See Also: Index of all Measures

Impartial Analysis from Nicholas George Rodriguez, City Attorney

Measure M would establish a utility users' tax on electricity, gas, telecommunications, video and water utility services in the City of Vernon for a period of ten years to raise revenue for general City purposes. Measure M provides an exemption for low income and disabled residents, and would cap the utility users' tax liability to an aggregate, maximum annual amount of $250,000, for any one user for gas, electricity and water services.

Measure M proposes an ordinance establishing the utility users' tax as a tax upon the user of the utility service. If approved, the tax would generally be collected along with utility service charges by the provider of the utility service. The tax would be calculated as 1% of the charge for utility service. For example, if an electric ratepayer incurs $1,000 of electric charges, a $10 tax will be added to that ratepayer's utility bill. Utility service providers are generally required by the ordinance to bill users for the tax and are required to remit collected taxes to the City on a monthly basis.

The tax applies to services provided to locations in the City of Vernon. For mobile telecommunications services (and other telecommunication services that are not associated with a fi xed location), it generally applies to services with a "place of primary use" in the City. The "place of primary use" is the street address representative of where a person's use of such service primarily occurs, which must be either the residential street address or the primary business street address of such person. Telecommunications services subject to the proposed tax generally include services that transmit, convey or route voice, data, audio, video or any other information or signals to a point, or between or among points, whatever the technology used.

The tax would not apply to residential services provided to service users meeting criteria for disability or low income set forth in the ordinance, so long as such users establish their exempt status with the City.

Proceeds of the utility users' tax would be placed in the City's general fund and available for any municipal purpose. City staff estimates the utility users' tax will raise $1.6 million annually.

The tax would be effective upon certification of voter approval of Measure M by the City Council and would automatically end ten years after such certifi cation.