City Council Agenda Report
Meeting Date: June 20, 2023
From: Scott Williams, Director of Finance
Department: Finance
Submitted by: John Lau, Accountant
Subject
Public Safety Special Parcel Tax Rate for Fiscal Year 2023-24 Recommendation
A. Adopt Resolution No. 2023-15 determining the Public Safety Special Parcel Tax levied for Fiscal Year (FY) 2023-24, pursuant to Municipal Code Section 3.20.020; and B. Approve and authorize the Director of Finance to execute an Agreement for Billing Direct Assessments with the County of Los Angeles Auditor-Controller’s Office, in substantially the same form as submitted, for the collection and distribution of the Public Safety Special Parcel Tax for FY 2023-24.
Background
On April 9, 2013, the City of Vernon voters approved Measure L, which authorized the annual levy of a parcel tax on non-residential parcels to fund public safety services. Since its adoption through and including its final FY 2022-23, the Public Safety Special Parcel Tax (Public Safety Tax) has been collected annually for each taxable parcel area that is not apportioned a share of the Warehouse Special Parcel Tax as an Assessment on the Los Angeles County Property Tax Bill.
On April 11, 2023, the City of Vernon voters approved Measure W, which extended and authorized the levy of an annual special parcel tax on non-residential parcels for a period of five years beginning with FY 2023-24. For each fiscal year the special parcel tax is to be collected, through and including FY 2027-28, the City Council sets the rate of the tax at an amount that does not exceed the maximum tax rate calculated for the fiscal year. For FY 2023-24, the maximum rate of the special parcel tax is $0.03683 per square foot of taxable parcel area. The provisions for calculating and collecting the Public Safety Tax are codified in Section 3.20.020 of the Vernon Municipal Code (VMC).
Pursuant to VMC Section 3.20.020(f), the tax is collected on the County of Los Angeles Property Tax Bill. An agreement is required by the County of Los Angeles Auditor-Controller's Office for the City of Vernon to use the County's collection services. Pursuant to VMC Section 3.32.110 et seq., competitive bidding and competitive selection are not required because the services are provided by a governmental entity and because the entity is the sole provider. The Agreement for Billing Direct Assessments was reviewed and approved as to form by the City Attorney's Office.
In order to implement the Public Safety Tax, Staff recommends that the City Council adopt the proposed resolution setting the Public Safety Tax at $0.03683 per square foot of taxable parcel area and approve and authorize the Director of Finance to execute an Agreement for the Billing of Direct Assessments (Public Safety Special Parcel Tax) with the County of Los Angeles AuditorController's Office for the collection and distribution of the Public Safety Special Parcel Tax for FY 2023-24.
Fiscal Impact
Based on the proposed rate of $0.03683 per square foot of taxable parcel area, and by implementing the recommended action, the City's Public Safety Tax revenue will provide an estimated $2.263 million for the FY 2023-24 Budget.
The County of Los Angeles Auditor-Controller charges $0.25 per assessment per parcel, plus a $50 processing fee for FY 2023-24. Corrections of direct assessments will be charged at a rate of $13 per parcel. Direct Assessment billing charges are deducted from revenues forwarded by the County to the City on the December 20th advanced distribution. The estimated total cost, based upon the parcels subject to the Public Safety Tax is $283.75.
Attachments
1. Resolution No. 2023-15
2. Agreement for Billing of Direct Assessments
3. Bureau of Labor Statistics Data