RPVCCA_CC_SR_2015_05_05_M_Repeal_Utility_User_Tax_Imposed_on_Telecommunications_ServicesCITYOF
MEMORANDUM
uz.
RANCHO PALOS VERDES
TO: HONORABLE MAYOR & CITY COUNCIL MEMBERS
FROM: CAROL LYNCH, CITY ATTORNEY
KATHRYN DOWNS, ACTING DIRECTOR OF FINANCE
DATE: MAY 5, 2015
SUBJECT: REPEAL OF THE UTILITY USER TAX THAT IS
IMPOSED ON TELECOMMUNICATIONS SERVICES
REVIEWED: DOUG WILLMORE, CITY MANAGER OGA-- J
RECOMMENDATION
INTRODUCE ORDINANCE NO. , AN ORDINANCE OF THE CITY OF RANCHO
PALOS VERDES, REPEALING THE UTILITY USER TAX ON
TELECOMMUNICATIONS SERVICES AND AMENDING THE RANCHO PALOS
VERDES MUNICIPAL CODE.
BACKGROUND
In response to legal issues regarding the City's 3% UUT imposed on telecommunications
services, in August 2014, the City Council took action to suspend collection of the UUT
from telecommunication service providers. The City Council also implemented a process
by which residents and businesses in the City can submit claims for refunds of the
telecommunications UUT for the period from August 1, 2013 through December 31, 2014.
The administration of that process is continuing. Staff does not recommend that the City
collect UUT on telecommunications services, unless an ordinance that updates the
current provisions of the Municipal Code is placed on a ballot and receives approval by a
majority of the City's voters.
At the last City Council meeting, the City Council discussed the issue and directed Staff
to prepare and present to the City Council an ordinance that rescinds the UUT on
telecommunications services.
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Repeal of the Utility User Tax that is Imposed on Telecommunications Services
May 5, 2015
Page 2 of 2
DISCUSSION
Prior to City Council action in August 2014, the City's General Fund collected about $0.7
million of telecommunications UUT annually. Although the revenue source can provide
for valuable City services such as public safety and infrastructure rehabilitation, the City's
FY14-15 budget was balanced without benefit of telecommunications UUT. The City's
General Fund has a history of significant favorable expenditure variances. On this same
agenda, the City Council will provide direction for the draft FY15-16 budget. Based on
current estimates, Staff expects the General Fund budget will continue to be balanced
going forward.
The attached ordinance implements the direction given by the City Council at the last
meeting. Introduction and adoption of the attached ordinance means that the UUT will
not be collected on telecommunications services until such time that it is re-established
by a new modernized ordinance that is approved by the voters at a future election.
CONCLUSION
Staff recommends that the City Council introduce the attached ordinance, which will
repeal the existing UUT on telecommunications services. By taking this action, it will be
clear that the City will not collect UUT on telecommunications services until such time that
an ordinance imposing the UUT on telecommunications services is presented to and
approved by the City's voters.
Attachment:
Proposed Ordinance (page 3)
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ORDINANCE NO. _
AN ORDINANCE OF THE CITY OF RANCHO PALOS VERDES REPEALING
THE UTILITY USER TAX ON TELECOMMUNICATIONS SERVICES AND
AMENDING THE RANCHO PALOS VERDES MUNICIPAL CODE
WHEREAS, in response to legal issues regarding the City's 3% Utility User Tax
("UUT") imposed on telecommunications services, in August 2014, the City Council
took action to suspend collection of the UUT from telecommunication service providers.;
and,
WHEREAS, at the City Council meeting that was held on April 21, 2015, the City
Council directed Staff to prepare and present to the City Council an ordinance that
rescinds the UUT on telecommunications services;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES DOES ORDAIN AS FOLLOWS:
Section 1: Section 3.30.020 of Chapter 3.30 of Title 3 of the Rancho Palos
Verdes Municipal Code, entitled Definitions, is hereby amended to read as follows:
3.30.020 - Definitions.
The following words and phrases, whenever used in this chapter shall be construed as
defined in this section, except where the context clearly requires otherwise;
"City" means the city of Rancho Palos Verdes.
"Cogeneration electrical energy" means the use for the generation of electricity of
exhaust steam, waste steam, heat, or resultant energy from an industrial, commercial or
manufacturing plant or process, or the use of exhaust steam, waste steam, or heat from
a thermal power plant for an industrial, commercial, or manufacturing plant or process.
"Electrical corporation," "gas corporation," and "water corporation" shall have the same
meanings as defined in Sections 218, 222 and 241, respectively, of the California Public
Utilities Code or any successor statute.
"Gas" means natural or manufactured gas or any alternate gaseous hydrocarbon fuel
which may be substituted therefor.
"Month" means a calendar month.
"Person" means all domestic and foreign corporations, firms, associations, syndicates,
joint stock companies, partnerships of every kind, joint ventures, clubs, Massachusetts
business or common-law trusts, societies and individuals. For the purposes of this
chapter, "person" shall not include any public entity which purchases and uses utility
Ordinance No. 2015 -
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services in the performance of governmental functions.
"Service supplier" means any person required to collect and remit a tax imposed by this
chapter.
"Service user" means a person required to pay a tax imposed under the provisions of
this chapter.
"Tax administrator" means the director of finance of the city or other person designated
by the city manager to administer the provisions of this chapter.
Section 2: Section 3.30.040 of Chapter 3.30 of Title 3 of the Rancho Palos
Verdes Municipal Code, entitled Telephone User Tax, is hereby repealed.
Section 3: Severability. If any section, subsection, subdivision, sentence,
clause, phrase, or portion of this ordinance or the application thereof to any person or
place, is for any reason held to be invalid or unconstitutional by the decision of any court
of competent jurisdiction, such decision shall not affect the validity of the remainder of
this ordinance. The City Council hereby declares that it would have adopted this
ordinance, and each and every section, subsection, subdivision, sentence, clause,
phrase, or portion thereof, irrespective of the fact that any one or more sections,
subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared
invalid or unconstitutional.
Section 4: The City Clerk shall cause this Ordinance to be posted in three (3)
public places in the City within fifteen (15) days after this passage, in accordance with
the provisions of Section 36933 of the Government Code. The City Clerk shall further
certify to the adoption and posting of this Ordinance, and shall cause this Ordinance
and its certification, together with proof of posting, to be entered in the Book of
Ordinances of the Council of this City.
Section 5: This Ordinance shall go into effect and be in full force and effect at
12:01AM on the thirty -fist (31St) day after its passage.
Attest:
PASSED, APPROVED AND ADOPTED this 21St day of April 2015.
City Clerk
Mayor
Ordinance No. 2015 -
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )ss
CITY OF RANCHO PALOS VERDES )
I, Carla Morreale, City Clerk of the City of Rancho Palos Verdes, hereby certify that the
whole number of members of the City Council of said City is five; that the foregoing
Ordinance No. passed first reading on May 5, 2015, was duly and regularly adopted
by the City Council of said City as a regular meeting thereof held on May _, 2015, and
that the same was passed and adopted by the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
City Clerk
Ordinance No. 2015 -
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