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05/11/1993 - Minutes PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 The City Council of Salt Lake City, Utah, met in Briefing Session on Tuesday, May 11, 1993, at 5:00 p.m. in Room 325, City Council Office, City County Building, 451 South State. The following Council Members were present: Paul Hutchison Alan Hardman Roselyn Kirk Ron Whitehead Tom Godfrey The following Council Members were absent: Don Hale Nancy Pace Council Chair Kirk presided at and conducted the meeting. Councilmember Kirk called they be allowed three minutes . the meeting to order at 5:00 p.m. Councilmember Hutchison said he had received a call REPORT OF THE EXECUTIVE from Tom Boley, owner of Mel DIRECTOR Boley Company, asking him to protest the franchise tax Cindy Gust-Jenson said increase. Councilmember Item D-2, the ceremonial Hutchison explained the situa- resolution, the Council would tion to him regarding the tax not have to present the resolu- increase and he seemed to tion to anyone because it was understand. Mr. Boley told him on the Consent Agenda. he was a member of the Utah Tax Payers Association and he would She said Item D-4, amend- pass the information on to ing Section 21 . 62 .010, the other members . reason they were redoing it was because of a typographical Mayor Corradini said she error in the original ordi- had gone to the Chamber Board nance. meeting that morning. She said there was still some misinfor- She said Item E-1, Water mation regarding the Ordinance, and Sewer Revenue Bonds, she so she explained the situation thought the Council could do to those at the meeting and without a report from the Bond everyone seemed to understand. Council and Financial Advisor. Ms . Gust-Jenson said the She said Item G-1, Utility University of Utah had expres- Revenue Tax, if there was a sed concerns about the type of large audience she suggested phone system they had with limiting comments to two respects to the utility revenue minutes, but if there was a tax. She said she told them it smaller group, she suggested was not an issue the Council 93 - 188 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 could deal with at the May llth Ms . Gust-Jenson said she meeting, but she advised them had recently received informa- that they could make a comment, tion that Animal Control had so the appropriate City recently started to patrol the representatives could look at area and they asked the City if it in the future. they could provide additional signage in the park. Ms . Gust-Jenson said the baseball stadium ground- The Council interviewed breaking time had changed from Judith Romney Wolbach for her noon to 4 : 00 p.m. on May 19, appointment to the City and 1993 . Mayor Corradini said County Building Conservancy and they had invited little league Use Committee. and high school baseball players . She said they had Ms . Wolbach said she had also invited the entire strong feelings about the City legislature, County Commis- and County Building and would sioners, Governor, and all not want to see it deteriorate. donors . She said they had requested the Utah Symphony She said she graduated Dixieland Group to donate their from law school in 1975 and time and play at the function. started practicing in one of She said they could have as the two court rooms located in many as 300 people in atten- the City and County Building. dance. Mayor Corradini said She said the court rooms were she hoped all Council Members beautiful, but the halls were would be able to attend. in bad condition. She said the building was a primary asset of Ms . Gust-Jenson said the the community and required on- City Administration wanted the going attention. She said she Council to be aware that when thought of herself as not only the Council had approved the an avid preservationist, but a Animal Control consolidation, practical person who knew the they had set up a committee. value of a dollar. She said She said the committee had not the community deserved account- been meeting on a regular basis ability on how City funds were to discuss animal control spent. She said she was also a issues, but they were going to member of the Salt Lake Arts meet on May 25, at 9 :30 a.m. Council and would be willing to She asked if any of the Council put in the time required. Members wanted to attend. The briefing adjourned at Councilmember Hardman said 5 : 20 p.m. he had received a complaint about Liberty Park not being bf patrolled by Animal Control personnel . 93 - 189 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 The City Council of Salt Lake City, Utah met in Regular Session on Tuesday, May 11, 1993, at 6 :00 p.m. in Room 315, City County Building, 451 South State Street. The following Council Members were present: Paul Hutchison Nancy Pace Alan Hardman Roselyn Kirk Tom Godfrey Ron Whitehead The following Councilmember was not in Attendance: Don Hale Mayor Deedee Corradini; Roger Cutler, City Attorney; Cindy Gust-Jenson, Executive Council Director; Roger Black, Director Management Services; S. R. Kivett, Chief Deputy City Recorder; and Bonnie Ferrin, Deputy Recorder were present. Council Chair Kirk presided at and Councilmember Hutchison conducted the meeting. #1. The Council led the CITIZEN COMMENTS Pledge of Allegiance. Hermoine Jex, Capitol Hill #2. Councilmember Godfrey Neighborhood Council, said they moved and Councilmember Hardman wanted to request a moratorium seconded to approve the minutes be placed on the pending land of the Salt Lake City Council trade between Amoco and Salt meetings held May 4 and May 6, Lake City. She said they 1993, which motion carried, all wanted a thorough investigation members present voted aye. by an unbiased, knowledgeable (M 93-1) source. She said the Neighbor- hood Council requested that the OUESTIONS TO THE MAYOR Mayor intercede and delay Petition No. 400-93-16 by Amoco Councilmember Kirk asked Oil Company at the Salt Lake about sales tax for the zoo and Planning Commission scheduled the arts . She suggested the for May 20, 1993 . Council discuss the resolution ahead of time. She said the petition requested that Salt Lake City Mayor Corradini said there close portions of 400 West and was some discussion as to 1000 North. Ms . Jex provided whether it would be going back the Council with a handout (see to the Council Of Governments file no. M 93-8) . She said the (COG) . She said she would find two issues were regarding a out and would discuss it with road alignment to improve the the Council at a later date. 400 West connection to Beck 93 - 190 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 Street and a land acquisition existing two lanes . She said expansion by Amoco Oil Company. she had received a letter from She said the road could take Governor Leavitt stating he place without giving up City agreed with UDOT staff to streets and the future mass implement the double left turn transit light rail right-of- lanes . way. She said the newest road cut through Block 169 was Ms . Jex said she asked listed as major ownership Brent Wilde, Deputy Director belonging to Deseret Recycling. Planning Division and Bill She said according to the Wright, Planning Director, Petition, Amoco would secure three weeks ago for a list of more land and would control the agreements, wills and restri- north end of 400 West and ctions that Salt Lake City had right-of-way and would also in place for the hillsides by interfere with the Bamberger Monroc and Beck Streets . She right-of-way. She said it said the 1980 aerials showed would place Amoco in major Monroc had already nicked in to control of all the west side of forest service lands . She said Beck Street. in the 1970's, the City Commis- sioner said it had already been She said the Capitol Hill violated. She said they had Neighborhood Council had tried heard about the pending con- to determine the location of tract to remove 5,000,000 tons the Sulphur Recovery Plant. of fill from Monroc and Beck. She said per their handout, She said they wanted to know they thought they had finally what was in place and have some located it. of these concerns answered. She said the handout CONSENT AGENDA stated their concerns regard- ing signal lights . She said ACTION: Councilmember there were none on 800 or 900 Godfrey moved and Council- North. She also asked where member Hardman seconded to oil tankers would go. She said approve the Consent Agenda, the Neighborhood Council felt which motion carried, all an adequate study of the members present voted aye . Capitol Hill preference needed to be done. She said she #1. RE: Approving the realized the City wanted to appointment of Judith Romney hurry up the process so Utah Wolbach to the Building Department Of Transportation Conservancy and Use Committee (UDOT) would reconsider and not for a term extending through put in a double left turn lane. July 1, 1994 . She said the Neighborhood (I 93-15) Council did not know if negotiations would include #2. RE: Adopting limiting Victory Road to the Resolution 46 of 1993 accepting 93 - 191 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 and expressing appreciation for Godfrey moved and Council- a contribution to plant a grove member Hardman seconded to of trees in Popperton Park. suspend the rules and adopt (R 93-7 ) Resolution 48 of 1993, which motion carried, all members #3. RE: Adopting present voted aye. Resolution 47 of 1993 authoriz- (0 93-9) ing the approval of an inter- local cooperation agreement DISCUSSION: Roger Black, between Salt Lake City Corpora- Director Management Services, tion and Utah Department of gave a brief explanation, per Transportation (UDOT) , Research his handout (see file no. and Material Division for UDOT .31 33 -0) APOnni d Gam"1p to perform various concrete bituminous and other tests for Mr. Black said the issue the City. was on the legislative list of (C 93-233) priorities during the last legislative session. He said #4. RE: Adopting the proposal was to accept the Ordinance 34 of 1993 amending items included in House Bill Section 21.62.010 dealing with 206 as legitimate parts of conditional uses in a "C-3A" basic local exchange services district. under the City's Franchise Tax (0 93-26 ) Ordinance. NEW BUSINESS He said in 1951 Mt. Bell negotiated a Franchise Tax #1 . RE: Adopting a Agreement with the City. He resolution authorizing the said it was a 2% fee for the issuance and confirming the use of the City' s streets and sale of not more than roads . He said this would be $13,500,000 aggregate princi- applied to "gross revenue per pal amount of water and sewer annum derived by said company revenue bonds of Salt Lake from all local exchange service City, Salt Lake County, Utah, revenue received from sub- fixing the maximum aggregate scribers located within the principal amount of the bonds, City of Salt Lake" . He said in the maximum number of years 1974 the City Commission over which the bonds may adopted a 2% Privilege Tax mature, the maximum interest which was levied in addition to rate which the bonds may bear the Franchise Fee and levied and the maximum discount from against the same base revenues . par at which the bonds may be He said in 1980 US West sold; authorizing publication initiated a series of lawsuits of a notice of bonds to be in which they claimed changes issued; and related matters. in the telephone industry had made it so that they were ACTION: Councilmember subject to tax on some of their 93 - 192 ---- PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 revenues, but their competitors ordinance why a particular were not. He said this lead service was not taxable. " He the Council to adopt the said in 1991 the City hired modification of the definition Municipal Administrative of those revenues which were Services, Inc. to conduct a subject to these fees in 1982 . detailed audit of the phone companies payment of franchise He said in 1983 AT&T was fees to the City. He said the required under a Federal Court finding of the audit was that Mandated Consent Decree to the telephone company had unbundle their services and the exempted from the calculation revenues stopped flowing from of the franchise fees certain US West and became a part of revenues which, in the judge- the non-regulated carrier. ment of the auditors, should have been included and the City He said the fiscal impact began the negotiations which of the change in 1982 was a lead to the introduction in the loss of approximately $1 past legislative session of million of revenue. He said in House Bill 206 . He said it the intervening period the clarified matters and identi- revenue had fluctuated within a fied some services which the narrow range. He said in 1984 City had maintained and the the City hired Fox and Company, auditors had maintained were CPA, to review the calculation always supposed to be in the collection and remittance revenue base, subject to the process of franchise fees paid fee. He said it eliminated by the telephone company. He some and specifically included said their conclusion was that some. He said the two services they were unable to do which this proposed ordinance sufficient work to reach a would bring were the extended decision about whether the area calling fee and the telephone company was applying customer access service the franchise fees to the interstate. He said before the correct set of revenues . legislation was passed the Auditors told the City that He said in 1986 the City they were losing approximately received advice from Bruce $1,500, 000 a year in franchise Sapol, with Wood, Luxsinger and revenues that should have been Epstein, from Washington D. C. , coming to the City given the who specialized in public meaning and intent of the utility issues . He said their City's ordinance. letter indicated that "all services provided by Mountain He said in a discussion Bell should be presumptively with Mt. Bell concerning the categorized as taxable and the resolution of this matter the burden placed on Mountain Bell City concluded that the two to explain and justify the items in question would be an language of the current appropriate compromise 93 - 193 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 position. He said the franchise taxes on extended estimated revenue which the area and customer access line City would receive, if passed, services . would be $750, 000 per year and would apply to the revenues of We understand that with the company. He said it was the devestiger of AT&T, the not a tax on consumers, it was telecommunications industry a tax on the company. He said experienced many dramatic a Public Service Commission changes . As new services ruling allowed them to pass it evolved the City attempted to on to the consumer. determine which of the new services were related to the Mr. Black said the City basic service package which had made provisions in the existed before the break-up of ordinance for exempting AT&T and which was subject to revenues which came from life- the franchise tax. In order to line customers, in the same way better understand the compli- that life-line customers were cated telephone billing records given special treatment in the and procedures, and to deter- rates that Mountain Bell had mine why franchise revenues charged them. were declining, the City commissioned an audit by a Councilmember Kirk read a national firm which specializes written statement to clarify in telecommunications issues . some questions and issues . She The audit revealed that the read "As the Chair of the City City should have been receiving Council I 've been concerned millions more in telecommuni- about some recent claims that cations franchise taxes . The the City will be imposing a loss of these millions of large new tax on residents with dollars has forced the City the passage of the Franchise over the past decade to meet Tax amendments, which are many painful cuts . We believe before us this evening. that court decisions, State, enabling legislation and City I am personally receptive ordinances were clear that to anti-tax arguments and as my these franchise taxes should colleagues on the Council can have been collected and should attest, I usually vote no on have been flowing into the increasing taxes . In the case City's general fund. A general of the proposed franchise tax fund which is seen real cuts of amendments, the Council, about 2 or 3% over the past through no fault of it' s own, several years . " is placed in a difficult position. The Administration PUBLIC HEARINGS and the Council strongly believe that during the past #1. RE: A public hearing decade, the telephone company to accept public comment and should have been collecting consider adopting an ordinance 93 - 194 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 relating to utility revenue tax to convince customers and the and businesses in competition Public Service Commission of with public utilities. that fact. ACTION: Councilmember He said he wanted to argue Godfrey moved and Council- that the imposition of the tax member Pace seconded to close would impact every telephone the public hearing, which user in the City and would have motion carried, all members a negative impact on businesses present voted aye. in particular. Councilmember Godfrey He said he was surprised moved and Councilmember Kirk to see in the budget document seconded to approve Ordinance the statement on Page 58 that 35 of 1993, which motion the passage of House Bill 206 carried, all members present settled the City's audit voted aye, except Councilmember dispute with US West and would Whitehead, who voted nay. result in an estimated on-going increase in franchise tax DISCUSSION: Howard revenues of over three-quarters Stephensen, 1038 East 13590 of a million dollars . South, Draper, Utah, President of the Tax Payers Association, He said on behalf of the said he was troubled by the Tax Payers Association he urged discussion of the tax proposal the Council to reject the tax which sounded like it was a increase at this time and "done-deal" . He said as a seriously debate the questions legislator himself , he he had brought up. recognized that when the bill was debated, the legislature Katheryn North, 606 did not decide the fate of the Blackhawk Way, Telecommuni- extended area service. He said cations Administrator with the the legislature only made it University of Utah, said the possible for cities to hold a University had some concerns public hearing to make the about the proposed utility determination. He said in franchise fee. She said the doing so, the legislature proposed tax was inequitable to wanted to send the message that business customers who utilized it was clearly a tax increase Centron service rather than a and should be accompanied by a PBX telephone system. She said "Truth In Taxation Hearing" , as proposed, the tax would be which the City had properly more than eight times larger noticed and was being held. for Centron service users then for PBX customers of comparable He said it had been stated size. earlier that it was not a tax on customers . He said he She said they proposed thought it would be difficult that the utility tax be 93 - 195 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 equitable for all telephone charging the tax only on the customers . She said the number of customers access line difference between Centron charges which corresponded with Service and a PBX system was the number of out-going and the Centron service utilized two-way trunks and not the the US West central office total number of customer access equipment to provide all system line charges for the Centron capabilities, whereas the PBX extensions . She asked the telephone system utilized Council to consider their switching equipment. She said concerns . for the basic service, both systems had a limited number of Councilmember Godfrey said incoming and outgoing lines it had been a frustrating which were shared by all experience for the Council extensions in the system. because they had tried to deal with seeing fewer dollars She said the lines were coming into the City from the called trunks for a PBX and Franchise Tax. He said after network access registers for the audit discovery, they had the Centron system. She said concerns because the City had the extended area service was negotiated in good faith with applied equally to both the US West and during the negotia- outgoing and two way trunks . tions, US West went to the She said the customer access legislature to prevent the City line charge on the PBX side was from receiving the monies from applied to the outgoing and the tax the City was supposed two-way trunks, but for Centron to be receiving. customers it was applied to each Centron extension, so CALC Councilmember Godfrey said was not a basic service. She he saw the legislation they said in the case of the were working under as special University of Utah, it meant interest legislation. He said that instead of having CALC the decision they would be billed with 345 trunks, the making was something they were CALC was billed on 9,000 forced into. Centron extensions . She said if the University were a PBX He said another concern he customer, under the City' s had was the millions of dollars proposal, their tax increase which had been lost to US West for both the extended area and over the years and he urged the customer access line charge other Council Members to would be about $3,800 per year. support the ordinance. She said as a Centron customer it would be more then $32,000 Councilmember Whitehead per year. said he was going to vote against the motion. He said US She said equitability West owed the City between $10 could be accomplished by million and $20 million. He 93 - 196 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, MAY 11, 1993 said he had a hard time Gary Spendlove, Community understanding why the City had Affairs Director for US West to have a public hearing on Communications, said on the revenues which were already in issue of fairness, the phone place. company would be happy to meet with the network and marketing Councilmember Whitehead people to see if there could be said he wanted to have the anything done from an equitable concerns presented by the standpoint. He said there were University of Utah looked at. a few issues which needed to be Councilmember Godfrey asked if raised. He said there may be a there was a mechanism for the cost issue to the telephone Administration or the company to redo their billing Attorney's Office to look at system to make sure that the issue of fairness. Centrex customers received some kind of a break. He said the Roger Cutler, City cost would be shared between Attorney, said they could all other rate payers in Utah contact the phone company and to make a change in their see whether it would fit within billing system. He said there their ability to segregate, but might also be a constitutional they also had a legal obliga- question on whether you could tion. He said this was an make exemptions over and above assessment on the phone company programs which were put into and the City did not have the effect by the Public Service enabling power to assess Commission, such as Life-line. individual tax payers and He said this could be discrim- however the ordinance was inating. He said the phone structured, they could not make company would be happy to work it a tax on the consumer or it with Mr. Cutler, Mr. Black and would be subject to legal the Mayor's Office to investi- challenge. He said they had gate all issues involved in solved the problem with the some kind of exemption for life-line rate by defining the Centrex customers. term not to include those (0-93-10) rates. He said whether they could do something similar, The meeting adjourned at without unduly burdening the 6:40 p.m. phone company on how they would process the assessments and exclusions, he could not answer at this point, but he would Council Ch it research it. Councilmember Godfrey said �� Lj ��.', /_', the Council would like his ief Se. """'k.ty 'ecorder office to look at it. AA � ►- bf i y ri 93 - 197 4 = W,