HomeMy WebLinkAbout3/15/2000 - STAFF REPORTS (11) DATE: March 15, 2000
TO: City Council
FROM: Director of Finance & Treasurer
COLLECTION OF UTILITY USERS TAX AT 5% RATE
RECOMMENDATION:
It is recommended that the City Council direct that the Utility Users Tax be collected at
the rate of 5%, effective with the first full billing cycle after June 30, 2000.
BACKGROUND:
The City has had the present form of the Utility Users Tax (UUT) since September, 1993.
Ordinance No. 1454 established the rate at 5% for electric, gas, and telephone usage.
As part of Resolution No. 19268, which adopted the Fiscal Year 1998-99 budget, City
Council directed the Director of Finance "to inform all providers who collect utility taxes
on behalf of the City, that the Utility Tax rate shall be 4.5 percent." The statutory UUT
rate remained at 5%.
An advisory measure on the November, 1999 ballot, asked the following question:
"Shall $400,000 of the revenue resulting from the continuance of the utility user
tax at 5% be used for the purpose of funding parks, recreation and leisure
activities, facilities, and improvements in the city?"
Measure Y passed with a 55% "yes" vote.
The recommendation to Council is to reinstate the UUT collection rate to 5%, with
$400,000 of the additional revenue dedicated to the areas listed in the ballot question.
The Parks & Recreation Commission recommends that the additional funds be allocated
one-third to the Palm Springs Public Library and two-thirds to facility improvements in
parks and recreation. The Commission further recommends a "pay-as-you-go" program
rather than issuing bonds. This will allow completion of several projects currently in
process, and will also allow the Parks and Recreation Commission and the Library Board
to thoroughly evaluate the City's needs.
Some of the specific projects under consideration are:
• Upgrade Swim Center's mechanical and filtration system
• Upgrade Demuth & Baristo Parks' play equipment
• Replace Victoria Park's play equipment
• Renovate Demuth, Victoria and Ruth Hardy Parks' restrooms
• Install new restroom at Sunrise Plaza Park
• Repave Library parking lot
• Replace Library automated circulation system
If the UUT rate reinstatement is approved, specific projects and funding levels will be
included in the proposed Capital Improvement Budget for Fiscal Year 2000-01.
Page 2
The current collection rate of the UUT costs the average household about $110 per year.
The 1/2% increase will add about$12 per year. The additional funds will help ensure that
the City's valuable library and recreation facilities are properly maintained in a safe and
attractive manner.
APPROVED BY SUBMITTED BY Dallas J. Flicek Thomas M. Kanarr
Interim City Manager Director of Finance & Treasurer
ATTACHMENTS:
1. Resolution
RESOLUTION NO. 19762
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, REINSTATING THE
COLLECTION RATE OF UTILITY USERS TAX TO 5%
WHEREAS, Ordinance No. 1454, Chapter 3.32 of Palm Springs Municipal Code
reinstated the Utility Users Tax (UUT) effective September 30, 1993, and
WHEREAS, the UUT rate established was 5% of electric, gas, and telephone usage, and
WHEREAS, the City Council reduced the UUT rate of collection to 4.5%, effective
September 1, 1998, and
WHEREAS, in November, 1999, the voters of Palm Springs approved an advisory ballot
measure to use $400,000 of the collections from a 5% UUT rate for parks, leisure and
recreational activities, and improvements,
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs
as follows:
Section 1. That the UUT collection rate be set at the 5% rate as established by
Ordinance No. 1454.
Section 2. That the 5% UUT collection rate be effective for the first full
billing period after June 30, 2000.
Section 3. That the Director of Finance and Treasurer is directed to inform all
utility companies and other providers who collect and remit UUT
to the City, of the change in the collection rate and its effective
date.
ADOPTED this 15th day of March , 2000.
AYES: Members Jones, Hodges, Oden, Reller-Spurgin and Mayor Kleindienst
NOES: None
ABSENT: None
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
City Clerk City Manager
REVIEWED & APPROVED AS TO FORM