Measure K proposes to amend the imposition of the tax in three significant ways. If passed, it would increase the tax from two percent (2%) to five percent (5%); it would expand the tax to include cellular, facsimile, pager and cable video services, with account addresses within the City of Cloverdale; and increase the cumulative dollar limitation annual cap from $250 to $350.

If Measure K fails, Cloverdale taxpayers will continue to pay tax on basic utility services, such as electricity, gas and telephone, but not on the more modern innovations not covered by the earlier ordinances. In addition, the City's General Fund will lose approximately $235,000 to $270,000 each year in revenues, and the City Council's ability to fund existing programs such as police, public works, parks and streets will be substantially reduced. If Measure K is approved, the tax will increase three percent (3%), it will be imposed on a broader number of services, and there will remain an annual limitation on the maximum any one user can be taxed which will increase from $250 to $350.

s/ Kenneth A. Wilson, City Attorney

As a result of this transfer, the City has become increasingly dependent on development related revenue. The reliance on this one time revenue is not healthy. These revenues make up 25% of the funding necessary to provide basic services. As the cost of services continues to go up and development related revenues subside, deficit spending will result unless an alternative funding source can be developed. Deficit spending will mean a reduction in basic services including Police, Public Works, Parks, Streets, etc.

We, the undersigned, strongly urge the voters of Cloverdale to cast a yes vote for Measure K. If approved, Measure K will increase the existing tax on utilities from 2% to 5%, and expand the application of the tax from Telephone, Gas and Electricity to include cellular, facsimile, pager and cable video services. This measure will raise between $235,000 and $270,000 to be used for basic services. It is estimated this increase will cost the average homeowner approximately $6.00 more a month. In no case will the tax cost any single consumer/ business more than $350 per year.

Approval of Measure K offers the citizens of Cloverdale the opportunity to preserve and maintain local services by creating a long-term reliable funding source for those services. It should be noted revenues raised through this measure will remain local, under local control and can not be arbitrarily reallocated by the State.

s/ Jeff Weiss, Real Estate Broker
s/ Philip C. Schneider, Retirement Counselor
s/ Robert Jehn, Insurance Agent
s/ Edwin D. Bowen, Banker

3.40.010 Definitions.

Except where the context otherwise requires, the definitions contained in this section shall govern the construction of this chapter:

"City" means the city of Cloverdale.

"Electrical corporation," "gas corporation" and "telephone corporation" shall have the same meanings as defined in Sections 218, 222 and 234 respectively, of the Public Utilities Code of the state of California. "Electrical corporation" shall be construed to include any municipality or governmental agency engaged in the selling or supplying of electrical power to a service user.

"Month" means a calendar month.

"Person" means all domestic and foreign corporations, associations, syndicates, joint stock companies, partnerships of every kind, joint ventures, clubs, Massachusetts business or common law trusts, societies and individuals.

"Service supplier" means a person required to collect and remit a tax imposed under the provisions of this chapter.

"Service user" means a person or entity required to pay a tax imposed by this chapter.

"Tax administrator" means the finance officer of the city. (Ord. 476-93 (part), 1993; Ord. 394-84 Sec. 1, 1987)

3.40.020 Telephone users tax imposed.

There is imposed a tax on the amounts paid for any intrastate and interstate telephone communication services in the city. The tax imposed by this section shall be at the rate provided in Section 3.40.050 of this chapter. Any person who provides proof that the taxpayer had properly paid a telephone communications service tax to a local jurisdiction other than the city based upon the same transmission as is taxed by the city shall be entitled to a refund, credit or adjustment for any duplicate tax that the taxpayer has paid the city. (Ord. 476-93 (part), 1993: Ord. 415-87 Sec. 2 (part), 1987; Ord. 394-84 Sec. 3, 1987)

3.40.030 Electricity users tax imposed.

A. There is hereby imposed a tax upon every person in the city, other than an electrical corporation or a gas corporation, using electrical energy in the city, The tax imposed by this section shall be at the rate provided in Section 3.40.050 of this chapter for such energy, and shall be paid by the person paying for such energy.

B. As used in this section, the words "using electrical energy" shall not be construed to mean the use of such energy from a storage battery; provided, however, that the term shall include the receiving of such energy for the purpose of using it in the charging of storage batteries.

C. As used in this section, the words "using electrical energy" shall not be construed to mean the receiving of such energy from an electrical corporation or a governmental agency at a point within the city for resale.

D. The tax imposed in this section shall be collected from the service user by the person selling such electrical energy. The amount of tax collected in one month shall be remitted to the tax administrator on or before the last day of the following month. (Ord. 415-87 Sec. 2 (part), 1987; Ord. 394-84 Sec. 4, 1987)

3.40.040 Gas users tax imposed.

A. There is hereby imposed a tax upon every person in the city, other than a gas corporation or an electrical corporation, using gas in the city which is delivered through mains or pipes. The tax imposed by this section shall be the rate provided in Section 3.40.050 of this chapter for such gas, and shall be paid by the person paying for such gas.

B. As used in this section, the word "charges" shall not include charges made for gas used in the generation of electrical energy by a public utility or a governmental agency.

C. As used in this section, the words "using gas" shall not be construed to mean the receiving of such gas by a gas corporation or governmental agency at a point within the city for resale.

D. The tax imposed in this section shall be collected from the service user by the person selling the gas. The amount collected in one month shall be remitted to the tax administrator on or before the last day of the following month. (Ord. 415-87 Sec. 2 (part), 1987; Ord. 394-84 Sec. 5, 1987)

3.40.050 Rate of tax.

A. The ordinance codified in this section shall be effective upon adoption but shall not become operative until the city council has adopted a resolution making a finding at a regularly scheduled city council meeting that the city's general fund revenue is estimated to be less than one million five hundred thousand dollars. A utility user's tax shall then levy at the tax rate of two percent as otherwise provided in this chapter.

Eighteen months after the operative date of said ordinance or thereafter the city manager shall make a report to the city council on the effects of the imposed tax at which time the council may choose to change or terminate the tax. Nothing in this section is to be construed as restricting the council from terminating or changing the tax at an earlier date should the council deem termination or change to be necessary.

B. It is the intention of the city council that it shall not be necessary for any utility company to prorate the billing and collection of any tax levied under this chapter and it is the council's further intention that upon the repeal of this chapter or upon the expiration of any tax levy made under this chapter, the levy shall remain effective until the applicable monthly billing period of each respective utility collecting the tax is computed. (Ord. 476-93 (part), 1993)

3.40.060 Exemptions.

A. Nothing in this chapter shall be construed as imposing a tax upon the city or any person when imposition of such tax upon that person would be in violation of the Constitution of the United States or California. The tax administrator shall prepare a list of the persons exempt from the provisions of this chapter by virtue of this section and furnish a copy thereof to each service supplier.

B. Federally subsidized housing complexes are hereby exempt for the provisions of this chapter.

C. The city council may, by order or resolution, establish one or more classes of persons or one or more classes of utility service otherwise subject to a payment of a tax imposed by this chapter, and provide that such classes of persons or service shall be exempt in whole, or in part from such tax. (Ord. 476-93(part), 1993: Ord. 394-84 Sec. 2, 1987)

3,40.061 Limitations.

In no case shall the cumulative dollar amount of taxes collected under Sections 3.40.030, electricity users tax, and 3.40.040, gas users tax, for any single energy service user exceed a maximum of two hundred fifty dollars in any given calendar year. (Ord. 476-93(part), 1993)

3.40.070 Conflicts with statutory provisions.

Nothing contained in this chapter is intended to conflict with applicable rules, regulations and tariffs of any service supplier subject to the jurisdiction of the California Public Utilities Commission. In the event of any conflict, the provisions of said rules, regulations and tariffs shall control. (Ord. 394-84 Sec. 12, 1987)

3.40.080 Recordkeeping requirements.

It shall be the duty of every service supplier required to collect and remit to the city any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax such service supplier may have been required to collect and remit to the city, which records the tax administrator shall have the right to inspect at all reasonable times. (Ord. 394-84 Sec. 13, 1987)

3.40.090 Tax deemed debt to city.

Any tax or penalty, or both, required to be paid by a service user under the provisions of this chapter shall be deemed a debt owed by the service user to the city, Any such tax collected from a service user which has not been remitted to the tax administrator shall be deemed a debt owed to the city by the person required to collect and remit. Any person owing money to the city under the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount. (Ord. 394-84 Sec. 6, 1987)

340.100 Collection procedures.

The duty to collect and remit the taxes imposed by this chapter shall be performed as follows:

A. The tax shall be collected insofar as practicable at the same time as and along with the charges made in accordance with regular billing practice of the service supplier. Except in those cases where a service user pays the full amount of said charges but does not pay any portion of a tax imposed by this chapter, if the amount paid by a service user is less than the full amount of the charge and tax which has accrued for the billing period, a proportionate share of both the charge and the tax shall be deemed to have been paid.

B. The duty to collect the tax from a service user shall commence with the beginning of the first regular billing period applicable to that person which starts on or after the operative date of the ordinance codified in this chapter. Where a person receives more than one billing, one or more being for different periods than another, the duty to collect shall arise separately for each billing period. (Ord. 394-84 Sec. 7, 1987)

3.40.110 Administrator--Enforcement authority.

A. The tax administrator shall have the power and duty and is hereby directed to enforce each and all of the provisions of this chapter.

B. The tax administrator shall have power to adopt rules and regulations not inconsistent with provisions of this chapter for the purpose of carrying out and enforcing the payment, collection and remittance of the taxes herein imposed. A copy of such rules and regulations shall be on file in the tax administrator's office.

C. The tax administrator may make administrative agreements to vary the strict requirements of this chapter so that collection of any tax imposed herein may be made in conformance with the billing procedures of a particular service supplier so long as the agreements result in collection of the tax in conformance with the general purpose and scope of this chapter. A copy of each agreement shall be on file in the tax administrator's office. (Ord. 394-84 Sec. 8, 1987)

3.40.120 Failure to remit-Collection remedies.

A. Whenever the tax administrator determines that a service user has deliberately withheld the amount of the tax owed by him from the amounts remitted to a person required to collect the tax for a period of four or more billing periods, or that a service user has refused to pay the amount of the tax to such person, or whenever the tax administrator deems it in the best interest of the city, he may relieve such person of the obligation to collect taxes due under this chapter from certain named service users for specific billing periods.

B. The service supplier shall provide the city with a report of the amounts refused along with the names and addresses of the service users refusing to pay the tax.

C. The tax administrator shall notify the service user that he has assumed responsibility to collect the taxes due for the stated periods and demand payment of such taxes. The notice shall be served on the service user by handing it to him personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at the address to which billing was made by the person required to collect the tax; or, should the service user have changed his address, to his last known address.

D. If a service user fails to pay the tax to the tax administrator within fifteen days from the date of the service of the notice upon him, which shall be the date of mailing if service is not accomplished in person, a penalty of twenty-five percent of the amount of the tax set forth in the notice shall be imposed, but not less than five dollars. The penalty shall become part of the tax herein required to be paid. (Ord. 394-84 Sec. 9, 1987)

3.40.130 Refunds.

A. A service supplier who has collected any amount of tax illegally, erroneously, or more than once may refund such amount to the service user and claim credit for such overpayment against the amount of tax which is due upon any other monthly returns, providing such credit is claimed in a return dated no later than three years from the date of overpayment.

B. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once, or has been erroneously or illegally collected received by the city under this chapter, it may be refunded to a service supplier or service user by the city provided a claim in writing therefor, stating under penalty of perjury the specified grounds, upon which the claim is founded, is filed with the tax administrator within three years of the date of payment. The claim shall be on forms furnished by the tax administrator. No refund shall be paid under the provisions of this: section unless the claimant establishes his right thereto by written records, and, in the case of a service user, that the service user has been unable to obtain a refund or adjustment from the service supplier who collected the tax.

C. Notwithstanding other provisions of this section, whenever a service supplier, pursuant to an order of the California Public Utilities Commission or a court of competent jurisdiction, makes a refund to service users of charges for past utility services, the taxes paid pursuant to this chapter on the amount of such refunded service charges may also be refunded to service users by the service supplier and the service supplier can claim credit for such refunded taxes against the amount which is due upon any monthly returns. In the event the ordinance codified in this chapter is repealed, amounts of any refundable taxes will be borne by the city. (Ord. 394-84 Sec. 10, 1987)

3.40.140 Operative date.

The ordinance codified in this chapter relates to taxes for the usual and current expenses of the city, and shall take effect immediately upon its passage. The utility companies obligated to collect taxes under this chapter shall I collect the same as soon as reasonably possible under their respective fiscal and administrative organization and procedures, but in any event the taxes hereby ordered and levied shall be applied to utility bills within the scope of this chapter issued for billing periods beginning on and after the first day of April, 1995. (Ord. 394-84 Sec. 15, 1987)

3.40.160 Continuation of provisions.

Notwithstanding the provision above in Section 3.40.150 for automatic termination of taxes, the ordinance codified in this chapter shall remain in effect and shall remain operative for purpose of the administration of such taxes and the collection thereof until such time as it is expressly repealed or amended to the contrary effect by the city council. By providing for automatic termination of taxes hereunder, the city council does not imply any surrender, abrogation or abdication of the governmental and taxing powers of the city, nor of the city council's reserved power to legislate as prescribed and allowed by the Constitution and laws of the state of California. (Ord. 394-84 Sec. 16, 1987)