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HomeMy WebLinkAboutMinutes - City Council - unsigned - 1991-07-09 - Adjourned Regular Meeting1 07/09/91 City Council Adjourned Regular Meeting Council Chambers Redding, California July 9, 1991 5:15 p.m. The meeting was called to order by Mayor Dahl with the following Council Members present: Arness, Buffum, Fulton, Moss, and Dahl. Also present were City Manager Christofferson, Assistant City Manager McMurry, City Attorney Hays, Director of Public Works Galusha, Director of Electric Utilities Lindley, Fire Chief Bailey, Director of Finance Downing, Director of Information Systems Kelley, Director of Utilities/Customer Service Vokal, Electric Utility Operations Manager Ryan, Public Information Officer Bachman, Chief Negotiator Ron Reynolds, City Clerk Nichols, and Secretary/Stenographer Rudolph. RESOLUTION - Releasing Abatement Proceedings on Property at 1240 Orange Avenue, Apts 1 and 2, owned by Gary and Diane Miralles (A-030-070) City Attorney Hays recalled that on April 2, 1991, the City Council initiated abatement proceedings on the property located at 1240 Orange Avenue, Apartments 1 and 2, owned by Gary and Diane Miralles. The necessary repairs have been completed by the owner and have been confirmed by the Building Department. It is, therefore, the recommendation of staff that the resolution releasing abatement proceedings on the subject property be adopted. MOTION: Made by Council Member Moss, seconded by Council Member Buffum, that Resolution No. 91-271 be adopted, a resolution of the City Council of the City of Redding releasing the proceedings of abatement under Chapter 9.36 of the Redding Municipal Code on certain real property in the City of Redding located at 1240 Orange Avenue, Apartments 1 and 2, owned by Gary and Diane Miralles. Voting was as follows: Ayes: Council Members - Arness, Buffum, Fulton, Moss & Dahl Noes: Council Members - None Absent: Council Members - None Resolution No. 91-271 is on file in the office of the City Clerk. UTILITY USER TAX (T-010) City Manager Christofferson provided Council with a report outlining the 83 cities throughout California which have adopted a utility user tax, with ranges of 1% to 11%. Mayor Dahl noted that at least three organizations are represented in the audience and indicated that Council will entertain their comments on the proposed utility user tax. Dave Gibson, 2352 Candlewood, Executive Director of the Greater Redding Chamber of Commerce (Chamber), thanked the Council for the additional time in which to review the utility user tax issue and its affect upon the businesses of Redding. He indicated that the Chamber reviewed the same information as the City and determined only 76 cities, not 83, have levied a utility user tax. After the Chamber's Board of Directors reviewed this information, it was determined that as the ordinance is written today, the Chamber is in opposition of its adoption. The reason for this opposition is that the Board cannot see where the City has shown a demonstrated need. The Chamber spoke with several larger businesses/employers in the community and found that the proposed utility user tax will result in annual utility increases from $8,000 for Tri-Tec Plastics and Viacom Cablevision to $50,000 for one of the local hospitals. He said the Chamber would like to become better educated on the issue. Marie Whitacre, Executive Officer of the Shasta County Board of Realtors, thanked the Council for the opportunity to present the real estate community's position on the utility user tax. She stated that in light of 2 07/09/91 the State's recent sales tax increase effective July 15, 1991, and without first reviewing this year's City budget, the real estate community opposes the implementation of additional taxes. Mayor Dahl commented that this is not a public hearing; however, the Council will at this time make an exception and entertain comments from any individuals wishing to address the Council. George Brkich, 1101 Brandon Court, Apt C, opined that if an agency's coffers are full, it will find a program to spend it on. Unless there is a real need for the City to increase revenues, he does not feel it is necessary to adopt this ordinance. He further opined that if Mercy Medical Center's utility rates are increased by $50,000 annually, these costs will be passed on to the patients. In response to Mr. Brkich, Mayor Dahl stated that no one likes to impose a tax; however, the community of Redding is growing. If sacrifices are not made to maintain the quality of life presently being experienced by investing funds in streets, public buildings and public safety services, the community will deteriorate. He indicated that he grew up in this community and is very proud of it. Larry Lash, Vice President of Finance for KMS Research, stated his support of the Chamber of Commerce's opposition to the utility user tax. He opined that more effort should be taken in reducing the City's current expenditures. Without the current budget available for review, there is not a clear picture of what the City's expenditures will be over the next year. He stated that it appears the City is acting hastily because of measures that the State may or may not be taking. Arnold Iwanick, 3665 Cal Ore Drive, stated that the affect of the utility user tax on certain businesses and industries needs to be taken into consideration to ensure it is equitable to all. He also requested that before the utility user tax is implemented that it be referred to both the City of Redding Electric Department and the Electric Utility Commission for review and consideration. Council Member Moss related that earlier there had been considerable concern by both the League of California Cities and himself that the State was going to tamper with the City's authority to impose a utility user tax; however, this is not his driving concern at the present time. This year, staff provided a budget that allowed for no net increase in employees and provided a 3% reserve as requested by Council. Council is aware that there are certain projects in progress that will reduce this reserve even further. He stated that if the utility user tax is adopted, the funds will go into the City's general fund for disbursement under Council's direction. He commented that when City surveys are conducted, one of the major issues the public wants addressed is the traffic situation. Currently, there is approximately $100,000,000 in unfunded projects, with only $2,000,000 being allocated this year. The development fee and traffic impact fee already in existence will not begin to cover the back log of traffic projects. In addition, the public does not want the City to cut back on public safety programs. Council Member Moss related that he understands the Chamber of Commerce's concern. Chambers statewide oppose the utility user tax and lean more towards a sales tax. He indicated that both businesses and individuals pay a utility user tax, whereas sales tax is primarily paid by individuals; thereby, making the utility user tax more equitable. In addition, cities have no authority over sales tax. As far as a demonstrated need, if the utility user tax is not implemented, the City will be required to cut back on its growth, which is not economically feasible. Even if the utility user tax were to be implemented at the full 7%, there will still not be sufficient funding to address all the projects currently required. The tax will, however, enable the City to address the more urgent items, as well as bring the reserve back to a fairly adequate position of approximately 5%. Council Member Fulton related that he is on record as opposing the utility user tax and his position has not changed. He indicated that even the State throughout the current budget crisis has shied away from imposing a utility user tax because of the impact it will have on the people who 3 07/09/91 cannot afford to have their utilities increased. If feasible, he said he is more in favor of a sales tax, or increasing some of the development fees. He opined that the people who put Council in office on a whole oppose the implementation of a utility user tax, and the Council is supposed to represent the voters, not the administration. Council Member Arness opined that Redding is attractive because it has planned ahead. He stated that he did not want subsequent Councils laden with inquiries as to why water hydrants and sewer lines do not have sufficient capacity. He indicated he is not anxious to see the utility user tax go towards salaries, unless it is for new positions needed by the Police and Fire Departments. He related that funds are needed to further develop such things as the park and trail system. He said he favors the enabling ordinance which will permit staff to develop a system of reviewing how the tax will affect the low income population and larger businesses. Council Member Buffum stated she has a reputation for her vision and planning for growth and believes it is the key to maintaining a successful City. She said she is concerned, however, that the City is not planning on how to adequately pay for development and growth. She opined that when looking at a group of unfunded projects which total $100,000,000, imposing a utility user tax which will only raise from $3,000,000 to $7,000,000 does not seem like it will serve to accomplish much. Council Member Buffum related that she is also concerned about the speed and urgency with which this tax is being pursued. She said that the City may need to impose a utility user tax, however, she does not feel that three weeks is sufficient time to make a proper determination. She also stated she realizes that the City's reserves are down; however, this has happened over the last several years and is a function of growth. She agreed with the Chamber of Commerce in that a demonstrated need has not been shown. She also expressed a need for a cap for major businesses, as well as a lifeline rate for senior citizens. She opined that the issues need to be further discussed to determine if a utility user tax is actually justified. Mayor Dahl opined that a long term funding source is needed to meet both the City's current and future needs. Redding is a rapidly growing city and one everyone can be proud of. He stated he does not want to be a party to allowing the City to deteriorate by having inferior streets and bridges, inadequate public safety services and library. He also related that the current sales tax and property tax revenue basically covers the Police and Fire Department budgets. Mayor Dahl stated that taxes affect everyone. He indicated it is uncomfortable for an elected representative to either advocate or vote for a tax increase, however, inadequate police and fire services, inadequate bridges, roads, and libraries also affect everyone. If the City of Redding is going to grow, prosper and maintain the quality of life currently available, everyone is going to have to be willing to make the necessary investment. Mayor Dahl indicated that implementing more development fees is not the answer. If more and more fees are imposed on new development, the City will soon experience a no growth situation; which is not economically feasible. Mayor Dahl agreed that the public needs to be educated about needs. He suggested that the first step for Council to take is to enact the ordinance, which sets the cap on how much can be assessed in utility user taxes. The next step will be to discuss and take input on the composition of the resolution, which can change from year-to-year. Questions which need to be addressed are caps, lifelines, percentages of utilities to be affected, and prioritizing projects and needs. He opined that at this time it is appropriate to proceed with the adoption of the ordinance. Council Member Moss related that he strongly supports a cap for major users, as well as providing relief to those individuals at the lower end of the income scale. He indicated he is willing to take the uncomfortable step of moving forward and imposing a utility user tax. He feels that 4 07/09/91 once the people have an opportunity to see where these funds are going, opinions will be different. 5 07/09/91 Council Member Fulton commented that he does not like to see Council divided as it has been the past couple of weeks; however, it is inevitable due to the different philosophies. He indicated there will always be projects which need to be funded, and once the taxes are put into the general fund, it is anyone's guess as to where these monies will be spent. He stated that the issues brought up this evening should be studied in detail before the enabling ordinance is adopted. Council Member Moss commented that if the ordinance is adopted this evening, there is still considerable time to discuss a cap for major users, relief for the lower income population, and the amount of the utility user tax to be imposed. Council Member Buffum related that on the list of cities which have imposed a utility user tax, five presently show a 0% rate in effect. Council Member Moss stated he checked with a couple of these cities and found that the cities previously had a utility user tax in effect, however, the rate has been reduced to zero. MOTION: Made by Council Member Arness, seconded by Council Member Moss, that the full reading of Ordinance No. 1964 be waived and the City Attorney be instructed to read the full title. Voting was as follows: Ayes: Council Members - Arness, Moss & Dahl Noes: Council Members - Buffum & Fulton Absent: Council Members - None MOTION: Made by Council Member Arness, seconded by Council Member Moss, that Ordinance No. 1964 be adopted, an ordinance of the City Council of the City of Redding amending Redding Municipal Code Title 4, Revenue and Finance, by adding Chapter 4.06: Utility Users' Tax. Voting was as follows: Ayes: Council Members - Arness, Moss & Dahl Noes: Council Members - Buffum & Fulton Absent: Council Members - None Ordinance No. 1964 is on file in the office of the City Clerk. Council Member Arness stated that while there may be differences of opinion, he does not feel that Council is divided. Mayor Dahl concurred with Council Member Arness and opined that everyone voted their conscience. Mayor Dahl instructed City Manager Christofferson to research the issues of a cap for major business, as well as lifeline rates, for discussion at the Council meeting on July 16, 1991. In response to Council Member Buffum, both Mayor Dahl and Council Member Moss opined that the issue of the utility user tax is a revenue decision to be made by the City Council and they do not see a need for the various commissions to become involved. PUBLIC COMMENT David Rose, 5920 Emerald Lane, stated he is a small business person which is affected by the utility user tax just as much as a larger business. He opined that the utility user tax will discourage new business and industry from moving into the City of Redding. He also stated he is looking at expanding his existing business within the next five years, and because of the utility user tax, will probably do so outside the City. Mayor Dahl opined that new business and industry will be more discouraged if the City of Redding has a rising crime rate, inadequate public services and deteriorating infrastructure; all of which require revenue. City Manager Christofferson indicated that when making a business decision of locating in the City of Redding, one must remember that it will take more than the utility user tax to offset the power rate difference, which is approximately 30% lower in the City. 6 07/09/91 CLOSED SESSION (P-100) Mayor Dahl declared that City Council will adjourn to closed session pursuant to California Government Code Section 54957.6(a) to discuss a personnel matter. At the hour of 6:10 p.m., Mayor Dahl declared the meeting adjourned to closed session. At the hour of 6:27 p.m., Mayor Dahl reconvened the meeting to regular session. ADJOURNMENT There being no further business, at the hour of 6:27 p.m., Mayor Dahl declared the meeting adjourned. APPROVED: _________________________________ Mayor ATTEST: ________________________________ City Clerk