Rancho P.V. : Hearing on Utility Tax

The City Council this week voted 3 to 2 to continue a public hearing on a proposed utility-users tax on March 18. At that time, the council will accept only written testimony from the public on the measure in order to avoid another 4 1/2-hour discussion like the one which lasted until 1 a.m. Wednesday.

Residents crowded into council chambers on Tuesday to voice strong opposition to the tax, which the city staff has said is necessary to cover a predicted budget deficits of $350,000 and to pay for a 5-year, $17-million capital improvements program.

More than 20 residents told the council they disapproved of the measure.

Opponents said the city should lobby the state Legislature for a bigger share of property taxes paid by residents. “I am chagrined at the effort going into raising taxes and increasing expenses. Let’s go after the dollars that already belong to us,” resident Richard Mahoney said.

Others suggested the street and storm drain improvements, accounting for more than half of the $17-million capital improvements program, were unnecessary. “Point out some bad roads,” demanded resident George Zanovich, a truck driver who makes deliveries in Rancho Palos Verdes. “These roads are beautiful.”

Councilmen Robert Ryan and John McTaggart objected to limiting the public’s input on the tax to written testimony at the March 18 meeting and voted against the move to hold over the public hearing. “I’m not afraid to listen to some more input,” McTaggart said.

City Manager Don Guluzzy told the council the proposed utility tax on telephone, electricity, water and gas bills would be 8%--up from the 7% to 7.5% tax discussed during an informal public hearing on Feb. 18. He said gross utility receipts in Rancho Palos Verdes were not as high in 1985 as had been anticipated and that a 7% tax would only generate $2.5 million a year. It had been originally calculated that the 7% or 7.5 % tax would raise approximately $3.4 million a year. Guluzzy said that even at 8%, only $2.9 million will be raised.

The draft utility tax ordinance provides for an automatic repeal at the end of five years, and also is subject to an annual council review.

Guluzzy said that the tax, which can be changed or eliminated at any time, should be capped at 9%.

Council members reiterated their concern for the condition of city facilities, particularly drains and streets. “The needs are real. They are not imagined. We need to act in a frank, reasonable manner and with some dispatch,” said Councilman Mel Hughes.

In related matters, the council also postponed a public hearing on a parcel tax on property until the March 18 meeting when City Attorney Steve Dorsey will supply the council with a written analysis on the “validity” of the tax. The parcel tax would require approval of two-thirds of the voters.