HomeMy WebLinkAbout65A - RPT - MODERNIZE UUT 2014 ELECTIONREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JANUARY 21, 2014
TITLE:
AUTHORIZE STAFF TO PREPARE DOCUMENTS
TO SUBMIT TO VOTERS AT THE NOVEMBER 4, 2014
MUNICIPAL ELECTION: ORDINANCE
MODERNIZING THE UTILITY USER TAX
0
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑
As Recommended
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As Amended
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Ordinance on 15' Reading
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Ordinance on Z' Reading
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Implementing Resolution
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Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize and direct staff to prepare all required documents necessary to proceed with a ballot
measure to modernize the Utility Users Tax Code (UUT), including, but not limited to, all of the
following:
a) a resolution giving notice of the City's General Municipal Election to be held in the
City of Santa Ana on November 4, 2014 for the submission of questions to the
voters relating to changes in the City's UUT;
b) a resolution containing the ballot question and related proposed UUT ordinance;
c) a resolution authorizing Councilmembers to file written arguments for or against the
amendments;
d) guidelines for preparation of arguments for or against the proposed amendments;
e) all other documents required to proceed with the UUT modernization.
DISCUSSION
The City currently receives approximately $24 million in UUT revenue which constitutes the third
largest revenue source for the City. This request for Council action is to modernize the City's
Utility Users Tax Code in order to protect and ensure ongoing receipt of UUT revenue.
Modernization of the code will reflect current and anticipated utility services for existing UUT
categories and will expand Telephone UUT services to cover current and anticipated tele-
communication (Telecom) services, as well as ensure conformity with all Federal and State
legislation.
The City first adopted the UUT in 1975 in order to support the City's efforts in public safety. The
rate was initially established at 3% and subsequently raised to the current rate of 6% (with an
established maximum cap of $11,000 on total UUT remittances by a single service user). The rate
has remained the same since 1994. Overall the Utility Users Tax is applied to four categories:
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Document Preparation to Submit
To Voters at the November 4, 2014 Election
January 21, 2014
Page 2
electricity, telephone, water, and gas. Electricity represents 44% ($10.5 million) of the total
revenue received while telephone represents 37% ($9 million), with water and gas at 11% ($2.6
million) and 8% ($1.9 million) respectively.
The recommended actions will provide staff direction to complete a review and prepare a UUT
ordinance as well as necessary documents to submit to the voters for consideration of a UUT
ballot initiative. In addition, the California Election Code requires the adoption of certain
resolutions to call the election and place the proposed question to the City's voters. The Orange
County Registrar of Voters requires that these resolutions be submitted generally before the end
of July 2014. Staff anticipates presenting the documents for approval in May or June of 2014.
The proposed ordinance will be developed so that it is consistent with best practices that have
been recommended and adopted by voters in other jurisdictions, is consistent with past and
proposed Federal and State legislation, reflects the continuing evolution of Telecom from
telephone service to telecommunications service; and protects a revenue source that is vital in
providing much needed programs and services to the Santa Ana community. In addition, staff will
be recommending that the UUT rate be reduced from the current level of 6% to 5.5% in order to
make the City rate on par with the State average of 5.5% for UUT services. It is estimated that the
combined modernization and reduction will result in a revenue neutral impact to the City.
FISCAL IMPACT
The County Registrar of Voters office has estimated that the additional cost of adding a ballot
measure to the City's consolidated general municipal election would be approximately $15,000
based on current voter registration in the City. Funds for these administrative costs will be
available in the 2014 -15 fiscal year budget in the Clerk of the Council Other Agency Services
account (no. 01107031 - 62300).
APPROVED AS TO FUNDS AND ACCOUNTS:
Francisc6-6u errez
Executive Director
Finance & Management Services Agency
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