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Minutes 78-06-23bllNIJTES OF AN ADJOURNED REGIILAR MEETING OF TIlE CYPRESS CITY COUNCIh HELD ,June 23, 1978 The adjourned regular meeting of the Cypress ("it,',' Council was called to order at 6:37 p.m. on Friday, ,June 23, 1978 in the Administrative Conference Room of tho Cypress City IlaI1, S275 Orange Avenue, Cypress, California, Mayor Donald Hudson presiding. PRESENT: ABSENT: Councilmembers Evans, Lacayo and tludson Councilmembers MacLain and Rowan Mayor lludson adjourned the meeting at 6:38 p.m. to the City Council Chambers. The meeting was called back to order at 6:45 p.m. in the City Council Chambers with the £ollow:ing Councilmembers present: PRESENT: Councilmembers Ew~ns, Lacayo, MacLain, Rowan and lludson ,~BSEN'I': None Also present were City Manager/City Clerk Darrell Essex, City Attorney ,/ohn Murpby, and tile following Gity staff members: Davenport, Duke, Bryant, tlawIey, Powell, Schatzeder and Sears. PI, EDGE OE ALLEGIANCE: The City Attorney led the pledge to the rial!. EXE{7/I'IIVE SESSION: b~ayor tludson called an Executive Session alt 6:50 p.m. for matters of litigation. The meeting was called back to order at 7:10 p.m. with all Councilmembers present. CONSIDI!RATION OE REPORT OF MAYOR ~ CITY NIANA(iERS' M[!ETING OF .JUNE 23, 1978 WITII TIlE ORANGE COUNTY BOARD OF SUPERVISORS: Mayor Iludson and tile City Hanagcr summarized the information which was presented at a meeting held with the Orange County Board of Supervisors earlier in the day regarding the implementation of Pruposition 13. ,.ONSID[!RAT[ON OF Al)OPTION OF BUI)GET: The City' Mana,~ler stated the budgets were prepared in accordance with guidelines set by Propesi- lion 8. lle stated the Blue Ribbon Committee will be making recom- mendations on modifications to the budgets, lie asked that sta£f be allowed to adjust the budget reserves to re£1ect all monies in terms ~f various contingencies aud reserves for capital improvements. Councilman l,acayo expressed concern about adopting a budget tha~t will nut balance and he felt the Council was going to review items discussed at the last budget meeting. The City Manager indicated that the Council does not know the true revenue picture because the assessed valuation figure will not be available nntil late duly or August. lie noted that economic conditions can change, such as a change in the assessed valuation or sales tax revenue, and this would require budget adjustments. Itc stated contin~iency f'actors are bail t into the budget. Itc reported the County Supervisors recommended that cities adopt the budget and then consider modifi- cations such as those which were recommended in the Team's report or which will be recommended by the Blue Ribbon Committee. Councilwomen MacLain and Evans expressed support for adopting the budget and Councilwoman MacLain £elt the Council should not argue over adopting the budget but should begin thinking of ways to help the City. Councilwoman Evans felt it was important to have an official record with the budget to show where the City stood before Proposition 13 and to provide a basis to show where cuts are made from. (Zity Council Minutes June 25, 1978 It was moved by Councilwoman Evans and seconded by Councilwoman MacLain to adopt the 1978-79 City budget with the provision that staff's recommendations as listed in the Team report dated June 16 aad recommendations from the Blue Ribbon Committee will be incor- porated. The motion carried by the following roll cai1 vote: AYES: d CO/JNCILMEMBERS: Ewin s, NOES: 1 CO[INC I LMEMBERS: Lacayo ABSENT: 0 COI/NCILMEMBERS: None MacLain, Rowan & Hudson CONSIDERATION OE TAXING ELEMENTS: With regard to the admissions tax for the Race Track, the City Manager reported that at the three meetings held with representatives of groups using the race track thc concerns, economic conditions, alternatives to the admissions tax, and possibility of payment for police services by the race track in lieu of the admissions tax were discussed. Ne reported that as a result of agreements at today's meeting, staff was pre- seating an ordinance which, upon enactment, will provide a base admissions tax of 35¢ which will be implemented with the winter racing meet beginning December I. He stated the 35~ base admissions tax will produce an annual revenue of about $66,000. He stated the ordinance also provides that the City will receive 15% of any ad- missions price increases made in the future. Mr. Dan Downs, (;enerul Manager of the Southern California Racing Association, stated they met several times and tried to be respon- sive to staff recommendations and the City's concerns. He stated they want to maintain a good working relationship with the City and put iu writing some method to resolve future prohlems and allow the City to participate in future price increases, tie recommended a memorandum of underst;,nding. Itc reported that a new turf club may be huilt and its admission price may be $10 to $20 daily, tlc stated the 15% increase would be high for the turf club and he asked ti~at this he renegotiated when the turf club is built, tie also requested that if future legislation is enacted which removes tax benefits to business and industry, they would like to renegotiate the five cent increase in December. lie indicated that they ;ire trying to resolve the City's problem with the Orange Connty Eair Board. Mr. Downs reported they are working with their charity foundations to determine if revenue can be directed to Cypress charitable youth organ i za ti ons. it wits moved by Councilwoman Evans and seconded by Councilwoman Macl,ain to order the following Ordinance read by title only, title ns follows, and to approve the first reading of the Ordinance: ORDINANCE NO. AN ORDINANCE OE TIIE CITY COUNCIl, OF THE CITY OF CYPRESS AMENDING SECTION 26-11 OF TIIE CODE OF SAID CITY REI,ATING TO ADMISSION TAXES. The motion unanimously carried by the following roll call vote: AYES: 5 CO/JNCILMEMBERS: Evans, Lacayo, & Hudson NOES: 0 COIJNC ILMEMBERS: None ABSENT: 0 COIINCILMEMBERS: None MacLain, Rowan It was moved by Councilwoman MacLain and seconded Rowan to adopt the following urgency ordinance by as follows: by Gouncilman title only, title ORDINANCE NO. 621 AN URGENCY ORDINANCE OF TIlE CITY COIlNCII, OF THE CITY OF CYPRESS AMENDING SECTION 26-11 OE THE CODE OE SAID CITY RELATING TO ADMISSION TAXES. -2- City Council Minutes June 23, The motion unanimously carried by the following roll AYES: S COUNCILMEMBERS: Evans, Lacayo, & Hudson NOES: 0 COUNCILMEHBERS: None ABSENT: 0 COIINCILMEMBERS: None 1978 call vote: MacLain, Rowan It was moved by Councilwoman Evans and seconded by Councilman Lacayo to direct staff to prepare a Memorandum of Understanding between the City and Los Alamitos Race Track officials which would provide for a renegotiation of the Turf Club tax upon its construc- tion and a renegotiation of the five cent admission price increase if property tax savings are not realized by the race track. The motion unanimously carried by the following roll call vote: .LYES: 5 COUNCILMEbIBERS: Evans, Lacayo, & Hudson NOES: 0 COUNC ILHEMBERS: None ABSENT: 0 COIINCILMEMBERS: None MacLain, Rowan With regard to the Street Light Users' Fee, the City Manager dis- tributed a draft ordinance and information which was requested at the dune 20 budget meeting. The Council discussed the proposed assessment. The City Attorney recommended adding a section to the ordinance to state: "the tax imposed by this section shall be at the rate of 4.3% of the charges made for such energy, or such lower percentage thereof that the City Council may establish from time to time by resolution" The Finance Officer suggested November 1, 1978 as tho effective date to impose the assessment. The City Attorney stated that if the City finds that the funds are not needed then the Council can defer the eEfective date, repeal the ordinance, or delay the collection commencemcnt date. The staff reported that there is no surplus in the street lighting fund and the $140,000 reserve is held to make the three payments which are due in ,July, September and November. It was moved by Councilman Rowan and seconded by Councilwoman Hat:Lain to adopt the following urgency Ordinance by title only, title as follows, with the stipulation that the assessment rat(' shall not exceed 4.3%, tbat the ordinance include language on the possi- ble de-escalation of the assessment, that the commencement date of the assessment be November 1, 1978, and that staff transmit the ordinance for City Council review at the October, 1978 meeting prior to the levying of the assessment: ORDINANCE NO. 622 AN URGENCY ORDINANCE OF THE CITY COUNCIL OF TftE CITY OF CYPRESS ADDING ARTICLE VI TO CHAPTER 26 OF TIlE CODE OF SAID CITY ESTAB- I. ISHING AN ELECTRICAL ENERGY USERS TAX. The motion unanimously carried by the following roll AYES: 5 COUNCILMEMBERS: Evans, Lacayo, & Hudson NOES: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None call vote: MacLain, Rowan It was moved by Councilman Rowan and seconded by Councilwoman MacLain to order the following Ordinance read by title only, title as follows, and to approve the first reading of the Ordinance, with the provision that the Ordinance be reviewed by the City Council at their October meeting before levying the assessment: -3- City Council Minutes June 23, 1978 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIl, OF THE CITY OF CYPRESS ADDING ARTICLE VI TO CHAPTER 26 OF TIlE CODE OF SAID CITY ESTABLISHING AN ELECTRICAL ENERGY DSERS TAX. The motion unanimously carried by the following roll call vote: AYES: S COUNCILMEMBERS: Evans, Lacayo, & Hudson NOES: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None MacLain, Rowan The City Council discussed the $50 home insp~ction fee at time of home sale. The City Attorney stated this would require, before the sale of a residential building, a report on the zoning classification, occupancy, and a statement that the construction is in compliance with the building and zoning regulations of the City. It would require that the seller make the report available to the buyer before closing the sale. It would exclude the first sale of a dwelling, as in a new subdivision. The fee would be to reimburse the City for costs incurred in preparing the report. He stated this is not a tax on real property but a fee for a City permit and it does not have to be approved before July 1. Mayor Itudson favored the fee as a protection for the safety and welfare of property owners. Councilman Lacayo stated he supported the intent but he felt persons wJ~o have not improved their homes should not be penalized, fie suggested that if the dwelling is found to be in compliance then the fee not be imposed. Councilwoman Evans agreed with the intent and refunding the fee if the dwelling is in compliance. llearing no objections, Mayor tludson requested a staff report for the July 24 meeting on the actual fee which should be imposed and that staff investigate and obtain the ordinances of cities which impose such a fee and include in the report the advantages and dis- advantages of the Fee. With regard to the business license ordinance, Mayor Hudson reviewed the Council's past actions and reported that the ordinance was reviewed with the Chamber of Commerce about a year ago and at that time there was opposition to the ordinance from realtors and From Hyatt Die Cast. tie stated the ordinance would not increase the current taxing structure but would change it to be more equitable for all types of businesses. The ordinance would provide the poten- tial of adding revenue from industrial development. The Finance Officer stated several types of development are not included in the current ordinance, such as headquarters offices and buildings leased to industrial and commercial users, and these areas would be in- cluded on an equitable basis in the new ordinance. Councilman Lacayo recommended that the Council defer action on the ordinance until after it is discussed with the Chamber of Commerce. The City Attorney advised that, according to Proposition 13, business license taxes are considered special taxes if the purpose is to raise revenue, so the ordinance should be approved before Jnly I. Mayor Hudson suggested adopting the ordinance now but making the effective date July 1, 1979. lle felt this would allow sufficient time for an analysis by the City and Chamber of Commerce. -4- The L'ity Attorney recommended adding to Section 3: "the ordinance will take effect immediately upon adoption provided, however, that through tire period ending June 30, 1979 business ]icense taxes shall continue to be levied, collected and paid in accordance with the provisions of Article I of Chapter 15 of the Cypress City Code existing before adoption of this ordinance". This would provide that although the ordinance is on the books the City will not enforce it until July l, 1979 and in the interim the City will enforce the ex,sting ordinance. Mayor ltudson moved to adopt the ordinance with the correction re- garding the $~.~.00 minimum t~lx included in Section 15 30. The it was moved by bla>or Iludson and seconded by Councilman Rowan to order tile following Ordinance read by title oniy, title as Follows, and to ;~pprove tire first reading of the Ordinance, with the provision th;~t the Ordinance he implemented on ,July l, 1979, and to direct staff to present the Ordinance for City Council review at the first regular Council meeting of dune, 1979, and that the Ordinance be transmitted to tire Chamber of (:ommerce: ORI) INANCE NO. AN ORDINANCE OF TI]I2 CITY (TOUNCII. OF TIlE (]["fY OE CYPRESS AMENDIN(; ARTI(71,E f, CIIAPTER 15 OF File CYP[~ESS CITY CODE PEI{'FA IN IN(; TO TAXIN(; TIlE TI~ANSACTION AND CARRYIN(] ON OE BUSINESSES, TRAI)ES, PROCESSIONS, CALl, IN(iS AND OCCUPATIONS IN TIlE CITY OE CYPIIESS EOR Till! PURI~OSE /)F RAISIN(; MI/NICIPAL RI!VENUE . l'he motion unanimously carried by tho £ollowinE r~ll call vote: AYES: 5 C()UNCII,MI!MBI-~RS: Evans, I,acayo, ~lacLain, ti Hudson NOES: 0 COUN(] I LMI!IxIBI!R S: None Al/SENT: 0 COUN(] [ LMI~MBERS: None Rowan It was moved hy Mayor tludsoa and seconded hy Counc i llnan Rowan adopt tile following urtloncy Ordin;~nce by title only, title ;~s follows;, with the provision that the Ordinance he implemented ,Itllv I , 1 9 0 ORDINANCE NO. 62.t AN /IR(;ENCY ORDINANCE OF TIlE CITY COUNCIl, OF TIlE CiTY OF CYPRESS AMENDIN(; ARTICLE I, CIIAP'FER 15 OF TItE CYPRESS CITY CODh PERTAININ(; TO T^X[Nf; TIIE TRANSACTION AND CARRYINf; ON OF BUSINESSES, TRADES, PROFESSIONS, CALLINGS AND OCCOPATIONS IN TIlE CITY OF CYPRESS FOR 'File PURPOSE OF RAISING M/INICIPAL RI!VENIIE. The motion unanimously carried by tile Following roll c;~ll vote: AYES: 5 COUNCIl, MEMBERS: Evans, l,acayo, & Hudson NOES: 0 COUNC ILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None Uaclm in, [h~wan Mayor Hudson inquired about the development related users' fees and the City Attorney stated these are not covered by Proposition 13 restrictions and do not have to be approved before .July I. With regard to the Team report of 3une 16, Mayor lludson suggested that the Council accept the report and allow the staff to proceed with its implementation so that they have guidance on the budget. tie also suggested that the elimination of City Commissions be effec- tive August 1 so that the staff can transfer these fuactions to the City Council. -5- ~t~City Council Minates June 23, 1978 Councilman Lacayo stated he agreed with the staff recommendations in the report but he felt it should first be reviewed by the Blue Ribbon Committee for ratification, and the outside agency support program should be reviewed with the Chamber of Commerce before it is deleted. Hayor Hudson stated his intent was that the elimination of funds for the Chamber would be effective at the end of the current con- tract, and the same would apply to outside agency support. Councilman Lacayo moved that it is the intent of the City Council to reduce the City budget and to support the staff's proposal For budget reductions, and that the reductions be reviewed further by the City Council and Blue Ribbon Committee before implementation. The motion was not seconded. Councilwoman Evans moved to accept the staff's proposed budget reductions as listed in the June 16 report including the cuts up to capital projects, and that the Council review in detail and ratify at a later date the outside agency support, community promotion and commission expenditure cuts. The motion was not seconded. it was moved by Councilwoman MacLain and seconded by Councilwoman Evans to continue the budget discussion to June 26 and to schednle further budget sessions at that time. The motion carried by the following roll call vote: AYES: 3 COUNCILMEMBERS: Evans, HacLain NOES: 2 COUNCILMEMBERS: Hudson & Lacayo ABSENT: 0 COUNCILMEMBERS: None & Rowan The Council agreed to schedule a meeting for Thursday, June ~{ ~ .) t O conduct the second reading of the ordinances approved tonight. ADJOURNMENT: Mayor Hudson 9:52 p.m. It was moved by Councilwoman MacLain, seconded hy and unanimously carried to adjourn the meeting at MAYOR OF THE//C~TY OF ~:~PRESS "~ ATTEST: CITY (]hgR~ OF THE CITY OF CYPRESS -6-