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HomeMy WebLinkAbout02-12-1985 CITY COUNCIL STAFF REPORTSr ' `^ CITY OF SARATOGA AGENDA BILL NO. DATE: 2/12/85 DEpAR`1,1 7 ': City Clerk Ste. Heritage Preservation Commission Issue Summa Initial: /f _ Dept. Hd. �v C. Atty. C. Mgr. Louisa Henderson has tendered the attached resignation from the Heritage Preservation Commission. The terms of Warren Heid and Barbara Voester expire in April 1985. It will be necessary to advertise at least for the Henderson vacancy; Heid has indicated he would like to be reappointed, and Voester is undecided at this point. The Council needs to determine the schedule for recruitment. Mr. "Reid is the appointee of the Historical Foundation, and their attached letter indicates that they would like to reappoint him. Recommendation Authorize advertising the vacancies in'the Saratoga News of February 27.and March 6, with the deadline for applications to be March 13, and conducting interviews before regular meeting of March 20. Fiscal Impacts None. Exhibits /Attachments Letter of resignation from Louisa Henderson Letter recommending reappointment of Warren Heid Council Action 2/20: Approved .staff. recomnendation'4 -0.. r- '..... February 8, 1985 T0: Mayor Fanelli and the Saratoga,City Council FROM: Louisa Henderson, Heritage Commissioner Please accept my resignation as Commissioner on the Heritage Commission. I have thoroughly enjoyed the working and personal relationship I've had with the Commissioners and the City Council, but due to personal reasons have found the time is'not available for me to do the kind of job this Commission deserves. Thank you all for your support. It has been greatly appreciated. Sincerely, Louisa Henderson cc Heritage Commission 408.867 -4311 The. Saratoga Historical Foundation Saratoga Historical Museum Post Office Box 172, Saratoga, Califomia 9507q Saratoga City Council Saratoga City Hall Saratoga, CA 95070 Dear Council Members: February 12, 1985 a The Saratoga Historical Foundation again nominates Warren Heid as our representative to the Saratoga Heritage Commission. We feel that his technical knowledge and understanding of the community will again be of great value to the Commission. Thank you for your consideration of this nomination. Very truly yours, ;4TO GA 7oper CAL FOU ATION Louise G. President II �;• CITY OF SMATOGA . �L Initial: AGEXDA HILL NO. Dept. Fad. DATE: February 13, 1985 C. Atty. DEPATzmE. -T: CITY AT'T'ORNEY C. Mgr. SUBJECT: Transient Occupancy Tax, increase in business license fees -and - �- Utility Users -TaX Issue Stry In order to balance the City budget, as increased by the costs of implementing the pavement management program, additional revenue is proposed to be raised through adoption of a Transient Occupancy Tax, increase in the business license fees and adoption of a Utility Users Tax. The ordinances previously considered by the Council have been revised in accordance with Council direction at your study sdssion on January 22, 1985, as explained in the MEmrandum from the City Attorney submitted herewith. ReQcrm er!dation (1) Conduct public hearing on proposed ordinances (2) Adopt ordinances Fiscal Impacts The transient-occupancy tax is expected to generate $17,000.of revenue from the existing motel, plus an additional $53,000 fram the new hotel in the Village. The additional revenue from increase in the business license fees is estimated'to be approximately $40,000: Although revenue from the Utility Users Tax is difficult to estimate, if.it is assumed.that average ` monthly utility bills are .$150, the annual tax would be $63;($150 x .035 x 12).. If it is further assumed that there are approximately 10,000 service users in the city, total annual revenue would be $630,000. Based on the foregoing, total estimated.revenue from all new and increased taxes would be $740,000. Exhibits /Attactu I.-?nts (a) Memorandum from City. Attorney (b) Proposed ordinance establishing Transient Occupancy Tax (c) Proposed ordinance.increasing business license fees (d) Proposed ordinance establishing Utility Users Tax council .Action ' 2/20:- public hearing to 2/26 and 3/6. 2/26: Continued to 3/6. 3/6: Continued to 3/20. 3/20: Introduced all three ordinances. 4/3: Adopted Ordinance 38.129, 38.130 5 -0; Ordinance 38.131 4 -1 .(Callon. opposed). PAUL B. SMITH ERIC L. FARASYN LEONARD J. SIEGAL HAROLD S. TOPPEL GREGORY A. MANCHUK STEVEN G. BAIRD ALEXANDER J. TRAFICANTI ATKINSON • FARASYN ATTORNEYS AT LAW 660 WEST DANA STREET P.O. BOX 279 MOUNTAIN VIEW, CALIFORNIA 94042 (415) 967 -6941 MEMORANDUM TO: Saratoga City Council FROM: HAROLD S. TOPPEL, City Attorney RE: Transient Occupancy Tax, Increase in Business License Fees and Utility Users Tax DATE: February 11, 1985 J. M. ATKINSON, (1892 -1982) L. M. FARASYN, (1915 -1979) Pursuant to the Council's request, the City Attorney has reviewed and, where appropriate, revised the ordinances pertaining to establishment of a transient occupancy tax, increase in the business license fees and establishment of a utility users tax. The main features of these ordinances are as follows: A. Transient Occupancy Tax. Except for certain minor changes in wording, the ordinance is substantially the same as the form introduced by the Council on November 16, 1983. The rate of tax has not been changed and remains as 8% of gross rents charged for use and occupancy of any space in a hotel. The tax will be imposed only in the case of "transient" occupancy, which is defined in the ordinance as occupancy for a period not exceeding 30 consecutive calendar days. B. Increase in Business License Fees. The earlier draft of this ordinance was substantially longer because it was intended to clean up some of the provisions contained in Chapter 4 of the City Code. This clean up is now being handled as part of the general code revision and republication process. The former draft also included a more complicated method of charging business license fees on a sliding scale based upon the number of employees, which necessitated provisions dealing with determination of the tax payable and audit of books and records. The revised ordinance now provides for a flat fee in the sum of $75.00 to be paid by any business for which a license is issued, regardless of the nature of such business. The critical language is set forth in Section 7 of the ordinance, which amends Section 4 -110 of the City Code. All businesses and activities which are presently exempt from the payment of a license fee, as described in Section 4 -120 of the City Code, will continue to be exempt. Section 6 of the ordinance, which amends Section 4 -109 of the City Code, specifically provides that there shall be no proration of any license fee. The prior draft similarly did not allow proration. The remaining sections of the proposed ordinance are merely intended to cross reference Section 4 -110 which establishes the amount of the license fee, and to eliminate inconsistent provisions. The Council should bear in mind the distinction in the code between permit fees and business license fees. In the case of DC certain business activities which are subject to special regulation in Chapter 4, a permit is required in addition to a business license and a fee is collected for the processing and issuance of such permit. The permit fee is intended to recover the cost of regulation and is not a source of general revenue, as in the case of business license fees. For example, the code requires a permit in order to conduct a circus or carnival, card games, public dance hall (which the present code refers to as a "license" and has been changed in the revised code to a "permit "), closing -out sale, and private patrol. In each case, the required permit must first be obtained before the applicant can receive a business license. A copy of Section 4 -110 as it now appears in the present code is attached hereto for your reference. All of the various classifications and schedules set forth therein have been eliminated. C. Utility Users Tax. The revised ordinance is substantially different from the earlier draft in the following respects: (1) The amount of the tax has been established at 3 -1/2% as opposed to 5 %. (2) The tax is imposed only with respect to telephone, electricity and gas service. The tax upon water, garbage and cable television service has been eliminated. (3) Low income households will be totally exempted from the tax. The suggested standard for exemption is any household where the combined annual gross income of all its members is 50% or less of the median income for Santa Clara County. This method of determining qualification for the exemption is being suggested because it is self adjusting and easy to apply. I deliberately avoided any consideration of net worth since a long time (and elderly) resident of Saratoga may own a home having very little debt but substantial increase in value during the period of ownership. If the person is living upon a fixed or limited income, such as social security, the accumulated equity in the home has no relevance to the financial ability of the person to pay the tax. The ordinance does require recertification of income each year in order to establish continued eligibility for the exemption. (4) Additional language has been added at the end of Subsection 4- 83(b) pertaining to the determination of whether a telephone account has a situs in the city. This language has been requested by Pacific Bell Telephone Company in order to accommodate the complexities arising from the deregulation and breakup of the telephone system. (5) The ordinance provides for a $100 maximum of all utility user taxes paid by a service user during any utility tax year. The first utility tax year will commence upon the effective date of the ordinance and terminate on June 30, 1986. Thereafter, the utility tax year will correspond with the city's fiscal year of July 1st to June 30th. Any service user has the option of simply paying to the city the $100 maximum tax prior to the 5IC (6) commencement of any utility tax year (except the first year, where such advance payment can be made within 30 days after the effective date of the ordinance). If a prepayment of the maximum tax is made, all utility suppliers will be instructed to exempt the service user from the tax collection procedures. If the maximum tax is not prepaid and the service user pays total taxes in excess of such maximum during any utility tax year, the service user may apply for a refund of the excess within 90 days after the end of the utility tax year. The entire Article imposing the utility user taxes will remain in force for a period of 5 years and will then automatically be repealed. WLD Saratoga City Attorney -3- § 4 -110 Saratoga City Code § 4 -110 (1) A base fee of thirty -five dollars per year or three and one -half percent of annual gross receipts, whichever is the lesser. Each person shall pay the base annual fee on January first of each year, and shall be reimbursed January first of the subsequent year for the difference, if any, between the base fee actually paid and the amount that is actually due hereunder, and (2) If at anytime during the calendar year such person or business is composed of more than eight persons, whether as partners, associates, or other- wise, or has more than eight full -time employees or the equivalent (which is interpreted to mean those working the equivalent of forty hours per week) , or any combination of above exceeding eight, then an additional fee of twenty -five dollars per year shall be levied, for a total of sixty dollars. (b) Classification "B" -- Peddlers and solicitors. Each peddler or solicitor, regardless of whether or not operating out o a fixed place of business within the city, shall pay a license fee of two dollars per day, or ten dollars per week, or twenty -five dollars per month, or one hundred dollars per year, per person, whichever is the lesser for the period in time for which the license is issued Each peddler or solicitor shall be required to have a separate license, and to pay a separate license fee, regardless of the fact that any such peddler or solicitor may operate out of a fixed place of business within the city, save and except as follows: Where an operation is out of a fixed place of business inside the city, by use of agents or employees as peddlers or solicitors in the field, or where the peddler. or solicitor .operates as an agent or employee of an owner, manager or supervisor who supervises the work of such person from a fixed place of busi- ness inside the city, the total license fees paid by such business and. its ped- dlers and solicitors collectively shall in no event exceed three times the monthly fee for a single peddler or solicitor's license. (c) Classification "C " -- Miscellaneous businesses. (1) Any person carrying on, or rendering any services as herein described shall pay a license fee in accordance with the following schedule: Ambulance services .........................$ 45.00 per year Animal hospitals ............................ 45.00 per year Auctioneers.. ............................... 50.00 per day Bill posting .. ............................... 60.00 per year Boxing/ wrestling ............................ 100.00 per year Christmas tree sales ........................ 50.00 per year Countryclubs .............................. 60.00 per year 70.4b Supp . #9, 5 -75 icy f § 4 -110 Business Regulations § 4 -110 Junk dealers .,,,,,,, „,,,,,,,,,,,,,,,,,,,,,,$100.00 per year Pawn brokers 100.00 per year Planing mills „ ; 50.00 per year Riding academies ........... 60.00 per year Shoeshine/bootblacks. . , , , , , , , , , , , , , , , , , 5.00 per year Swim and racket clubs, . , , , , , , , , , , , , , , 60.00 per year Taxicabs 45.00 per. year Tractor sales,,,,,,,,,, .... .. .... 50.00 per year (2) Amusements, entertainment clubs and devices. a. Every person managing , conducting or carrying on a place of amusement or an amusement. business or amusement device as herein enumerated shall pay a license fee as specified: Bowling alley.. * ....... ................ $10.00 /alley Pool room /billiard room ............. . 10.00 /table . b. Every person carrying on the occupation of operating a shooting gallery, skating rink, trampoline, miniature golf range, so- called "pitch and putt” course, so- called "driving range" and similar type of business shall pay an annual license fee of $75.00 c. Every person conducting the business of a theatre shall pay an annual license fee based on the following rate schedule: 1) Theatres having 0 to 500 seats or stalls shall pay. . . . . . . . . $100.00 2) Theatres having more than 500 seats or stalls shall pay. . ... . . 150.00 . (3) Contractors (Resident and non- resident) . Every person, firm or corporation licensed by the state as a contractor shall pay an annual license fee of twenty -five dollars to the city, for operating such contracting business in any manner in the city, regardless of whether or not such contractor has a fixed place of business in the city. (4) Mobile home parks, rest homes, sanitariums. Every person engaged in the business of operating a mobile home park, rest home, or sani- tarium, shall pay an annual license fee of twenty -five dollars, plus the sum of two dollars per unit for each living unit in a mobile home park, and in the case of a rest hor,;e or sanitarium, the sum of two dollars per bed. (Ord. No. 38.8, § 1; Ord. No. 38.41, § 2; Ord. No. 38,51, § 2; Ord. No. 38.51.1, § §1, 2.) 70.4c Supp . #13, 7 -78 Sec. 4 -110. Classification and rate schedules. (a) Classification "A " -- General (Commercial, personal services, ro- fessional, manu acturin ). Every person, w ether a resident or non - resident of the city, who is engaged in, or conducting or doing business within the city limits, except as otherwise provided for in classifications "B" and "C" hereof, or except as may otherwise be provided for by any of the other articles of this chapter, shall pay an annual license fee as follows: 70.4a SuPP • #9, 5 -75 • •-����'? CITY o f = � ' AT O GA 13777 FRUITVALE AVENUE • SARATOGA, CALIFORNIA 95070 O o� (408) 867 -3438 COUNCIL MEMBERS: Linda Callon Martha Clevenger Virginia Laden Fanelli Joyce Hlava David Moyles February 27, 1985 To: City Council From: City Manager Subject: Miscellaneous Calculations for Utility Tax Rate Based on information obtained from P G & E, here are the calculations requested by the City Council on various aspects of the proposed utility user tax. 1. AVERAGE TAX, PER FAMILY, PER YEAR: P G & E provided Chart I attached which displays the average residential gas and electric usage and total average bill, by month, for all individually metered accounts within the City of Saratoga. The sum of the total average bill for all 12 months is $1,288.43. The average annual utility tax is derived by multiplying the above average yearly total by the proposed tax rate: average yearly total bill $1,288.43 x proposed utility tax rate x 3.5% average yearly totoal tax $ 45.09 Each 1% of tax rate would cost the average tax payer $12.88/yr. At the proposed 3.5% utility tax rate, a customer's annual bill must exceed $2,857 (or 2.2 times the average) to reach the suggested $100 /yr. tax ceiling. 2. ESTIMATE FOR NON - TAXABLE EXEMPTIONS: P G & E provided a print out of all non - residential accounts within the City as of December, 1983. This listing included 35 pages and 888 accounts. City staff reviewed this record and identified non - taxable accounts for all governmental entities. These included accounts in the name of the City, the State, all school districts, public utility districts (not privately owned) and Federal accounts such as the Post Office. From this list of identified accounts, P G & E compared the billings for the month of December, 1984 to the total billings for the same period within the City. The resulting totals are shown on Chart II, attached. The percentage reduction in tax revenue is derived from the ratio of total revenue for the month to the amount billed to non -taxed entities: Amount billed to exempt accounts /Total Amount Billed = % Exempt $118,995.43/$1,937,654.09 = 6.1% The City Council has requested this ratio to be tested for one other month. P G & E will provide that information as soon as available. 3. ESTIMATE FOR LOW - INCOME EXEMPTIONS: The number of households in Saratoga with annual incomes below 50% of the Median Family Income for Santa Clara County, according to the 1980 census data, is 825. (The number 125 given at the 2/26 study session was incorrect). This number represents 8.8% of the total households (9,343) in the City at the time. It is reasonable to assume that this proportion will not change significantly over time and that not all elligible households will claim the exemption, if allowed. However, the number is larger than previously stated and significant enough to be a factor. Therefore, for purposes of this analysis, a low- income exemption of 5% is assumed. The effect of a 5% exemption for low - income, on the net taxable annual revenue, reduces the tax yield by about $26,250 per year. K 4. ESTIMATE OF PROCEEDS FROM UTILITY USER TAX: P G & E has determined their gross revenues from the City of Saratoga for the 1984 calendar year at $16,284,521. This amount must be adjusted for non - taxable entities and for low - income exemptions, if approved by the City Council. The estimate is derived as follows: Gross Revenues for 1984: Less: Non - taxable exemptions, 6.1% of gross: Low- income exemptions, 5% of net Revenues: Estimated net taxable revenues: x Proposed Tax Rate: ESTIMATED TAX REVENUE: 5. RECAPITULATION OF FINANCING PLAN: Increase in Business License Tax from $35 to $75 per year: Annual interest income from proceeds of sale of Cox Ave. property; $1 million net proceeds @ 10%/yr: Transient Occupancy Tax, at 8% on both existing and new motel: Utility User Tax proceeds, at 3.5 %, net of low - income exemptions: ESTIMATED TOTAL ANNUAL REVENUE: WaVne Derne 1 : ccrffemo2. 2 7 3 S $16,284,521 993,356 814,226 $14,476,939 3.5% $506,693 $40,000 100,000 100,000 506,693 $746,693 Month January February March April May June July August September October November December CC+or P,7 T AVERAGE RESIDENTIAL GAS & ELECTRIC USAGE City of Saratoga Individually Metered Accounts Gas Average Use Average Bill 151 142 110 89 71 45 36 32 33 48 96 153 Prepared By: J. I. Tarango Economics & Statistics Department $86.00 $80.83 $58.83 $45.14 $39.57 $26.84 $20.81 $18.38 $19.43 $30.41 $59.97 $95.12 Electric Average Use y-erage Bill 877 $63.37 774 $56.26 740 $53.58 726 $62.50 720 $51.65 718 $51.33 769 $55.69 753 $56.29 712 $60.47 789 $66.02 810 $67.89 858 $72.05 Total Average Bill $149.37 $137.09 $112.41 $ 97.64 $ 91.22 $ 78.17 $ 76.50 $ 74.67 $ 79.90 $ 96.43 $127.86 $167.17 Z Vol '.4A / 0,7,:3.7. q� oe7 3 . ?4 Zo-V TF Saratoga Inc. Revenue December, 1984 Electric 939,326.04 Gas 998,328.05 Gross Revenue $1937,654.09 Exemptions as identified by the City (98) Gross Revenue Eligible for taxation 118,995.43 (Q°% $18181:1658.66 -- -- - -- -- ----- ��-- - - - - -- - - PACIFIC' GAS '-AND ELECTRIC_ - -- PAGE REPORT # SRG 8153502 REQUESTER LGS 3309 12 -15-83 — — SARATOGA ACCT NO NAME - -_— -- UTILITY USERS FOR _ REVIEW FOR —u TAXING --- - �' IC2 SIC3 SVC- ADD�f_ SV�LY SUPPLY ESCHED GSCHED SIC BVJ1135153 DON R SMITH 8021 9000 20444 PROSPECT RD SARATOGA CA 95070 DENTAL OFFICE A 2 G 2XN 8021 , BVJ1135201 DR GREGORY L SAWYER __ 3021 20444 PROSPECT RD SARATOGA CA 95070 DENTAL OFC A 2 G 2XN 8021 BVJ116067 L� RT B 5�44't T741C"f'°"" _ :_ . ,_ -i� Rem ,•• ��••�•• rAL ITATTnu yen�. - - 4952 500 - A 2EP 4952 BVJ1160691 BOETHING TREELAND NRSY 20210 PROSPECT RD SARATOGA CA 95070 NURSERY OFC A 2 181 9000 181 BVJ1173001 SARATOGA PK HMOWNR ASC 12135 PLUMAS DR SARATOGA CA 95070 REC RM -POOL TR 5069 A 2E G 2XII 8641 29 9020 BVJ1173751 SARATOGA PK HMOWNR ASC PARCEL A PAMPAS CRT SARATOGA CA 95070 SPRINKLERS A 2 8641 9000 8641 BVJ117501 RTT" I OG�i� ..�.' C,A ,.9070 4. ,. ;- - p =��r j 8661 8661 90000 BVJ1177003 PRIDES CROS HOME 12018 KRISTY LN SARATOGA CA 95070 TRACT GATE LIGHYS A 2 8641 8641 9000 BVJ118525 _ ,ARAT0GA CA '74070- __- _. - 8212 ;:5000 G 2Xti 8212 BVJ11 85521 MICHAEL T COBLER - -- - - - 18574 PROSPECT RD SARATOGA CA 95070 RETAIL SANDWICH SHOP G 2XN 5812 5812 9000- -- - BVJ1185541 MICHAEL T COBLER 18574 PROSPECT RD SARATOGA CA 95070 SANDWICH SHOP A 12 5812 5812 9000 BVJ118600AMPBELL UNION HI PROSPECT AT LAWRENCE - - -- - -- SARATOGA SARATOGA CA 95070 TENNIS CRTS A 2E 8212 8212 .500 TWO JAN INC 18576 PROSPECT RD SARATOGA CA 95070 REAL EST OFFICE A 2 P G 2XN 6531 6531 9000 BVJ1186551 W P CHAO & N CHAD 18564 PROSPECT RD SARATOGA CA 95070 PRINT SHOP A 2 P G 2XN 2752 2752 9000 -- BVJ1186601 INTEGRITY ENTERTAINMNT 18578 PROSPECT RD SARATOGA CA 95070 RETAIL RECORDS & TAPES G 2XN 5733 5733 9000 BVJ1186621 INTEGRITY ENTERTAINMNT 18578 PROSPECT RD SARATOGA CA 95070 RETAIL_ RECORDS & TAPES A 2 P 5733 5733 9000 - BVJ1186701 BELLOMO PROPERTIES 18578 PROSPECT RD SARATOGA CA 95070 COMML A 2 P G BVJ1186801 VOLUMEN CASUAL SHOES 18562 PROSPECT RD #585 SARATOGA CA 95070 RETAIL SHOE STORE A 2 P G 2XN 5661 5661 9000 BVJ1186901 CHARTAM CORP 18566 PROSPECT RD SARATOGA CA 95070 HAIR SALON A 2 P G 2XN 7231 7231 9000 BVJ1190502 DELTA QUEEN MGMT CORP.- 18560 PROSPECT RD SARATOGA CA 95070 CAR WASH G 2XN 9000_- . 0 BVJ1190552 DELTA QUEEN MGMT CORP 18560 PROSPECT RD SARATOGA CA 95070 CAR WASH A 12 7542 7542 9090 BVJ1190602 PENTA INVEST CORP _. 18568 PROSPECT RD SARATOGA CA 95070 OPTOMITRIST OFFICE A 2 G 2XN 6512 8042 9021--- _. - - BVJ1190611.JAMES Q DANIELSKI 18570 PROSPECT RD SARATOGA CA 95070 PHOTO LAB A 2 P G 2XN 7393 7395 9022 JRT SRG8153502 CCONT *DS PAGE 00002 SARATOGA UTILITY USERS FOR REVIEW FOR TAXING 12 -15 -83 ACCT NO NAME SVC ADDR SVC CITY SUPPLY ESCHED GSCHED SIC ;2 SIC3 BVJ1190661 BOOKMANIA INC 18572 PROSPECT RD SARATOGA CA 95070 BOOK STORE A 2 P G 2XN 5942 ; 9421 9 0 0 0 - - -- -- -- - - -- - BVJ1190701 D AMICO TIRE SERV INC 18522 PROSPECT RD SARATOGA CA 95070 TIRE STORE & SERVICE A 2 P G 2XN 5531 ;531 9 0 04 BVJ119075 CONSERVATIVE BAPTIST _ 18510 PROSPECT _ RD SARATOGA :_CA __95070 CHURCH ASSOC OFC 2 8661 -521 9000` __. _ _._ .A _ BVJ1191001 GRAND AUTO STORE 10506 PROSPECT RD SARATOGA CA 95070 SARATOGA #36 G G 2XN 5531 ;531 9000 BVJ1191051 GRAND AUTO_.STORES 18506 PROSPECT RD_ SARATOGA CA 95070 SARATOGA #36 (E) A 12 5531 ')531 9000 BVJ1191202 JOHN B SEGALL 18484 PROSPECT RD SARATOGA CA 95070 COMML HSE MTR A 2 P G 2XN 6512 ,522 9000 BVJ1191502 JOHN B SEGALL -- -. 18486 PROSPECT RD SARATOGA CA 95070 OFC -STORE RENTAL A 2 P 6512 >522 9000 _ _ BVJ1191801 SEE CANDIES INC 18470 PROSPECT RD SARATOGA CA 95070 CANDY STORE A 2 P G 2XN 2065 ;441 9000 BVJ1192203 YASUTO YAMASHITA DBA 18478 PROSPECT RD SARATOGA CA 95070 BEAUTY SALON -SHOP A 2 P G 2XN 7231 '231 9000 - - - -- BVJ1192505 MARK MILSTEAD 18480 PROSPECT, RD SARATOGA CA 95070 MGMT AGENCY A 2 P 7999 '999 9000 BVJ1192758__RAM & UMA SAXENA DBA 18476 PROSPECT RD SARATOGA CA 95070 ELECTRONICS STORE A 2 G 2XN 5999 ;999 9091 BVJ1193002 C COWDEN t R EVERS DBA 18482 PROSPECT RD SARATOGA CA 95070 PIZZA PARLOR A 2 G 2XN 5812 ;812 9000 BVJ1193259 GORDEN G CHEN 18486 PROSPECT RD SARATOGA CA 95070 RESTAURANT A 2 G 2XN 5812 5812 9000 - - BVJ1193505 JAESUP LEE DBA 18472 PROSPECT RD SARATOGA CA 95070 FLOWER STORE A 2 5992 3992 9000 BVJ1193751 JAESUP LEE 18474 PROSPECT RD SARATOGA CA 95070 FLOWER STORE A 2 G 2XN 5992 5992 9000 BVJ1194007 JIM G WILSON 18474 PROSPECT RD #A SARATOGA CA 95070 CRAFT GALLERY A 2 G 2XN 5999 ;999 9000 BVJ1219901 MARIA LANE MUTUAL 21151 MARIA LN SARATOGA CA 95070 PUMP A._ 2E 4941 x941 5000 BVJ1241861 MARIA LANE MUTUAL PROSPECT N /BLUEHILLS SARATOGA CA 95070 DEP WTR SYS PUMP A 2 4941 0941 . 9000 BVJ1521901 SOUTHERN PACIFIC RR CO COX AVE AT SP RR TRKS SARATOGA CA 95070 4956 FLASHER SIGNAL. A 2 4011 018 9000 BVJ1521931 SANTA CLARA VALLEY COX AVE AT S P R R SARATOGA CA 95070 SARATOGA TURN VALUE A 2EP 4941 941 5000 1 - BVJ1521961 SAN JOSE WTR WORKS SS COX RD SARATOGA SARATOGA CA 95070 PUMP STATION A 12 4941 x941 900445, BVJ152200 OF SANTA CLARA 19800 COX AVE - - - -- SARATOGA CA 95070 FIRE STATIONS A 2E G 2XN 9224 )224 500 BVJ152394(l ITY OF SARATOGA GLEN BRAE DR SARATOGA CA 95070 SNACK BAR , A 2E 0 5812 40 _. ._ BVJ4022541 GALEB PAVING INC 20359 WILSON LN SARATOGA CA 95070 TEMP 7012206 A 2 1611 L543 900 BVJ402560 UPEPTINO UNION SCH 12300 DE SANKA AVE SARATOGA CA 95070 SARATOGA SCHOOL#' G 2XN 8211 3211 500 - BVJ402562 UPERTINO UNION SCH 12300 DE SANKA AVE SARATOGA CA 95070 SCHOOL A 12 E 8211 3211 50 0' • I� • yt {`¢4'FY"5mv . yx• 11.. d14e u.• *M � , F 5 ¢ 0 Nil REPORT TO MAYOR AND CITY COUNCIL DATE: 1/13/84 COUNCIL MEETING: 1/18/84 SUBJECT Pavement Management Program and Financing Alternatives The City Council has been conducting a series of public hearings regarding financing alternatives for the Pavement Management Program. At the January 4, 1984 public hearing, members of the City Council requested additional information and submitted ques- tions and proposals for response. Staff responses are provided in this report. Pavement Management Program History and Reports The current file on pavement management and street maintenance requirements goes back almost two years to February 1982. At that time the - City's Finance Committee and City Council wanted to know the extent of the unfunded portion of the City's street main- tenance needs. In February 1982, the Maintenance Department roughly estimated the deferred maintenance needs at $1,033,000 per year. Discussions on this issue continued into deliberations on the 1982 -1983 City budget. At that time, Council authorized staff to bring back recommendations and proposals for conducting a pavement management analysis. In the Summer of 1982, field surveys were conducted on the condition of the City's street system. In early 1983, the City Council authorized acquisition of a pavement management reporting system that would be utilized by City staff to perform the pavement management needs analysis and provide optimal system -wide maintenance schedules, based on the field survey data previously gathered. The first report issued in May 1983 indicated the annual pavement management maintenance requirement to range from $88 ,, -1 -1283 to $902,589 in 1985. Discussions continued on th device n of these figures, and their meaning. In July 1983, e City Council authorized an independent technical evaluation o the report from a noted researcher and consulting engineer in the field. In September !, t �t, 0, W__ Report to Mayor and City Council January 13, 1984 • Page Two 1983, the independent evaluation corroborated the earlier reports. Also in mid -1983, the City Council called for a review of alter- natives to finance the pavement management needs, if confirmed. On June 1, 1983 the City staff issued the "Report on Revenue Increasing Options." This report had been prepared under the review of the City's Finance Committee. This report concluded that under current law and the City's financial structure there were few limited alternatives available for generating revenues sufficient to finance the pavement management program. In September 1983, the City Council initiated efforts to determine whether a financing program for Pavement Management would be feasible. Those efforts now are nearing completion. Copies of the key reports and documents from the above events are enclosed for the City Council. Re- calculation of Pavement Manaaement Annual Costs Because the amounts projected for pavement management needs vary from year to year, the "average" level of effort required over the years is not readily apparent. These projections also are based on identified assumptions regarding "unit- costs" for various • pavement management treatments. Thirdly, the projections make no provision for inflation or escalation of costs from year to year. Because questions have been raised whether the $900,000 "target" is appropriate or not, staff have reconsidered this issue to determine whether lowering the amount is feasible. Here are our conclusions. 1. Virtually any amount provided for pavement management of the City's street system-will improve current levels of street maintenance. However, unless the full amount actually required to maintain pavements at the scheduled intervals is provided and applied, some level of deferred maintenance will continue. The consequences of this simply are that over time there will be streets that are not brought up to "good" condition and maintained at that level. We cannot in advance determine which streets nor what service level can be main- tained nor what time periods will occur. Another way of looking at this is to consider that providing 50% of the amount actually needed will reduce the level of deferred maintenance by half, and so on. 2. The amount actually needed cannot be proven; it can only be estimated. Our best current estimate was and continues to be the level of $900,000 per year to do the full job. The • amount will have to be revised according to changes in unit Report to Mayor and City Council • January 13, 1984 Page Three costs. Two factors need to be considered. Unit Costs: The May 1983 Pavement Report assumed unit costs for various kinds of treatment at certain rates. Actual contracts awarded by the City in the Summer of 1983, which were competitive at the time, resulted in unit costs that slightly exceeded those assumed in the May 1983 analysis. A revision of the May 1983 report was prepared recently, using the unit costs actually obtained in 1983 with these results. Year Projected Cost 1983 $1,006,016 1984 837,507 1985 1,054,710 1986 880,522 1987 769,936 1988 861,718 Total $5,410,409 Average Cost per year - $901,735 . Please note these costs are not adjusted for inflation. Engineering and Administrative Expense: The second factor to be considered is that costs projected in the Pavement Management report are based on actual maintenance work. These costs do not include Engineering and Adminis- tration expenses that are directly related to the mainte- nance work. Such expenses provide for preparation of plans and specifications for contract bidding; costs of evalua- tions and awarding bids; and costs of inspection and completion of contract supervision. Such expenses typically run at least 10% of the work performed. While these ex- penses will not necessarily be "added" costs to the City, it is expected that some portion of additional expense will be needed and thus will have to be financed. Based on the above results and factors, staff continues to believe the minimum target for full financing of the pave- ment management needs should be $900,000 per year. Revenue Alternatives During the discussion of revenue alternatives, several questions have been raised. Q. CAN THE "LIFELINE ALLOWANCE" ON GAS AND ELECTRIC BILLS BE • EXEMPTED FROM THE y UTILITY USER TAX? Report to Mayor and City Council January 13, 1984 • Page Four A. Yes, but this would not accomplish the intent of exempting lower income residents from the tax. The "lifeline allowance" appears only on the PGand E bill for gas and electric service and does not extend to the other utility services. The "allowance" actually is an allocation of energy usage (for gas and electrical) to each customer served by PGandE at below full cost rates. All customers, regardless of income level, receive the benefit of "lifeline allowance ". Customers who consume more energy than the lifeline allowance, regard- less of income, pay a premium rate for the energy used which in turn subsidizes the.lower energy consumers. We have not yet received an estimate from PGandE on the actual amount of revenue that would be "lost" by exempting the life- line portion from everyone's PGandE bill. No other City has chosen this method. Q. IS THERE A BETTER WAY TO EXEMPT LOW INCOME RESIDENTS FROM THE TAX? A. Yes. The City of Scotts Valley recently adopted the tax and provided that any resident whose family income was 500 or less of the County average family income would be exempt. The • proposed ordinance for Saratoga already provides that the City will maintain and provide a list of exemptions to the utility companies for other reasons (public agencies and others who cannot legally be taxed by the City). If it were desired by the Council, persons or families in Saratoga whose income was below a certain level could be exempted from the tax and placed on the exemptions list. Q. CAN THE UTILITY USE TAX BE "SUNSETTED "? A. Yes, an- City ordinance can include a built -in termination date. However, in view of the long term nature of the pro- gram to be financed by this tax, we suggest there not be an automatic termination date, but rather a periodic review of the tax to determine if the need continues. The City Council can repeal the tax any time it so desires by a simple majority vote. Renewal of the tax after it is adopted and expires automatically may not be possible, depending on Constitutional or legal restrictions. Q. WILL THE FEDERAL OR STATE GAS TAXES BE INCREASED OR THE COUNTY -WIDE GAS TAX BE ADOPTED? A. Both Federal and State Gas taxes were increased in recent years, by 5� and 2G per gallon respectively. The City receives no share of the Federal Gas Tax and only a minor • share of the State Gas Tax increase. The latter amount has already been factored into our financing. There is no • C] • Report to Mayor and City Council January 13, 1984 Page Five discussion at present on further increases nor on adding a county -wide tax. The prospects for additional funding from these sources are remote. . Q. HOW MUCH REVENUE CAN BE GENERATED FROM THE SALE OF SURPLUS CITY LAND? A. There are several important variables that determine the answer to this question. It is very difficult to estimate the potential for revenue generation. The important vari- ables include: The actual sale price; the time required to make a sale; the terms of sale; future rates of interest; and the conditions and /or restrictions upon the City for disposal of some of the properties in question. In its review of this issue, the City's Finance Committee estimated land values and reported on possible restrictions and conditions as follows: Property Value Restrictions Cox /Sara - S'vale $1,000,000 clear Azule 1,500,000 restricted K. Moran 2,000,000 restricted From the above, the property at Cox and Saratoga- Sunnyvale looks to be a dependable source of revenue. Both park sites may have to be submitted to election and may also have restric- tions on use of proceeds. Estimating interest rates for the near term future is also difficult. Estimated earning potential for City- invested funds range from 8% to 12% per year over the next several years. At a minimum, it would likely take about a year to sell any of the properties; two years or more if an election is re- quired. Therefore, a "conservative" estimate of revenue generating capacity would produce $80,000 per year, after one year. The highest estimate would generate about $450,000 per year after one to two years, if all three properties were sold for cash and the City maintained a 10% rate of return. Comprehansive Financing Plan Several alternative financing plans have been suggested. At the most recent Council meeting, Council member Fanelli set forth a combination plan. That plan, along with staff comments is Report to Mayor and City Council January 13, 1984 • Page Six described below. FANELLI PROPOSAL Source Revenue Generated Comments 1. Increase Business $40,000 per year 1. Does not License Tax To adjust auto - $75.00 "Flat" Rate matically for inflation. 2. Adopt T.O.T. at $17,000 per year 1. Estimate 8% (existing motel may be high; only) $10 -$15K is more likely. 2. Should not rely on "new" hotel unless construction begins. 3. Proceeds from Sale of Property a. Cox /Sara - S'vale $100,000 per year 1. One year $1,000,000 @ 10% lag in revenue. • 2. Interest rate may be 1 -2% high. b. K. Moran $200,000 per year 1. 1 -2 year $2,000,000 @ 10% lag in revenue. 2. Interest rate may be 1 -2% high. 3. Some restric- tions may apply. 4. Election may be required. 4. Utility User Tax: $450,000 per year 1. Estimate Rate of 2.5% fairly accurate. 2. Assumes no exemptions. $807,000 In the above plan, significant reliance is made on interest earned on proceeds from sale of land. Such earnings would not be gene- rated for 1 to 2 years after the decision is made. These earnings also would depend on future interest rates which may move inde- pendently from inflation rates. • Report to Mayor and City Council • January 13, 1984 Page Seven The above plan does not raise the amount projected to be needed for a full pavement management program. These uncertainties and shortfall suggest that an initial higher rate of Utility User Tax (say, at 4 %) would be needed to assure sufficient finan- cing for an adequate pavement management program in the early years. Subsequent adjustment downward could be contemplated if revenues from the sale of land are fully realized and if expendi- ture requirements for the pavement management program were stabi- lized at or below the'$900,000 per year level. Other factors that possibly would reduce the reliance on Utility User Tax and allow a future rate reduction include: - any future increase in street maintenance revenues from the State; - contruction of the proposed hotel; - new revenue sources from the State. The probability for any of the above occurrences can not be established at this time. Conclusion The need for a comprehensive pavement management program has been • well documented and confirmed. Because the City's finances are presently tight, there is no room to absorb these costs without eliminating other services. The City's present options for raising sufficient revenues are severely limited by legislative and Constitutional contraints. In order to meet its responsibility to the public over the long run, the City will have to increase its revenues. Such increases, in the form of higher taxes, are difficult and painful decisions to make. Once made, however, it is likely that the public can adjust and will benefit from the improved quality of street services. The average impacts of the proposed new taxes are not major for the vast majority of residents. It has been suggested that the annual impact of a 5% Utility User tax on most families is Saratoga is less than the price of one new tire and one shock absorber. In deciding how to "package" any combination of tax increases, it is suggested that we keep in mind the difficulty of increasing revenues when needed, versus the ease of reducing tax rates. Also, perhaps we should reflect on the feasibility of "under - planning" new programs at their inception. Experience shows that programs that are "underplanned" fail to produce the results desired and are viewed as unsuccessful in the long run. While it is possible and feasible to operate a Pavement Management Program at less than the amounts projected to be needed, in the final Report to Mayor and City Council January 13, 1984 Page Eight analysis such a strategy may not produce the quality or type of results desired. i et §i Wayn Dernetz C ty Manager JWD:llc • • R �7 12 March 1985 �' -L City Council, City of Saratoga City Hall, Saratoga, Ca. 95070 Dear Mayor and Councilmembers: A year ago when I agreed to work for passage of a street tax, I did so with the understanding that we would have the unanimous support of the council, and that all candidates for the council would agree not to make a political issue of the subject. It was also understood that the sole purpose of the tax would be for maintaining our streets, and that everything possible would be done to make the tax as equitable as possible. We sought and obtained the support of many.individual civic leaders and organizations, and together we came up with.a solution which the voters approved by a margin of eight per cent. This was not enough to pass Measure G, but it was a firm indication that a majority of the voters accepted our solution, and wanted our. streets maintained. On this basis I agreed to support the council in passing a tax measure based on a utility which would incorporate the three basic features of Measure G. These were the one,hundred and two hundred dollar caps for residences and businesses, the five year sunset clause, and protection for the financially distressed. The city attorney drafted an ordinance and it had its first reading on 20 February 1985. At the continued public hearing on 26 February 1985, which.had less than a half dozen spectators, a new element was introduced, The caps were removed. This completely changed the focus of the purpose of the tax. Instead of a tax solely to maintain our streets, it also became a punitive conservation tax. To 'me, this is a gross breech of faith with the voters and I cannot support it. To add another issue after two years of hearings, discussions, and work is to turn this into a political issue as well as breaking faith with the voters, and the many people who worked so hard for (Measure G.. Removal of the caps will also considerably increase the basic inequities of the tax; initially for some, and later for many. It will be particularly inequitable for certain businesses, owners of older homes, the elderly, and families with many children. I strongly urge you to continue to support a tax for our streets which will incorporate the three basic features of Measure G, and not permit any change in the basic purpose of the tax. I also urge you to drop consideration of the transient occupancy tax and raising business license fees at this time. Until the city has at least one year with the PG &E utility tax for streets, these additional taxes and fees are premature, and quite possibly uncessary. For example, even though the council has been over two years studying this problem, it was only at the 26 February meeting that figures on -the average PG &E bill for residences became:a'vailable, and it wasn't until the last meeting on 6 March that the council was informed of the considerable variation in the size of PG &E bills for the many businesses in our city. We need to know for a fact how much money the tax will actually generate, whether it will be more or less than is needed, and whether the city can actually use the amount generated. Pass the PG &E utility street tax with the three basic features of Measure G, postpone further consideration of the others, and let's get some factual experience. Sincerely, Terrill Barco 19101 Camino Barco Saratoga, Ca. 95070 BE GOOD GOVERNMENT GROUT' of Saratoga, California, Inc. P. O. Box 371' •�; ��� Saratoga, California 95070 February 28, 1985 To: Saratoga City Council Subject: Proposed Utility Tax to Support Street Maintenance The Board of Directors of the Good Government Group discussed the proposed utility tax to support street maintenance at its most recent meeting. By unanimous vote, we took the following positions which support the direction the Council is now headed. 1. We reiterate our previous position that a utility tax should be passed to support street maintenance. 2. We favor limiting the tax to P.G. and E. and not taxing other utilities such as water, telephone or garbage. 3. We do not believe there should be a limit of $100 per household per year on the tax. 4. We support a five year expiration to the law - a sunset clause. 5. We believe the utility tax should be reviewed for need at lea st as often as once a year. Sincerely, 0.1." 9� r�z" Charles H. Robbins President Saratogans in action since 1957. (408) 867 -0707 REALTOR MILES RANKIN, Realtor, Inc. Certified in Real Estate, Certified Member Broker 14506 BIG BASIN WAY • P.O. BOX 426 SARATOGA, CALIFORNIA 95070 RESIDENTIAL — ACREAGE — SITES — INVESTMENTS — EXCHANGES March 7, 9:985 City Council &1siness' tax Saratoga City Fruitvale Ave. Saratoga, California Honorable Ladies and Gentlemen: I would like to have you consider the point of equity in discussing the change in the amount of the anneal business license fee. From what I.understand you are considering a change in the fee from $35. to $75. for all business /professional people, regardless of the size of the business. To me this is not fair and equitable; why should a one person business or profession pay the same fee as a company employing 100 people, all using Saratoga streets to come and go. I realize that simplicity is the great advantage of this method, but it just isn't fair, and usually the small businesses can ill afford an'increase in expenses; a large company will not notice an increase at all! I therefor suggest�.a two tier method: 1 -3 employees $45. a year and over 3 employees $125: per year. In any case, the amount .of money generated, is not large in relation to the amount needed for road maintenance, so moving the figures around will gain too much, but what we would have t-rould be an equitable solutions as to the amount of the business license fee. Respectfully su itted, MILES RANKIN PS: The amount of the business license fee here in Saratoga is FAR BELOW the amount of the fee in other nearby cities. G MEMBER SAN JOSE BOARD OF REALTORS MEMBER LOS GATOS - SARATOGA BOARDS OF REALTORS RE GOOD GOVERNMENT GROUP of Saratoga, California, Inc. P. O. Box 371 Saratoga, California 95070 March 13, 1985 Tos Saratoga City Council Subjects Cap on Utility Tax for Street Maintenance The Board of Directors of the Good Government Group by unanimous vote reiterates its position opposing a cap on the proposed utility tax to support street maintenance. This position was taken March 12 at a special meeting of the Board at which we thoroughly reviewed the new information provided by Saratoga merchants at the Council meeting of March 6. Although we sympathize with the position of the merchants, we feel that their problems are overridden by the importance of creating a tax that is easy to administer. We fear that a cap administered by the City would. prove to be too expensive to operate. We believe that if the tax is passed, the effect on the merchants should be carefully examined within a year. The Board wishes to thank the Council for the delay in voting on t he tax to allow our group and others to consider the new information from the merchants. incerely, Charles H. Robbins President Saratogans in action since 1957. AGENDA BILL NO: DATE: _February 14, 1985__ DEPARTMENT: Parks & Buildinzs Initial: Dept. Head: City Atty: City Mgr: SUBJECT: Donation of Paint for Park Signs Issue Summary Mr. and Mrs. Charlie and Sandra McFall of Saratoga Hardware made a very generous donation of waterproofing stain and paint to the City for use in our parks on various signs and structures for weather protection and wood preservation. Recommendation Accept and acknowledge this donation by way of a letter from the Mayor. Fiscal ImDact Value of the donation is $107.00 Attachments None Council Action -------- - - - - -- 3/6: Approved 5 =0.. 1 AGENDA BILL N0: —_7L I_ DATE:_Februarl 14,_1985__ DEPARTMENT: Parks & Buildinzs Initial:T• Dept. Head: City Atty: City Mgr: SUBJECT: Donation of Plants and Granite Slabs for Hakone Issue Summary Mr. Fairall has been a patron of Hakone Gardens for many years, a good friend of Tanso Ishihara and with Jack Tomlinson, our current Japanese Garden Specialist. Mr. Fairall was instrumental in repairing the wooden lantern in the Garden and has donated many plants to the Garden prior to this. Mr. Fairal l has been told he has terminal cancer and wished to make a significant contribution to the Garden which included slabs of granite and a number of plants, including some rare cultivar maples. Attached is a list of the quantities of this material and the value he places on them. The slabs of granite can be utilized in the Garden now and will make a tremendous impact when we do some of the new proposed projects. The plans, of course, will continue to add beauty to the garden and be a living memorial to someone who loves Hakone and wants to aid in its perpetuity and enjoyment by everyone who visits Hakone for years to come. Recommendation -------- - - - - -- Accept and acknowledge this donation by way of a letter from the Mayor. Fiscal Impact Value of the donation: Granite, $10,000; plants, $1000. Attachments List of material donated. Council Action 3/6: Approved 5 -0. 1 February 14, 1985 Materials donated by Mr. Robert Fairall for the Hakone Gardens: 16 Granite slabs approximately 2' x 4' x 8" 5 2' x 7' x 8" 7 2' x 5' x 8" Value $10,000 4 - 24" Box Maple Cultivars 600 1 - 24" Box Dogwood 200 2 - 4' - 6' Timber Bamboo 200 Total Value $11,000