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Home My WebLink About00263 MINUTES OF THE REGULAR SESSION OF AUGUST 4th 1964 CONTINUEDL 472 MINUTES OF THE REGULAR SESSION OF AUGUST 4th 1964 CONTINUED Mayor Sullivan referred the request to the Street Committee and the Street Supt and City Engineer and to have a report at the next regular session. From State of 6.ashington Tax Commission - to -wit: BEFORE THE TAX COMMISSION OF T::E STATE OF WASHINGTON i In the Matter of the Petition for ) 64-28 Correction of Assessment of ) 9 R D E R City Of Port Townsend ) City Hall ) R"gistration No. AC161-3 Port Townsend, Washington ) TAX CO.iMISSIONERS PRESENT: Chas. 17. Hoddo, Chairman; Clark Squir, Commissioner; G. Merton Dick, Commissioner TAXPAYER REPRESENTED BY: Glenn Abraham, Jr., City Attorney; Dennis Sullivan, Mayor; Gale I. Youngblood, City Clerk TAX COMMISSION REPR3SEN`TED BY: James R. Stanford, Secretary/ Henry IV. Wager, Assistant Attorney General/ S.E. Tveden, Chief, Review Board Section DATE A!,--D PLACE OF ICARING: December 16, 1963, Olympia, Washington FACTS: A field audit has been made covering the business activities of the taxpayer for the perio Januaryl, 1959, through June 30, 1963. Assessment 17B40 wns issued November 1, 1963, for th deficiency found duo of N20,848.38. No portion of the assessment has been paid. TAXPAYER'S EXCEP'PIONS: Most of the deficiency assessed consists of Utility Tax assessed under the Water Clussific tion upon amounts received b y the city from Crown Zellerbach pursuant to a written agreement between the parties. The city contends that it is simply leasing to Crown Zellerbach certai portions of its water works end system and that this lease constitutes rental of real estate not subject to tux. Objection is also made on the ground that the receipts under this agreement q are allocated to the retirement of water revenue bonds and so are believed not to be subject be tax for renaons similar to t:;ose advanced by the plaintiffin the Kennewick case. The Taxpayer explains that the entire water system is included in the lease, the city reserving simply the right to withdraw the first four million gallons per day. On the other hand, Cronw Zwllerbach is not ro-uired to take any water under the agreement and the fixed payments are due irrespective of the amount of water used by Crown Zellerbach. The payments made by Crown Zellorbach under the contract are equal to the amounts necessary to meet the !bond payments as they fall due. i4aintenance of the system is primarily the citys responsibility but it is performed jointl by the parties. The only city employee working on operations of the system is the chlorinut all other on ray ons functions with respect to the portion of the system located outside the , city being handled by employees of Crown Zellerbach. The bonds are scheduled to be retired in 1986 whereas the lease runs to the year 2000. Thus, payments under the contract with Crown Zellorbach continue to be made after the bonds have been paid off; however, the payments due after 1986 are as substantially reduced rates. DISCUSSION: It is clear that the City of Port Townsend is engaged in the Dater Distribution Business within the meaning of RCW 82.010(4) and in our view it is immaterial that its income from it largest customer, Crown Zellerbach, is derived under a contract characterized as a lease. The fact remains that the amount derived under the lease is essentially for providing or mak ng availabel w:.ter to Crown Zellerbach. Secondly, the tax imposed is under RCW Chapter 82.16 whereas the exemption claimed for sal or rental of real estate is derived from RCW Chapter 82.04, and so in inapplicable. Vinether the receipts under the agreement in nuestion are exempt because they are allocated entirely to the retirement of revenue bonds is a matter which may be resolved by the Kennewick case. In the event the plaintiff in that case is successful in the presently pending litigation, we will give consideration to a petition for refund filed by the taxpayer, subje t to the provisions of Chapter 82.32 RCW. ! DISPOSITI Oil: The taxpayers petition is denied. The due date for payment of Assessment of 17840, as extended to In rmit our consideration of the taxpayers exceptions, is set at twenty days from the,date of this order. 0 Date this 28th day of July 1964. TAX COMMISSION OF THE STATE OF WASHINGTON Chas. W. Hodde, Chairman Clark Squire, Commissioner G. Merton Dick, Commissioner City Attorney Abraham commented to the Mayor & Council that the letter was self explainitor and that all were familiar with the case and assumed would protestthe ruling. He explained that before an appeal could be made the amount specified by the state would have to be paid. Due to the date of payment it would be impossible to pay so would asKfor an extension. Also •would call a meeting of the council before the next regular meeting to discuss the ruNling of the state. CALL FOR BIDS A call for bids was read for 3,271 lineal feet of 36" Z.D. x 1/4" electric welded steel pipe, bids to be opened August 18, 1964. It was moved by Councilman Siebenbaum seconded by councilman Lindsey that the City Clark be authorized to call for bids and the bids to be opened August 18, 1964. Motion carried. A call for bids was read for laying of the steel pipe, bids to be opened Sept. 1, 1964. _. It was moved by Councilman Lindsey seconded by Councilman Judy that the city clerk be author- ized to call for bids and the bids to be opened Sept. 1, 1964. Motion carried. T:IIRD READING AND BISSAGE OF ORD. NO. 1457 Ordinance no. 1457 which is duly incorporated in the minutes of July 21, 1964 was again Drought before the council for passage or regoeti n at this meeting. It was moved by Council.an srter sIVbecondeddby CouncihlmanhS.riebenbdauim thaththe first reading of Ord. no. 1857 be considero the asr,°e rea8aforgthe thir°dttime oy°IIii�l'a onl� an'Prt°%,is mov°on'may°uouncllmangfc�CiNgacovd5 d y Councilman Judy that Ord. Ie. 14 7 do now pass. Motion carried. P r� I i(f r 4k a 473 NEW & OLD BUSINESS Ctty Attorney Abzrham reported for the Chief of Police, saying there had been a traffic study on tbber st for a Pepiod of 16 hrs. In the 16 hr period 5415 cars were checked. Councilman Judy informed the council that this was the time to accept or reject the bid on the new fire truck, he asked Fire chief ,Jones to comment. Chief Jones told the Council that the bid of Lm M. Curtis & Sons of Seattle complied with the bid specifications where th bid of American Larrance Co did not and recommended to the council to accept the bid of L. M. Curtis & Sons. Councilman Siebenbaum questioned possible restrictive specifications and felt now bids be called for. It was moved by Councilman Hoglund seconded b:- Councilman Rub that a five minute recess be called to discuss thetwo bids. I:Iotlon carried. RECO14VEIC & ROLL CALL After the five minute recess roll was called and all councilmen present. It was moved by councilman Judy seconded by councilman Ruby that the bid of &, i,I Curtis & Sons be accepted o the approval of the lease. I -lotion carrie.d _ Councilman Carter spoke for the building cotnnittee saying that a price had been given to build shelves in the rooms up sh&irs so they could be cleaned up the price visa 395.00 and recommendod the work be done. Fire Proof City Attorney Abraham said that the council should be thinking about a walk in vault for the city clerks office at the present time there was no place to keep the records of the cit and in case of a fire the records would be wiped out. Mayor Sullivan informed the council that the county commissioners :wo Id like to have as manyy of the council meet with them that,could'.at 10:b9-am at -the -commissioners room on the 17th the meeting would pertain no the property at Fart 'Norden. IIe also he would like to have as many councilmen attend a meetin at the city hall to meet with a reprosentive from Carey & Kramer on the Sewer Situation, the meeting would be on the 12th at 8:00 pm. ADJOURN,=, T As there visa no further business to come before the council at this time it was moved by Councilman Carter seconded by Councilman Thomas that the meeting do now adjourn. Motion carried. MAYOR Attest: /��d�_a- Z G C In MINUTES OF THE REGULAR SESSI iN OF AUGUST 18 1964 August 18, 1964 Port Townsend, Washington The City Council of the City of Port Townsend, Washington, met in regular session this 18 diday n gof August 1964 at 7:30 pm in the council chambers of the city hall, Mayor Sullivan pros • ROLL CALL Officers and members present were as follows: 14a::or Sullivan, City Clerk Youngblood, Cit Attorney Abraham, Councilmen Thomas, Judy, Siebenbaum, Carter. Councilmen Hoglund, Ruby, Lindsey were absent. ,MINUTES OF THE PREVIOUS SESSION The minutes of the previous session were read in full and it was moved by Councilman Sieb baum seconded by Councilman Judy that the minutes be approved as read and that the Mayor an City Clerk sign same. ;Motion carried. It was moved by Councilman Thomas seconded by Councilman Siebonbaum that the bid opening be held at this time due to some of the Gentlemen who were present had to travel a long way to got home. :,lotion carried. BID OPENII'IG The following bids were opened for purchasing steel pipe on '3TR No 15. Hydraulic Supply Mfg. Co. Seattle )df'68,005.79 American Pipe & Const. Co. Portland ¢p84,421.80 United 06perete Pipe Corp. Auburn ll'n �y75,006.88 Beall Pipe & Tank Corporation, Portland 559,216.87 King Bros., Inc. Portland r•75,556.68 King Bros., Inc. Alternate Bid $72,558.77 Engineer Becker received permission from the Council to tal:o all bids and check them for any docropiencies. REGULAR ORDER OF Bi7SI-NESS RESUMED BUILDING PE:iILITS The following building permits were presented and acted upon as follows: Bud Ammeter, Service Station, Concrete Blocks, Sims flay, 12,000.00. James C. Pierce, Carport, 121X241, Frame, 1710 Sheridan, N200.00. Remodel Store, 229 Tayihor, �4;1,500.00. Carl Foster R. D. Benson, Carport, 121X241, Frame 509 l'/alker, r;75.00 Robert Allan, Porch, BIX121, Frame, 516 Fillmore, y200.00 It visa moved by Councilman Thomas seconded by Councilman Carter that the building parnib: be granted. Motion carried. COMLNNICATIOTIS I