PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #9.E
SUBJECT/TITLE:
SETTING THE WATER SERVICE SPECIAL TAX RATE FOR FISCAL YEAR 2023-2024 AT $220.90, AND APPROVING POSTING OF SAID TAX TO THE COUNTY
ASSESSMENT ROLL
RECOMMENDATION:
Adopt a Resolution approving the updated Engineer’s Parcel/Equivalent Dwelling Unit (EDU) Table, setting the water service special tax rate for Fiscal Year 2023-2024 at $220.90, and approving posting of said tax to the County assessment roll per Government Code Section 50077(b).
BACKGROUND:
In March 1997, Pismo Beach voters adopted the special water service tax as Article III of Chapter 13.08 of the Municipal Code to provide the necessary revenue to assure provision of an adequate supply of water to the citizens and to meet the City’s State Water and Lopez Water Fixed Financial Obligations, with an effective date beginning July 1, 1997.
Municipal Code Section 13.08.332.C. provides that the City Council shall each year set the water service tax rate by resolution. The maximum water service tax rate allowable by Municipal Code Section 13.08.332.B. (based on actual fixed costs and reserve restrictions), for Fiscal Year (FY) 2024 is $220.90 per equivalent dwelling unit (EDU), which is calculated by adjusting the FY 2023 maximum allowable rate per year ($214.48) by the lesser of the local Consumer Price Index (CPI) increase from March 2022 to March 2023 (3.65%) (Attachment 2), or the maximum annual CPI adjustment of 3.00%.
Based on estimated expenditures and other revenues, the Water Service Tax Revenue needed for FY 2024 is $2,128,909. Based on the Engineer’s count of 7,011.91 EDUs in the City for FY 2024, this FY 2024 revenue target equates to a target tax rate of $303.61 per EDU. Since the noted target tax rate of $303.61 is above the allowable maximum, the water tax rate for FY 2023 will be $220.90, the maximum allowable that can be used in the EDU Table, rounded down to an even number that can be divisible by two, per San Luis Obispo County’s assessment requirements. Calculations are provided as Attachment 1.A.
Municipal Code Section 13.08.331.D. requires that the Engineer’s Parcel/EDU Table be updated annually using the most current information available as of March 1 of each year, including the number of EDUs, and the amount of water tax levied on each parcel for the new fiscal year. The data in this table will be transmitted to the County as the official tax roll for the FY 2024 water service tax. Action must be taken prior to July 20, 2023 to meet the deadline for placing the new water tax rate on the FY 2024 County tax roll. An attached memorandum from the Public Works Engineering Division (Attachment 3) explains the changes in the EDU table.
9.E-1Council Agenda 6-6-2023
Conclusion and Recommendation
Staff recommends that Council adopt a Resolution (Attachment 1) approving the updated Engineer’s Parcel/EDU Table, setting the water service special tax rate for Fiscal Year 2024 at $220.90, and approving posting of said tax to the County assessment roll per Government Code Section 50077(b).
FISCAL IMPACT:
The fiscal impact of approving the attached Resolution would result in $1.55 million of Water Service Tax revenues in the Water Tax Fund in FY 2024. Revenues generated by the Water Service Tax Rate provide funding for fixed and capital costs for obtaining State Water and San Luis Obispo County Water from the Lopez Dam, which is estimated to cost $2.40 million. Staff projects that the difference will be offset by Water Tax (Supply) Impact Fees and transfers from the Water Enterprise Fund.
ALTERNATIVES:
Do not approve the new rate of $220.90 per EDU for FY 2024; provide direction to staff.
ATTACHMENTS:
1. Resolution
1.A. Exhibit A to Resolution: Water Service Tax Rate Calculation spreadsheet for FY 2024
2. March 2023 CPI Calculation
3. Engineering Department Memo of “EDU Adjustments for FY 2023-24” Prepared by: Meeting Date: June 6, 2023
Marc Arroyo, Senior Management Analyst
Submitted by: Nadia Feeser, Administrative Services Director Interim City Manager Approval:
9.E-2Council Agenda 6-6-2023
RESOLUTION NO. R-2023-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH, CALIFORNIA APPROVING THE UPDATED ENGINEER’S PARCEL / EQUIVALENT
DWELLING UNIT (EDU) TABLE, SETTING THE WATER SERVICE SPECIAL TAX RATE FOR FISCAL YEAR 2023-2024 AT $220.90, AND APPROVING POSTING OF
SAID TAX TO THE COUNTY ASSESSMENT ROLL PER GOVERNMENT CODE 50077(b)
WHEREAS, Section 13.08.331.D. of the Pismo Beach Municipal Code provides that an Engineer’s Parcel / Equivalent Dwelling Unit (EDU) Table shall be updated annually to provide the most current information as to each parcel within the City and shall constitute the official tax roll of the City for the water service special tax; and WHEREAS, Section 13.08.332.C. of the Pismo Beach Municipal Code provides that the City Council shall determine the method for billing and collection of the water service special tax; and
WHEREAS, Government Code 50077(b) provides that the City Council of the City of Pismo Beach may provide for the collection of the special tax in the same manner and subject to the same penalty of the City, and the County may deduct its reasonable costs incurred for the service before remittal of the balance to the City; and WHEREAS, effective administration of the water service special tax requires that authority be granted to the City Manager to make corrections to the Engineer’s Parcel / EDU Table.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach as follows:
1. The Engineer’s Parcel / EDU Table dated May 15, 2023, which updates the Parcel / EDU Table dated May 11, 2022, is hereby approved, subject to changes which may be made pursuant to the adjustment procedure set forth in Section 13.08.340 of the Pismo Beach Municipal Code, and to corrections which may be made pursuant to Section 4 below.
2. Pursuant to Section 13.08.332.C. of the Pismo Beach Municipal Code, the water service special tax rate for Fiscal Year (FY) 2024 is hereby set at $220.90 per EDU.
3. Pursuant to Section 13.08.360 of the Pismo Beach Municipal Code, the City Council hereby determines that the water service special tax shall be billed and collected through posting the tax to the assessment roll of the County of San Luis Obispo, except that for those taxpayers whose use is not associated with an Assessor’s Parcel Number (such as, but not limited to, the State of California with Attachment 1
9.E-3Council Agenda 6-6-2023
respect to highway irrigation meters) the tax shall be billed directly to the taxpayer by and payable to the City of Pismo Beach.
4. Pursuant to Government Code Section 50077(b), the City Council of the City of Pismo Beach may provide for the collection of the special tax in the same manner and subject to the same penalty as, or with, other charges and taxes fixed and collected by the County on behalf of the City, and the County may deduct its reasonable costs incurred for the service before remittal of the balance to the city.
5. The City Manager or his or her designee is hereby authorized to make changes to the Engineer’s Parcel / EDU Table to correct clerical errors or other errors in the application of Ordinance 97-03 to any parcel, and to take action necessary to correct the tax billing. Any such changes shall be reported to the City Council for Council acknowledgment at the next regular City Council meeting following the City Manager’s determination that a correction is warranted.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 6th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
Attachment 1
9.E-4Council Agenda 6-6-2023
City of Pismo Beach
Water Service Tax Rate Calculation for FY 2024
Balance Available at June 30, 2022 139,495$
FY 23 Projected Revenues
Water Tax 1,450,000$
State Water Buy-In - Building Permits 150,000
Transfer In from Water Enterprise Fund 500,000
Total FY 23 Revenues 2,100,000
Total FY 23 Funds Available 2,239,495
FY 23 Projected Expenditures
State Water - Gragg 50,290
State Water 1,405,144
Sub-total 1,455,434
Lopez 425,831
Transfer Out to Water Enterprise Fund -
Total FY 23 Expenditures 1,881,265$
Estimated Balance at June 30, 2023 358,230$
FY 24 Projected Revenues
Water Tax (To be Calculated) -
State Water Buy-In 507,511
Transfer In from Water Enterprise Fund -
Total FY 24 Revenues 507,511
Total FY 24 Funds Available 865,741$
FY 24 Projected Expenditures
State Water 1,960,000
Lopez 435,720
Total FY 24 Expenditures 2,395,720$
Estimated Balance at June 30, 2024 (1,529,979)$
Less Reserve (25% of FY 24 Expenditures)598,930
FY 24 Water Tax Revenue Needed 2,128,909$
Engineer's Count of EDU's for FY 24 7,011.91
Calculated Water Tax Rate Needed 303.61$ Per EDU Rate Cap per Municipal Code 220.90$ Per EDU FY 24 Water Tax Revenue at the Cap Rate 1,548,961$
Proposed Water Tax Rate for FY 24: 220.90$ Per EDU Estimated Budget FY 24 Water Tax Revenue:1,500,000$
Attachment 1.A
9.E-5Council Agenda 6-6-2023
March 2023 CPI Calculation
Attachment 2
9.E-6Council Agenda 6-6-2023
DATE: May 15, 2023
TO: Marc Arroyo, Senior Management Analyst
From: Erin Olsen, Management Analyst
OLD APN #'s NEW APN #'s New APN Address "2022/2023" OLD EDU
"2023/2024"
NEW EDU REASON
005‐017‐007 005‐017‐038 781 Stratford 1.0000 1.0000 Lot Line Adjustment 005‐017‐021 005‐017‐037 791 Stratford 1.0000 1.0000 Lot Line Adjustment 005‐017‐028 1.0847 0.0000 Lot Line Adjustment ‐ part of 781/791 Stratford 005‐035‐027 005‐035‐026 518 San Luis Ave 0.0000 0.9470 Lot Line Adjustment Old EDUs New EDUs
Total Changes 3.08 2.95
Total EDUs 7012.0438 7011.9061
EDU Adjustments FY 2023/2024
Attachment 3
9.E-7Council Agenda 6-6-2023