CC SR 20151006 J - Utility User Tax Refund RptCITY OFLwirar�RANCHO PALOS VERDES
MEMORANDUM
TO: HONORABLE MAYOR & CITY COUNCIL MEMBERS
FROM: DEBORAH CULLEN, FINANCE DIRECTOR/
DATE: OCTOBER 6, 2015
SUBJECT: UTILITY USER TAX (UUT) REFUND REPORT
REVIEWED: DOUG WILLMORE, CITY MANAGER'1a.�'
Project Manager: Allan Kaufman, Senior Administrative Analyst
RECOMMENDATION
1. Receive and file Utility User Tax (UUT) Refund Report.
2. Keep the remaining balance from the UUT Telecommunication Claim Account in the
General Fund to cover any future costs related to this matter.
FISCAL IMPACT
Budgeted Amount:
Amount Spent to date:
Additional Appropriation
Account Number:
$713,468
$499,107
$0
101 -6000 -315 -XX -XX
Breakdown of amount spent to date
Item
Amount
Final
Refunds Paid
$256,374
Yes
Claim Administration
83,240
Yes
Language Translation Services
3,570
Yes
Outside Legal Services
155,923
No (ongoing)
TOTAL
$499,107
BACKGROUND
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 can 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.
Utility User Tax (UUT) Refund Report
October 6, 2015
Page 2 of 4
On December 16, 2014, the City Council approved the Professional Services Agreement
with Gilardi & Co. LLC to oversee the claims process administration. Staff worked closely
with Gilardi, the claim administrator, Scott Noya from the law firm of Daley & Heft, and the
City Attorney to develop a notice, the claim form (including a web -based claim system) and
payment documentation of the claim by the City.
The UUT Claim Form that was developed, offered residents with four refund (4) options:
1. $25 Flat Refund
2. Extrapolated Refund. Refund calculated by multiplying the UUT on the statement
you submitted by 17 months included in the refund period.
3. Exact Refund: Submission of full documentation of each and every telephone billing
statement during the refund period showing the City's UUT applied to the telephone
bill.
4. Contribute refund to the City's "Gifts for Parks" Program.
Along with the Claim Form, residents received a Claim Notice providing answers to
common questions as well as the choice to receive the Claim Form in five (5) languages
other than English.
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. Based on the recommendation
from our attorney, the City sent reminder notices to all households in the City on June 16,
2015.
DISCUSSION
City Outreach
Prior to and after the UUT claim form and notice were mailed out to residents, the City
made a significant outreach effort to make the community aware of the UUT refund process.
The following are specific outreach steps the City took.
Publication Notice
In 2015, the UUT legal notice was published in both the Daily Breeze on two consecutive
Tuesdays (February 10th and 17th) and Sundays (February 8th and 15th); and in the
Peninsula News on two consecutive Thursdays (February 12th and 19th).
Claim_ s Administration Website
The claims administration website: www. ran chopalosverdesuutrefund.com was developed
and included all information to assist claimants with the refund process. Specifically, it
provided answers to frequently asked questions (FAQs), electronic copies of claim
documents, and capability to complete an electronic claim form with electronic
signature/certification of information (with the ability to upload copies of supporting
2
Utility User Tax (UUT) Refund Report
October 6, 2015
Page 3 of 4
documents where applicable or option of sending in supporting documents via email, fax
or mail). The website included the claim form and notice/instruction documents translated
into Spanish, Chinese, Japanese, Korean and Hindi. Additionally, the website offered live
telephone support for claimants who required assistance or sought additional information.
City Website
The City established a dedicated UUT information page, under the Finance section, on the
City's website. This page provided residents with essential UUT information including the
refund claim period, refund options, claim statistics, refund submission deadline and check
distribution dates.
Weekly Administrative Report
The City provided regular updates and reminders on the UUT refund as well as updated
statistics in the City's Weekly Administrative Report. The statistics were reported at a
specific date, and included but not limited to: total Flat Refund amount claimed, average
amount of an Extrapolated Refund, and average amount of an Exact Refund.
City Newsletter
The City had UUT articles featured in the City Newsletter providing essential information
and reminders to residents on the UUT refund. The articles were published in the following
City newsletter editions: winter 2014 (mailed the week of December 3, 2014), spring 2015
(mailed the week of March 25, 2015 and summer 2015 (mailed the week of June 15, 2015).
UUT Refund Claim Data
Gilardi received 6,210 valid forms, which represents nearly 38 percent of households in the
City. There were 9,618 valid claims (Landline and Wireless) in the amount of $256,374. Of
these claims, 6,688 were physical (mailed) claims and 2,930 were online claims. It is
important to note that the number of claims is higher than the forms submitted as some
residents were eligible for a refund on both their landline and wireless phone(s).
The table below breaks down the data by refund option, claim type (Physical and Online),
phone type (Landline and Wireless), and amount paid out.
Refund Type
Landline
Wireless
Physical
Claims
Online
Claims
$ Amount
(Refund Type)
Physical
Claims
Online
Claims
$ Amount
(Refund Type)
Flat
3,449
1,416
$121,625
2,415
1,138
$88,825
Extrapolated
302
114
15,215
339
196
28,945
Exact
17 l
7
1,087
11
7
677
Contribution to City
95
33
3,173*
60
19
1,995*
SUBTOTAL
3,863
1,570
$137,927
2,825
1,360
$118,447 J
Total Claims: 9,618 !
GRAND TOTAL I
Total Refund Amount Paid: $256,374
Note: "Contributions to City $ amount was not included in subtotal and grand total amounts as this money chd ool leave the C-Iy
Contributions to City $ amount will be transferred to the Donor Restricted Contributions Fund for Parks
3
Utility User Tax (UUT) Refund Report
October 6, 2015
Page 4 of 4
Additional data to note is the number of claims filed relative to the refund option selected
did not match, as some claimants are eligible for multiple refunds if they have more than
one telecom account. Also, residents with multiple accounts did not always elect the same
refund option.
UUT Refund Checks
To date, Gilardi has issued refund checks for valid claims on two occasions; May 11, 2015
and August 28, 2015. For the estimated 1,400 claims submitted that were marked as
deficient (either missing information of not completed correctly), residents were given 30
days to provide the necessary information or make the needed correction(s) to be eligible
for a refund. Gilardi will perform a third check distribution in early October 2015 for deficient
claims that were resolved. Of the deficient claims submitted, all but 730 were corrected.
0