City Council Meeting: July 25,
2006
Agenda Item: 9-A
To: Mayor and City Council
From: Craig
Perkins, Director – Environmental and Public Works Management
Subject: Public Hearing for Proposed Clean Beaches
and Ocean Parcel Tax and Adopt a Resolution to Place on the November 7, 2006
Ballot
Recommended
Action
It is recommended that the City Council:
1. conduct a Public Hearing to discuss Proposed
Clean Beaches and Ocean Parcel Tax Measure; and
2. adopt a resolution to place the Clean Beaches
and Ocean Parcel Tax on the November 7, 2006 ballot.
On July 12, 2006, the City Council directed staff to call a public
hearing for July 25, 2006, and prepare ballot language to place a special
parcel tax ordinance before Santa
Monica voters in the upcoming November 2006
election. The ordinance is attached as
Exhibit A to the Resolution. The Council
reserved to the July 25 meeting the decision whether to approve the Resolution
calling for adoption of a Clean
Beaches and Ocean Parcel
Tax or to proceed with placing the measure on the November 7, 2006, General
Election ballot.
The Clean Beaches
and Ocean Parcel Tax ordinance will raise
revenue to be used solely for the purpose of implementing and financing a
portion of the City’s Watershed Management Plan. The goals of the Plan are to reduce
urban runoff pollution; reduce urban flooding; increase water reuse and
conservation; increase recreational opportunities and open space; and increase wildlife
and marine habitat. The proposed special
tax will fund financing the operation, administration, maintenance,
improvement, environmental restoration, upgrade and replacement of the existing
and future storm drainage system, on-site stormwater management systems, storm
drain conveyance system upgrades, and multipurpose capital improvement
projects, improving the quality of stormwater, as well as paying for, or
securing the payment of, any indebtedness incurred for these purposes. The urban runoff management and pollution
prevention activities of the Plan will assist the City in complying with
National Pollution Discharge Elimination System (NPDES) permit requirements,
meeting the goals of the Clean Water Act, as well as new regulations
promulgated by the Los Angeles Regional Water Quality Control Board relating to
Total Maximum Daily Loadings (TMDLs).
Discussion
Parcel
Tax Rate
The
Clean Beaches and Ocean Parcel Tax ordinance
establishes an initial annual parcel tax of $84.00 per single residential detached
family unit ($7.00 per month). Rates for
multi-family and commercial properties will vary depending upon parcel size and
a “runoff factor” that represents the amount of average storm drainage from a
parcel for a particular land use. The
runoff factors and the formula to compute the parcel tax for multi-family,
commercial and other property types is identified in section 7.64.040 of the
attached Ordinance. The rates are
subject to increase each year based on the annual percent increase for the twelve month
period February through February of the prior fiscal year, if any, in
the Wage
Earners and Clerical Workers All Items Consumer Price Index (CPI-W) for
the Los Angeles-Riverside-Orange County statistical area, or any successor
index.
Under
the California Constitution, a special tax is treated differently from a
property-related fee, the latter of which cannot exceed the reasonable cost of
providing a service or regulatory activity for which the fee is charged. The Clean
Beaches and Ocean Parcel Tax is a
special tax in that public agencies, including the Santa
Monica Community College,
Santa Monica-Malibu Unified School District and the City of Santa Monica, are exempt from special taxes
as a matter of law. In addition, other
qualifying non-profit institutions generally exempt from taxation (e.g.
churches, schools, hospitals) may seek to exempt themselves from a special
tax. Notwithstanding these exemptions,
the parcel tax rate will raise annual revenues of approximately $2,350,000.
Compliance with State Law.
Consistent with state law,
proceeds of the Clean
Beaches and Ocean Parcel
Tax will be deposited into a special fund and
applied only to the specific purposes identified in the Ordinance. Each year,
the City’s Chief Financial Officer will be required to file a report with the
City Council containing both of the following:
(a) the amount of funds collected and expended; and (b) the status of
any project authorized to be funded as identified in the Ordinance. In addition, the City Council will establish
and appoint members to a citizen’s oversight committee to audit the use of
funds.
Subcommittee
Proposed section
9 of the Resolution authorizes the Mayor or a designated subcommittee to
prepare a written argument in favor of the Measure not to exceed 300 words, on
behalf of the City Council. If the
Council wishes to retain section 9 in the Resolution, it should decide whether
to appoint a subcommittee. At the
subcommittee’s discretion, the argument may also be signed by bona fide
organizations or by individual voters.
Rent Control Pass
Through and Low Income Exemption
The legal
responsibility for payment of the special tax, if passed, would fall to
property owners, including owners of rent-controlled multi-family buildings,
unless the Santa Monica Rent Control Board votes to authorize a direct
pass-through of the special tax to renters.
In the interest of equity, it is therefore recommended that Council
direct staff to request the Rent Control Board to authorize a direct
pass-through of the tax prior to the November election. It is also recommended that Council direct
staff to prepare a process and eligibility criteria for the exemption of low
income property owners and renters from the tax. The recommended low income exemption process
will be presented to Council for formal approval prior to November 2006.
Communication with Santa
Monica Community College
and Santa Monica-Malibu Unified School Districts.
The
Council requested staff to inquire as to the status of the school district’s
intent to hold a special election in November 2006 on a bond measure and report
on the impact of such an election if pursued.
In addition, the Council requested staff to inquire of these Districts
as to the cooperation they could provide and the resources that could be made
available to implement Wastewater Management Plan activities. Staff will report on discussions with the
Districts at the hearing.
The
budget impact resulting from the recommended action would be an increase in City
election costs of from $5,000 to $7,000.
If the ballot measure is approved by the voters, there will be an
increase in special tax revenue for implementation of the Wastewater Management
Plan of approximately $2,350,000 annually.
Resolution
Proposed Ordinance
Prepared by: Craig Perkins
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Forwarded to Council:
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Director
– Environmental and Public Works Management Department
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P. Lamont
Ewell
City Manager
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