CC SR 20160315 O - Final Utility User Tax Refund ReportRANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 03/15/2016
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA DESCRIPTION:
Receive and file final Utility User Tax (UUT) Refund Report.
RECOMMENDED COUNCIL ACTION:
(1) Receive and file Utility User Tax (UUT) report.
(2) Leave remaining unspent balance of $160,312 in the designated UUT claim
account in the General Fund to cover ongoing litigation.
FISCAL IMPACT: See below.
Amount Budgeted:
Additional Appropriation:
Total Expenditures:
Account Number(s):
Remaining Balance
$713,469
$0
$553,157
101-6000-315-xx-xx (Refunds Paid)
101-2020-411-32-00 (Claim Administration)
101-1003-411-32-00 (Legal Services)
101-2020-411-32-00 (Translation Services)
$160,312
ORIGINATED BY: Allan Kaufman, Senior Administrative Analyst
REVIEWED BY: Deborah Cullen, Director of Financed --
APPROVED BY: Doug Willmore, City Manager
BACKGROUND AND DISCUSSION:
On August 19, 2014, the City Council took action to suspend collection of UUT from
telecommunication providers. The City created a 17 -month "Refund Recovery Period"
(August 1, 2013 through December 31, 2014) by which residents and businesses in the
City could submit claims for refunds of the telecommunications UUT collected during
this time period. To pay the refund claims, the City Council established a UUT
Telecommunication Claim Account, which holds all UUT revenue collected since August
2013 from telecommunication providers.
On February 5, 2015, the UUT Notice and Claim Form were mailed to all 16,353
housing units within the City. Residents were given until August 5, 2015 (six months) to
complete and submit a valid claim form to receive a refund check. During the six-month
refund claim period, the City's Claim Administrator, Gilardi, mailed the following
reminder notices to encourage residents to complete and submit their claim(s):
• A postcard reminder was mailed to all households in the City on June 16, 2015
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A deficiency reminder was sent to residents for claims that were either deemed
incomplete or in need of correction. The reminder letter provided residents 30
days to "cure" their deficiency to receive a refund.
After the claim deadline had passed, it was determined that 730 claims remained
deficient. Staff shared this information with the City Council on October 6, 2015, at
which time, it was decided that Staff would provide an update to the City Council on the
deficient claims. On November 17, 2015, the City Council approved the following
recommendations from Staff:
Pay the 11 Utility User Tax (UUT) deficient refund claims that were unsigned, but
had no other deficiency;
2. Mail UUT claim reminder to residents for the remaining 719 deficient claims. The
reminder would give residents an additional 30 days to provide the necessary
information and/or make the needed corrections to their claim to receive a
refund.
This second deficiency reminder was mailed to residents on November 23, 2015 and
cost $7,465 to administer. This second reminder allowed residents whose claim was still
deemed deficient, a total of seven (7) months (six month claim period plus one
additional month) to cure their deficiency.
Claim Data
Summary Information
The City has paid out $257,116 to 6,212 City residents, which represents over 38% of
households as illustrated in the table below. It is important to mention that the number
of claims processed is higher the number of residents who received a refund, as some
residents were eligible for a refund on both their landline and wireless phone(s).
Summary Table
Number of
Total number of
Amount of
Percentage (%) of
Residents that
claims
claims paid
households that
received a refund
processed
out
received a refund
6,212
9,776
$257,116
38%
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Below is a summary of costs the City has incurred to date to administer the claim
process and to pay out refund claims.
Cost Summary
Item
Amount
Refunds Paid
$257,116
Claim Administration
• General Administration (i.e. setup
claim website, mail claim notices
80,000
and FAQ document, process refund
claims, two (2) check distributions)
• 3rd Check Distribution
3,240
• Second Deficiency Claim Reminder
7,465
• 4t" (Final) Check Distribution
1,500
Total Claim Administration
92,205
Language Translation Services
(Translate Claim and FAQ document in five (5)
$3,570
Languages.
Legal Services
General: (i.e. assist in developing Request
for Proposal (RFP), attendance at City
Council meetings, confer with Claim
$200,267
Administrator, etc.)
Litigation: Relates to a class action lawsuit.
TOTAL COSTS
$553,157
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