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Council Meeting: May 25, 1993
fM1 ` '~,^ y
Santa Monica, California
TO: Mayar and C~ty Caunc~l
FROM: City Staff
SUBJECT: Ordinances for Introduction and First Reading Proposing a Parking Facility Tax, and Increaszng the Utility
User's Tax Rate and Applying the Increased Utility
User's Tax Rate ta Water Use-Related Charges
Introductian
As directed by the City Council, this repart: pro~ides for Yntroductian and first read~ng ardinances proposing a Parkzng Facility Tax, and increasing the Uti~~ty User's Tax rate and applying the increased rate ta City Water use-related charges; and, pravides information concerning the City's FY 1993-94 General Fund budget.
Background
On April 27, 1993 s~aff presented to Cat~ncil a preliminary status r~port an next fiscal year's
General Fund budget. At that time,
staff indicated that the FY 1993- s94' revenue shortfall, due to the continuing economic slump and the State's taking of City rev~nues, was about $ 11.2 million. However, due to staff and Council budget actions to that date, this shortfall had been reduced to $5.1 million.
To close this remaining budget gap, Council directed staff ta continue to work on reducing the gap, and directed the C~ty Attorney to prepare and submit for its consideration ardinances rs'{ "+ 4 ~ JJ.+
ATTACHMENT D
to implement various revenue increase optians se~ected by Council fram an options list prepared by staff.
At this time, staff has reduced the rema~ning budget gap to $3.8 million.
Some members of the Council also requested staff to submit additional information summarizing actians which wauld be recommended in the proposed budget ta eliminate the ~otal budget gap of $11.2 ~illion.
Proposed Ordinances
The ordinance at Attachment A would establish a Parking Facility Tax. The Parking Facility Tax would p~ace a tax of 10~ on all parking sold ta the public in Santa Monica. The ordinance follows the City of Los Angeles Parking Tax which was implemented in 1990, as recently amended. Staff estzmates that this new tax wall yield aba~t $1.1 million annually follawing implementation next fiscal year.
The ordinance at Attachment B would increase the City's Utility User's Tax rate from 9.5% ~0 10.0% and expand the tax base to include the water and wastewater components of the City's utility bill. Increasing the tax rate wauld add about $.88/month to the average hausehold's costs for telephone, gas, electricity, and cable television. Expanding the tax base to include ~ he City's water use-related charges wou~d cost the average hausehold abaut
5. two-78/ month billing period. Staff estimates these actions 2 -
ATTACHMENT D
will yield about $ 2.7 million annually following implementation next fiscal year.
If Council approves the Utility User's Tax Ordinance on May 2~, 1993, the Rent Cantrol Board has indicated it will include the resulting cost increases in its FY 1993-94 general rate increase thereby enabling landlords ta pass the cost increases through to tenants.
Additional Information Requested
At this time, General Fund budget recommendations far next fiscal year will reflect $7.4 million in non-public safety related cost savings and cost-covering user fee/fine increase measures thereby reducing the remaining budget gap to $ 3.8 miliion. These measures consist of the fo~ ng { low~in millians}:
11.2 -- Total budget gap
2.8} -- Salary and wages savings reflecting
reorganizations, the elimination of over 30
positions and the absorption of salary step
and health/dental cost increases;
1.6} -- 5upplies and Expense savings reflecting:
reduced professional services and various
other departmental items; the absorption of
cost increases for fuel, gas and telephone
service; and reduced funding for social
service and City-supported nan- tprof~
agencies.
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ATTACHMENT D
3.0) -- User fee increases ta be recommended ta the
Cauncil aver the next few months, and fine
increases previously approved by Cauncil to be
sffsctius July l, 1993.
3.8 Remaining budget gap.
In order to maintain the Council's commitment to continue public safety operations at acceptabl~ levels of public service, ~t was necessary, however, to increase Police and Fire allocations by
2.3 million. These increases were necessary to fully fund all po~ice pasitions and to purchase replacement police vehicles, and ta fulZy fund al~ police and fire MOU provisions ( primarily retirement ~ate changes}.
The reorganizatians which will be reflected in the proposed budget znclude: changing the Department of Information 5ystems to a division of the City Manager's
Office thereby eliminating a
department head position; restructuring the Departmenti af Cultural and Recreation Services to focus programs in terms of end users thereby increasing program effectiveness and generating cost savings, and streamZining supervisory control in the General Services Department.
The attached tax change ordinances, if approved, wi~l eliminate this remaining budget gap.
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ATTACHMENT D
Recom~endation
It is recommended that Council introduce far first reading the attached tax change ordinances.
Prepared by: Jahn Jalili, City Manager
Lynne Barrette, Assistant City Manager
Mike Dennis, Director of Finance
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ATTACHMENT D
AT~' CHAIENT P_A
CA: pkgtax. wp51\ df
City Council Meeting
JLD: ord\ pc~
5-9325- Santa Monica, Caiifornia
ORDINANCE NUMBER { CCS)
City Council Seriesy
AN QRDINANCE OF THE CTTY COUNCIL 4F THE
CITY ~F SANTA MONICA ADDING CHAPTER 6.70 TO THE
SANTA MONICA MUNICIPAL CODE TO ESTABLISH A
PARKING FACILITY TAX
THE CITY C~UNCIL OF THE CITY OF SANTA MONICA DOES ~R~AIN AS FOLLOWS:
SECTION 1. Chapter 6.70 is added to the Santa Monica
Municipal Code to read as follows:
SECTION 6. p10. 70 Definitioas.
Except where the context otherwise
requires, the definitions in this Sectian
govern the construction of this Chapter.
a) Motor vehicle. " Motor vehicle"
means every self-propelled vehic~e vperated ar
suitable far operation on the highway.
b) Ocougancy. " Occupancy" means the
use or possession or the right to the use or
possession of any space for the parking af a
motor vehicie ar any other purpose in a
parking facility.
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c} oaaupant. j~occupant" means a person
wha, for a consideration, uses, possesses or
has the right to use or possess any space for
the parking o~ a motor vehicle in a parking
facility under any lease, concession, permit,
right of access, license to use or other
agreement or otherwise, whether voluntarily or
involuntarily. Occupant shall be deemed to
include any person required to pay any valet
or service labor charge in connection with the
parking ~f motor vehicles an public or private
property and any persan required to pay a
charge for the occupancy of parking space by
another person by means of validation or
atherwise.
d) Operatar. " operator" means the
p~rson who canducts a parking facility,
whether in the capacity o~ owner, lessee,
mortgage ~n possessian, license~, valet or
other service supplier or any other capacity.
When the operator performs his or her
functions through a managing agent of any type
or character other than an employee, the
managing agent shall alsa be deemed an
vperator for purposes of this article and
shall have the same duties and iiabilities as
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his principal. When the managing agent
c~llects parking fees and tax on behalf af his
ar her principal and deposits the same into
the principal's
account in a financial
institution, such principal shall be
responsible for reporting and remitting the
tax to the City. It shall be the duty of the
managing aqent to provide the Director of
Finance with the name and address of each
principal who will be responsib~e for
reporting and remitting the tax to the City.
Gompliance with the prnvisions af this article
by either the principal ar the managing agent
shall be considered to be compliance by both.
A person who qualifies as an operator shall
not, by reason of being exempt from the tax
imposed in this artic~e, be exernpt from the
duties and liabilities of an operator imposed
under this article.
e) Parkinq Meter. " Parking meter"
means any device which, when the recarding
device thereof is set in motian, ar
immediately follawing the deposit af any coin,
shall register the periad of time that any
motor vehicle may be parked adjacent thereto.
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f) Parkinq Facility. " Parking
faciiity" means any outdoor space or uncavered
plot, place, street, lot, parcel, yard or
enclnsure, or an~ partzon thereof, or any
building or structure, or any portion thereof,
where or in which a mator vehicle may be
parked, stored, housed ar kept, for which any
charge is made.
g) Person. " Persan" means any natural
person, partnership, joint venture, joint
stock company, carparatian, estate, trust,
business trust, receiver, administrator,
executor, assignee, trustee in bankruptcy,
firm, company, association, club, syndicate,
society, municipal corporation, the State flf
CaZifornia, political subdivisa.on of the State
of California, the United States,
instrumer~tality of the United States, or any
group or combination acting as a unit, whether
mutual, cQaperative, fraternal, nonprofit or
o~' Wlel^iS e .
h) Parking Fea. " Parking fee" means
the cansidera~ion charged, wh~ther or not
received, for the occupancy or use of space in
a parking facility valued in money, whether
received in money, goads, labor or otherwise,
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including al~ receipts, cash, eredits and
property and services of any kind ar nature,
without any deduction therefrom. The parking
fee shall ~ e deemed ta include the total
Charges required to be paid by an occupant,
includinq, but not iimited to, any va3et or
service labor charge in connection with the
use or accupancy of parking space on public ar
private property. Nathing shall be construed
to mean that a parking fee is charged to the
occupant of space in a parking facility for
the sale af petroletxm products, automabile
parts ~ro~her tangible personal property, the
rendering of services, including car wash
services, totally unconnected with the use ar
vccupancy ot parking space, or where parking
space is provided ta the occupant as a
comp~iment from the operator and where no
Gonsideration is charged to or received fram
any other person.
Sectian 7. 020. 60 Parkinq Facility Tax.
On ar after July 1, 1993, there is hereby
imposed a tax upon every person in the City
who occupies a parking tacility or who is
obligatad to pay a parking fee. The tax
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imposed b~ this Chapter shall be at the rate
of ten percent {10~) of the total parking fee
charged by the vperatar for use of the parking
facility.
Secti~n 6. 030. 70 Colleation.
a) On or after the effective date of
this Chapter, every operator or persan
receaving any payment for use of a parking
facility shall collect the amount of the tax
imposed by this Chapter from the person paying
the parka.ng fee or wha is obligated to pay the
parking fee.
b} Un3ess otherwise prohibited by law,
every person occupying a parking space in a
parking facility shal~ be required to pay the
tax impased by this Chapter to the operator or
the person collecting the parking fee. If the
parking fee is paid in installments, or if an
amaunt paid is less than the full amount of
the parking fee and tax accrued at the time of
payment, a proportionate share of the tax
shall be deemed to have been paid with each
such partial payment or installment.
c) The taxes reqnired to be collected
pursuant to this Chapter shall be deemed ta be
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held in trust by the operator ar the person
required to collect the tax on behalf of the
City until the taxes are remitted to the City
as required by this Chapter and shall
constitute a debt owed by the aperator to the
City.
Section 040. 6.70. Reports and Tas
Remittance.
a) The person or operator collecting or
obligated to co~lect any parking facility tax
pursuant ta this Chapter, shall prepare a
report upon such forms and settang f~rth such
informatian as the Director of Finance may
prescribe and require to carry out the
purposes of this Chapter.
bj The person or operator collecting or
obligated ta collect any parking facility tax
shall report the amount af parking fees
collected and, the tax required ta be
co~. lected along with a remittance of the tax.
cj The reports and tax remittances of
parking facility taxes shali be due no later
than the twenty-fifth day following the end af
each calendar quarter and shali cover the just
ended calendar quarter. For purposes of this
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Chapter, the calendar quarters begin January
1, April 1, July 1 and October 1 of each year
and end the last day of March, June, Septemb~r
and December of each year.
Section 050. G.70 Interest aad
Peaaities.
If any person fails or refuses to remit
to the Director of Finance the tax required to
be collected by this Chapter~ there shail be
added to such tax a penalty of ten percent
10~) of the amount of the tax due for each
thirty days that the tax is unpaid. If the
tax due remains unpaid for a period of ninety
90} days ar longer, in addition ta the
penalty prescribed by this section, the person
owing the tax shall pay to the City interest
on the amount due frflm the date the tax was
due, in the amount determined by th~ Director
of Finance as equal to the City's actual rate
af return on its invested funds.
Section 6. 060. 72. Failure to Collect and
Report Tax.
If any person shall fail or refuse to
collect the parking facility tax or to make,
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within the time provided in this Chapter, any
Xeport or remittance required by this Chapter,
the Director of Finance shall proceed in such
manner as he or she may deeia best to obtain
facts and informatian on which to estimate the
tax due. As soon as the Director of Finance
hall procure such facts and information as h~
or she is able to abtain upon which to base
the assessment of any tax payable by any
person who has failed or refused ta col].ect
the same and to make such report or
remittance, the Director of Finance shall
proceed to determine and assess against such
person the tax and penalties provided for by
this Chapter and shall notify such person by
mai~ sent to his ar her last knawn place of
address of the total amount of such tax
including interest and penaltiES, and the
total amount thereof shall be payabla within
ten days from the date of such notice.
SECtion a70. 6.72 Rscords.
It sha11 be the duty of e~ery person
lialale for the collection and payment to the
City of any tax imposed by this Chapter to
keep and preserve, for a period of two years,
9 ATTACHMENT D
such suitabie records as may be necessary to
determine the amount of such tax as he or she
may have been iiable for the callection of and
payment to the City~ which records the
Director of Finance shall have the right to
inspect at ail reasonable times.
section 080. 6.72 cessatioa ot Business,
Whenever any person required ta collect
and pay to the City a tax under this Chapter
shall cease to operate or otherwise dispose of
his or her business, any tax payable hereunder
to the City shal]. become immediately due and
payable and such person shall immediately make
a
report and pay the tax due.
Section 09Q. 6.72. Egceptions.
No tax shall be payable hereunder in any
of the follow~ng instances:
a) On the parking fee paid by any
federa~, State af Ca~ifornia, or City of Santa
Monica~ official or employees when on official
business provided that a tax exempt
certificate is executed no later than the time
when payment of the parking fee is due, on a
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ATTACHMENT D
form to be provided by the Director of
Finance.
b) On the parking fee deposited in any
parking meter owned or operated by the City.
c) On the parking fee paid for any City
preferential parking penait.
d) On the parking fee paid as part of
any residential dwelling unit lease, rental
agreement or abligation, including on the
parking fee paid as part of any hotel, matel
or other ~odging facility occupancy, but anly
when the length of the accupant's stay exceeds
thirty ( 30) consecutive days in the hotel,
mate~ ar other lodging facility.
Section 100. 6.72. Penalty.
Any person viaiating or fai~ing to comply
with any of the provisions of this Chapter,
shall upon conviction thereof, be guilty of a
misdemeanor and shall, in addition to any jai].
s~ntence, be fined not more than five hundred
dollars. Each t~iolation of thzs Chapter shall
constitute a separate offense. Any conviction
for vio3ation af this Chapter shall nat
relieve any person from the payment,
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ATTACHMENT D
eollection or remittance of the parking
facilit~ tax as pravided in this Chapter.
Section 6. 110. 72 Director of Finaace--
Po~ers and Duties.
It shall be the duty of the Director vf
Financa to ascertain the name of every person
operating a parking facility in the City of
5anta Monica, liable far the collectian of the
tax ~ evied by this ordxnance, who fails,
refuses or neglects to collect the tax ar to
make, within the time provided by this
ardinance, the reports or remittances required
herein. In addition to any other remedy or
proceed~ng, the DiXector of Fxnance is
authorized to request that the City Attorney
commence any praceeding as may be appropriate
to obtain payment of any tax, including
penaZty and interest, as may be due the City
under this Chapter.
SECTION 2. Any provision af the Santa Monica Municipal
Code or appendices thereto inconsistent with the prvvisians of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that e~ent necessary ta affect he provisians af thi.s ordinance.
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ATTACHMENT D