SR-104-088 (7)~_
~ City of
5anta Monica
City Council Report
City Council Meeting: July 25, 2006
Agenda Item: -1'~
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.
Executive Summary
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.
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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
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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
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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. ln 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.
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Communication with Santa Monica Communitv Colleqe 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.
Budqet/Financial Impact
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.
Prepared by: Craig Perkins
Approved: Forwarded to Council:
Craig Perk' s
Director - Environmental and Public
Works Management Department
Attachment: Resolution
P. ont Ewell
C Manager
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