HomeMy WebLinkAboutE-5 Staff Report - Hazardous Waste Facilities Tax Increase CONSENT ITEM
E-5
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES
DATE: APRIL 7, 2025
SUBJECT: RESOLUTION INCREASING TAX RATE ON OFFSITE, MULTIUSER
HAZARDOUS WASTE FACILITIES WITHIN THE CITY
BACKGROUND:
In June 2024 with the adoption of the Fiscal Year (FY) 2024-25 budget, the City Council
reviewed the City’s financial position and economic forecasts and instructed Staff to return to the
City Council with options to enhance revenues to ensure the City maintains a balanced annual
budget (annual revenue collections are sufficient to cover expenses for the same year) as required
by the City’s adopted Budget Policy and to ensure the City’s General Fund remains fiscally
strong.
Since 1989, the City has imposed a general tax on offsite multiuser hazardous waste facilities
(Hazardous Waste Tax) operating within City limits. This voter-approved tax is levied upon a
facility’s annual gross receipts for the treatment, storage, or disposal of hazardous waste at the
facility. State law and the City’s voter-approved ordinance allow the City to levy up to ten
percent (10%), or such other amount as authorized by state law, by resolution of the City
Council. In November 2019, the City Council adopted Resolution 2019-C60, amending the tax
rate over a period of five years from two percent (2%) to the current rate as of July 1, 2024, six
percent (6%).
Staff recommends the City Council adopt a resolution to further increase the Hazardous Waste
Facilities Tax by one percent (1%) per year from the current 6% to the maximum rate of 10%
beginning in Fiscal Year 2025/26 through Fiscal Year 2028/29. Raising the tax rate to 10% is
estimated to increase the General Fund’s annual revenues by $1.2 million by end of the fourth
year and helps the City maintain a balanced annual budget.
RECOMMENDATION:
Staff recommends the City Council take the following action:
Resolution Amending Tax on Offsite Multiuser Hazardous Waste Facilities
April 7, 2025
Page 2
1) Adopt Resolution 2025-C18 increasing the rate of the offsite, multiuser hazardous waste
facilities tax over a four-year period from 6% to 10% pursuant to California Health and
Safety Code Section 25173.5 and Azusa Municipal Code Section 18-707.
ANALYSIS:
The City’s General Fund is the primary operating fund of the City. Public safety, governmental
administration, internal support services, community resources (such as youth and senior
recreational services), library activities, and parks and facilities maintenance make up the
majority of the General Fund budget. Cost increases including 24/7 police services, fire
prevention and animal control contracts with Los Angeles County, and operational costs of the
Azusa Resource Center to address the unhoused population, all impact the General Fund budget.
The City’s ordinance for levying a general tax on offsite, multiuser hazardous waste facilities
provides a voter approved revenue enhancement opportunity to aid the General Fund in keeping
up with rising costs of providing valuable services to the City residents and businesses and
maintaining a balanced budget.
At the General City Election held on November 2, 1988, Azusa voters approved Ordinance No.
2373, currently codified as Azusa Municipal Code Sec. 18-707. Offsite, multiuser hazardous
waste facilities tax. (AMC 18-707), establishing an offsite, multiuser hazardous waste facilities
tax effective January 1, 1989. AMC 18-707 is consistent with State law (Health and Safety Code
Section 25173.5) which authorizes cities to levy a Hazardous Waste Tax not to exceed 10% of
the annual gross receipts for the treatment, storage, disposal of hazardous waste at the facility.
Section 25173.5 authorizes the legislative body of a city or county to impose and enforce a tax,
for general purposes on the operation of an offsite, multiuser hazardous waste facility located
within the jurisdiction of the City. Therefore, the City is authorized to increase the tax rate up to
the maximum rate of 10% as proposed with the attached Resolution.
Beginning July 1, 2024, Azusa’s assessed Hazardous Waste Facilities Tax rate was set at 6%.
After careful review of current economic conditions and the City’s annual budget, Staff
recommends increasing the current 6% rate to 10% over the next four years as follows:
Effective Date
Percentage
Assessed
Fiscal Year
Revenues
Actuals Or
Estimate
Increase from
Prior Year
FY 2019-20 2.00%530,731.88$ Actuals
July 1, 2020 3.00%739,404.48$ Actuals 208,672.60$
July 1, 2021 4.00%1,041,937.07$ Actuals 302,532.59$
July 1, 2022 4.75%1,451,915.01$ Actuals 409,977.94$
July 1, 2023 5.50%1,594,300.94$ Actuals 142,385.93$
July 1, 2024 6.00%1,739,237.39$ Estimate 144,936.45$
July 1, 2025 7.00%2,029,110.29$ Estimate 289,872.90$ *
July 1, 2026 8.00%2,318,983.19$ Estimate 289,872.90$ *
July 1, 2027 9.00%2,608,856.08$ Estimate 289,872.90$ *
July 1, 2028 10.00%2,898,728.98$ Estimate 289,872.90$ *
*Assumes processing volume remains at the current or greater level
Resolution Amending Tax on Offsite Multiuser Hazardous Waste Facilities
April 7, 2025
Page 3
This proposed plan will result in increased revenues of approximately $290,000 each year up to
$1.2 million by the end of the four-year plan when compared to current processing volumes.
In accordance with AMC 18-707 the City Council may modify the tax rate by resolution up to
the voter approved maximum tax rate of 10%. Upon approval of the attached Resolution, the
Hazardous Waste Facilities Tax will be increased to 7% effective July 1, 2025 and increase by
1% each July 1 up to 10% on July 1, 2028. The tax rate will not exceed the voter approved
maximum tax rate nor are any changes proposed to the methodology use to calculate the tax.
Therefore, the City Council may approve the attached Resolution without further voter approval.
FISCAL IMPACT:
Approval of the Hazardous Waste Facilities Tax rate increase will augment General Fund
revenues and offset various rising capital improvement, public safety, fire prevention, animal
control, parks and facilities maintenance, and Azusa Resources Center operating costs. The
proposed action is expected to increase revenues by approximately $289,873 in FY 2025-26 and
each year thereafter up to $1,159,492 million by the end of FY 2028-29 when compared to
current processing volumes.
Prepared by: Reviewed and approved:
Talika M. Johnson Sergio Gonzalez
Director of Administrative Services City Manager
Attachment:
1. Resolution 2025-C18
2. Azusa Municipal Code Sec. 18-707
RESOLUTION NO. 2025-C18
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, GRADUALLY INCREASING THE RATE OF THE OFFSITE
MULTIUSER HAZARDOUS WASTE FACILITIES TAX FROM 6% TO 10%
PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION
25173.5 AND AZUSA MUNICIPAL CODE SECTION 18-707
WHEREAS, the City of Azusa (“City”) is a municipal corporation, duly organized under the
Constitution and laws of the State of California; and
WHEREAS, California Health and Safety Code Section 25173.5 (originally enacted in 1986)
states, in pertinent part:
“. . . . the legislative body of a city or county may impose and enforce a tax, for general
purposes, or may impose a user fee on the operation of an offsite, multiuser hazardous waste
facility located within the jurisdiction of the city or county. The tax or the user fee imposed
shall not exceed 10 percent of the facility’s annual gross receipts for the treatment, storage, or
disposal of hazardous waste at the facility.”; and
WHEREAS, pursuant to Section 25173.5, in 1988 the City opted to enact a tax on offsite
multiuser hazardous waste facilities rather than a user fee; and
WHEREAS, in 1988, California Proposition 62 (Government Code Section 53724) required
that any City general tax be approved by a majority of Azusa voters voting at an election; and
WHEREAS, on November 8, 1988, Azusa voters approved Azusa Municipal Code Section
18-707 (formerly codified as AMC 5.12.150) establishing a general tax on offsite multiuser
hazardous waste facilities and such general tax revenues may be used for any lawful purposes; and
WHEREAS, Azusa Municipal Code Section 18-707 states, in pertinent part:
“Every person who operates an offsite, multiuser hazardous waste facility located within the
city shall pay a tax to the city in such amount as set by resolution of the city council, but not
to exceed ten percent, or such other amount as authorized by state law of the facility's annual
gross receipts for the treatment, storage or disposal of hazardous waste at the facility.”
WHEREAS, from January 1, 1989 through June 30, 2020, the City had set the offsite
multiuser hazardous waste facilities tax rate at two percent (2%) of a facility’s annual gross receipts
for the treatment, storage, or disposal of hazardous waste at the facility; and
WHEREAS, on November 18, 2019, the City Council adopted Resolution 2019-C60
gradually increasing the hazardous waste facilities tax rate each year from two percent (2%) up six
percent (6%) of a facility’s annual gross receipts for the treatment, storage, or disposal of hazardous
waste at the facility beginning July 1, 2020 through July 1, 2024; and
WHEREAS, the City Council desires to gradually increase over a period of four years the
offsite multiuser hazardous waste facilities tax rate from six percent (6%) to ten percent (10%) of the
facility’s annual gross receipts for the treatment, storage, or disposal of hazardous waste at the
facility; and
WHEREAS, through the enactment of Azusa Municipal Code Section 18-707, Azusa voters
have vested the City Council with the discretion to adjust the rate of the offsite multiuser hazardous
waste facilities tax by future resolution, subject to a ten percent (10%) maximum rate; and
WHEREAS, California Government Code Section 53750(h)(2)(B) provides that an additional
election for a tax is not required, if the tax:
“Implements or collects a previously approved tax, fee, or charge, so long as the rate is not
increased beyond the level previously approved by the agency, and the methodology
previously approved by the agency is not revised so as to result in an increase in the amount
being levied on any person or parcel.”; and
WHEREAS, this resolution does not increase the taxing rate beyond the 10% maximum level
nor does it alter the taxing methodology already approved by Azusa voters; and
WHEREAS, for these reasons, the City Council is authorized to adopt this resolution and
another election is not required for its approval.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, DOES FIND AND DECLARE THAT:
SECTION 1. Incorporation of Recitals. The City Council hereby finds the above recitals to
be true and correct and are incorporated herein by this reference.
SECTION 2. Approval of Gradually Increased Tax Rate on Offsite Multiuser Hazardous
Waste Facilities. The City Council hereby approves the following increases to the offsite multiuser
hazardous waste facilities tax rate on the annual gross receipts for the treatment, storage, or disposal
of hazardous waste at a facility and that such increases do not exceed the voter approved maximum
tax rate of 10%:
Effective Date Tax Rate
Current 6.00%
July 1, 2025 7.00%
July 1, 2026 8.00%
July 1, 2027 9.00%
July 1, 2028 10.00%
SECTION 3. All Other Provisions Unaffected. Except as set forth herein, the tax on offsite
multiuser hazardous waste facilities shall continue to be levied, collected and administered as set
forth in California Health and Safety Code Section 25173.5, Azusa Municipal Code Section 18-707
and any other applicable law.
SECTION 4. CEQA. That the City Council finds that adoption of this Resolution relates to
organizational or administrative activities of governments that will not result in direct or indirect
physical changes in the environment, and therefore is not a “project” within the meaning of the
California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines, section
15378(b)(5).
SECTION 5. Severability. If any provision, section, paragraph, sentence, or word of this
Resolution is rendered or declared invalid by any court of competent jurisdiction, or by reason of
preemptive legislation, the remaining provisions, sections, paragraphs, sentences, and words of this
Resolution shall remain in full force and effect.
SECTION 6. Effective Date. This resolution shall become effective upon its adoption.
PASSED, APPROVED and ADOPTED this 7th day of April 2025.
__________________________________________
Robert Gonzales
Mayor
ATTEST
__________________________________________
Jeffrey Lawrence Cornejo, Jr.
City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution No. 2025-C18 was duly adopted by the City
Council of the City of Azusa at a regular meeting thereof held on the 7th day of April 2025, by the
following vote of the Council:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
__________________________________________
Jeffrey Lawrence Cornejo, Jr.
City Clerk
APPROVED AS TO FORM:
__________________________________________
Best Best & Krieger LLP
City Attorney
Azusa Municipal Code
Created: 2024-08-15 09:58:40 [EST]
(Supp. No. 70)
Page 1 of 1
Sec. 18-707. Offsite, multiuser hazardous waste facilities tax.
(a) Every person who operates an offsite, multiuser hazardous waste facility located within the city shall pay a
tax to the city in such amount as set by resolution of the city council, but not to exceed ten percent, or such
other amount as authorized by state law of the facility's annual gross receipts for the treatment, storage or
disposal of hazardous waste at the facility.
(b) The tax imposed by this section shall not apply to that portion of the gross receipts of the hazardous waste
facility that derives from the recycling of hazardous waste or the treatment of infectious waste; provided,
however, that the tax shall include gross receipts on retrograde materials derived from recycling or
treatment of such hazardous waste.
(c) The terms used in this section shall be defined as set forth in Health and Safety Code § 25100 et seq.
(d) The tax imposed by this section shall be paid quarterly during the year with quarters ending in March, June,
September and December. All such payments are due within ten days of the end of the quarter and shall be
accompanied by a statement of gross receipts executed under penalty of perjury by the chief operating
officer of the facility. Such statement of gross receipts shall not be conclusive as to the matters set forth
therein, nor shall the filing of such statement preclude the city from collecting, by appropriate action, such
sums as are actually due and payable. Such statement and each of the several items therein contained shall
be subject to audit and verification by the city, or its contractor; and the city, or its contractor, shall have the
right to inspect the books and records of the taxpayer as may be necessary to verify and ascertain the
amount of the tax due and payable.
(Code 1971, § 5.12.150)