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HomeMy WebLinkAbout10/02/2006 B A K E R S F I E L D _~' ~ ~'----- Mike Maggard, Chair John Stinson, Assistant City Manager Irma Carson For: Alan Tandy, City Manager Harold Hanson AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Monday, October 2, 2006 - 10:00 a.m. City Manager's Conference Room - Suite 201 City Hall, 1501 Truxtun Avenue, Bakersfieldl CA 1. · ROLL CALL The meeting was Called to Order at 10:10 a.m. Present: Councilmembers Mike Maggard, Chair; Irma Carson and Harold Hanson 2. ADOPT AUGUST 28, 2006 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Discussion and Committee recommendation regarding WiFi (wireless Internet service) Assistant City Manager John Stins0n stated the representatives from MetroFi notified the City on Friday they were not going to be available to attend today's meeting due to scheduling. Staff recommended this item be deferred to the next meeting. Committee Chair Mike Maggard asked staff to let MetroFi know their attendance is necessary if they want to proceed with their proposal for an agreement with the City to supply WiFi Internet. Staff will notify MetroFi in writing and give considerable notice of the next meeting. DeVictor King Mason, KCPA-TV, spoke in support of the WiFi proposal before the Committee to supply free Internet service and requested the Committee not to let pornography issues, which you have with all Internet providers, hold up getting free Internet service for City residents. AGENDA SUMMARY REPORT Page 2 BUDGET AND FINANCE COMMITTEE MEETING Monday, October 2, 2006 Marvin Dean spoke in support of the proposal before the Committee and about the need for free Intemet service in Iow-income areas. A program is being promoted through the schools to provide free computers to Iow-income families and free Intemet is vital for the success of this program. Committee Member Irma Carson spoke about the need for a hearing to allow for public input if the Committee moves forward on the WiFi proposal. Committee Member Harold Hanson made a motion to reserve a slot for a hearing at the December City Council meeting and to continue this item to the next Committee meeting on November 6th. The Committee unanimously approved the motion. B. Discussion and Committee recommendation regarding PG&E SmartMeter Project use of City light poles Public Works Director Raul Rojas provided an overview of the request from PG&E regarding their SmartMeter Project to place data collection transmission units on City streetlight poles to transmit data from natural gas meters to PG&E. Over the next couple of years, this technology will replace traditional meter readers. The original request was for 30 streetlight pole locations; however, PG&E has found locations on their own electric poles and properties for all but four of the data collection transmission units. PG&E's request is for one location in Ward Six, one. location in Ward Three, and two locations in Ward Four. Staff recommended entering into a contract with PG&E for use of the City's streetlight poles at an annual charge of $36 per pole. Southern California Gas Company services about half of the City's residents with natural gas, so in the near future the City may get a similar request for use of streetlight poles from Southern California Gas Company. Scott Loveless, Pacific Gas and Electric Company Project Manager, explained their project. Besides the data collection transmission program to read gas meters, PG&E will also be using similar technology to read electric meters, but will be using their own electric lines and poles for transmitting data from electric meters. PG&E has a licensed frequency for the SmartMeter Project, which will not interfere with other transmission signals, such as cell phones. City Manager Alan Tandy explained to move this forward a contract should be prepared to establish the fee, indemnify the City, and allow for some flexibility when the City grows to add the use of streetlight poles as needed. Committee Member Harold Hanson made a motion the Committee recommend to the Council that the City enter into a contract with PG&E as outlined by staff. The Committee unanimously approved the motion. Staff will forward the Committee's recommendation and the contract to the City Council. AGENDA SUMMARY REPORT Page 3 BUDGET AND FINANCE COMMITTEE MEETING Monday, October 2, 2006 5. NEW BUSINESS A. Discussion and Committee recommendation regarding Business Licensing for Real Estate Firms Finance Director Nelson Smith gave an overview. As a routine review of various groups or individuals that may be conducting business in the City without a business tax certificate, approximately 120 letters were sent out in late August informing real estate brokers that anyone Conducting business within the City must possess a business tax certificate (business license). Councilmember Harold Hanson having been contacted by realtors, requested staff to provide an explanatory memorandum and referred the issue to the Budget and Finance Committee. f Finance staff was invited by the Bakersfield Association of Realtors to attend a meeting held on September 13th. Finance Director Nelson Smith and City Treasurer Cheryl Perkins attended. From the questions, it became apparent there were different interpretations in the real estate community on how the code applied to real estate agents and brokers, and some felt realtors were being singled out. Some agents and brokers were under the impression they were working on the real estate firm's business license and some real estate businesses (brokers) were paying on all gross receipts (commissions) instead of the agents and brokers working there each paying on their own gross receipts. The minimum cost for a Business Tax Certificate (business license) is $30 ($25 plus a $5 processing fee) with a percentage charged on gross receipts above $38,462. Finance Director Nelson Smith explained anyone doing business in Bakersfield should be paying an annual tax based on their gross receipts 'in order to obtain an annual business tax certificate (business license). Evidence of "conducting business" would be the receipt of an IRS Form 1099 instead of a W-2 form, and being required to file a business tax return, such as an IRS Schedule "C" (Income or Loss from Business). After the meeting with the Association of Realtors and learning of the confusing interpretations of the Municipal Code, staff recommended the following plan of action to avoid trying to sort out who paid for what for those agencies that have already paid their business tax: · Finance staff will continue to work with the Association of Realtors to educate their members about the business tax process. AGENDA SUMMARY REPORT Page 4 BUDGET AND FINANCE COMMITTEE MEETING Monday, October 2, 2006 · Effective July 1, 2007, each broker and agent will be required to obtain their own Business Tax CertifiCate and pay their own taxes on an annual basis as required by the Bakersfield Municipal Code. · This process will be enforced by City staff effective with the July 1, 2007 business tax cycle, and each broker and agent will be required to pay the appropriate tax on or before July 31, 2007 to avoid incurring penalties or interest for the new tax year. · For those who comply, the City will not require payment of back taxes and penalties or interest for prior years. · For those with a broker's license who are retired or not currently selling and will have no receipts for the year, a form will be available certifying they are not doing business in Bakersfield. Don Cohen, President of the Bakersfield Association of Realtors, thanked Finance staff for coming to their meeting and working toward a solution with no back penalties as many in the real estate community were not aware of this ordinance. He expressed this is an educational issue and the Association of Realtors are willing to work with the City, but as some brokers felt realtors were being singled out, he wanted to be able to ensure their members that the Municipal Code is implemented the same way for all types of businesses for which this section applies. A discussion followed and other realtors made comments and asked questions of the staff. City Attorney Ginny Gennaro provided an opinion that staff is following the Municipal Code as it is written and unless the Committee wants to recommend changes to the ordinance, no formal 'action is required. Committee Member Harold Hanson expressed concerns with staff spending time 'collecting $30 and burdening small independent agents with this tax. If there were a legal way other than changing the Municipal Code, he would have preferred to have only businesses pay the tax. Committee Chair Mike Maggard indicated he did not like this tax on small individual real estate agents but as it would affect all businesS licenses, he did not want ,to recommend changing the Municipal Code. Committee Member Carson agreed with the Committee Chair, but expressed she understands the reality if you are self-employed doing business in the City, a business license is required. She Spoke in favor of staff moving forward with an educational effort. Committee Chair Mike Maggard thanked the realtors for attending the Budget and Finance Committee meeting. The Committee took no further action. AGENDA SUMMARY REPORT Page 5 BUDGET AND FINANCE COMMITTEE MEETING Monday, October 2, 2006 6. COMMITTEE COMMENTS 7. ADJOURNMENT' The meeting adjourned at 11:45 a.m. Attendance: Staff: City Manager Alan Tandy; Assistant city Manager John W. Stinson; City Attorney Ginny Gennaro; Finance Director Nelson Smith; Deputy City Attorney Robert Sherfy; Public Works Director Raul Rojas; Assistant City Attorney Janice Scanlan; City Treasurer Cheryl Perkins; Public Works Operations Manager Brad Underwood; General Services Superintendent Steve Hollingsworth; and IT Director Bob Trammell Others: Ray Karpe, Karpe Real Estate Center; Linda Vernon, CEO, Bakersfield Board of Realtors; Don Cohen, President, Bakersfield Board of Realtors; Jeanne Radsick, Bakersfield Board of Realtors; Scott Loveless, Pacific Gas and Electric; DeVictor King Mason, KCPA-TV; Marvin Dean; David Burger, reporter, The Bakersfield Californian; and John Philips, KBAK TV-29 cc: Honorable Mayor and City Council S:\JOHN\Council Committees\06 Budget&Finance\bf06 oct 02summary.doc