HomeMy WebLinkAbout3283 Related to Public Utility Taxes; Correcting the Tax Rate Imposed by Ordinance 3203 and Amending Port Townsend Municipal Code Section 5.84.030 and Waiving Any Underpaid Utility Tax from Prior Years and Establishing an Effective Date Ordinance 3283
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ORDINANCE NO. 3283
AN ORDINANCE OF THE CITY OF PORT TOWNSEND RELATED TO PUBLIC
UTILITY TAXES; CORRECTING THE TAX RATE IMPOSED BY ORDINANCE 3203
AND AMENDING PORT TOWNSEND MUNICIPAL CODE SECTION 5.84.030 AND
WAIVING ANY UNDERPAID UTILITY TAX FROM PRIOR YEARS AND
ESTABLISHING AN EFFECTIVE DATE
RECITALS
1. The City of Port Townsend imposed a 22%tax on the gross receipts of the City's water,
sewer, and stormwater utilities. The City itemized the utility tax on each utility bill. Because the
City itemized the utility tax, the City's utility underpaid the tax. A gross receipts tax should be
applied to the total revenue, including the revenue used to pay the tax. The City had not
calculated the utility tax in this manner, and this resulted in an underpayment to the general fund.
In order to collect the same utility tax revenue, the City must reduce the tax rate from 22%to
18%.
2. Since the tax is a transfer from the utility funds to the general fund, the City general fund can
waive the underpayment rather than collect the funds from the utilities thereby requiring a rate
increase.
3. Staff will require some time to correct billing statements to reflect the changes, and so the
effective date of rate change and waiver is April 1, 2022.
NOW THEREFORE, the City Council of the City of Port Townsend do ordain as follows:
Section 1. Amendment. Section 5.84.030G (Tax imposed) of the Port Townsend Municipal
Code are amended as follows (strike is deleted, underline is added):
5.84.030 Tax imposed.
From and after January 1, 1982, there is levied upon, and there shall be collected from,
every person, firm or corporation engaged in carrying on the following business for hire
or for sale of a commodity or a privilege of so doing business as defined in this section:
G. EffectiveITL1 2.02'x, through December 31, 2023, there is levied a
fee or tax equal to 22 18 percent on the gross revenues of the following utilities:
1. The city's storm and surface water utility established under Chapter 13.31 PTMC;
2. The city's water system established as provided in Chapters 13.11 through 13.17
PTMC (the "water code"); and
3. The city's sewer system established as provided in Chapters 13.21 through 13.24
PTMC (the "sewer code").
Effective January 1, 2024, the fee or tax shall revert to 20 16.5 percent.
Ordinance 3283
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Funds shall be allocated as follows:
a. Revenues from first 4-0 8.25 percent and from the temporary two 1_5 percent: general
fund services;
b. Revenues from second 4-0 8.25 percent (amount collected in excess of the first 4-0 8.25
percent): 85 percent to street fund and 15 percent to public safety.
The capital surcharge component of the water, sewer, and storm and surface water rates is
excluded from the city's utility tax.
Section 2. Waiver. As of April 1, 2022, the City general fund waives, without penalty, any
utility tax underpayment by the City's stormwater, water, or sewer utilities.
Section 3. Severability. If any provision of this ordinance or its application to any person or
circumstance is held invalid, the remainder of the ordinance, or the application of the provision
to other persons or circumstances is not affected.
Section 4. Effective Date. This ordinance shall take effect and be in force five days after the
date of its publication in the manner provided by law. The new tax rate shall go into effect on
April 1, 2022.
ADOPTED by the City Council of the City of Port Townsend, Washington, at a regular
meeting thereof, held this 20t" day of December 2021.
._ . c
Michelle Sandoval
Mayor
Attest: Approved as to Form:
J,,JA,,-
ioanna
Sanders, MMC Hei di
. m enwo d
City Clerk City Attorney