10A Action 2008 0902 - Laserfiche WebLink

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CITY OF SAN LEANDRO STAFF REPORT DATE: August 28, 2008 TO: John Jermams, City Manager FROM: Perry Carter, Interim Finance Director SUBJECT/DESCRIPTION: APPROVED AND FORWARDED TO CITY COUNCIL f John J ~ennanis City~f~~ager MATTER OF CONSIDERATION OF DISCONTINUING THE COLLECTION OF THE CITY OF SAN LEANDRO'S EMERGENCY COMMUNICATION SYSTEM ACCESS FEE AS CODIFIED IN TITLE 2 CHAPTER 16 OF THE SAN LEANDRO MUNICII'AL CODE AND DIRECTING THE CITY MANAGER TO TAKE ALL APPROPRIATE ACTION IN ACCORDINACE WITH THE COURT'S RULING IN THE CASE OF BAYAREA CELLULAR CD. V. CITY OF UNION CITY SUMMARY AND RECOMMENDATION Due to recent action by the California Supreme Court the City of San Leandro's Emergency Communication System Access Fee (911 Fee) has been invalidated. Accordingly, staff is recommending, by the attached resolution, that collection of the fee be discontinued effective September 2, 2008. BACKGROUND Originally adopted by City Council in 2004, the City's 911 Fee ordinance charges a fee to support the operation of the City's 911 communication system. The fees for fiscal year 2008-09 are $2.06 per single access line, $14.41 per trunk line and $50.44 per super trunk line, per month. Revenues generated by the 911 Fee on an annual basis total approximately $2.5 million. The 911 Fee was amended once since its introduction in 2004 and increased 2.9% on July 1, 2006. As you know, the City has been following the status of several legal challenges initiated against California cities which collect a "911 fee", similar to San Leandro's Emergency Communication System Access Fee (911 Fee). The argument is that the "fee" is in fact a tax and as such requires voter approval. Of particular importance has been the suit against the City of Union City, which is in the same judicial district (1st District Court of Appeal) as San Leandro. On August 13, 2008 the California Supreme Court denied the City of Union City's petition for review and as a result the trial court will enter judgment upholding the decision that Union City's fee is, in fact a special tax. Given this development, and advice from the City Attorney that San Leandro is bound by the Union City decision, staff is recommending that the City discontinue collection of the San Leandro 911 Fee, effective September 2, 2008.