Measure I, The Grow House Electricity Tax: City Council Resolution, Municipal Code Section, City Attorney Analysis and Ballot Argument In Favor – August 3, 2012

Friday, August 3, 2012

Grow lights and associated hardware plus cannabis confiscated during a March raid on a Lewis Avenue residence. The sheer volume of cannabis related evidence, including hardware and the cannabis itself, is posing storage problems for Arcata Police. KLH | Eye

RESOLUTION NO. 112-52 

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCATA PLACING AN EXCESSIVE RESIDENTIAL ELECTRICITY USERS TAX MEASURE ON THE BALLOT FOR THE ELECTION TO BE HELD NOVEMBER 6, 2012 

WHEREAS, in 2006, the City of Arcata adopted the Community Greenhouse Gas Reduction Plan which established a greenhouse gas emission reduction target of 20% below the emissions level of 2000 to be achieved by 2012; and

WHEREAS, the City’s Community Greenhouse Gas Reduction Plan identifies energy efficiency as one of seven action areas in which to obtain reductions in greenhouse gas emissions, including implementation of measures to conserve or reduce electrical energy use such as encouraging adjustments to personal behavior and living patterns so that less energy is required for daily needs; and

WHEREAS, when the City completed comparison emissions inventories in 2000 and 2006, it discovered that residential sector energy use in Arcata had increased by 30% (24% per capita) or 9,236,897 kilowatt-hours per year; and

WHEREAS, the California Public Utilities Commission (CPUC) establishes baseline quantities for average residential electricity use, measured in daily allowances of kilowatt hours (kwh) of electric power within climate based regions of service territories that insures all residential customers are provided a minimum necessary quantity of electricity at the lowest possible cost (“Baseline Allowance”); and

WHEREAS, the CPUC permits extra allowances of electricity at the lowest billing rate for residential customers who rely on life support equipment, or those who have life threatening illnesses or compromised immune systems (“Medical Baseline”); and

WHEREAS, the CPUC also permits subsidized billing rates for low income residential customers, and is considering disallowing such low-income subsidy for residential electricity use in excess of 600% over the Baseline Allowance, based on determinations that residential use in excess of 600% of the Baseline Allowance represents egregious electricity use; and

WHEREAS, electricity usage at levels of 600% over the Baseline Allowance equals more than three times the average household electricity usage in Arcata; and

WHEREAS, the average residential household in Arcata uses 5,868 kilowatt hours per year; and

WHEREAS, out of 9,500 residential electricity meters in Arcata, 633 meters exceeded 600% over the Baseline Allowance in 2011; and

WHEREAS, in 2011, each residential household in Arcata whose electricity usage exceeded 600% over the Baseline Allowance used on average 10,231 kilowatt hours in excess of 600% over the Baseline Allowance; andPage 2 of 5

WHEREAS, in 2011, those residential households in Arcata whose electricity usage exceeded 600% over the Baseline Allowance used 6,476,332 kilowatt hours of electricity in excess of 600% over the Baseline Allowance, which is equivalent to 2,279 tons of carbon dioxide emissions; and

WHEREAS, Government Code section 37100.5 authorizes the legislative body of a city to levy a tax on the consumption of utility services (a “utility users tax” or UUT) subject to voter approval; and

WHEREAS, Government Code section 37100.5 also authorizes a city levying a UUT to require collection of the tax by the service provider; and

WHEREAS, beginning in 1993, the City of Arcata has imposed a 3% UUT on the consumption of electricity, gas, telecommunication, water and wastewater services within the City; and

WHEREAS, an increased tax rate imposed on residential electricity usage in excess of 600% over the Baseline Allowance will further the goals of the City’s Community Greenhouse Gas Reduction Plan by reducing greenhouse gas emissions and promoting energy efficiency; and

WHEREAS, the City Council finds that imposing such an increased tax rate is consistent with CPUC pending policy identifying egregious residential electricity usage at levels in excess of 600% over baseline.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arcata hereby places the following question before the voters of Arcata at the election to be held November 6, 2012:

Shall the City of Arcata impose an electricity users tax rate of 45% on residential customers whose electricity usage exceeds 600% over the established Baseline Allowance with a sole exemption for households receiving an extended Medical Baseline from the electricity service supplier, and automatically terminating in twelve years (City of Arcata Resolution No. 112-52)?

BE IT FURTHER RESOLVED, that upon approval of the foregoing question by a majority vote of the electorate, the City shall adopt the Excessive Residential Electricity Users Tax attached hereto and incorporated herein, and shall direct the City Clerk to codify said tax by adding Section 2628.5 to Article 1.5, Utility Users Tax, Chapter 5, Taxation, Title II, Administration, of the Arcata Municipal Code.

BE IT FURTHER RESOLVED, that in the event a majority vote of the electorate fails to approve the adoption of an Excessive Residential Electricity Users Tax, no provision of the City’s existing Users Utility Tax shall be affected.

This Resolution shall be effective upon its adoption.

DATED: July 11, 2012

ATTEST: APPROVED: 

/s/ Randal J. Mendosa /s/ Michael Winkler

City Clerk, City of Arcata Mayor, City of Arcata

CLERK’S CERTIFICATE 

I hereby certify that the foregoing is a true and correct copy of Resolution No. 112-52, passed and adopted at a regular meeting of the City Council of the City of Arcata, County of Humboldt, State of California, held on the 11th day of July, 2012, by the following vote:

AYES: WINKLER, BRINTON, ORNELAS, STILLMAN, WHEETLEY 

NOES: NONE 

ABSENT: NONE 

ABSTENTIONS: NONE 

/s/ Randal J. Mendosa City Clerk, City of Arcata

 

TITLE II—ADMINISTRATION 

CHAPTER 5—TAXATION 

ARTICLE 1.5—UTILITY USERS TAX 

SECTION 2628.5—EXCESSIVE RESIDENTIAL ELECTRICITY USERS TAX 

(Measure to be submitted to voters November 6, 2012) 

(a) When a Residential Customer’s electrical energy use exceeds six hundred percent (600%) of the Baseline Allowance, the tax imposed pursuant to Section 2628 shall be imposed at the rate of forty-five (45%) of the total charges made for electrical energy, and for any supplemental services or other associated activities directly related to and/or necessary for the provision of electricity to the Service User. The tax shall be paid by the Person responsible for the paying for such service, and shall be collected from the Service User by the Service Supplier or Non-utility Service Supplier, or its billing agent.

(b) The following words whenever used in this Section 2628.5 shall be construed as defined in this sub-Section 2628(b):

(1) “Baseline Allowance” shall mean the rate structure mandated by the California Legislature and approved by the California Public Utilities Commission that insures all Residential Customers of an electricity Service Supplier are provided a minimum necessary quantity of electricity at the lowest possible cost.

(2) “Residential Customer” shall mean the class of Service Supplier customers whose dwellings are single-family units, multi-family units, mobilehomes or other similar living establishments, such as Residential Dwelling Units or Residential Hotels, provided that 50% or more of the annual energy use on the meter is for residential end-uses.

(3) “Residential Dwelling Unit” shall mean a room or group of rooms, such as a house, a flat, or an apartment, which provides complete family living facilities in which the occupant(s) normally cooks meals, eats, sleeps, and carries on the household operations incidental to domestic life.

(4) “Residential Hotel” means a hotel establishment which provides lodging as a primary or permanent residence and has at least 50 percent of the units or rooms leased for a minimum period of one month and said units are occupied for nine months of the year, excluding those establishments such as guest or resort hotels, resort motels or resort ranches, tourist camps, recreational vehicle parks, halfway houses, rooming houses, boarding houses, dormitories, rest homes, military barracks, or a house, apartment, flat or any residential unit which is used as a residence by a single family or group of persons.

(c) All provisions contained in Article 1.5, Utility Users Tax, of Chapter 5, Taxation, Title II, Administration, of the Arcata Municipal Code shall apply to this Section 2628.5 except as expressly stated otherwise in this Section 2628.5. In the event of conflict between this Section 2628.5 and other provisions in Article 1.5, this Section 2628.5 shall control.

(d) Exemptions: Service Users who rely on life support equipment, or those who have life threatening illnesses or compromised immune systems, and therefore receive an extended Medical Baseline Allowance from an Electrical Corporation, are exempt from paying the tax imposed by this Section 2628.5 upon application to the City Manager or his or her designee.

(e) Service Users subject to the tax imposed by this Section 2628.5 are not eligible for the exemption found at Section 2626(c) for Service Users receiving low income rate assistance.

(f) Service Users subject to the tax imposed by this Section 2628.5 may not apply the tax levied pursuant to this Section 2628.5 toward the maximum amount of tax as otherwise authorized in Section 2632.

(g) Notwithstanding Section 2642(a), the levy of taxes imposed by this Section 2628.5 shall expire on November 30, 2024.

 

 

 MEASURE I 

AN INITIATIVE ESTABLISHING AN 

EXCESSIVE RESIDENTIAL ELECTRICITY USERS TAX 

IMPARTIAL ANALYSIS BY CITY ATTORNEY, CITY OF ARCATA

Measure I would impose a 45% tax on excessively high residential electricity usage, pursuant to City of Arcata Resolution No. 112-52. The tax would be imposed only on residential usage which exceeds 600% over the established “baseline allowance.”

The “baseline allowance” is established by the California Public Utilities Commission (CPUC) in order to ensure a low cost to residential users for a minimum quantity of electricity. It reflects an average quantity of residential electricity use measured in kilowatt hours (kWh) of electric power. The CPUC designates the “baseline allowance” for specific climate-based regions within the different service territories.

The average residential household use in Arcata uses 5,868 kWh per year. Electricity usage at 600% over the “baseline allowance” equals more than three times this average usage. Out of a total 9,500 residential meters in Arcata, 633 meters exceeded 600% over the “baseline allowance” in 2011 and would have been subject to the tax if it had then existed.

The Measure proposes an exemption for those on an extended “medical baseline,” which is an extra allowance of electricity at the lowest billing rate established by the CPUC for residential users who rely on life support equipment, who have life threatening illnesses, or who have compromised immune systems. No exemption would be provided to low-income residential customers.

The tax is consistent with the City’s Community Greenhouse Gas Reduction Plan which established a greenhouse gas emission target of 20% below 2000 emission levels to be achieved by 2012. Emission inventories completed for years 2000 and 2006 indicate that residential electric use in Arcata increased by 30% per year over this time period. The City’s Greenhouse Gas Reduction Plan includes implementation measures to conserve or reduce electrical energy including encouraging adjustments to personal behavior and living patterns.

Based on 2011 usage data, the tax would net approximately $1,249,000 per year, and is expected to decrease over time as residential customers implement energy efficient measures. PG&E would be responsible for collecting the tax and remitting it to the City as it does currently with the City’s 3% utility users tax. PG&E estimates its cost to the City to implement the Excessive Electricity Users Tax to be a one-time amount not to exceed $650,000.

If approved by a majority of the voters at the November 6, 2012, election, the ordinance would go into effect upon adoption. There will be an unspecified delay before the tax is charged to and collected from residential users to allow PG&E to implement its collection procedures. The tax will automatically terminate 12 years after its adoption.

A YES vote approves the measure.

A NO vote rejects the measure.

Respectfully submitted,

/s/ Nancy Diamond

City Attorney, City of Arcata

435 words

 

 Arguments in support or opposition of the proposed laws are the opinions of the authors. 

Argument in Favor of Measure I 

A YES vote on Measure I is our community standing up for a healthy environment, safe neighborhoods, and fair taxation.

Arcata is known for its longstanding commitment to sustainability, but excessive residential electricity use undermines our goals. We must take action as a community before it’s too late. This is why we support Measure I:

 Residential electricity use in Arcata increased 30% between 2000 and 2006 and remains high. In 2011, 633 households exceeded 600% of baseline—that’s three times the average residential electricity use in Arcata. Measure I will discourage excessive energy consumption and encourage conservation.

 Large-scale marijuana grow houses are primarily responsible or Arcata’s dramatic increase in residential electricity use. They can also attract violent crime, start house fires, and erode the character of our neighborhoods. Measure I will make Arcata a less appealing place for large-scale residential marijuana cultivation.

 Measure I is a fair tax. It closes a loophole that has allowed unpermitted, high energy using businesses operating in residential areas to go undertaxed. Measure I will ensure that these unpermitted businesses contribute their fair share to our tax base, as do other types of businesses.

 Measure I will generate funds for important public services without taxing the vast majority of Arcata residents. Only those households using more than 600% of baseline will pay the tax—those are users with a minimum average annual electricity cost of $7,995 (with gas heat) or $16,570 (with electric).

This measure has gained broad approval from throughout our community. The Arcata City Council voted unanimously to support it and many other prominent individuals and organizations have endorsed it. Please join us in voting YES on Measure I.

/s/ Shane Brinton, Vice-Mayor, City of Arcata

/s/ Julie Vaissade-Elcock, Local Business Owner

/s/ James I. Zoellick, Energy Research Engineer

/s/ Carl E. Pellatz, Former Mayor of Arcata

/s/ Kate Christensen, Local Business Owner

 

 

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11 Responses to “Measure I, The Grow House Electricity Tax: City Council Resolution, Municipal Code Section, City Attorney Analysis and Ballot Argument In Favor – August 3, 2012”

  1. Rob Walker

    Meanwhile, back at the lumber mill, someone is still enjoying their low rates….

    #64013
  2. Steven Ct Cook

    Umm… realizing they're trying to generate revenue, wouldn't it be simpler to get a warrant for search and seizure of cannabis for those houses which were above the threshold and shut them down, rather than just boost the taxes? Last I heard, grow houses weren't legal down there yet. Did I miss a memo? :D

    #64014
  3. Rob Walker

    well, it depends on what you call legal. You can grow for yourself. You cannot grow for others… period. Now, these people like to think that we are all dumb enough to believe that they smoke or ingest 6 pounds every 2 months or so. Well, it aint likely. So there must be sales going on and that is the operational theory behind the busts. Additionally, there is the problem of changes to the home without the proper permitting. The main reason that they dont just pull someone's electricity bill and raid, is that a high bill is not in and of itself, probably cause, nor is it generally within the purview of police to have access to that without a warrant. So, they await telephone calls from neighbors and/or a bust outside of the home which leads to a search warrant at the house. I don't think that the police or agencies involved would be able to get a blanket list of those people who end up paying the increased tax. In fact, since the tax won't be used for anything but more enforcement (police) it really just another of the many ways we all get screwed because rather than have a police force suitable to the population, we will have a police force suited to the budget.

    #64015
  4. Rob Walker

    well, it depends on what you call legal. You can grow for yourself. You cannot grow for others… period. Now, these people like to think that we are all dumb enough to believe that they smoke or ingest 6 pounds every 2 months or so. Well, it aint likely. So there must be sales going on and that is the operational theory behind the busts. Additionally, there is the problem of changes to the home without the proper permitting.

    The main reason that they dont just pull someone's electricity bill and raid, is that a high bill is not in and of itself, probable cause, nor is it generally within the purview of police to have access to that without a warrant. So, they await telephone calls from neighbors and/or a bust outside of the home which leads to a search warrant at the house.

    I don't think that the police or agencies involved would be able to get a blanket list of those people who end up paying the increased tax. In fact, since the tax won't be used for anything but more enforcement (police) it really just another of the many ways we all get screwed because rather than have a police force suitable to the population, we will have a police force suited to the budget.

    #64016
  5. Anonymous

    For Christ's sake, you guys catch a clue!

    On the one hand, it is certainly a good thing the entire city council voted to promote the inclusion of this measure on the November ballot. It means they all should be replaced, as well as that bright light of a city attorney.

    As an owner of a recently purchased electric vehicle, I would like to state an obvious, GLARINGLY OBVIOUS, issue with this prospective new tax. As an early adopter of new technology, I was offered economic incentives to "take a risk" and buy one of these automobiles which are run by rechargeable batteries. At an average cost, delivered here to Arcata, of more than 37,000 USD, this was no small "front pocket" purchase for me and my family. Based on existing agreement with PG&E of a GOVERNMENT SUPPORTED program I understood that there was some financial sense in taking the risk of essentially being the guinea pig owner this early version. I did the arithmetic and understood that I would get a substantial reduction in what would, otherwise, be an enormous electric bill. This, folks, was decided at a STATEWIDE level.

    So along comes our bank of geniuses at City Hall and promotes a law that countermands an existing technology incentive passed by the STATE OF CALIFORNIA. Hello?

    I'd like to be perfectly clear for the Arcata voters who have not yet weighed in on this issue, and have a few months to "think" about it. This proposed law runs at diametrically opposed cross currents to the legislation aimed at promoting new technology adoption. The city will get hit with a substantial lawsuit right up their so called "progressive" tailpipe if this proposal gets voted into law. Period. Exclamation point. It will be class action, it will be organized, and it will be supported, with technical assistance, by the industry which lobbied to give a tangible economic kick favoring the the adoption of this cutting edge technology to those of us who took that risk. A technology which, BTW, lessens carbon emissions. You think this is bullshit, press that button. I dare you.

    If any of you Arcata citizens have the desire to show that you might have more common sense that these self aggrandizing city councilmen, women and staff, please give some consideration to the topic of what this lawsuit will cost the City, because YOU will pay for it, not them, AND it will strike down the law in the process.

    The government of this little town should pay more attention to what it wastes our time on. Here is a condensed list of other good deeds they have recently committed:

    1. Members of this City Council killed the longest running volunteer organized recycling center in the United States. (head on down 9th Street to see this historical monument to citizen initiative!)

    2. Members of this City Council used parking meter funds to purchase homeless housing – then tried to place it on an unapproved subdivision in riparian watershed WITHOUT AN ENVIRONMENTAL IMPACT REPORT. (These melting houses still sit precariously six feet in the air at 13th and O St, go take a look) A preschool teacher caught you in this act. Nice work, staff! Fearless, but Fairless, and Folly!

    3. Members of this City Council promoted the building of a "new" recycling center out in Manila which almost immediately went bankrupt and crashed our Community Development loan corporation so badly it went out of business. Now the nationwide mafia garbage company is in the process of buying the complex from a bankruptcy referee at firesale prices. (Drive by it on the way to Manila, its BIG and BLUE and NEW.)

    So, yes, go ahead and fly your "tax the pot farmers out of the city" law past us. Sounds like a grand idea, just brainless, (and maybe a little bit "yellowbellied") like a whole laundry list of recent crappy local government. Just, in the future: Don't ask us to volunteer anymore. Don't ask us to snitch our neighbors out. Don't ask us to pass a law which countermands State law. Don't ask us to allow PG&E to make millions of dollars during a downturn in their profits, from which you take your filthy, and fat cut. But most of all DON'T ASK US TO VOTE FOR YOU – ANY OF YOU- because if you had a brain you would take it out and play with it.

    #64039
  6. Rob, you are incorrect. Only Law enforcement reads the law as you can not make a profit. The AUTHORS of sb420 intended for medical cannabis providers to make a profit.

    "There is a widely held misperception that businesses in the California medical cannabis industry are prohibited from making a profit. In reality, no California law prohibits cannabis-related businesses from making a profit."

    http://www.tokeofthetown.com/2012/02/medical_marijuana_profit_is_allowed_under_californ.php

    http://www.scribd.com/doc/80975204/Vasconcellos-SB-420-Ltr

    " Itwas
    certainly true that
    one
    side
    wanted
    to
    outlaw
    any
    profit-making, while
    the
    other side
    didnot
    and
    would not.
    So
    right there
    and
    then
    - in
    order
    not to
    lose
    our
    coherence
    as a
    working
    team
    hoping for a broadly supported result and to hold our coalition together
    ~
    we took the
    openly
    deliberated,
    fully
    appreciated compromise
    way
    out:
    We
    catered
    to
    neither side
    on
    thisissue. Instead the Task Force
    crafted
    the language that appears in Health and
    Safety
    Codesection
    1
    1362.765(a)
    as
    follows:
    ".
    . . nor
    shall anything
    in this
    section authorize
    any
    individual
    or
    group
    to
    cultivate
    or
    distribute marijuana
    for
    profit."
    It
    was so
    carefully
    crafted
    that neither side could claim victory.
    In
    effect
    that issue
    was
    entirely
    left
    to whatever otherwise is the status of that issue in California law.
    Although
    certain members
    of our
    Task Force
    did
    advocate
    for a
    prohibition
    on
    profit-making,
    that
    position was
    firmly
    rejected by the Task Force
    hi
    favor
    of the above compromise language.
    The
    language
    we
    fashioned means nothing more

    nor
    less

    than what
    it
    explicitly says.
    Nothingin
    that section prohibits profit. Nothing
    in
    that section explicitly authorizes
    profit,
    either.But Imust
    point
    outthat nobodyisrequiredtoobtainan
    "authorization"
    from
    the
    Legislature to
    make
    a
    profit
    in
    California."

    #64041
  7. The election board invalidated 12 of my nomination signature for city council. According to the letter i just received at least 5 of them ( enough to make the ballot" had the proper name, proper address, we registered to vote at the current address, but someone did not "like" the way they signed their names. They claim the signatures do not match.

    Every non incumbent challenger had a minimum of 10 signatures rejected.

    At this point I am leaning towards ELECTION FRAUD.

    I want to see the voter registration cards. I personally know everyone that signed my paper and they are all willing to go to election headquarters to fight for their rights. (Having their legal signatures counted)

    #64042
  8. "3. Members of this City Council promoted the building of a "new" recycling center out in Manila which almost immediately went bankrupt and crashed our Community Development loan corporation so badly it went out of business. Now the nationwide mafia garbage company is in the process of buying the complex from a bankruptcy referee at firesale prices. (Drive by it on the way to Manila, its BIG and BLUE and NEW.)""

    This happened with the assistance of a "brown act" violation( committed by Mike Winkler), where there was NO prosecution, even though it cost 35 or so jobs…They claimed it was resolved in a "public meeting" but somehow Shane still lost his seat on the board…

    #64043
  9. What a freaking load. If they want to generate cash flow, let the people be, the market will stabilize in time and set a value according to the people and everyone will benefit. Too much government always FK's it up for the world at large.

    #64060
  10. [...] of the the energy he would have put into his re-election campaign into promoting Measure I, the proposed tax on excessive electricity use aimed at abating illegal cannabis grow houses. Brinton also said [...]

    #64069
  11. http://www.tokeofthetown.com/2012/08/ca_supreme_court_throws_out_marijuana_dispensary_b.php

    "High Court prohibits municipalities from using Pack v. City of Long Beach to ban dispensaries".

    "While municipalities may pass reasonable regulations over the location and operation of medical marijuana collectives, they cannot ban them absolutely," read the brief. "These bans thwart the Legislature's stated objectives of ensuring access to marijuana for the seriously ill persons who need it in a uniform manner throughout the state."

    #64073

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