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HomeMy WebLinkAbout08/14/19721 7 1 RnII rAII MINUTES. ADJOURNED MEETING OF THE CITY COUNCIL AUGUST 14, 1.972 7:30 P.M. CITY HALL PRESENT: Councilmen Blake, Brown, Graham,'Gurnee and Mayor Schwartz ABSENT: None City Staff PRESENT: J. Fitzpatrick, City Clerk; R. Miller, Administrative Officer; R. Young, Planning Cirector; A.J.Shaw, Jr., City Attorney; W. Flory, Parks and Recreation Director I. The City Clerk reported that the following bids were' received for Traffic Signal Installation, Johnson Avenue at Lizzie Street, City Plan 16 -72, SS 169. Bids opened 3:00 P.M., Monday, August 14, 1972. Lee Wi Ison Electric Co. Arroyo Grande, CA Rosendin Electric, Inc.. San Jose, CA Steiny and Company San Francisco, CA Hannah Electric San Luis Obispo, CA R. Flatland Co. San Mateo, CA ENGINEER'S ESTIMATE $19,363.00 $22,411.00 $23,205.00 $23.,669.00 $24,500.00 $16,000.00 R. D. Miller, Administrative Officer, reviewed the project with the City Council and recommended that the low bid of Lee Wilson Electric Company, in. the amount of $19,363.00,'be accepted and the contract charged to Gas Tax. On motion of Councilman Blake, seconded by Councilman Graham, that the low bid be accepted with $17,,500 charged to Capital Outlay and the balance charged to Gas Tax. Motion carried.. 2.. Request from Mandala School for permission to hold a Children's Fair in the Mission Plaza on Saturday, September 30, 1972. The purpose of the function was a fund - raising project for the school's scholarship fund and for the operational fund in order to further the development of this private elementary school in the community. On motion of-Councilman Blake, seconded by Councilman Brown, the request was approved for September 30, 1972. City Council Minutes August 14, 1972 Page 2 3. At this time, the City Council continued their consideration of the adoption of a construction tax.. Mayor Schwartz reviewed the reasons for the Ci.ty Council considering the adoption of a construction tax on every person who constructs or causes to be constructed any building or portion thereof or any mobile home park in the city. The reasoning being that people or firms developing properties and mobile home sites added to the City population and to the burden on the City for services and this would be one way of recapturing the .capital for the services. A. J. Shaw, City Attorney, submitted for the Council's information a draft of the ordinance providing an excise tax upon construction of buildings and mobile home parks. He stated that the construction tax was for purposes of raising revenue and not for regulatory purposes. He then briefed the Council on the contents of each section of the proposed ordinance and its implication. ; R. D. Miller, Administrative Officer, presented figures as prepared by the various City departments for the future needs of the City depending on growth and in the growth areas. He listed such things as additional fire and police protection, park facilities, etc. Mayor Schwartz declared the public hearing open.. Art Wilson, SLO Building Contractors' Association, representing 187 building contractors in SLO County, spoke in opposition of the Council considering the adoption of a construction tax. He felt this was a selective tax which would be levied on a certain small segment of the population, and therefore, was discriminatory. He felt the construction tax would be one more tax on an already burdened industry carrying such additional costs as permit fees, plan checking fees, sewer charges, underground utility charges, subsidies, trade employee pension funds, etc. He felt this would just be another property tax when a nationwide America was realizing that taxes were unfair, particularly to older people. He felt it was a tax on shelter, a basic necessity of life, and was certainly undesirable from this point of view. He suggested that instead of .a construction tax, that the City Council consider a tax on services to augment and balance that already assessed on goods. He felt that taxes were best assessed where the economic action is and not against hard earned possessions like homes and furniture. He continued that, although the City collected business license taxes on service, businesses as.welI. as other. businesses, he felt that. most firms and individuals selling services as opposed to tangible product's were not paying anywhere near their share as measured in dollars and cents of economic action. He hoped the City Council would look into this tax on services in an attempt to equalize the tax burden. Dennis Wheeler, contractor, opposed the adoption of the construction tax as he felt the building industry was already highly taxed. He also felt the tax was discriminatory against newcomers to the City. John Holloway, electrical union, opposed the adoption of a construction tax which he felt was discriminatory against the b.uilder and members of the building trade who had a tough time getting jobs at this time'. Dorothy Rible, Laguna Lake area, was surprised that the City administra- tion had not presented full figures on what governmental costs were for each new resident to the City.. She did not feel the people who live here should pay for the improvements and that the new people should pay for them through the construction tax. 1 1 City Council Minutes August 14, 1972 Page 3 Vern Dillon, contractor, opposed the adoption of a new tax.as he felt the people he built for were already residents of the City and were not from out of town and had been paying for City services for many years. ' Martin Polin, attorney and real estate broker, felt that if the Council were determined to adopt. this type of tax, he hoped they would start at a lower percentage. He also hoped that if the Council adopted the tax it would exempt .those people who had plans in for the plan checking process at this time. Mike Maino, contractor and real estate salesman, objected to the tax as he felt it would cause higher rates for renters and higher costs for builders.. He stated that building costs were already too high.. Rose McKeen,.real estate broker, opposed the adoption of a construction tax as she felt it was discriminatory and would run building costs out of.sight. She was also.opposed to the City of San Luis Obispo copying something from the City of San Jose or Pismo Beach, as she felt the City of San Luis'Obispo should do its own thing. Roy Parsons, San Luis Mill and Lumber Co., objected to the .tax on the basis that costs would be passed on and would cause people to shop elsewhere for building materials. Harold NieI son , contractor, objected 'to the adoption of the construction tax as he felt it was unfair to the citizens. Hal Boyle, Laborers' Union, objected to the adoption of the new tax as he felt the added cost would not allow young people-to buy housing or ' qualify for financing. He felt that just $200 might make a difference in some qualifying for .financing for a home loan. He also felt the Council..was getting poor adivice as this tax was just one more way to promote a no- growth policy. Jerry Taylor, resident, presented costs of subdividing. and building in San' Luis Obispo and its percentage increase over the -last 12 .years. He felt if the additional tax was added to construction it would make construction impossible.. He strenuously objected to addition of.the regressive tax... Arnold Volny, contractor, was opposed to the tax which he felt was just one more strike against the builders of, homes and against the home buyer which made the ability to.own. homes more difficult in-the City of San.Luis Obispo. He Listed costs that had been added to buildings and lot costs by the City, such as water charges, plan checks, etc. John King, contractor, objected.to.the.adoption of the tax as he felt there were other fairer and more equitable methods of raising funds for the City that would be paid equitably by all citizens, not just the newcomers. Rex .Bolby, Carpenters' Union representative, stated his membership was unanimously opposed to the adoption of this tax-as they felt it was discriminatory to the members of the building trades' unions and they were opposed to the City's no- growth policy. Mayor Schwartz declared the public hearing closed. Richard D. Miller, Administrative Officer; explained to the City Council the effect the Library consolidation would have on City and County tax rates. He also explained the philosophy of keeping the $1.50 tax rate for the City over all these years. City Council. Minutes August 14, 1972 Page 4 Councilman Brown felt the City needed housing for low and medium income citizens, and based on testimony, it seemed this tax might cost beyond the ability to pay, even with a rate as low as Pismo Beach's suggested rate. Councilman Graham reminded the audience that all costs to develop 1 housing such as construction tax, building permits, acreage fees, etc., were not paid by the builder but were passed on to the ultimate purchaser of the property and he was afraid the tax would not up -grade building quality. He felt building quality was not at the highest now. He also did not feel the tax was based on a no- growth policy. Councilman Gurnee felt that this tax was needed as developers were the, people who were causing the need for improvements to water and sewer facilities, need for parks and recreation facilities, and for additional police and fire protection personnel. He felt .these facilities should pay the needed amenities and not require the existing tax payers to keep paying .for improvements for newcomers. He also stated he was not advocating a no- growth policy but a policy of planned growth and fiscal responsibility. Councilman Blake felt the proposed ordinance had many flaws and the . Council had not restudied it in its entirety and he felt that the ordinance as written was an ordinance to control growth within the City and was not needed. Further, in light of the Council adopting the , utility users tax, he felt there was no demonstrated need for additional funds by the City. He felt the ordinance was poorly prepared and he opposed adoption of a.construction tax ordinance. He was thoroughly opposed.to the construction tax as i.t should.not be adopted or again considered as he felt it was unfai.r and discriminatory. Mayor Schwartz stated that the City Council and future Councils must look not only to the past but to the future so that what had been good in the past could be continued for the future citizens without bankrupti.ng the City. As everyone knew, inflation had the same effect on City government as on private individuals. No one Like to pay. more taxes and it was difficult for City Councils to vote new taxes but someone must face future developments and growth of the City and financing must be available to pay for such facilities as enlarged sewer and water facilities, additional police and fire protection, new library facil_iti_es, new park and recreation programs. He continued that the City Council and citizens must decide whether the existing citizens must continue to pay for expansion or whether newcomers who have caused the need for enlarged and expanded programs should pay their share. He concluded that the City Council had never gone on record officially for a no- .growth policy but was on record for planned growth for development. He felt he could support a.construction tax if the fee were nominal and would only pay a porti.on of the expanded programs. Councilman Blake ojected to the Council considering construction taxes until they knew what revenue the utility tax would bring in. He felt the utility users tax was a better tax and would bring in twice.as' much revenue as a construction tax would bring and would not cause the dislocation of the construction industry. City Council Minutes August 14, 1972 Page 5 Mayor Schwartz said the Council's action at this time could be: I. to continue consideration of the construction tax; 2. adopt the construction tax ordinance; ' 3. modify the construction tax ordinance; or 4. rewrite the ordinance in its entirety. On motion of Councilman Blake, seconded by Councilman Graham, that the City Council table consideration of the construction tax ordinance at this time. Motion carried on the following roll call vote: AYES: Councilmen Blake, Graham and Brown NOES: Councilman Gurnee and Mayor Schwartz ABSENT: None 4. R. D. Miller, Administrative Officer, brought to the City Council's attention a class suit against the major auto makers on auto pollution asking if the City Council wished to continue as a party to this suit or whether they wished to be released. On motion of Councilman Blake, seconded by Councilman Graham, the City Clerk was authorized to sign the certificate removing the City of San Luis Obispo from the suit. Motion carried. 5. On motion of Councilman Graham, seconded by Councilman Brown, the meeting adjourned. APPROVED: 1 .,�;F`ITZPATRICK, CITY CLERK