DEPARTMENT Business Services
AGENDA NO.
17 MEETING DATE June 25, 2024
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Regular Calendar
Project Manager: Nancy Hom
Authorize General Manager to seek Board of Supervisors Approval of Payments to Power Enterprise Customer Oliver De Silva, Inc., Customer Sunol AgPark and Alameda County
Summary of
Proposed
Commission Action:
Authorize General Manager to seek Board of Supervisors approva l for payments from the General Fund to customer Oliver De Silva for $101,825, to customer Sunol AgPark for $340, and to Alameda County for $651,976.
Background: In June 2018, Pacific Gas and Electric Co. transferred the Oliver De Silva electric service account at the Sunol Valley Aggregate Quarry to the Power Enterprise (Power). In 2023, Oliver De Silva informed Power that Power had been charging the S an Francisco Utility Users Tax (UUT) rate of 7.5% instead of the Alameda County UUT rate of 6.5%.
Oliver De Silva asked for a refund of the 1% it had overpaid. When Power investigated this overpayment, it determined that in addition to charging the wrong tax rate, it also had improperly remitted the taxes to the San Francisco Treasurer and Tax Collector instead of the Alameda County Treasurer-Tax Collector. A similar problem was discovered for customer Sunol AgPark, who as a government agency should have been exempted from UUT charges. The total amount collected from Oliver De Silva and remitted to the San Francisco Tax Collector was $754,167.
Of this amount, $101,825 is the amount Oliver De Silva overpaid. and $651.976 is the amount that should have been remitted to Alameda County. Sunol AgPark paid $340, all of which should be refunded.
Summary through July 2023
Account Name Bill Period
for 7.50%
UUT
6.50% Tax
Amt. due
to Alameda
1%
Customer
Credit
Oliver DeSilva,
Inc
7/16/2018
through
7/19/2023
$651,975.40 ($101,824.48)
ACRCD Sunol
AG Park- SFPUC
Natural Resources
9/06/2017
through
7/02/2023
N/A ($339.94)
$651,975.40 ($102,164.42)
Agreement: Authorize Settlement of Unlitigated Claims in Excess of $25,000 for Utility User Taxes Collected by the Power Enterprise from Oliver De Silva
Commission Meeting Date: June 25, 2024
The City Attorney informed Alameda County of this oversight and continues to work with Alameda County to reach a settlement . Power is concerned with further delay in issuing a refund to Alameda County and its customers Oliver De Silva and Sunol AgPark.
Result of Inaction: Failing to approve this resolution would mean that the SFPUC could not seek Board of Supervisors approval to return the overcollected UUT to Oliver De Silva and Sunol AgPark and the improperly remitted UUT to Alameda County.
Budget & Costs: The SFPUC intends to seek Board of Supervisors authorization for the General F und to pay Oliver De Silva , Sunol AgPark and Alameda County, because these funds were mistakenly remitted to the General Fund. If approved by the Board of Supervisors, there would be no cost to the PUC.
Environmental
Review:
This action does not constitute a “project” under the California Environmental Quality Act Guidelines s ection 15378 because there would be no direct or indirect physical change in the environment.
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Public Utilities Commission ( SFPUC) has jurisdiction over and operates and maintains the City and County of San Francisco’s municipal electric distribution and service facilities; and
WHEREAS, SFPUC’s Power Enterprise (Power) is responsible for collecting applicable Utility Users Taxes from its customers; and
WHEREAS, Oliver De Silva, Inc. operates the Sunol Valley Aggregate Quarry in Alameda County, pursuant to a lease from the SFPUC; and
WHEREAS, Sunol AgPark, comprised of eight, small-scale organic farms producing fresh food and flowers for diverse Bay Area communities, is owned by the SFPUC and managed through a partnership agreement with the Alameda County Resource Conservation District; and WHEREAS, In June 2018, Pacific Gas and Electric Co. transferred the Oliver De Silva and Sunol AgPark electric service accounts at the Sunol Valley Aggregate Quarry to Power; and WHEREAS, Upon becoming the electric service provider to Oliver De Silva, Power started collecting Utility Users Taxes from Oliver De Silva at the City and County of San Francisco rate of 7.5% instead of the Alameda County rate of 6.5%; and WHEREAS, Upon becoming the electric service provider to Sunol AgPark, Power started collecting Utility Users Taxes at the City and County of San Francisco rate of 7.5% instead of finding that Sunol AgPark was exempt from the Alameda County UUT; and WHEREAS, SFPUC collected a total of $754,167 in Utility Users Taxes from Oliver De Silva and Sunol AgPark, of which $651,976 should be paid to Alameda County; and WHEREAS, Oliver De Silva overpaid its Utility User s Taxes in the amount of $101,825; and
WHEREAS, Sunol AgPark overpaid Utility Users Taxes in the amount of $340; and WHEREAS, The SFPUC will seek Board of Supervisors’ approval of payments to Oliver De Silva and Sunol AgPark from the General Fund; and
WHEREAS, This action does not constitute a “project” under the California Environmental Quality Act Guidelines section 15378 because there would be no direct or indirect physical change in the environment; now, therefore, be it
RESOLVED, This Commission finds that the SFPUC erred by requiring Sunol AgPark to pay Utility Users Taxes and Oliver De Silva to pay Utility Users Taxes in the amount of 7.5 % instead of the Alameda County Utility User Tax rate of 6.5% and by remitting the taxes to the City and County of San Francisco Treasurer and Tax Collector instead of the County of Alameda Treasurer-Tax Collector; and be it
FURTHER RESOLVED, That this Commission hereby authorizes the General Manager of the SFPUC to seek Board of Supervisors approval to pay Oliver De Silva $101,825 for overpaid Utility Users Taxes; and be it
FURTHER RESOLVED, That this Commission hereby authorizes the General Manager of the SFPUC to seek Board of Supervisors approval to pay Sunol AgPark $340 for mistakenly charged Utility Users Taxes; and be it
FURTHER RESOLVED, That this Commission authorizes the General Manager of the SFPUC to seek Board of Supervisors authorization to pay $651,976 to Alameda County for Utility User Taxes it should have received; and be it
FURTHER RESOLVED, That this Commission authorizes the General Manager of the SFPUC to seek Board of Supervisors approval for the General Fund to fund these payments since the erroneous Utility Users Tax payment was remitted to the General Fund; and be it
FURTHER RESOLVED, That this Commission authorizes the General Manager of the SFPUC to execute such documents as may be necessary to effectuate these authorizations, and to enter into any amendments or modifications to such documents that the General Manager determines, in consultation with the City Attorney, are in the best interest of the SFPUC , do not materially increase the obligations or liabilities of the SFPUC or materially diminish the benefits to the SFPUC, are necessary or advisable to effectuate the purposes and i ntent of the resolution, and are in compliance with all applicable laws, including the City Charter.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of June 25, 2024.
Acting Commission Secretary, Public Utilities Commission