The URL can be used to link to this page

Home My WebLink About1995 12 20 CC MIN SS1995 12 20 CC MIN SS@˜{ˆMIN SS DEC 20 1995à›[H('8 BALDWIN PARK CITY COUNCIL STUDY SESSION CITY HALL, 14403 EAST PACIFIC AVENUE, WEDNESDAY, DECEMBER 20, 1995 The City Council of the City of Baldwin Park met in a Study Session in Room 307 at 6:00 p.m. ROLL CALL PRESENT: COUNCILMEMBERS LOWES, LOZANO, MARTINEZ, MUSE, AND MAYOR VARGAS ALSO PRESENT: City Attorney Bower, Acting Chief of Police Kies, Dir. of Administrative Services Yeats, Dir. of Public Works Mousavi, Dir. of Rec/Community Services Nunez, and Acting City Clerk Branek 00- The absence of City Clerk Gair was excused. 00- ORAL COMMUNICATION Mayor Vargas declared Oral Communications open and invited those wishing to speak to come forward. There were none. Mayor Vargas declared Oral Communications closed. 00- Mayor Vargas apologized for the meeting starting at 6:00 p.m. instead of the posted time of 5:30 p.m. 00- Director of Administrative Services Yeats explained that the ultimate decision of the Supreme Court on December 14th states that Prop 62 is constitutional, that all general taxes should have a majority vote and special taxes a 2(3 vote by the people. Our utility tax is a special case, as it was adopted prior to Prop 62 being passed. In 1986, if the tax had been left alone and not lowered, it would still be in effect. Unfortunately, the utility tax was lowered to 3% then to 0% and now back up to 3%. We did not do that so that makes our tax somewhat invalid. BIB] 37175-U01 MIN-U02 SS-U02 DEC-U02 20-U02 1995-U02 LG1-U03 LI1-U03 FO3433-U03 FO3520-U03 FO3563-U03 DO4182-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 MIN-U05 SS-U05 DEC-U05 20-U05 1995-U05 BIB] 37260-U01 1995-U02 12-U02 20-U02 CC-U02 MIN-U02 SS-U02 LG1-U03 LI1-U03 FO3433-U03 FO3520-U03 DO4182-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 CITY-U05 COUNCIL-U05 MINUTES-U05 1995 12 20 CC MIN SS@˜{ˆMIN SS DEC 20 1995à›[H('8REGULAR STUDY SESSION MEETING OF THE PAGE NO.2 CITY COUNCIL OF THE CITY OF BALDWIN PARK DECEMBER 20,1995 City Attorney Bower stated that the unconstitutional part of Prop 62 is, the Constitution does not allow referendums on tax issues. The courts looked at Prop 62 as a direct referendum. This was a statutory initiative as opposed to a constitutional initiative. The Supreme Court said this is not a referendum, it is a part of enabling legislation in order to pass a tax. Instead of undoing a tax, it's part of the process of adopting a tax. The City has similar things like Article 34 for low/moderate income housing. If the City wants to build a low/moderate income housing project they have to go to a vote of the people before they can do that. That has been referred to by the courts as a direct referendum. For some reason on Prop 62 the courts are saying it is not a referendum. The Supreme Court said they are going to uphold Prop 62. The question is how does that impact the utility tax that was imposed in 1991 from 0% to 3%. The general rule in California is that court decisions are retroactive. Someone could come in and say this tax is invalid. One argument against that is, there is a 3 year statute of limitations to attack passage of this tax as being a violation of Prop 62. That statute has run, and there is a strong argument that nobody can now challenge our utility tax. Counter arguments could be made every time someone pays it, that it is being imposed on them, and is continuing harm them. So they can challenge continuing payment of the tax. There are questions about what the statutes of limitations are in terms of filing claims, to get a refund. There are questions about whether refunds are available, there may not be any rights to refunds. Prop 62 provides a remedy if you violate Prop 62 the county deducts $1 of property tax for every $1 collected illegally. Another question being asked is what does the county do with the money collected? There is a question, should an initiative be placed on the ballot to validate the utility tax, but Prop 62 says before you can impose a tax you have to get the vote. There is a strong argument that if we get the vote 5 years after the fact, is that valid? Probably not, it would be valid from the election on. There have been questions about impounding the taxes. Our Ordinance does provide that if a tax is erroneous or illegally collected then the people have a right to a refund. Even though there is no refund in the state law, our ordinance does provide for a refund. One thing that should be done is to amend the ordinance, to completely remove it, or make it a one year refund provision. State law would allow the City to do that. Courts and the legislature can make this not be retroactive, so this would apply only on taxes imposed after December 14, 1995. The cities have relied on this clear cut rule, there are state cases that held directly in point, that Prop 62 is unconstitutional and you don't have to follow it. Secondly, the City has relied upon it for general fund purposes, and relied on it for police services, and for entering into contracts. So there are a lot of equitable arguments why this should not be retroactively imposed. If taxes are impounded you have a situation as an attractive target to go after and that cuts against arguments that you needed these taxes and relied upon earlier cases to impose these taxes. BIB] 37175-U01 MIN-U02 SS-U02 DEC-U02 20-U02 1995-U02 LG1-U03 LI1-U03 FO3433-U03 FO3520-U03 FO3563-U03 DO4182-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 MIN-U05 SS-U05 DEC-U05 20-U05 1995-U05 BIB] 37260-U01 1995-U02 12-U02 20-U02 CC-U02 MIN-U02 SS-U02 LG1-U03 LI1-U03 FO3433-U03 FO3520-U03 DO4182-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 CITY-U05 COUNCIL-U05 MINUTES-U05 1995 12 20 CC MIN SS@˜{ˆMIN SS DEC 20 1995à›[H('8REGULAR STUDY SESSION MEETING OF THE PAGE NO.3 CITY COUNCIL OF THE CITY OF BALDWIN PARK DECEMBER 20, 1995 Director Yeats stated that through December 14th the City had collected $498,000 in utility tax. We annually collect $1.5 million. If we placed all the taxes collected in a trust account that would leave the City at the end of the year in a $707,000 general fund budget gap. Our operations from a percentage of general fund expenditures, knowing that public safety is 72% of those expenditures, including indirect costs. There is nowhere to cut unless you start cutting public safety. He further stated that he thought we should take the City Attorney's advice to have a wait and see attitude and see what the legislature does. The League of California Cities affirmed that there are five or six different bills that are addressing the problem. Councilmember Muse stated that the City needs to send letters to the legislators. Director Yeats stated that the City is taking a very proactive approach on Prop 62 and speaks to the League almost daily. Some cities are having emergency meetings and laying off people today. Azusa has a $1.2 million budget gap and they are reducing their police force. In response to Councilmembers Lozano and Lowes, City Attorney Bower stated that the tax was passed in 1986, and we could make the argument that we never did get rid of the tax. Assessments are not taxes, the Business License Tax and the Transient Occupancy Tax are not involved. Mayor Vargas stated that he would like to take the City Attorney's advice and wait and see what the legislature does. Director Yeats stated that he could take all the utility taxes collected after December 14th and place them in a trust account. If we find out that everything collected after December 14th needs to be refunded it would be a journal entry to disburse. Councilmember Lowes suggested not spending the money after December 14th. She further stated that El Monte was thinking of conducting a special election. City Attorney Bower stated that even if there was a suit, the court could determine that this should not be retroactive, and by the time it gets to the Supreme Court it will take several years. Mayor Vargas stated that it would be wise not to react, to take the City Attorney's advice, get more information, continue talking with the League, and to set up a meeting, possibly a Study Session, with our own State Senator and Assemblyman. 00- COUNCIL/STAFF REQUESTS AND COMMUNICATIONS BIB] 37175-U01 MIN-U02 SS-U02 DEC-U02 20-U02 1995-U02 LG1-U03 LI1-U03 FO3433-U03 FO3520-U03 FO3563-U03 DO4182-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 MIN-U05 SS-U05 DEC-U05 20-U05 1995-U05 BIB] 37260-U01 1995-U02 12-U02 20-U02 CC-U02 MIN-U02 SS-U02 LG1-U03 LI1-U03 FO3433-U03 FO3520-U03 DO4182-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 CITY-U05 COUNCIL-U05 MINUTES-U05 1995 12 20 CC MIN SS@˜{ˆMIN SS DEC 20 1995à›[H('8REGULAR STUDY SESSION MEETING OF THE PAGE NO.4 CITY COUNCIL OF THE CITY OF BALDWIN PARK DECEMBER 20, 1995 Mayor pro tern Martinez requested 1) that the men's restroom in the breezeway at City Hall have the graffiti removed and cleaned; and 2) a report on the cost to have a new public address system, including wireless microphones for the Community Center. Mayor Vargas requested a report on the cost to replace all the public address systems in the various City Facilities. Councilmember Muse suggested Councilmember Lozano have his picture taken for the City Hall Lobby. Councilmember Muse requested that all involved parties come together for a meeting to discuss the issues concerning the water treatment facility in Irwindale. Councilmembers Lowes, Lozano, Muse and Mayor Vargas volunteered to tour the Burbank water treatment facility. City Attorney Bower stated that it is necessary that the tour Councilmember attending the facility not discuss any of the issues while on the tour, and that an agenda would need to be posted. In response to Director of Public Works Mousavi, Council requested the tour of the Burbank water treatment facility be set for January 8,1996 at 10:00 a.m. to 2:00 pm. 00- Mayor Vargas declared the Study Session adjourned at 6:55 p.m. There were no objections. LINDA L GAIR, CITY CLERK BETTY BRANEK, DEPUTY CITY CLERK BIB] 37175-U01 MIN-U02 SS-U02 DEC-U02 20-U02 1995-U02 LG1-U03 LI1-U03 FO3433-U03 FO3520-U03 FO3563-U03 DO4182-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 MIN-U05 SS-U05 DEC-U05 20-U05 1995-U05 BIB] 37260-U01 1995-U02 12-U02 20-U02 CC-U02 MIN-U02 SS-U02 LG1-U03 LI1-U03 FO3433-U03 FO3520-U03 DO4182-U03 C4-U03 MINUTES1-U03 10/11/2001-U04 ADMIN-U04 CITY-U05 COUNCIL-U05 MINUTES-U05