HomeMy WebLinkAbout2001-239
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RESOLUTION NO. 2001-239
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING ENACTMENT OF A
FORMULA FOR THE REDUCTION OF THE UTILITY USER'S TAX IN THE CITY
OF SAN BERNARDINO
WHEREAS, the Mayor and Common Council of the City of San Bernardino desire
the reduction of the service user's tax established by San Bernardino Municipal Code Section
3.44, commonly called the utility user's tax; and
WHEREAS, the Mayor and Council has determined that a systematic process for
reduction of the utility user's tax is necessary to achieve this goal; and
WHEREAS, the concept behind the utility tax reduction is that as major General Fund
revenue sources increase from year to year, a portion of this net revenue increase shall be used
to reduce the utility user's tax rate;
NOW, THEREFORE, IT IS RESOLVED by the Mayor and Common Council of the
City of San Bernardino, California, as follows:
Section 1. The following definitions, formula, and process are hereby established
for the calculation of a possible utility user's tax rate reduction each year:
A. Definitions:
Revenue Indicators (A) shall equal the total of sales tax, vehicle license fees, property tax, business registration,
franchise fee, and utility user's tax revenue for the fiscal year two years prior to the application of the rate
reduction foOllula as indicated by the City's audited financial statement for that year, adjusting for anyone-time
gains in these revenue categories andlor the cost of any Utility User's Tax rebate or credit program that may be
offered in that year.
Revenue Indicators (B) shall equal the total of sales tax, vehicle license fees, property tax, business registration,
franchise fee, and utility user's tax revenue for the fiscal year prior to the application of the rate reduction foOllula
as indicated by the City's audited financial statement for that year, adjusting for anyone-time gains in these
revenue categories andlor the cost of any Utility User's Tax rebate or credit program that may be offered in that
year.
CPI shall equal the Consumer Price Index for All Urban Consumers (CPI-U) for the 12-month period ended each
February, as published by the U.S. Department of Labor's Bureau of Labor Statistics.
B. Formula:
Step 1:
B - (A increased by Cpr) = Net Revenue Growth (G)
Step 2:
20% ofG = Amount of revenue available for rate reduction (R) .
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2001-239
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING ENACTMENT OF A
FORMULA FOR THE REDUCTION AND ELIMINATION OF THE UTILITY USER'S
TAX IN THE CITY OF SAN BERNARDINO
Step 3:
If R is less than or equal to zero, then there is no rate reduction,
If R is greater than zero, than the rate may be reduced as follows:
(R divided by the more recent year adjusted UUT ) = P
Step 4:
Current UUT rate - (Current OUT Rate x P) = New possible rate
C. Process:
Each March, a possible utility user's tax rate reduction shall be calculated by the
Finance Department using the definitions, formula, and process established by this resolution.
These calculations shall be presented to the Mayor and Common Council in March of each
year, along with an analysis of the City's current financial condition and other appropriate
financial information. If the Mayor and Common Council determine that a utility user's tax
rate reduction is fiscally prudent based upon these calculations and other information, an
ordinance shall be adopted that amends San Bernardino Municipal Code Section 3.44 to
establish the new, reduced utility tax rate. This rate reduction shall be effective July I of that
same year, and shall be adopted in accordance with a schedule that allows sufficient time to
provide adequate notice to utilities as required by California Public Utilities Code Section 799.
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2001-239
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23 Approved as to
Form and legal content:
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING ENACTMENT OF A
FORMULA FOR THE REDUCTION AND ELIMINATION OF THE UTILITY USER'S
TAX IN THE CITY OF SAN BERNARDINO
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
j t.
and Common Council of the City of San Bernardino at a reg. meeting thereof, held on the
23rd day of July
, 200 I, by the following vote, to wit:
Council Members:
AYES
NAYS
ABST AlN ABSENT
ESTRADA
x
x
LIEN
MCGINNIS
x
SCHNETZ
--1L-
x
SUAREZ
ANDERSON
x
x
MCCAMMACK
'Jxv;o1fl[;)~ d,,;Xu& f)/ TJi
City Clerk ,/ I <J
The foregoing resolution is hereby approved this d(" -r!f
day of July
2001.
u/{ {~"--
alles, Mayor
San Bernardino
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JAMES F, PENMAN,
City Attorney
r.o.
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2001-239
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Attachment A
Examole 1:
Using the 2 most recent audits, this is what would have happened for FY 2001-2002 if the formula had
been in effect in March 200 I,
* Assumes CPI of3.6%, which is the CPI for the I2-month period ending May 2001,
FY 98-99:
22,907,000 - sales tax
8,377,000 - VLF
7,025,000 - property tax
3,823,000 - business reg
2, 254,000 - franchise
15.093.000- UUT
59,479,000 - Total Revenue Indicators (A)
FY 99-00:
25,294,000 - sales tax
8,980,500 - VLF
7,215,400 - property tax
4,160,800 - business reg
2,331,800 - franchise
15.347.600 - UUT
63,330,100 - Total Revenue Indicators (8)
Step 1:
63,330,100 - (59,479,000 (increased by CPI 00.6%)) = Net Revenue Growth (G)
63,330,100 - (61,620,244) = 1,709,856 Net Revenue Growth (G)
Step 2:
20% ofG = Amount of revenue available for rate reduction (R)
20% of 1,709,856= 341,971 (R)
Step 3:Since R is greater than zero, than the rate is reduced as follows:
(R divided by FY 99-00 UUT ) = P
(341,971/15,347,600) = .022 (P)
Step 4:
Current UUT rate - (Current UUT Rate x P) = New rate
8 - (8 x .022) = New Rate
8 - (.18) = 7,82 % New Rate
In this scenario, rate goes down by .18%.
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2001-239
Example 2: March 2002 possibilities
Assumes: 1) FY 00-01 revenue estimates in the Prelim Budget are the audited actuals for that year
2) Uses FY 99-00 audited actuals
3) CPI of3.6 %
FY 99-00:
25,294,000 - sales tax
8,980,500 - VLF
7,215,400 - property tax
4,160,800 - business reg
2,331,800 - franchise
15.347.600 - UUT
63,330,100 - Total Revenue Indicators (A)
FY 00-01:
26,217,100 - sales tax
9,750,000 - VLF
7,310,000 - property tax
4,150,000 - business reg
2,493,500 - franchise
17.644.900 - UUT
67,565,500 - Total Revenue Indicators (B)
Step 1:
67,565,500 - (63,330,100 (increased by CPI of 3.6%) ) = Net Revenue Growth (G)
67,565,500 - (65,609,983) = 1,955,517 Net Revenue Growth (G)
Step 2:
20% ofG = Amount of revenue available for rate reduction (R)
20% of 1,955,517 = 391,103 (R)
Step 3: Since R is greater than zero, than the rate is reduced as follows:
(R divided by FY 00-01 UUT) = P
(391,103/17,644,900) = ,022 (P)
Step 4:
Current UUT rate - (Current UUT Rate x P) = New rate
8 - (8 x .022) = New Rate
8 - (.18) = 7.82 % New Rate
In this scenario, rate goes down by ,18%.
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2001-239
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Examnle 3: March 2002 nossibilities. assuminl! even stronl!er UUT revenue l!rowth
Assumes: 1) FY 00-01 revenue estimates in the Prelim Budget are the audited actuals for that
year, except Ihat UUT revenues come in $2 million higher than our current estimates
2) uses FY 99-00 audited actuals
3) CPI of3.6 %
FY 99-00:
25,294,000 - sales tax
8,980,500 - VLF
7,215,400 - property tax
4,160,800 - business reg
2,331,800 - franchise
15.347.600 - UUT
63,330,100 - Total Revenue Indicators (A)
FY 00-01:
26,217,100 - sales tax
9,750,000 - VLF
7,310,000 - property tax
4,150,000 - business reg
2,493,500 - franchise
19.644,900 - UUT
69,565,500 - Total Revenue Indicators (B)
Step 1:
69,565,500 - (63,330,100 (increased by CPI of3.6%)) = Net Revenue Growth (G)
69,565,500 - (65,609,983) = 3,955,517 Net Revenue Growth (G)
Step 2:
20% of G = Amount of revenue available for rate reduction (R)
20% of3,955,517 = 791,103 (R)
Step 3:Since R is greater than zero, than the rate is reduced as follows:
(R divided by FY 00-01 UUT) = P
(791,103/19,644,900) = ,040 (P)
Step 4:
Current OUT rate - (Current UUT Rate x P) = New rate
8 - (8 x ,040) = New Rate
8 - (.32) = 7.68 % New Rate
In this scenario, rate goes down by ,32%.
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Example 4: March 2002 possibilities. assuminl! even stronl!er revenue I!rowth in other catel!ories
Assumes: I) FY 00-01 revenue estimates in the Prelim Budget are the audited actuals for that
year, except that non-UUT revenues come in $2 million higher than our current
estimates
2) uses FY 99-00 audited actuals
3) CPI 00.6 %
This scenario has all the same calculations for Steps 1-2 in Scenario 2.
Step 3: Since R is greater than zero, than the rate is reduced as follows:
(R divided by FY 00-01 OUT) = P
(791,103/17,644,900) = ,045 (P)
Step 4:
Current UUT rate - (Current OUT Rate x P) = New rate
8 - (8 x .045) = New Rate
8 - (.36) = 7.64 % New Rate
In this scenario, rate goes down by .36%.