Hermosa Beach May Enact Tax on Utilities
Residents would start paying a 6% city tax on their telephone, cable TV, electricity, gas and water bills this fall under an ordinance the City Council is expected to adopt this week.
The utility users tax, modeled after similar taxes in other South Bay cities, would collect an estimated $650,000 for the financially troubled city in its first year, city officials estimate. The tax would decrease to 5% the second year and would expire in 1988, according to the ordinance introduced at a council meeting June 13.
The council voted 3 to 2 in favor of introducing the ordinance, with Mayor George Barks and Councilman Jack Wood dissenting. The measure must receive final approval Tuesday before it can become law.
The proposed tax was not publicized before the council meeting, although it appeared on the agenda as “Report on Utility Users Tax.” The city clerk said proposed utility user taxes are not required by law to be advertised.
While none of the council members complained at the time, Barks last week criticized the council for introducing the measure without having publicized it.
“It is not a proper way to handle this,” he said. “When you are considering taxing people, I think they ought to have an opportunity to voice their opinion.”
Councilman Tony DeBellis, who proposed the tax, said he would not have opposed a public hearing, but said no one suggested it. “The same people who always come to the meetings were there and, to my recall, none of them asked to speak,” he said. “The people who care most and are involved in the community were there.”
The council earmarked most of the estimated revenue--about $500,000--for the renovation of the city’s badly deteriorated sewer system. An additional $100,000 would allow the Police Department to extend its downtown and beach foot patrols from the summer to a year-round operation. About $35,000 would be used to fund a crackdown on “bootleg” apartments, which are units not legally zoned for the property.
“We have been nickeling and diming the city to death to try and raise little portions of money,” DeBellis said. “This spreads the tax to everybody.” The ordinance exempts residents over 62 years old and those with incomes of less than $9,000.
Utility companies that would administer and collect the tax for the city opposed the measure, arguing that it effectively increases the cost of their services without providing any benefit to them or the customer. Jeff Eden, general manager of Storer Cable TV Inc., the local cable firm, said the tax will increase the basic rate for cable service by 60 cents.
“We would anticipate a certain number of subscribers not being able to afford the service with the increase,” he said. “When we implement our own increases, we have some corresponding or offsetting benefits. With this, there is no benefit.”
Jerry Davis, district manager of the western division of the Southern California Gas Co., said the company’s customers do not distinguish between a tax and the cost of the product. “Every cent of the tax makes our product look more expensive,” he said. “It will affect the customers even more in the winter time because of the cold weather. We recognize the cost of our product is already very high.”