Pismo Beach Municipal Code Art. III Water Service Tax

Pursuant to the authority of Article XI, Section 7 of the California Constitution, Government Code Sections 37100.5 and 53722, and Section 2(c) of Article XIII C of the California Constitution and subject to two-thirds voter approval pursuant to Section 2(c) of Article XIIIC of the California Constitution, there is levied a special tax within the city upon the privilege of use, or having available the use, of water services. This tax shall be known as the "water service tax." The tax shall take effect and commence on July 1, 1997. (Ord. 97-03 § 1 (part), 1997)

The purpose of the water service tax is to generate sufficient revenue to pay the fixed costs for providing water through the State Water Project and Lopez Project by taxing the privilege of using, or having available the use of, water services. The tax shall be levied proportionally to the extent of the estimated use or availability of water service. The water service tax is not an ad valorem tax based on the value of property. (Ord. 97-03 § 1 (part), 1997)

The following definitions shall govern the construction of this article:

"EDU" is defined as an equivalent dwelling unit. The single-family residence has been designated as the basic unit for calculation of the special tax, with other land use parcels receiving varying levels of proportionate tax based on parcel usage and size. One EDU represents an equivalency factor relative to a single family residential parcel.

"Engineer's report" is defined as the engineer's report prepared to analyze and make a recommendation on the most equitable method of levying this tax. This report is dated March 4, 1997, and has been prepared by North Coast Engineering, entitled "City of Pismo Beach, Special Tax for State Water and Water Supplied Through Lake Lopez Water Supply Facilities, Engineer's Report."

"Fixed costs" is defined as those costs which the city pays for supplying water that are not based on the quantity of water actually delivered.

"Improved property" is defined as all parcels of real property within the city with improvements valued over one thousand dollars on the property according to the latest assessor's tax roll as of March 1st of each year.

"Lopez Project" is defined as the water supply project by which water is delivered to the city from Lopez Lake and the city is obligated to make payments to San Luis Obispo County Flood Control and Water Conservation District pursuant to a contract originally dated April 4, 1966, and its various amendments.

"Maximum tax rate" is defined as the maximum allowable dollar amount for a single EDU which may be levied as a tax.

"Parcel" or "property" is defined as all parcels of real property within the city as shown on the assessment role of the county of San Luis Obispo assessor as a parcel to which a separate assessor's parcel number is assigned as of March 1st for the year preceding the fiscal year in which the tax is to be levied. It shall also include all other real property for which an assessor's parcel number has not been assigned, for which water service is made available, including, but not limited to, rights of way owned by a public agency.

"State Water Project" is defined as the water supply project by which water is to be delivered to the city through the state water pipeline. encompassing all aspects of that system, for which the city is obligated to make payments to the San Luis Obispo County Flood Control and Water Conservation District pursuant to two contracts both originally dated May 15, 1992, the first entitled the "Water Treatment and Local Facilities Agreement," and the second entitled the "Water Supply Agreement Between San Luis Obispo County Flood Control and Water Conservation District and City of Pismo Beach."

"Unimproved parcels" is defined as all parcels or real property in the city which do not meet the definition of improved parcels. (Ord. 97-03 § 1 (part), 1997)

The tax shall be levied on water users and property owners on a per parcel basis. The total tax for each fiscal year for each parcel shall be equal to the number of EDUs attributed to the parcel times the tax rate established by the city council for that fiscal year. (Ord. 97-03 § 1 (part), 1997)

A. EDUs shall be attributed to parcels of real property within the city based upon the anticipated water use. Anticipated water use is to be forecast using the most current information regarding parcels of real property within the city available as of March 1st of each year.

1. Residential parcels shall be attributed EDUs depending upon their status of improved or unimproved.

a. All improved parcels which had permits issued or actual improvements constructed as of March 1, 1997, shall be attributed with EDUs based upon the parcel's actual use at that time, regardless of the parcel's development potential. Improved parcels which do not meet the March 1, 1997, deadline shall also be taxed based upon actual use, so long as the improvements exceed the average density for that zone attributed in the engineer's report and/or the parcel owner executes and records a deed restriction giving up all development rights beyond that use.

b. Unimproved parcels shall be attributed with EDUs based upon the average potential density for development of the parcel using the size of the parcel and the current city general plan average density designations, unless there has been final approval of a subdivision for the property which provides for the full development of the parcel. EDUs shall be attributed to unimproved parcels which have finally approved subdivisions providing for their full development based upon the actual use of the parcel as allowed by the approved subdivision.

2. Commercial parcels, whether improved or unimproved, shall be attributed EDUs based upon the square footage of the parcel.

3. Open space parcels, common areas in condominium developments and parcels for which irrigation meters are installed will be taxed on the basis of one EDU per irrigation meter.

4. Parcels with mixed uses or other recognized anomalies shall be attributed EDUs as follows:

a. Mixed Commercial and Residential. EDUs will be attributed to these parcels based upon the commercial calculation plus the appropriate residential EDU factor, either multifamily or single-family residential.

b. Multifamily Residential (Apartments and Condominiums) in Commercial Zoned Areas. EDUs shall be attributed to these parcels based on the number of units on the parcel.

c. Single-Family Residential Parcels with Multiple Meters. These parcels shall be attributed one EDU for the single-family residential use and shall be attributed further EDUs using the multifamily residential factor for each water meter above the first.

B. The number of EDUs attributable to each parcel of real property in the city has been calculated for the purposes of levying this tax. The specific method, and rationale, for calculating the number of EDUs per parcel is presented in detail in the engineer's report. This report is on file in the office of the city clerk. The engineer used existing, approved studies and plans to develop the most equitable method of attributing EDUs to each parcel of real property in the city to accurately forecast anticipated water use of each parcel.

C. Except for in unique or anomalous circumstances as recognized in this section and/or situations falling under Section 13.08.350 of this article, EDUs shall be attributed to each parcel in the city based on the following schedule:

D. Each parcel of real property in the city is identified, and EDUs have been assigned to each parcel, in the "Engineer's Parcel/EDU Table." The "Engineer's Parcel/EDU Table" shall be updated annually and a copy of the most current update shall be made available to the public in the city's finance department. The "Engineer's Parcel/EDU Table" shall also contain the amount of tax levied on each parcel and shall constitute the official tax roll of the city for this tax. It shall be updated annually to provide the most current information as to each parcel within the city.

E. For purposes of determining categorization of any particular parcel due to subsequent changes in zoning or use of a parcel or property, a parcel will be taxed on the basis of the revised zoning or use as of the effective date of the zoning or use change. If a new zoning district is created in addition to those districts identified in subsection C of this section, the EDU for such zone shall be established by the city engineer using the same methodology as that used in the engineer's report. Parcels annexed to the city shall also be subject to the tax upon annexation.

F. EDUs are only used in this article as an equivalency factor to equitably levy the tax. Their use here shall in no way result in vesting future water or development rights, or rights to access water service, to any particular property. (Ord. 97-03 § 1 (part), 1997)

A. The tax rate per EDU per year shall not exceed one hundred twenty-five dollars, along with an adjustment for inflation calculated using the Consumer Price Index. The maximum tax rate represents a ceiling above which the tax cannot exceed.

B. This maximum tax rate shall be adjusted annually by application of the local Consumer Price Index ("CPI"), as published by the Department of Labor computed for the first index in March of each year. In no event, however, shall any one year's CPI adjustment exceed three percent. Consumer Price Index adjustments to the maximum rate shall not constitute an extension of, increase of, or imposition of, the tax. Adjustments to the maximum tax rate based upon the application of the Consumer Price Index shall be cumulative and the right to adjust the maximum tax rate for inflation is not waived by any decision not to apply the CPI indexing factor, or any portion thereof, in setting the tax rate for any year.

C. The city council shall set the tax rate for each fiscal year annually by resolution. In no case, however, shall the tax rate exceed the maximum rate established by this section without the approval of the voters. Should the city council fall to set a tax rate in any year for any reason, the tax rate of the immediately previous fiscal year shall be used and the city manager (or designee) is authorized to proceed with collection of the tax based upon its calculation at that previous tax rate.

D. No section of this article shall be construed to permit, and the city council is expressly prohibited from, increasing the tax rate beyond the maximum rate set forth in this section. (Ord. 97-03 § 1 (part), 1997)

A. A property owner or water service user subject to the special tax may apply for an adjustment in the tax pursuant to the standards and procedures as set forth in this section. The city manager, or the city manager's designee, is authorized to reduce the mount of the tax imposed under these provisions upon a showing of objectively verifiable gross inequity. The gross inequity must be due to the clear inability of the property upon which the fee is imposed to support the use of the forecast amount of water. The city council may set by resolution an application and/or appeal fee to be paid by an applicant for an adjustment.

B. Applicants under this section shall present a written application to the city manager (or designee) for a reduction to the tax imposed under these provisions due to special circumstances arising to gross inequity. The application shall set out the grounds for the requested reduction and list in detail objectively verifiable special circumstances upon which the request for reduction should be granted. The city manager (or designee) shall provide a written decision either approving or denying the requested reduction.

C. The city manager's (or designee's) decision must be grounded on objectively verifiable circumstances. Reductions in the special tax may only be justified on the basis of the following: (1) errors in the information used to calculate, or errors in calculation of, the tax; and/or (2) the inability to develop a parcel, or portion thereof, due to city regulations or specific geographic conditions such that application of the formula for imposition of the special tax clearly over estimates the amount of potential water use of the property.

D. An applicant for a reduction may appeal the city manager's decision to the city council, subject to payment of an appeal fee which may be established by the city council. An appeal must be filed with the city clerk in writing within ten days of the applicant being notified in writing of the city manager's decision. If notice of the city manager's decision is mailed, the applicant must file an appeal within fifteen days from the date of mailing of the decision. The city clerk shall set the matter for hearing before the city council within forty-five days of receiving the written appeal. The city council shall deny the appeal and affirm the decision of the city manager unless it finds the city manager abused his or her discretion by being arbitrary and capricious or the decision otherwise violates the law. If the city council grants the appeal and overrules the decision of the city manager, it shall make written findings and determinations supporting its decision based upon the testimony and documents presented to it at the hearing, and shall adopt its written findings and determination within fourteen days of the close of the hearing on the matter.

E. Any refunds granted under this section shall be distributed within sixty days of the determination. Refunds shall only be of the principal sum paid to the city. Interest will not be paid by the city. (Ord. 97-03 § 1 (part), 1997)

The special tax imposed by this article shall be imposed on all taxable entities, including federal, state, or other public entities, unless otherwise exempt by paramount law. The city shall be exempt from the special tax since to levy the tax against itself would be inconsistent with the purpose of the tax. (Ord. 97-03 § 1 (part), 1997)

The method of collection of the tax shall be determined by the city council. Billing and collection of the tax may be through any convenient method determined by the city council, including, but not limited to, billing with the water rates as set out in Article II of this chapter (Sections 13.08.130 et seq.) or through posting the tax to the assessment roll of the county of San Luis Obispo, or any combination thereof. The tax, together with all penalties and interest thereon, shall constitute a personal obligation owed to the city by each parcel owner or water service user on the date the tax becomes due, as well as an obligation of the parcel upon which it is levied. The tax imposed shall be collected either in the same manner as other charges and taxes fixed and collected by the county of San Luis Obispo on behalf of the city or in such other manner, or combination thereof, as determined by the city council. The tax shall be subject to the same penalties and interest as other charges and/or taxes collected in the same manner. The tax, together with all penalties and interest thereon, shall constitute a lien upon the parcel upon which it is levied until it has been paid. (Ord. 97-03 § 1 (part), 1997)

The revenue raised by the tax imposed by this article shall only be used for the payment of the fixed costs for supplying water through the State Water Project and the Lopez Water Project, establishment of a reserve fund, and payment of the costs associated with creation and administration of this special tax. The revenues from this tax shall be placed in a special fund and used only for these purposes. The reserve fund shall be established for the purpose of assuring future state water and Lopez water fixed cost obligations can be met in the event of unforeseen shortfalls, and shall not exceed twenty-five percent of the maximum single year revenue requirement. Any unexpended surplus balance remaining after set-aside of the reserve fund shall be used to reduce the amount of special tax for subsequent tax years. (Ord. 97-03 § 1 (part), 1997)

The city council is empowered to amend the procedural provisions of this article by three affirmative votes of the members thereof for the purposes of carrying out the general purposes of this article. In no event, however, may the city council impose any new tax, or extend or increase any existing tax, through its procedural revisions to this ordinance. This water service tax may only be repealed by a two-thirds vote of the citizens of the city voting on the issue of repeal. (Ord. 97-03 § 1 (part), 1997)