LEGISLATURE MUST PASS SB 659 QUICKLY TO POSTPONE SCHEDULED DISSOLUTION OF REDEVELOPMENT AGENCIES ON FEBRUARY 1, 2012 Temporarily Postponing February 1 Deadline for Dissolution of Agencies Will Ensure the State and Education Receive the Funding Intended by the Legislature, and allow Time to Develop a New Job Creation and Neighborhood Renewal Program
Background: On December 29, 2011, the California Supreme Court ruled in the redevelopment litigation -- CRA v. Matosantos – upholding ABX1 26 which abolished redevelopment agencies, but striking down companion legislation that would have allowed agencies to survive if they contribute money to the State. As part of the Supreme Court’s ruling, agencies are to be dissolved on February 1, 2012. A coalition of labor, business, local government, public safety and affordable housing advocates is working with members of the Legislature to pass SB 659 and temporarily postpone the February 1, 2012 dissolution deadline in order to preserve the ability to develop a new job creation and neighborhood renewal program. Here’s why: SB659 Fact Sheet.pdf and SB659 Coalition Letter.pdf
Please write a letter in support of SB 659 to: Governor Jerry Brown Governor Jerry Brown Sacramento, CA 95814 Fax: (916) 558-3160 http://gov.ca.gov/m_contact.php
Senator Ron Calderon Capital Office: Senator Ron S. Calderon (30th Senate District) State Capitol, Room 5066 Sacramento, CA 95814 Tel: (916) 651-4030 Fax: (916) 327-8755 http://dist30.casen.govoffice.com/ District Office: 400 N. Montebello Blvd., Suite 100 Montebello, CA 90640 Tel: (323) 890-2790 Fax: (323) 890-2795
Assemblyman Tony Mendoza Capitol Office: Assembly Member Tony Mendoza (56th Assembly District) State Capitol P.O. Box 942849 Sacramento, CA 94249-0056 Tel: (916) 319-2056 Fax: (916) 319-2156 http://asmdc.org/members/a56/ District Office: 12501 E. Imperial Highway Suite 210 Norwalk, CA 90650 Tel: (562) 864-5600 Fax: (562) 863-7466
If you are looking for your local senate and assembly persons, click on the links below to those websites.
On November 2, 2010, Santa Fe Springs voters approved a new utility user's tax (UUT). The enacting ordinance authorizes a tax on charges for electric, gas and telecommunications services (wired and wireless) of up to 5%. On December 9, 2010, the Santa Fe Springs City Council voted to not impose the maximum rate, and instead adopt a lower "phase-in" UUT of 3.5% tax on those same services.
Depending on the utility (i.e., electricity, gas, telecommunications), businesses will begin to see the new tax on their utility bills starting in February, 2011.
The ordinance provides each business with a $20,000 annual UUT cap for each of the three utilities: electric, gas and telecommunications. Therefore, the aggregate cap is $60,000. Both individual and aggregate annual caps are set on a fiscal year basis (July 1st through June 30th). Furthermore, the ordinance allows for caps to be adjusted for inflation by the Consumer Price Index beginning July 1, 2012.
In addition to the 3.5% rate, the City Council also took two additional "phase-in" actions:
(1) For the current fiscal year (ending June 30, 2011), there is a pro-rated $6,600 annual cap on each of the three utilities. (2) For fiscal year July 1, 2011-June 30, 2012, there is a $40,000aggregate cap for each business.
Please be advised that each business is responsible for monitoring and reporting to the City's Department of Finance when the annual cap has been reached on any of the three utilities, and/or when the aggregate cap has been reached, during the fiscal year. Upon receipt of copies of paid utility bills, the City will contact the appropriate utility and request that the business be exempted from paying additional UUT for the applicable fiscal year.
Businesses can be exempted from the UUT by exercising the option to pay the aggregate cap of $13,300 for the current fiscal year ending June 30, 2011 in a single payment. If a business would like to select the single payment option, please remit your payment in person at the City Hall Finance Office or by mail (attention Jose Gomez, Director of Finance and Administrative Services) not later than March 1, 2011. The single payment option is also available for the aggregate cap of $40,000 the fiscal year July 1, 2011-June 30, 2012. This payment should be remitted to the City Finance Department not later than June 1, 2011. Upon receipt of a single payment for the aggregate cap amount, the City will contact each utility providing a gas, electricity and telecommunications service to the business and request that the business be exempted from paying additional UUT for the applicable fiscal year.
Whenever the amount of any tax has been overpaid, the tax will be refunded by the City. A resident or business must file a written claim for refund within one (1) year of the overpayment. The written claim must include written records that clearly establish the claimant's right to the refund, including, but not limited to copies of utility bills and cancelled checks.
If you have any additional questions or would like additional information regarding the utility user's tax, please contact Al Fuentes at (562) 868-0511, ext. 7355 or email: firstname.lastname@example.org.
Jose Gomez Director of Finance and Administrative Services
Dear Chamber Members and Santa Fe Springs Business Community:
I wanted to let everyone know about the current state of the utility users tax in Santa Fe Springs. Last night the election results were certified and the vote was on the agenda for council consideration. The recommendation was to implement the 5% utility users tax however Councilmember Rounds made an alternative motion. He noted that he and Councilmember Gonzalez serve on the finance subcommittee and after meetings with the chamber, local businesses and intensive review they were recommending an alternative implementation of 3.5% across the board that would assist smaller businesses that would not be affected by the cap. The motion was seconded by Councilmember Gonzalez and passed unanimously.
With the community interest in the Utility User Tax (Measure S) I felt that it would be beneficial to have this information out to our chamber members expediently.
I wish you all a happy and safe holiday season.
Wendy Meador Chamber President
Santa Fe Springs Votes Yes on Utility Tax
By Sandra T. Molina, Staff Writer
Posted: 11/03/2010 05:39:48 PM PDT
SANTA FE SPRINGS - Voters handily passed Measure S, a utility users tax that is expeced to generate $3 million annually and preserve city services. Business owners and the chamber of commerce lament the tax on communications, gas and electricity.
"We're pleased that the community showed trust and confidence in the council to address our challenges," City Manager Fred Latham said Wednesday.
Voters Tuesday approved the 5-percent utility users tax by a 61-39 percent margin.
The final vote was 2,020 to 1,291.
The tax would apply to electric, natural gas and telephone bills - both land line and cellular.
The City Council placed the tax on the ballot to generate money for the city to make up for a decrease in sales tax revenue from $26.4 million four years ago to a projected $18.4 million this year.
"It's a significant new source of revenue for the city, which will be used appropriately to meet legitimate challenges," Latham said. "It will not be used frivolously."
The Santa Fe Springs Chamber of Commerce opposed the tax, saying it would have a negative effect on businesses.
Although a cap of $20,000 per utility bill and an overall limit of $40,000 until June 30, 2012 was authorized, some businesses may not be able to take the financial hit, chamber officials said.
"It's going to have a significant impact on city businesses," said Kathie Fink, board president of the Santa Fe Springs Chamber of Commerce. "It may be the tipping point for the small and medium businesses."
The city has an estimated 4,800 households and 3,500 businesses, said Jose Gomez, director of finance and administrative services.
Both city and chamber officials said they are hopeful they can continue to work together to minimize the financial impact on businesses.
"We formed a subcommittee to address our concerns prior to it being placed on the ballot," Fink said, "and we hope to continue to talk with the city."
The city will begin implementation of the tax in early spring, Latham said.
Although it can go as high as 5 percent, there is no guarantee the council will apporve that amount. "The chances are very good it may not be 5 percent," Latham said. That still may not help some businesses.
"It's still an added expense for business owners," Fink said. Latham countered that no business will have to pay the $40,000 cap until June 30, 2012.
Councilman Bill Rounds said it was a tough decision to put the tax on the ballot. And it's possible it will be taken off in the future.
"If we don't need this tax money we won't impose it," he said. Rounds predicted it may go away since the council will evaluate the need for it annually.
The City Council made about $4.7 million in budget cuts this year, including $2.2 million from a 9-percent pay cut for employees.
The city's reserves have decreased from about $16 million to about $5.5 million during the last three years.
The Santa Fe Springs Chamber of Commerce opposes the proposed utility user tax placed on the November ballot by the city council.
"While we appreciate the city's need for additional revenue in this tough economy, our businesses are suffering, too," said Chamber President Wendy Meador, Tangram Interiors.
"Adding an additional tax burden-one that will remain long after the recession has ended-is not a good idea in a city known for its ‘business friendly' reputation."
In 2009, the Los Angeles County Economic Development Commission named Santa Fe Springs the "Most "Business Friendly City" in the county.
The ballot measure proposes charging customers a five percent tax on electric, gas, and telephone (landline and mobile) bills. Only a simple majority (50 percent plus one) is required to pass the tax because it is a general assessment.
On a 4-1 vote, the council approved the ballot proposition as a way to replenish the city's dwindling treasury.
Because of the poor economic environment, Santa Fe Springs' municipal budget has been cut by nearly $5 million. Employees have been forced to take days off without pay and services reduced.
The council agreed to an annual $20,000 per utility cost cap for businesses and overall annual cap of $60,000 per business. These caps will expire on June 30, 2012.
Residents enrolled in Southern California Edison's low-income program would be exempted from paying the tax on electric bills.
The anticipated revenue from a utility user tax would compensate for most or all of the city's shortfall, about nine percent of the annual budget of $45 million.
In 1984, the city imposed a one percent utility tax. It was removed two years later when the economy improved. The current proposal has no "sunset" clause.
SANTA FE SPRINGS UTILITY USER TAX
Wednesday, July 28, 2010, the City Council voted to place a Utility User's Tax ballot measure before the voters on November 2, 2010
Santa Fe Springs Vital City Services Protection and Fiscal Stability Measure
To maintain funding for City services including police officers, firefighters, paramedics, senior programs, youth/gang, drug, and crime prevention programs, street repairs, parks, fields, after school library programs, community centers and other City services, shall an ordinance be adopted to establish a 5% utility users tax, exempting low income seniors/residents, with annual audits, no tax increase without voter approval and no funds for Sacramento?
The Santa Fe Springs business community at large should be aware of such an important piece of legislation and as such; The Chamber of Commerce would like to encourage you to become informed on this matter as it pertains to your business.
Should you wish more information, please contact the chamber office at (562)944-1616/e-mail or City Hall at 562/868-0511. Should you wish to e-mail the City Council members, their e-mail addresses are as follows:
The proposed Utility User's Tax is summarized as 5% Communication's User's Tax (both land line and cellular), 5% Electricity User's Tax and 5% Gas User's Tax.
The Santa Fe Springs Chamber is a strong, active and involved organization committed to providing service to your business and developing a prosperous, vital business community. There are a variety of programs and services available to you and your employees to enhance your business and encourage business development. The benefits of Chamber membership can help to ensure your success!
SFS Chamber of Commerce 12016 E Telegraph Rd, Suite 100 Santa Fe Springs, CA 90670 562/ 944-1616
July 20, 2010
City of Santa Fe Springs 11710 E. Telegraph Road Santa Fe Springs, CA 90670
Mayor Betty Putnam Mayor Pro-Tem Joseph D. Serrano, Sr. Councilmember Louis Gonzales Councilmember William K. Rounds Councilmember Juanita Trujillo City Manager Fred Latham
The Santa Fe Springs Chamber of Commerce recognizes the city's need for an additional revenue source and appreciates the City of Santa Fe Springs for their inclusion of the business community in discussions regarding the proposed ballot initiative dealing with a Utility User Tax Resolution No. 9273.
After a lengthy review and considering our position as an advocate for businesses in Santa Fe Springs, we must respectfully declare our opposition to this tax.
Businesses have located in Santa Fe Springs specifically for the business friendly relationship with the city. This tax could negatively impact many businesses as well as put a heavier burden upon manufacturers, whose utility costs are a significant portion of their operating budget.
The Chamber would like to propose the creation of a committee to partner with the council's subcommittee. This committee would consist of high energy users within our city and headed by Board Member Curtis Mello with Heraeus Metal Processing, LLC. The committee would like to provide their input regarding our top five issues we would like to see addressed before implementation of this tax.
1. A cap on the total tax individual businesses would be required to pay
2. A lower percentage than the proposed 5%
3. A "phasing-in" program that would start at a lower rate (allowing for budgeting in future years for businesses)
4. The removal of mobile phones from the telecommunications portion of the tax
5. The possibility of a sunset clause
Should the ballot initiative pass on November 2, 2010, the committee would like to meet biannually with the council's subcommittee to review the current financial status of the city, and discuss revisions to the Utility User Tax at those times.
The Chamber of Commerce is committed to keeping the City of Santa Fe Springs' business friendly reputation, representing our member's interests and looks forward to working with the council.