PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.F
Meeting Date: May 21, 2024
TITLE:
Setting the Water Service Special Tax Rate for Fiscal Year 2024–2025 at $227.52, 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 2024–2025 at $227.52, and approving posting of said tax to the County assessment roll per Government Code Section 50077(b).
DISCUSSION:
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) 2025 is $227.52 per equivalent dwelling unit (EDU), which is calculated by adjusting the FY 2024 maximum allowable rate per year ($220.90) by the lesser of the local Consumer Price Index (CPI) increase from March 2023 to March 2024 (4.03%) (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 2025 is $2,550,025. Based on the Engineer’s count of 7,012.44 EDUs in the city for FY 2025, this FY 2025 revenue target equates to a target tax rate of $363.64 per EDU. Since the noted target tax rate of $363.64 is above the allowable maximum, the water tax rate for FY 2025 will be $227.52, 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 2025 water service tax. Action must be taken prior to July 22, 2024 to meet the deadline for placing the new water tax rate on the FY 2025 County tax roll. An attached memorandum from the Public Works Engineering Division (Attachment 3) explains the changes in the EDU table.
Council Agenda 5-21-2024 9.F-1
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 2025 at $227.52 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 $1.60 million of Water Service Tax revenues in the Water Tax Fund in FY 2025. 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 $2.38 million. Staff projects that the difference will be offset by Water Tax (Supply) Impact Fees and transfers from the Water Enterprise Fund.
ATTACHMENTS:
1. Resolution
1. A Exhibit A to Resolution: Water Service Tax Rate Calculation spreadsheet for FY 2025
2. March 2024 CPI Calculation
3. Engineering Department Memo of “EDU Adjustments for FY 2024-25” Prepared by:
Marc Arroyo, Senior Management Analyst
Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:
Council Agenda 5-21-2024 9.F-2
RESOLUTION NO. R-2024-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 2024-2025 AT $227.52, 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 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; 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 by the City Council of the City of Pismo Beach as follows:
1. The Engineer’s Parcel / EDU Table dated May 10, 2024, which updates the Parcel / EDU Table dated May 15, 2023, 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) 2025 is hereby set at $227.52 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 Council Agenda 5-21-2024 9.F-3
Attachment 1
Assessor’s Parcel Number (such as, but not limited to, the State of California with 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 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 21st day of May 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Pismo Beach, California, on _______________________. ________________________
Erica Inderlied, City Clerk
Council Agenda 5-21-2024 9.F-4
Attachment 1
City of Pismo Beach
Water Service Tax Rate Calculation for FY 2025
Balance Available at June 30, 2023 296,671$
FY 24 Projected Revenues
Water Tax 1,520,000$
State Water Buy-In - Building Permits 80,000
Transfer In from Water Enterprise Fund 500,000
Total FY 24 Revenues 2,100,000
Total FY 24 Funds Available 2,396,671
FY 24 Projected Expenditures
State Water 1,639,962
Lopez 388,732
Transfer Out to Water Enterprise Fund -
Total FY 24 Expenditures 2,028,694$
Estimated Balance at June 30, 2024 367,977$
FY 25 Projected Revenues
Water Tax (To be Calculated)
State Water Buy-In 60,000
Transfer In from Water Enterprise Fund
Total FY 25 Revenues 60,000
Total FY 25 Funds Available 427,977$
FY 25 Projected Expenditures
State Water 1,968,000
Lopez 414,402
Total FY 25 Expenditures 2,382,402$
Estimated Balance at June 30, 2025 (1,954,425)$
Less Reserve (25% of FY 25 Expenditures)595,601
FY 25 Water Tax Revenue Needed 2,550,025$
Engineer's Count of EDU's for FY 25 7,012.44
Calculated Water Tax Rate Needed 363.64$ Per EDU
Rate Cap per Municipal Code 227.52$ Per EDU
FY 25 Water Tax Revenue at the Cap Rate 1,595,471$
Proposed Water Tax Rate for FY 25: 227.52$ Per EDU
Estimated Budget FY 25 Water Tax Revenue:1,595,471$
Council Agenda 5-21-2024 9.F-5
Attachment 1.A
March 2024 CPI Calculation
Council Agenda 5-21-2024 9.F-6
Attachment 2
Council Agenda 5-21-2024 9.F-7
Attachment 3