate, partnership of any kind, association, syndicate, club, join t
stock company, joint venture, limited liability company, corporation (including foreign ,
domestic, and non-profit), municipal district or municipal corporation (other than th e
City), cooperative, receiver, trustee, guardian, or other representative appointed by orde r
of any court .
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ATTACHMENT 2
(1)
"Place of primary use"means the street address representative of wher e
the customer's use of the telecommunications service primarily occurs, which must b e
the residential street address or the primary business street address of the customer .
(m)"Post-paid telecommunication service"means the telecommunicatio n
service obtained by making a payment on a communication-by-communication basi s
either through the use of a credit card or payment mechanism such as a bank card, trave l
card, credit card, or debit card, or by charge made to a service number which is no t
associated with the origination or termination of the telecommunication service .
(n)
"Prepaid telecommunication service"means the right to acces s
telecommunication services, which must be paid for in advance and which enables th e
origination of communications using an access number or authorization code, whethe r
manually or electronically dialed, and that is sold in predetermined units or dollars o f
which the number declines with use in a known amount .
(o)
"Private telecommunication service"means a telecommunication
service that entitles the customer to exclusive or priority use of a communication s
channel or group of channels between or among termination points, regardless of th e
manner in which such channel or channels are connected, and includes switchin g
capacity, extension lines, stations, and any other associated services that are provided i n
connection with the use of such channel or channels . A communications channel is a
physical or virtual path of communications over which signals are transmitted between o r
among customer channel termination points (i . e ., the location where the customer either
inputs or receives the communications).
(p)"Service address"means the residential street address or the busines s
street address of the service user . For a telecommunication or video service user,
"service address" means either :
(1)The location of the service user's telecommunication equipment from
which the telecommunication originates or terminates, regardless of where th e
telecommunication is billed or paid ; or,
(2)If the location in subsection (1) of this definition is unknown (e .g ., mobile
telecommunications service or VoIP service), the service address means the location o f
the service user's place of primary use .
(3)For prepaid telecommunication service, "service address" means the locatio n
associated with the service number or, if not known, the point of sale of the services .
(q)
"Service supplier"shall mean any entity or person, including the City ,
that provides, sells, or resells a utility service to a user of such service within the City .
(r)
"Service user"shall mean a person required to pay a tax imposed unde r
the provisions of this Chapter .
4
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ATTACHMENT 2
(s)"State" shall mean the State of California .
(t)"Streamlined Sales and Use Tax Agreement"means the multi-stat e
agreement commonly known and referred to as the Streamlined Sales and Use Ta x
Agreement, as it is amended from time to time .
(u)"Tax Administrator"shall mean the Finance Director, or his or he r
designee .
(v)"Telecommunications service"means the transmission, conveyance, o r
routing of voice, data, audio, video, or any other information or signals to a point, o r
between or among points, whatever the technology used . The term "telecommunication s
services" includes such transmission, conveyance, or routing in which compute r
processing applications are used to act on the form, code or protocol of the content fo r
purposes of transmission, conveyance or routing without regard to whether such service s
are referred to as voice over internet protocol (VoIP) services or are classified by th e
Federal Communications Commission as enhanced or value added, and includes vide o
and/or data services that is functionally integrated with "telecommunication services ."
"Telecommunications services" include, but are not limited to the following services ,
regardless of the manner or basis on which such services are calculated or billed :
ancillary telecommunication services ; intrastate, interstate, and international
telecommunication services ; mobile telecommunications service ; prepai d
telecommunication service ; post-paid telecommunication service ; private
telecommunication service ; paging service ; 800 service (or any other toll-free number s
designated by the Federal Communications Commission); 900 service (or any other
similar numbers designated by the Federal Communications Commission for service s
whereby subscribers who call in to pre-recorded or live service).
(w)"Video programming"means those programming services commonl y
provided to subscribers by a "video service supplier" including but not limited to basi c
services, premium services, audio services, video games, pay-per-view services, video o n
demand, origination programming, or any other similar services, regardless of the conten t
of such video programming, or the technology used to deliver such services, an d
regardless of the manner or basis on which such services are calculated or billed .
(x)"Video services"means "video programming" and any and all services
related to the providing, recording, delivering, use or enjoyment of "video programming "
(including origination programming and programming using Internet Protocol, e .g., IP-
TV and IP-Video) using one or more channels by a "video service supplier," regardles s
of the technology used to deliver, store or provide such services, and regardless of th e
manner or basis on which such services are calculated or billed, and includes ancillar y
video services, data services, "telecommunication services," or interactiv e
communication services that are functionally integrated with "video services ."
(y)"Video service supplier"means any person, company, or service whic h
provides or sells one or more channels of video programming, or provides or sells the
ATTACHMENT 2
capability to receive one or more channels of video programming, including an y
communications that are ancillary, necessary or common to the provision, use o r
enjoyment of the video programming, to or from a business or residential address in th e
City, where some fee is paid, whether directly or included in dues or rental charges fo r
that service, whether or not public rights-of-way are utilized in the delivery of the vide o
programming or communications . A "video service supplier" includes, but is not limite d
to, multichannel video programming distributors (as defined in 47 U .S .C .A . Section
522(13)); open video systems (OVS) suppliers ; and suppliers of cable television ; maste r
antenna television; satellite master antenna television ; multichannel multipoin t
distribution services (MMDS); video services using internet protocol (e .g ., IP-TV and IP-
Video, which provide, among other things, broadcasting and video on demand), direc t
broadcast satellite to the extent federal law permits taxation of its video services, now o r
in the future ; and other suppliers of video services (including two-way communications),
whatever their technology .
(z)
"VoIP (Voice Over Internet Protocol)"means the digital process o f
making and receiving real-time voice transmissions over any Internet Protocol network .
(aa)"800 Service"means a "telecommunications service" that allows a calle r
to dial a toll-free number without incurring a charge for the call . The service is typicall y
marketed under the name "800," "855," "866," "877," and "888" toll-free calling, an d
any subsequent numbers designated by the Federal Communications Commission .
(bb)"900 Service"means an inbound toll "telecommunications service "
purchased by a subscriber that allows the subscriber's customers to call in to th e
subscriber's prerecorded announcement or live service . "900 service" does not includ e
the charge for : collection services provided by the seller of the "telecommunication s
services" to the subscriber, or service or product sold by the subscriber to the subscriber's
customer. The service is typically marketed under the name "900" service, and an y
subsequent numbers designated by the Federal Communications Commission .
3 .16 .030 Constitutional, statutory, and other exemptions .
(a)Nothing in this Chapter shall be construed as imposing a tax upon any person o r
service when the imposition of such tax upon such person or service would be i n
violation of a Federal or State statute, the Constitution of the United States or th e
Constitution of the State .
(b)Any service user that is exempt from the tax imposed by this Chapter pursuant t o
subsection (a) of this Section shall file an application with the Tax Administrator for a n
exemption ; provided, however, this requirement shall not apply to a service user that is a
State or Federal agency or subdivision with a commonly recognized name for suc h
service . Said application shall be made upon a form approved by the Tax Administrato r
and shall state those facts, declared under penalty of perjury, which qualify the applican t
for an exemption, and shall include the names of all service suppliers serving that servic e
user. If deemed exempt by the Tax Administrator, such service user shall give the Tax
6
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ATTACHMENT 2
Administrator timely written notice of any change in service suppliers so that the Ta x
Administrator can properly notify the new service supplier of the service user's ta x
exempt status . A service user that fails to comply with this Chapter shall not be entitled t o
a refund of a users' tax collected and remitted to the Tax Administrator from such servic e
user as a result of such noncompliance .
The decision of the Tax Administrator may be appealed pursuant to Sectio n
3 .16 .200 of this Chapter. Filing an application with the Tax Administrator and appeal t o
the City Administrator, or designee, pursuant to Section 3 .16 .200 of this Chapter is a
prerequisite to a suit thereon .
(c)The City Council may, by resolution, establish one or more classes of persons o r
one or more classes of utility service otherwise subject to payment of a tax imposed b y
this Chapter and provide that such classes of persons or service shall be exempt, in whol e
or in part from such tax for a specified period of time .
(d)If a billing for utility services includes charges for two or more household s
situated within nonprofit retirement facilities which (1) are operated solely for th e
accommodation of persons with low incomes and (2) which qualify for the welfar e
exemption set forth in the California Revenue and Taxation Code, and if the charges fo r
such services are paid by the operators of the retirement facilities, the operators shall b e
entitled to an annual refund of all taxes paid under the provisions of this ordinance . The
procedure for obtaining such refunds shall be established by the tax administrator ,
including the requirement for whatever proof he or she deems necessary to establis h
qualification for refund .
3 .16 .040 Telecommunication Users' Tax .
(a)There is hereby imposed a tax upon every person in the City usin g
telecommunication services . The tax imposed by this Section shall be at the rate of fou r
and eight-tenths percent (4 .8%) of the charges made for such services and shall b e
collected from the service user by the telecommunication services supplier or its billin g
agent. There is a rebuttable presumption that telecommunication services, which ar e
billed to a billing or service address in the City, are used, in whole or in part, within th e
City's boundaries, and such services are subject to taxation under this Section . There is
also a rebuttable presumption that prepaid telecommunication services sold within th e
city are used, in whole or in part, within the City and are therefore subject to taxatio n
under this Section . If the billing address of the service user is different from the servic e
address, the service address of the service user shall be used for purposes of imposing th e
tax . As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the telecommunication services .
(b)"Mobile telecommunications service" shall be sourced in accordance with th e
sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 US. C.
Section 124).The Tax Administrator may issue and disseminate to telecommunication
B2-23
ATTACHMENT 2
service suppliers, which are subject to the tax collection requirements of this Chapter ,
sourcing rules for the taxation of other telecommunication services, including but no t
limited to post-paid telecommunication services, prepaid telecommunication services ,
VoIP, and private communication services, provided that such rules are based upo n
custom and common practice that further administrative efficiency and minimize mult i
jurisdictional taxation (e .g., Streamlined Sales and Use Tax Agreement).
(c)The Tax Administrator may issue and disseminate to telecommunication servic e
suppliers, which are subject to the tax collection requirements of this Chapter, a n
administrative ruling identifying those telecommunication services, or charges therefore ,
that are subject to or not subject to the tax of subsection (a) above .
(d)As used in this Section, the term "telecommunication services" shall include, bu t
is not limited to, charges for : connection, reconnection, termination, movement, o r
change of telecommunication services ; late payment fees ; detailed billing ; central offic e
and custom calling features (including but not limited to call waiting, call forwarding ,
caller identification and three-way calling); voice mail and other messaging services ;
directory assistance ; access and line charges ; universal service charges ; regulatory o r
administrative fees, charges or surcharges ; cost recovery charges or surcharges fo r
programs imposed by state or federal law ; local number portability charges ; and text an d
instant messaging . "Telecommunication services" shall not include digital downloads tha t
are not "ancillary telecommunication services," such as music, ringtones, games, an d
similar digital products .
(e)To prevent actual multi jurisdictional taxation of telecommunication service s
subject to tax under this Section, any service user, upon proof to the Tax Administrato r
that the service user has previously paid the same tax in another state or city on suc h
telecommunication services, shall be allowed a credit against the tax imposed to th e
extent of the amount of such tax legally imposed in such other state or city ; provided,
however, the amount of credit shall not exceed the tax owed to the City under thi s
Section .
(g)
The tax on telecommunication services imposed by this Section shall be collecte d
from the service user by the service supplier . The amount of tax collected in one month
shall be remitted to the Tax Administrator, and must be received by the Ta x
Administrator on or before the twentieth (20th) day of the following month .
3 .16.050 Electricity Users Tax .
(a) There is hereby imposed a tax upon every person using electricity in the City . The tax
imposed by this Section shall be at the rate of five percent (5%) of the charges made fo r
such electricity, and for any supplemental services or other associated activities directl y
related to and/or necessary for the provision of electricity to the service user, which ar e
provided by a service supplier or non-utility service supplier to a service user . The tax
shall be collected from the service user by the service supplier or non-utility servic e
supplier, or its billing agent .
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ATTACHMENT 2
(b) As used in this Section, the term "charges" shall apply to all services, components an d
items that are : i) necessary for or common to the receipt, use or enjoyment of electri c
service ; or, ii) currently are or historically have been included in a single or bundled rat e
for electric service by a local distribution company to a class of retail customers . The
term "charges" shall include, but is not limited to, the following charges :
(1)energy charges ;
(2)distribution or transmission charges ;
(3)metering charges ;
(4)stand-by, reserves, firming, ramping, voltage support, regulation, emergency ,
or other similar charges for supplemental services to self-generation service users ;
(5)customer charges, late charges, service establishment or reestablishmen t
charges, demand charges, fuel or other cost adjustments, power exchange charges ,
independent system operator (ISO) charges, stranded investment or competitiv e
transition charges (CTC), public purpose program charges, nuclea r
decommissioning charges, trust transfer amounts (bond financing charges),
franchise fees, franchise surcharges, annual and monthly charges, and othe r
charges, fees or surcharges which are necessary for or common to the receipt, us e
or enjoyment of electric service ; and ,
(6)charges, fees, or surcharges for electricity services or programs which ar e
mandated by the California Public Utilities Commission or the Federal Energ y
Regulatory Commission, or by any state or federal law, whether or not suc h
charges, fees, or surcharges appear on a bundled or line item basis on th e
customer billing.
(c) As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the electricity or services related to the provision of suc h
electricity .
(d) The Tax Administrator, from time to time, may survey the electric service supplier s
to identify the various unbundled billing components of electric retail service that the y
commonly provide to residential and commercial/industrial customers in the of the City ,
and the charges therefor, including those items that are mandated by state or federa l
regulatory agencies as a condition of providing such electric service . The Ta x
Administrator, thereafter, may issue and disseminate to such electric service suppliers a n
administrative ruling identifying those components and items which are : i) necessary fo r
or common to the receipt, use or enjoyment of electric service ; or, ii) currently are o r
historically have been included in a single or bundled rate for electric service by a loca l
distribution company to a class of retail customers . Charges for such components an d
items shall be subject to the tax of subsection (a) above .
(e) As used in this Section, the term "using electricity" shall not include the mere
receiving of such electricity by an electrical corporation or governmental agency at a
point within the City for resale .
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ATTACHMENT 2
(f) The tax on electricity provided by self-production or by a non-utility service supplie r
not under the jurisdiction of this Chapter 16 shall be collected and remitted in the manne r
set forth in Section 3 .16 .070 of this Chapter . All other taxes on charges for electricit y
imposed by this Section shall be collected from the service user by the electric servic e
supplier or its billing agent . The amount of tax collected in one (1) month shall b e
remitted to the Tax Administrator, and must be received by the Tax Administrator on o r
before the twentieth (20 th) day of the following month ; or, at the option of the person
required to collect and/or remit the tax, such person shall remit an estimated amount o f
tax measured by the tax billed in the previous month or upon the payment pattern of th e
service user, which must be received by the Tax Administrator on or before the twentiet h
(20 th) day of the following month, provided that such person shall submit an adjuste d
payment or request for credit, as appropriate, within sixty (60) days following eac h
calendar quarter . The credit, if approved by the Tax Administrator, may be applie d
against any subsequent remittance that becomes due .
3 .16.060 Gas Users Tax .
(a)There is hereby imposed a tax upon every person using gas in the City, which i s
transported and delivered through a pipeline or by mobile transport . The tax imposed b y
this Section shall be at the rate of five percent (5%) of the charges made for such gas ,
including all services related to the storage, transportation and delivery of such gas . The
tax shall be collected from the service user by the service supplier or non-utility servic e
supplier, or its billing agent, and shall apply to all uses of gas, including but not limite d
to, heating, electricity generation, and the use of gas as a component of a manufacture d
product .
(b)As used in this Section, the term "charges" shall apply to all services, components an d
items for gas service that are : i) necessary for or common to the receipt, use or
enjoyment of gas service ; or, ii) currently are or historically have been included in a
single or bundled rate for gas service by a local distribution company to a class of retai l
customers . The term "charges" shall include, but is not limited to, the following charges :
(1)the commodity charges for purchased gas, or the cost of gas owned by th e
service user (including the actual costs attributed to drilling, production, lifting ,
storage, gathering, trunkline, pipeline, and other operating costs associated wit h
the production and delivery of such gas), which is delivered through a ga s
pipeline distribution system ;
(2)gas transportation charges (including interstate charges to the extent no t
included in commodity charges);
(3)storage charges ; provided, however, that the service supplier shall not b e
required to apply the tax to any charges for gas storage services when the servic e
supplier cannot, as a practical matter, determine the jurisdiction where such store d
gas is ultimately used ; but it shall be the obligation of the service user to self -
collect the amount of tax not applied to any charge for gas storage by the servic e
supplier and to remit the tax to the appropriate jurisdiction ;
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(4)capacity or demand charges, late charges, service establishment o r
reestablishment charges, transition charges, customer charges, minimum charges ,
annual and monthly charges, and any other charges which are necessary for o r
common to the receipt, use or enjoyment of gas service ; and,
(5)charges, fees, or surcharges for gas services or programs which are mandate d
by the California Public Utilities Commission or the Federal Energy Regulator y
Commission, or by any state or federal law, whether or not such charges, fees, o r
surcharges appear on a bundled or line item basis on the customer billing .
(c)As used in this Section, the term "charges" shall include the value of any other
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the gas or services related to the delivery of such gas .
(d)The Tax Administrator, from time to time, may survey the gas service suppliers t o
identify the various unbundled billing components of gas retail service that the y
commonly provide to residential and commercial/industrial customers in the City, and th e
charges therefor, including those items that are mandated by state or federal regulator y
agencies as a condition of providing such gas service . The Tax Administrator, thereafter ,
may issue and disseminate to such gas service suppliers an administrative rulin g
identifying those components and items which are : i) necessary for or common to th e
receipt, use or enjoyment of gas service ; or, ii) currently are or historically have bee n
included in a single or bundled rate for gas service by a local distribution company to a
class of retail customers . Charges for such components and items shall be subject to th e
tax of subsection (a) above .
(e)There shall be excluded from the calculation of the tax imposed in this Section ,
charges made for gas which is to be resold and delivered through a pipeline distributio n
system .
(f)The tax on gas provided by self-production or by a non-utility service supplier no t
under the jurisdiction of this Chapter 16 shall be collected and remitted in the manner se t
forth in Section 3 .16 .070 . All other taxes on charges for gas imposed by this Sectio n
shall be collected from the service user by the gas service supplier or its billing agent .
The amount of tax collected in one (1) month shall be remitted to the Tax Administrator ,
and must be received by the Tax Administrator, on or before the twentieth (20th) day o f
the following month ; or, at the option of the person required to collect and/or remit th e
tax, such person shall remit an estimated amount of tax measured by the tax billed in th e
previous month or upon the payment pattern of the service user, which must be ,received
by the Tax Administrator on or before the twentieth (20 `h) day of the following month ,
provided that such person shall submit an adjusted payment or request for credit, a s
appropriate, within sixty (60) days following each calendar quarter . The credit, i f
approved by the Tax Administrator, may be applied against any subsequent remittanc e
that becomes due .
3 .16 .070 Collection of Tax from Service Users Receiving Direct Purchase of Gas o r
Electricity .
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(a)Any service user subject to the tax imposed by Section 3 .16 .050 or by Section
3 .16 .060 of this Chapter, which produces gas or electricity for self-use regardless o f
technology used to produce such gas or electricity ; which receives gas or electricity ,
including any related supplemental services, directly from a non-utility service supplier
not under the jurisdiction of this Chapter ; or which, for any other reason, is not having th e
full tax collected and remitted by its service supplier, a non-utility service supplier, or it s
billing agent on the use of gas or electricity in the City, including any relate d
supplemental services, shall report said fact to the Tax Administrator and shall remit th e
tax due directly to the Tax Administrator within thirty (30) days of such use, based on th e
charges for, or value of, such gas or electricity, or supplemental services, as provided i n
subsection (b). In lieu of paying said actual tax, the service user may, at its option, remi t
to the Tax Administrator within thirty (30) days of such use an estimated amount of tax
measured by the tax billed in the previous month, or upon the payment pattern of simila r
customers of the service supplier using similar amounts of gas or electricity, provide d
that the service user shall submit an adjusted payment or request for credit, as
appropriate, within sixty (60) days following each calendar quarter . The credit, i f
approved by the Tax Administrator in writing, may be applied against any subsequent ta x
bill that becomes due .
(b)The Tax Administrator may require said .service user to identify its non-utility servic e
supplier, and otherwise provide, subject to audit : invoices ; books of account ; or other
satisfactory evidence documenting the quantity of gas or electricity used, including an y
related supplemental services, and the cost or price thereof . If the service user is unabl e
to provide such satisfactory evidence, or if the administrative cost of calculating the ta x
in the opinion of the Tax Administrator is excessive, the Tax Administrator ma y
determine the tax by applying the tax rate to the equivalent charges the service use r
would have incurred if the gas or electricity used, including any related supplementa l
services, had been provided by the service supplier that is the primary supplier of gas o r
electricity within the City . Rate schedules for this purpose shall be available from th e
City.
3 .16.080 Video Users' Tax .
(a)There is hereby imposed a tax upon every person in the City using video services .
The tax imposed by this section shall be at the rate of four and eight-tenths percent
(4 .8%) of the charges made for such services and shall be collected from the service use r
by the video service supplier, or its billing agent . There is a rebuttable presumption tha t
video services, which are billed to a billing or service address in the City, are used, i n
whole or in part, within the City's boundaries, and such services are subject to taxatio n
under this Chapter . If the billing address of the service user is different from the servic e
address, the service address of the service user shall be used for purposes of imposing th e
tax .
(b)As used in this section, the term "charges" shall include, but is not limited to, charge s
for the following :
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(1)regulatory fees and surcharges, franchise fees and access fees (PEG);
(2)initial installation of equipment necessary for provision and receipt of vide o
services ;
(3)late fees, collection fees, bad debt recoveries, and return check fees ;
(4)activation fees, reactivation fees, and reconnection fees ;
(5)video programming and video services ;
(6)ancillary video programming services (e .g ., electronic program guid e
services, search functions, recording functions, or other interactive services o r
communications that are ancillary, necessary or common to the use or enjoymen t
of the video services);
(7)equipment leases (e .g ., remote, recording and/or search devises ; converters);
and,
(8)service calls, service protection plans, name changes, changes of services, an d
special services .
(c)As used in this section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the video services .
(d)The Tax Administrator may issue and disseminate to video service suppliers, whic h
are subject to the tax collection requirements of this Chapter, an administrative rulin g
identifying those video services, or charges therefor, that are subject to or not subject t o
the tax of subsection (a) above .
(e)The tax imposed by this section shall be collected from the service user by the vide o
service supplier, its billing agent, or a reseller of such services . In the case of vide o
service, the service user shall be deemed to be the purchaser of the bulk video servic e
(e .g ., an apartment owner), unless such service is resold to individual users, in which cas e
the service user shall be the ultimate purchaser of the video service . The amount of ta x
collected in one (1) month shall be remitted to the Tax Administrator, and must b e
received by the Tax Administrator on or before the twentieth (20th) day of the followin g
month .
3 .16 .090 Water Users' Tax .
(a) There is imposed a tax upon every person using water in the City which i s
transported and delivered through a pipeline distribution system . The tax imposed by thi s
section shall be at the rate of five percent (5%) of the charges made for such water .
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(b)As used in this section, the term "charges" shall apply to all services, component s
and items that are : i) necessary for or common to the receipt, use or enjoyment of wate r
service ; or, ii) currently are or historically have been included in a single or bundled rat e
for water service by a local distribution company to a class of retail customers . The term
"charges" shall include, but is not limited to, the following charges : water commodity
charges (potable and non-potable); distribution or transmission charges ; metering
charges ; customer charges ; fire protection services ; late charges ; service establishment or
reestablishment charges ; franchise fees ; franchise surcharges ; annual and monthl y
charges ; and other charges, fees and surcharges which are necessary for or common t o
the receipt, use or enjoyment of water service ; and, charges, fees, or surcharges for wate r
services or programs, which are mandated by a water district or a state or federal agency ,
whether or not such charges, fees, or surcharges appear on a bundled or line item basis o n
the customer billing .
(c)As used in this section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by the
service user in exchange for the water services .
(d)The Tax Administrator, from time to time, may survey the water service suppliers i n
the City to identify the various unbundled billing components of water retail service that
they commonly provide to residential and commercial/industrial customers in the City ,
and the charges therefor, including those items that are mandated by a water district or a
state or federal agency as a condition of providing such water service . The Tax
Administrator, thereafter, may issue and disseminate to such water service suppliers an
administrative ruling identifying those components and items which are : i) necessary for
or common to the receipt, use or enjoyment of water service ; or, ii) currently are o r
historically have been included in a single or bundled rate for water service by a loca l
distribution company to a class of retail customers . Charges for such components an d
items shall be subject to the tax of subsection (a) above .
(e)The tax on water service imposed by this section shall be collected from the servic e
user by the water service supplier or its billing agent . The amount of tax collected in on e
(1) month shall be remitted to the Tax Administrator, and must be received by the Ta x
Administrator on or before the twentieth (20th) day of the following month .
3 .16 .100 Bundling Taxable Items .
If any nontaxable charges are combined with and not separately stated from taxabl e
service charges on the customer bill or invoice of a service supplier, the combined charg e
is subject to tax unless the service supplier identifies, by reasonable and verifiabl e
standards, the portions of the combined charge that are nontaxable and taxable throug h
the service supplier's books and records kept in the regular course of business, and i n
accordance with generally accepted accounting principles, and not created an d
maintained for tax purposes . If the service supplier offers a combination of taxable an d
non-taxable services, and the charges are separately stated, then for taxation purposes, th e
values assigned the taxable and non-taxable services shall be based on its books and
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records kept in the regular course of business and in accordance with generally accepte d
accounting principles, and not created and maintained for tax purposes . The servic e
supplier has the burden of proving the proper valuation and apportionment of taxable an d
non-taxable charges.
3 .16 .110 Substantial Nexus/Minimum Contact .
For purposes of imposing a tax or establishing a duty to collect and remit a tax under thi s
Chapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favor
of the imposition, collection and/or remittance of the utility users' tax to the fullest exten t
permitted by State and Federal law, and as it may change from time to time by judicia l
interpretation or by statutory enactment . Any telecommunication service (includin g
VoIP) used by a person with a service address in the City, which service is capable o f
terminating a call to another person on the general telephone network, shall be subject t o
a rebuttable presumption that "substantial nexus/minimum contacts" exists for purpose s
of imposing a tax, or establishing a duty to collect and remit a tax, under this Chapter.A
service supplier shall be deemed to have sufficient activity in the City for tax collectio n
and remittance purposes if its activities include, but are not limited to, any of th e
following : maintains or has within the City, directly or through an agent or subsidiary,a
place of business of any nature ; solicits business in the City by employees, independen t
contractors, resellers, agents or other representatives ; solicits business in the City on a
continuous, regular, seasonal or systematic basis by means of advertising that is broadcas t
or relayed from a transmitter with the City or distributed from a location with the City ; or
advertises in newspapers or other periodicals printed and published within the City o r
through materials distributed in the City by means other than the United States mail ; or i f
there are activities performed in the City on behalf of the service supplier that ar e
significantly associated with the service supplier's ability to establish and maintain a
market in the City for the provision of utility services that are subject to a tax under thi s
Chapter .
3 .16.120 Duty to Collect Procedures .
(a)
Collection by Service Suppliers :The duty of service suppliers to collect an d
remit the taxes imposed by the provisions of this Chapter shall be performed as follows :
(1)The tax shall be collected by service suppliers insofar as practicable at th e
same time as, and along with, the collection of the charges made in accordance with th e
regular billing practice of the service supplier . Where the amount paid by a service use r
to a service supplier is less than the full amount of the charge and tax which was accrue d
for the billing period, a proportionate share of both the charge and the tax shall b e
deemed to have been paid . In those cases where a service user has notified the servic e
supplier of refusal to pay the tax imposed on said charges, Section 3 .16 .916 shall apply .
(2)The duty of a service supplier to collect the tax from a service user shal l
commence with the beginning of the first regular billing period applicable to the servic e
user where all charges normally included in such regular billing are subject to the
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provisions of this Chapter . Where a service user receives more than one billing, one o r
more being for different periods than another, the duty to collect shall arise separately fo r
each billing period .
(b)
Filing Return and Payment :Each person required by this Chapter to remit a ta x
shall file a return to the Tax Administrator, on forms approved by the Tax Administrator ,
on or before the due date . The full amount of the tax collected shall be included with th e
return and filed with the Tax Administrator . The Tax Administrator is authorized t o
require such additional information as he or she deems necessary to determine if the ta x
is being levied, collected, and remitted in accordance with this Chapter . Returns are du e
immediately upon cessation of business for any reason . Pursuant to Revenue and Tax
Code Section 7284 .6,the Tax Administrator, and its agents, shall maintain such filin g
returns as confidential information that is exempt from the disclosure provisions of th e
Public Records Act .
3 .16 .130 Collection Penalties-Service Suppliers .
(a)Taxes collected from a service user are delinquent if not received by the Ta x
Administrator on or before the due date . Should the due date occur on a weekend or lega l
holiday, the return must be received by the Tax Administrator on the first regula r
working day following the weekend or legal holiday . A direct deposit, including
electronic fund transfers and other similar methods of electronically exchanging monie s
between financial accounts, made by a service supplier in satisfaction of its obligation s
under this Chapter shall be considered timely if the transfer is initiated on or before th e
due date, and the transfer settles into the City's account on the following business day .
(b)If the person required to collect and/or remit the utility users' tax fails to collec t
the tax (by failing to properly assess the tax on one or more services or charges on th e
customer's billing) or fails to remit the tax collected on or before the due date, the Ta x
Administrator shall attach a penalty for such delinquencies or deficiencies at the rate o f
fifteen percent (15%) of the total tax that is delinquent or deficient in the remittance, an d
shall pay interest at the rate of seventy-five one-hundredths percent (0 .75%) per month ,
or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date o n
which the remittance first became delinquent, until paid .
(c)The Tax Administrator shall have the power to impose additional penalties upo n
persons required to collect and remit taxes pursuant to the provisions of this Chapter fo r
fraud or gross negligence in reporting or remitting at the rate of fifteen percent (15%) o f
the amount of the tax collected and/or required to be remitted, or as recomputed by th e
Tax Administrator .
(d)For collection purposes only, every penalty imposed and such interest that i s
accrued under the provisions of this Chapter shall become a part of the tax herei n
required to be paid .
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(e)
Notwithstanding the foregoing, the Tax Administrator may, in his or he r
discretion, modify the due dates of this Chapter to be consistent with any unifor m
standards or procedures that are mutually agreed upon by other public agencies imposin g
a utility users' tax, or otherwise legally established, to create a central payment locatio n
or mechanism .
3 .16 .140 Actions to Collect .
Any tax required to be paid by a service user under the provisions of this Chapter shall b e
deemed a debt owed by the service user to the City . Any such tax collected from a servic e
user which has not been remitted to the Tax Administrator shall be deemed a debt owe d
to the City by the person required to collect and remit and shall no longer be a debt of th e
service user . Any person owing money to the City under the provisions of this Chapte r
shall be liable to an action brought in the name of the City for the recovery of suc h
amount, including penalties and interest as provided for in this Chapter, along with an y
collection costs incurred by the City as a result of the person's noncompliance with thi s
Chapter, including, but not limited to, reasonable attorneys' fees . Any tax required to b e
collected by a service supplier or owed by a service user is an unsecured priority excis e
tax obligation under 11 U S. CA . Section 507(a)(8) (C).Service suppliers who seek to
collect charges for service in bankruptcy proceedings shall also include in any such clai m
the amount of taxes due the City for those services, unless the Tax Administrato r
determines that such duty is in conflict with any federal or state law, rule, or regulation o r
that such action would be administratively impractical .
3 .16.150 Deficiency Determination and Assessment-Tax Application Errors .
(a)The Tax Administrator shall make a deficiency determination if he or sh e
determines that any person required to pay or collect taxes pursuant to the provisions o f
this Chapter has failed to pay, collect, and/or remit the proper amount of tax b y
improperly or failing to apply the tax to one or more taxable services or charges . Nothing
herein shall require that the Tax Administrator institute proceedings under this Sectio n
3 .16 .150 if, in the opinion of the Tax Administrator, the cost of collection or enforcemen t
likely outweighs the tax benefit .
(b)The Tax Administrator shall mail a notice of such deficiency determination to th e
person required to pay or remit the tax, which notice shall refer briefly to the amount o f
the taxes owed, plus interest at the rate of seventy-five one-hundredths percent (0 .75%)
per month, or any fraction thereof, on the amount of the tax from the date on which th e
tax should have been received by the City. Within fourteen (14) calendar days after th e
date of service of such notice, the person may request in writing to the Tax Administrato r
for a hearing on the matter .
(c)If the person fails to request a hearing within the prescribed time period, th e
amount of the deficiency determination shall become a final assessment, and shal l
immediately be due and owing to the City . If the person requests a hearing, the Tax
Administrator shall cause the matter to be set for hearing, which shall be scheduled
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within thirty (30) days after receipt of the written request for hearing . Notice of the tim e
and place of the hearing shall be mailed by the Tax Administrator to such person at leas t
ten (10) calendar days prior to the hearing, and, if the Tax Administrator desires sai d
person to produce specific records at such hearing, such notice may designate the record s
requested to be produced .
(d)At the time fixed for the hearing, the Tax Administrator shall hear all relevan t
testimony and evidence, including that of any other interested parties . At the discretion o f
the Tax Administrator, the hearing may be continued from time to time for the purpose o f
allowing the presentation of additional evidence . Within a reasonable time following th e
conclusion of the hearing, the Tax Administrator shall issue a final assessment (or non -
assessment), thereafter, by confirming, modifying or rejecting the original deficienc y
determination, and shall mail a copy of such final assessment to person owing the tax .
The decision of the Tax Administrator may be appealed pursuant to Section 3 .16 .200 of
this Chapter . Filing an application with the Tax Administrator and appeal to the Cit y
Administrator, or designee, pursuant to Section 3 .16 .200 of this Chapter is a prerequisit e
to a suit thereon.
(e)Payment of the final assessment shall become delinquent if not received by th e
Tax Administrator on or before the thirtieth (30th) day following the date of receipt of th e
notice of final assessment . The penalty for delinquency shall be fifteen percent (15%) o n
the total amount of the assessment, along with interest at the rate of seventy-five one -
hundredths percent (0 .75%) per month, or any fraction thereof, on the amount of the tax ,
exclusive of penalties, from the date of delinquency, until paid . The applicable statute o f
limitations regarding a claim by the City seeking payment of a tax assessed under this
Chapter shall commence from the date of delinquency as provided in this subsection (e).
(f)All notices under this Chapter may be sent by regular mail, postage prepaid, an d
shall be deemed received on the third calendar day following the date of mailing, a s
established by a proof of mailing .
3 .16 .160 Administrative Remedy-Non-Paying Service Users .
(a)
Whenever the Tax Administrator determines that a service user has deliberatel y
withheld the amount of the tax owed by the service user from the amounts remitted to a
person required to collect the tax, or whenever the Tax Administrator deems it in the bes t
interest of the City, he or she may relieve such person of the obligation to collect th e
taxes due under this Chapter from certain named service users for specific billing periods .
To the extent the service user has failed to pay the amount of tax owed for a period o f
two (2) or more billing periods, the service supplier shall be relieved of the obligation t o
collect taxes due . The service supplier shall provide the City with the names an d
addresses of such service users and the amounts of taxes owed under the provisions o f
this Chapter . Nothing herein shall require that the Tax Administrator institut e
proceedings under this Section 3 .16 .160 if, in the opinion of the Tax Administrator, th e
cost of collection or enforcement likely outweighs the tax benefit .
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(b)In addition to the tax owed, the service user shall pay a delinquency penalty at th e
rate of fifteen percent (15%) of the total tax that is owed, and shall pay interest at the rat e
of seventy-five one-hundredths percent (0 .75%) per month, or any fraction thereof, on th e
amount of the tax, exclusive of penalties, from the due date, until paid .
(c)The Tax Administrator shall notify the non-paying service user that the Ta x
Administrator has assumed the responsibility to collect the taxes due for the state d
periods and demand payment of such taxes, including penalties and interest . The notic e
shall be served on the service user by personal delivery or by deposit of the notice in th e
United States mail, postage prepaid, addressed to the service user at the address to whic h
billing was made by the person required to collect the tax; or, should the service use r
have a change of address, to his or her last known address .
(d)If the service user fails to remit the tax to the Tax Administrator within thirty (30 )
days from the date of the service of the notice upon him or her, the Tax Administrato r
may impose an additional penalty of fifteen percent (15%) of the amount of the total ta x
that is owed .
3 .16 .170 Additional Powers and Duties of the Tax Administrator.
(a)The Tax Administrator shall have the power and duty, and is hereby directed, t o
enforce each and all of the provisions of this Chapter .
(b)The Tax Administrator may adopt administrative rules and regulations consistent
with provisions of this Chapter for the purpose of interpreting, clarifying, carrying out
and enforcing the payment, collection and remittance of the taxes herein imposed. The
administrative ruling shall not impose a new tax, revise an existing tax methodology a s
stated in this Chapter, or increase an existing tax, except as allowed by California
Government Code Section 53750(h)(2).A copy of such administrative rules an d
regulations shall be on file in the Tax Administrator's office . To the extent that the Tax
Administrator determines that the tax imposed under this Chapter shall not be collected i n
full for any period of time from any particular service supplier or service user, tha t
determination shall be considered an exercise of the Tax Administrator's discretion t o
settle disputes and shall not constitute a change in taxing methodology for purposes o f
Government Code Section 53750 or otherwise . The Tax Administrator is not authorize d
to amend the City's methodology for purposes of Government Code Section 53750 and
the City does not waive or abrogate its ability to impose the utility users' tax in full as a
result of promulgating administrative rulings or entering into agreements .
(c)Upon a proper showing of good cause, the Tax Administrator may make
administrative agreements, with appropriate conditions, to vary from the stric t
requirements of this Chapter and thereby : (1) conform to the billing procedures of a
particular service supplier so long as said agreements result in the collection of the tax i n
conformance with the general purpose and scope of this Chapter; or, (2) to avoid a
hardship where the administrative costs of collection and remittance greatly outweigh th e
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tax benefit. A copy of each such agreement shall be on file in the Tax Administrator's
office, and are voidable by the Tax Administrator or the City at any time .
(d)The Tax Administrator may conduct an audit, to ensure proper compliance wit h
the requirements of this Chapter, of any person required to collect and/or remit a ta x
pursuant to this Chapter . The Tax Administrator shall notify said person of the initiatio n
of an audit in writing . In the absence of fraud or other intentional misconduct, the audi t
period of review shall not exceed a period of three (3) years next preceding the date o f
receipt of the written notice by said person from the Tax Administrator . Upon completio n
of the audit, the Tax Administrator may make a deficiency determination pursuant t o
Section 3 .16 .150 of this Chapter for all taxes (and applicable penalties and interest) owe d
and not paid, as evidenced by information provided by such person to the Ta x
Administrator . If said person is unable or unwilling to provide sufficient records to enabl e
the Tax Administrator to verify compliance with this Chapter, the Tax Administrator i s
authorized to make a reasonable estimate of the deficiency . Said reasonable estimate shal l
be entitled to a rebuttable presumption of correctness .
(e)Upon receipt of a written request of a taxpayer, and for good cause, the Ta x
Administrator may extend the time for filing any statement required pursuant to thi s
Chapter for a period of not to exceed forty-five (45) days, provided that the time for filin g
the required statement has not already passed when the request is received . No penalty
for delinquent payment shall accrue by reason of such extension . Interest shall accru e
during said extension at the rate of seventy-five one-hundredths percent (0 .75%) per
month, prorated for any portion thereof.
(f)The Tax Administrator shall determine the eligibility of any person who asserts a
right to exemption from, or a refund of, the tax imposed by this Chapter .
(g)Notwithstanding any provision in this Chapter to the contrary, the Tax
Administrator may waive any penalty or interest imposed upon a person required t o
collect and/or remit for failure to collect the tax imposed by this Chapter if the non -
collection occurred in good faith . In determining whether the non-collection was in goo d
faith, the Tax Administrator shall take into consideration the uniqueness of the product o r
service, industry practice or other precedence . The Tax Administrator may als o
participate with other utility users' tax public agencies in conducting coordinate d
compliance reviews with the goal of achieving administrative efficiency and uniform ta x
application determinations, where possible . To encourage full disclosure and on-goin g
cooperation on annual compliance reviews, the Tax Administrator, and its agents, ma y
enter into agreements with the tax-collecting service providers and grant prospective onl y
effect on any changes regarding the taxation of services or charges that were previousl y
deemed by the service provider, in good faith and without gross negligence, to be non -
taxable . In determining whether the non-collection was in good faith and without gros s
negligence, the Tax Administrator shall take into consideration the uniqueness of th e
product or service, industry practice or other precedence .
3 .16 .180 Records .
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ATTACHMENT 2
(a)It shall be the duty of every person required to collect and/or remit to the City an y
tax imposed by this Chapter to keep and preserve, for a period of at least three (3) years ,
all records as may be necessary to determine the amount of such tax as he/she may hav e
been liable for the collection of and remittance to the Tax Administrator, which record s
the Tax Administrator shall have the right to inspect at a reasonable time .
(b)The City may issue an administrative subpoena to compel a person to deliver, t o
the Tax Administrator, copies of all records deemed necessary by the Tax Administrato r
to establish compliance with this Chapter, including the delivery of records in a commo n
electronic format on readily available media if such records are kept electronically by th e
person in the usual and ordinary course of business . As an alternative to delivering th e
subpoenaed records to the Tax Administrator on or before the due date provided in th e
administrative subpoena, such person may provide access to such records outside the Cit y
on or before the due date, provided that such person shall reimburse the City for al l
reasonable travel expenses incurred by the City to inspect those records, including travel ,
lodging, meals, and other similar expenses, but excluding the normal salary or hourl y
wages of those persons designated by the City to conduct the inspection .
(c)The Tax Administrator is authorized to execute a non-disclosure agreemen t
approved by the City Attorney to protect the confidentiality of customer informatio n
pursuant to California Revenue and Tax Code Sections 7284 .6 and 7284 .7.
(d)If a service supplier uses a billing agent or billing aggregator to bill, collect ,
and/or remit the tax, the service supplier shall : 1) provide to the Tax Administrator th e
name, address and telephone number of each billing agent and billing aggregato r
currently authorized by the service supplier to bill, collect, and/or remit the tax to th e
City ; and, 2) upon request of the Tax Administrator, deliver, or effect the delivery of, an y
information or records in the possession of such billing agent or billing aggregator that, i n
the opinion of the Tax Administrator, is necessary to verify the proper application ,
calculation, collection and/or remittance of such tax to the City .
(e)If any person subject to record-keeping under this Chapter unreasonably denie s
the Tax Administrator access to such records, or fails to produce the informatio n
requested in an administrative subpoena within the time specified, then the Ta x
Administrator may impose a penalty of Five Hundred Dollars ($500 .00) on such perso n
for each day following : 1) the initial date that the person refuses to provide such access ;
or, 2) the due date for production of records as set forth in the administrative subpoena .
This penalty shall be in addition to any other penalty imposed under this Chapter .
3 .16.190 Refund s
Whenever the amount of any tax has been overpaid or paid more than once or has bee n
erroneously or illegally collected or received by the Tax Administrator under this Chapte r
from a person or service supplier, it may be refunded as provided in this Section a s
follows :
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(a)Written Claim for Refund :The Tax Administrator may refund any tax that ha s
been overpaid or paid more than once or has been erroneously or illegally collected o r
received by the Tax Administrator under this Chapter from a person or service supplier ,
provided that no refund shall be paid under the provisions of this Section unless th e
claimant or his or her guardian, conservator, executor, or administrator has submitted a
written claim to the Tax Administrator within one year of the overpayment or erroneou s
or illegal collection of said tax . Such claim must clearly establish claimant's right to th e
refund by written records showing entitlement thereto . Nothing herein shall permit th e
filing of a claim on behalf of a class or group of taxpayers unless each member of th e
class has submitted a written claim under penalty of perjury as provided by this Section .
(b)Compliance with Claims Act : The filing of a written claim pursuant t o
Government Code Section 935 is a prerequisite to any suit thereon . Any action brough t
against the City pursuant to this Chapter shall be subject to the provisions of Governmen t
Code Sections 945 .6 and 946.The Tax Administrator, or the City Council where th e
claim is in excess of Five Thousand Dollars ($5,000 .00), shall act upon the refund clai m
within the time period set forth in Government Code Section 912 .4 .If the Tax
Administrator/City Council fails or refuses to act on a refund claim within the tim e
prescribed by Government Section 912.4,the claim shall be deemed to have been rejecte d
by the City Council on the last day of the period within which the City Council wa s
required to act upon the claim as provided in Government Code Section 912 .4.The Tax
Administrator shall give notice of the action in a form which substantially complies wit h
that set forth in Government Code Section 913 .
(c)Refunds to Service Suppliers :Notwithstanding the notice provisions o f
subsection (a) of this Section, the Tax Administrator may, at his or her discretion, giv e
written permission to a service supplier, who has collected and remitted any amount o f
tax in excess of the amount of tax imposed by this Chapter, to claim credit for suc h
overpayment against the amount of tax which is due the City upon a subsequent monthl y
return(s) to the Tax Administrator, provided that, prior to taking such credit by th e
service supplier : 1) such credit is claimed in a return dated no later than one year from th e
date of overpayment or erroneous collection of said tax ; 2) the Tax Administrator i s
satisfied that the underlying basis and amount of such credit has been reasonabl y
established ; and, 3) in the case of an overpayment by a service user to the service supplie r
that has been remitted to the City, the Tax Administrator has received proof, to his or he r
satisfaction, that the overpayment has been refunded by the service supplier to the servic e
user in an amount equal to the requested credit .
3 .16 .200 Appeals .
(a)
The provisions of this Section apply to any decision (other than a decision relatin g
to a refund pursuant to Section 3 .16 .190 of this Chapter), deficiency determination ,
assessment, or administrative ruling of the Tax Administrator . Any person aggrieved b y
any decision (other than a decision relating to a refund pursuant to Section 3 .16 .190 of
this Chapter), deficiency determination, assessment, or administrative ruling of the Ta x
Administrator, shall be required to comply with the appeals procedure of this Section .
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Compliance with this Section shall be a prerequisite to a suit thereon . [See Governmen t
Code Section 935(b)].Nothing herein shall permit the filing of a claim or action o n
behalf of a class or group of taxpayers .
(b)If any person is aggrieved by any decision (other than a decision relating to a
refund pursuant to Section 3 .16 .190 of this Chapter), deficiency determination ,
assessment, or administrative ruling of the Tax Administrator ; he or she may appeal t o
the City Administrator, or designee, by filing a notice of appeal with the City Cler k
within fourteen (14) days of the date of the decision, deficiency determination ,
assessment, or administrative ruling of the Tax Administrator which aggrieved th e
service user or service supplier .
(c)The matter shall be scheduled for hearing before an independent hearing office r
selected by the City Administrator, or designee, no more than thirty (30) days from th e
receipt of the appeal . The appellant shall be served with notice of the time and place o f
the hearing, as well as any relevant materials, at least five (5) calendar days prior to th e
hearing . The hearing may be continued from time to time upon mutual consent . At the
time of the hearing, the appealing party, the Tax Administrator, and any other intereste d
person may present such relevant evidence as he or she may have relating to th e
determination from which the appeal is taken .
(d)Based upon the submission of such evidence and the review of the City's files, th e
hearing officer shall issue a written notice and order upholding, modifying or reversin g
the determination from which the appeal is taken . The notice shall be given withi n
fourteen (14) days after the conclusion of the hearing and shall state the reasons for th e
decision. The notice shall specify that the decision is final and that any petition fo r
judicial review shall be filed within ninety (90) days from the date of the decision in
accordance with Code of Civil Procedure Section 1094 .6 .
(e)All notices under this Section may be sent by regular mail, postage prepaid, an d
shall be deemed received on the third calendar day following the date of mailing, a s
established by a proof of mailing .
3 .16 .210 No Injunction/Writ of Mandate .
No injunction or writ of mandate or other legal or equitable process shall issue in an y
suit, action, or proceeding in any court against this City or against any officer of the Cit y
to prevent or enjoin the collection under this Chapter of any tax or any amount of ta x
required to be collected and/or remitted .
3 .16 .220 Notice of Changes to Ordinance .
If a tax under this Chapter is added repealed, increased, reduced, or the tax base i s
changed, the Tax Administrator shall follow the notice requirements of California Publi c
Utilities Code Section 799.
ATTACHMENT 2
3 .16 .230 Effect of State and Federal Reference/Authorization .
Unless specifically provided otherwise, any reference to a State or Federal statute in thi s
Chapter shall mean such statute as it may be amended from time to time, provided tha t
such reference to a statute herein shall not include any subsequent amendment thereto, o r
to any subsequent change of interpretation thereto by a State or Federal agency or cour t
of law with the duty to interpret such law, to the extent that such amendment or change o f
interpretation would require voter approval under California law, or to the extent tha t
such change would result in a tax decrease (as a result of excluding all or a part of a
utility service, or charge therefor, from taxation). Only to the extent voter approval woul d
otherwise be required or a tax decrease would result, the prior version of the statute (o r
interpretation) shall remain applicable ; for any application or situation that would no t
require voter approval or result in a decrease of a tax, provisions of the amended statut e
(or new interpretation) shall be applicable to the maximum possible extent .
To the extent that the City's authorization to collect or impose any tax imposed under thi s
Chapter is expanded or limited as a result of changes in State or Federal law, n o
amendment or modification of this Chapter shall be required to conform the tax to thos e
changes, and the tax shall be imposed and collected to the full extent of the authorizatio n
up to the full amount of the tax imposed under this Chapter .
3 .16.240 No Increase in Tax Percentage or Change in Methodology Without Vote r
Approval ; Amendment or Repeal .
This Title 3, Chapter 16 of the San Luis Obispo Municipal Code may be repealed o r
amended by the City Council without a vote of the People . However, as required by
Chapter XIIIC of the California Constitution,voter approval is required for an y
amendment provision that would increase the rate of any tax levied pursuant to thi s
Ordinance . The People of the City of San Luis Obispo affirm that the following action s
shall not constitute an increase of the rate of a tax :
(1)The restoration of the rate of the tax to a rate that is no higher than that set by thi s
Ordinance, if the City Council has acted to reduce the rate of the tax ;
(2)An action that interprets or clarifies the methodology of the tax, or any definitio n
applicable to the tax, so long as such interpretation or clarification (even if contrary t o
some prior interpretation or clarification) is not inconsistent with the language of thi s
Ordinance ;
(3)The establishment a class of persons that is exempt or excepted from the tax or th e
discontinuation of any such exemption or exception (other than the discontinuation of a n
exemption or exception specifically set forth in this Ordinance); and
(4)The collection of the tax imposed by this ordinance, even if the City had, for som e
period of time, failed to collect the tax .
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ATTACHMENT 2
[OPTIONAL] 3 .16.250 Independent Audit of Tax Collection, Exemption ,
Remittance, and Expenditure .
The City shall annually verify that the taxes owed under this Chapter have been properl y
applied, exempted, collected, and remitted in accordance with this Chapter, and properl y
expended according to applicable municipal law . The annual verification shall b e
performed by a qualified independent third party and the review shall employ reasonable ;
cost-effective steps to assure compliance, including the use of sampling audits . Th e
verification shall not be required of tax remitters where the cost of the verification ma y
exceed the tax revenues to be reviewed .
3.16 .260 Remedies Cumulative .
All remedies and penalties prescribed by this Chapter or which are available under an y
other provision of law or equity, including but not limited to the California False Claim s
Act (Government Code Section 12650 et seq .)and the California Unfair Practices Ac t
(Business and Professions Code Section 17070 et seq .),are cumulative . The use of on e
or more remedies by the City shall not bar the use of any other remedy for the purpose o f
enforcing the provisions of this Chapter .
3 .16 .270 Interaction With Prior Tax .
(a).Collection of Tax by Service Providers . Service providers shall begin to collect th e
tax imposed by this amended Chapter 16 as soon as feasible after the effective date of th e
Chapter, but in no event later than permitted by Section 799 of the California Publi c
Utilities Code .
(b).Satisfaction of Tax Obligation by Service Users . Prior to April 1, 2013, any perso n
who pays the tax levied pursuant to Title 3, Chapter 16 of this Code, as it existed prior t o
its amendment as provided herein, with respect to any charge for a service shall b e
deemed to have satisfied his or her obligation to pay the tax levied pursuant to Title 3 ,
Chapter 16 as amended herein, with respect to that charge . The intent of this paragraph i s
to prevent the imposition of multiple taxes upon a single utility charge during th e
transition period from the prior Utility Users' Tax ordinance to the amended Utility
Users' Tax ordinance (which transition period ends April 1, 2013) and to permit servic e
providers or other persons with an obligation to remit the tax hereunder, during tha t
transition period, to satisfy their collection obligations by collecting either tax .
(c) In the event that a final court order should determine that the election enacting this
Title 3, Chapter 16 (as amended herein) is invalid for whatever reason, or that any ta x
imposed under this Title 3, Chapter 16 (as amended herein) is invalid in whole or in part ,
then the taxes imposed under Title 3, Chapter 16 of this Code, as it existed prior to its
amendment as provided herein, shall automatically continue to apply with respect to an y
service for which the tax levied pursuant to this Chapter 16 has been determined to b e
invalid . Such automatic continuation shall be effective beginning as of the first date o f
service (or billing date) for which the tax imposed by this Chapter is not valid . However ,
2 5
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ATTACHMENT 2
in the event of an invalidation, any tax (other than a tax that is ordered refunded by th e
court or is otherwise refunded by the City) paid by a person with respect to a service an d
calculated pursuant to this Title 3, Chapter 16 (as amended herein) shall be deemed to
satisfy the tax imposed under Title 3, Chapter 16, as it existed prior to its amendment a s
provided herein, on that service, so long as the tax is paid with respect to a service provide d
no later than six months subsequent to the date on which the final court order is published .
SECTION 2 .Effective Date . This Chapter, if approved by the electorate of the City
of San Luis Obispo at the General Municipal Election of November 6, 2012 shal l
become effective immediately upon the declaration of the results of that election by
the City Council of the City of San Luis Obispo .
SECTION 3 .Severability . If any section, subsection, sentence, clause, phrase, o r
portion of this Ordinance is for any reason held to be invalid or unenforceable by a
court of competent jurisdiction, the remaining portions of this Ordinance shal l
nonetheless remain in full force and effect . The People hereby declares that the y
would have adopted each section, subsection, sentence, clause, phrase, or portion o f
this Ordinance, irrespective of the fact that any one or more sections, subsections,
sentences, clauses, phrases, or portions of this Ordinance be declared invalid o r
unenforceable .
SECTION 4 .Ratification of Prior Tax . The People of the City of San Luis Obisp o
hereby ratify and approve the past collection of the Utility Users' Tax Title 3, Chapte r
16 of the San Luis Obispo Municipal Code, as it existed prior to the effective date o f
this Ordinance.
SECTION 5 .Execution . The Mayor is hereby authorized to attest to the adoption o f
the Ordinance by the voters of the City by signing where indicated below .
I hereby certify that the foregoing Ordinance was PASSED, APPROVE D
and ADOPTED by the People of the City of San Luis Obispo, California voting o n
the 6th day of November, 2012 .
Mayo r
ATTEST :
City Clerk
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ATTACHMENT 2
APPROVED AS TO FORM :
City Attorney
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ATTACHMENT 3
2012 Reauthorization 2014 Reauthorizatio n
Pros Cons Pros Cons
Increased vote r
turnout during th e
Presidential election
More than two years prior
to the measure's expiratio n
date .
Allows fo r
identification of the
reductions necessary i f
Measure Y is no t
reauthorized .
Measure Y revenue s
would not be availabl e
during only the las t
quarter of the 2013-1 5
financial plan, which
may not present a full
financial picture of the
impacts to City service s
if Measure Y is not
renewed .
would mean that mor e
San Luis Obisp o
residents would weig h
in on the renewa l
question.
According to the
City's public opinio n
research consultant ,
the citizen satisfactio n
survey indicates tha t
there would b e
increased support fo r
Measure Y renewal
from likely voter s
during the Novembe r
2012 Presidentia l
election.
If reauthorization wa s
unsuccessful, it coul d
make it more challengin g
to secure approval in 2014 .
Some believe you should
only take "one bite at the
apple".
Provides more time t o
accomplish projects tha t
show residents the valu e
of a local tax measure .
Rejection of state sales
tax measure may
bolster opposition t o
renewal efforts .
Approval of statewide
measures will lift th e
sales tax baseline an d
could make voter s
eager for relief from the
City's 1/2 cent add-on .
Approval would
provide certainty in
the budget process for
2013-15 and indicate
stability for any bond
ratings during this
period
The Chamber o f
Commerce and Downtow n
Association suppor t
waiting to seek renewal .
The economy may
develop a head of steam
by 2014, creating a
more favorable
environment for a local
tax measure .
The economy could b e
less stable in 2014 ,
thereby creatin g
opposition toward s
renewal .
The recent citize n
satisfaction surve y
indicates that 59% o f
likely voters suppor t
reauthorization (+/-
5%).
City labor relation s
objectives may not be fully
implemented by Novembe r
2012, providing a narrativ e
for opponents of the
measure .
Statewide tax measures
will have been decided .
Implemented project s
may not align with
community group
priorities in 2014 an d
create opposition
towards renewal .
If it does fail ,
significant
intelligence would b e
gained as to why,
allowing proponent s
to be better prepare d
for 2014 ("second bit e
at the apple").
Multiple tax measures ,
particularly on a statewid e
ballot, will compete with a
local measure thereb y
hurting the local measure .
In 2014, there coul d
also be statewide and/o r
local tax measures o n
the ballot as expected in
2012 .
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ATTACHMENT 4
15 May 201 2
To :
Mayor Jan Marx and City Councilmember s
From :
Deborah Cash, Executive Directo r
San Luis Obispo Downtown Associatio n
Re :
Measure Y
The SLO Downtown Association Board of Directors at its May 8, 2012 meeting receive d
a presentation from City Manager Katie Lichtig on Measure Y, noting that it will sunse t
in 2015 and that input from the public is being solicited as to the perceived value an d
benefit of the measure as well as issues the council should consider as you are decidin g
the future of Measure Y. The Board of Directors went on to consider whether th e
measure, if placed on a ballot, should occur in 2012 or 2014 .
Later in closed session, the Board discussed that it did consider Measure Y as havin g
value for the projects it has provided funding for-including those in Downtown— an d
that it is worth placing on a ballot for voters to determine if it should be renewed .
The Board voted unanimously to recommend to the City Council that it consider placin g
Measure Y (or its replacement measure for continuance of the sales tax increas e
implemented with Measure Y) on the ballot in the year 2014 .
There are advantages to choosing this time frame including the opportunity for the City t o
develop two budgets, one that includes a tax increase and one that does not, offering th e
advantage of seeing what projects may or may not occur in the two scenarios . It would
also give those assembling the measure time to develop a brand . Finally, anticipated
competing tax measures on the 2012 ballot might result in `tax fatigue' turning voter s
against supporting any tax measures .
Thank you for consideration of this request and for allowing our input .
Cc :
SLO Downtown Association Board of Director s
SLO Downtown Association Economic Activities Committe e
Katie Lichtig, City Manage r
Michael Codron, Assistant City Manage r
Robert Horch, Downtown Champion
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ATTACHMENT 5
an Luis Obispo Chamber of Commerc e
1039 Chorro Street a San Luis Obispo, California 93401-327 8
(805) 781-2670 a FAX (805) 543-125 5
Ermina Karim,President/CE O
Russ Levanway, 2012 Board Chai r
Mayor Jan Mar x
Members of the City Counci l
City of San Luis Obispo
990 Palm Stree t
San Luis Obispo, CA 93401
RE: Renewal of Measure Y
Dear Mayor Marx and Council .,members;
The San Luis Obispo Chamber of Commerce,on behalf of our more than 1,350 busines s
members, respectfully writes to communicate our position on the city's consideration to y
seek renewal of Measure Y,the half-cent sales tax increase measure which sunsets i n
2015 . While the Chamber continues to support the priorities and funding produce d
from the original Measure Y,we recommend that renewal of the measure not b e
pursued in 2012 .
The Chamber has an involved history with this Measure, playing a key support role in
its passage as part of a broad coalition of stakeholders . When it was first put befor e
voters in 2006, the Chamber believed the measure was a fair way to raise needed fund s
to invest in community priorities to enhance the quality of life for our residents . Our
original support was predicated upon significant citizen oversight provisions to ensur e
that the money raised is spent consistent with resident priorities .
Over the last several years, Measure Y has proven to be a significant tool to support a
level of service that would not have been otherwise possible given the sharp economi c
downturn . The funds have helped to maintain roads and storm drains, to pursue ope n
space acquisition, to support senior services and other programs .
However, the current economic climate and sentiment from Chamber member s
strongly indicates that seeking renewal this year would be an uphill battle . Instead, we
encourage the City to remain focused on the efforts to achieve long-term fisca l
May 24, 2012
B2-46
responsibility and address the priorities of the residents . For future consideration o f
renewal support, we urge you to continue educational efforts over the next few year s
leading up to the sunset of the Measure, demonstrate prudent financial managemen t
and reporting of Measure Y expenditures, and be able to hi-light the potential negativ e
impacts to services should Measure Y not be approved for renewal.
We look forward to remaining engaged in this important community discussion .
Thank you for your consideration .
Sincerely ,
Russ Levanway
207.2 Chairperson of the Boar d
San Luis Obispo Chamber of Commerce
Ermina Karim
President/CE O
San Luis Obispo Chamber of Commerc e
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