Staff Report
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City Hall
10300 Torre A venue
Cupertino, CA 95014-3255
Telephone: (408) 777-3223
FAX: (408) 777-3366
kimberlys@cupertino.org
CITY OF
CUPEIQ1NO
OFFICE OF THE CITY CLERK
SUMMARY
Agenda Item No. _
Meeting Date: November 19, 2001
SUBJECT AND ISSUE
Preparation of arguments/rebuttals for the March 2002 election regarding the extension of the
utility users excise tax.
BACKGROUND
On October 15,2001, City Council enacted Ordinance No. 1888, which extended the utility tax
for a period of fifteen years and ordered the submission of a proposition to the electorate of the
city on this matter. The election will be held on Tuesday, Mar 5, 2002.
The deadline for filing arguments in the City Clerk's Office is 5 p.m. on Wednesday, Dec. 5.
The deadline for rebuttals is 5 p.m. on Friday, December 14. These deadlines will be noticed in
the San Jose Mercury News and the Cupertino Courier next week.
"Utility Tax Initiative. Residents currently pay a 2.4% tax on uti lily use, specifically
electric, gas and telephone. Shall the City of Cupertino extend the existing utility tax
which will otherwise terminate in 2015 for an additional 15 years to 2030, for general city
services and programs?"
The City Attorney has prepared an impartial analysis of the measure, which will appear in the
voter's pamphlet. The measure wording and impartial analysis are attached.
RECOMMENDATION:
Consider preparation of an argument in favor of the utility tax extension.
Submitted by:
Approved for submission:
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City Clerk
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David W. Knapp
City Manager
Printed on Recycled Paper
ATTACHMENT A
Cupertino Measure_
Utility Tax Initiative. Residents currently pay a 2.4% tax on utility use, specifically electric, gas
and telephone. Shall the City of Cupertino extend the existing utility tax which will otherwise
tenninate in 2015 for an additional 15 years to 2030, for general city services and programs?
Impartial Analysis
Initiative Measure to Be Submitted Directly to the Voters
On November 6, 1990, Cupertino voters approved the enactment of an ordinance which imposed
upon the users of electricity, gas and telephone utilities a general excise tax of 2.40% of the
monthly bills for said utility services (subject to an exemption for senior citizens). The purpose
of this tax was to enable the City, through its general fund, to acquire and preserve various
properties within the City (including Blackberry Fann) for open space and park services.
Upon enactment of the tax measure in 1990, the City, through the issuance of new debt, was able
to raise sufficient money to allow it to accomplish the above-described goals. The original debt
issued by the City is scheduled to be retired in 2015. The 1990 tax measure provided that the
utility users tax would also cease in 2015, unless extended by the voters.
The City Council of the City of Cupertino has identified public interest and support for new
public works projects (the most expensive of which is the construction of a new public library).
The City's Director of Finance has infonned the City Council that the City's general fund will be
unable to finance many of these new projects (including the library) without additional sources of
revenue.
If this measure were adopted, the City would be in the position to raise approximately
$5,000,000 (through a combination of issuing new debt and refinancing of the existing debt) to
be used by the general fund to defray some ofthe costs of these new projects.
This measure would not increase the current utility users tax, but it would extend the
existing tax for an additional 15 years from 2015 to 2030. The current senior citizen
exemption would be maintained.
Charles Kilian
Cupertino City Attorney
The above statement is an impartial analysis of Ordinance No. 1888'. If you desire a copy of the
ordinance or measure, please call the Cupertino City Clerk's Office at (408) 777-3223 and a copy
. will be mailed at no cost to you.