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Nevada City Council to consider sales tax increase and sewage rate adjustment

The City Council of Nevada City will meet at 6:30 p.m. Wednesday to consider use tax and transaction tax options that would increase annual revenue for the city.

According to city documents, a reason for the sales tax adjustment was the extra operating cost due to ending the co-staffing relationship between the Nevada County Fire Consolidated Fire District and the Nevada City Fire Department.

City staff is proposing two options. One option would increase special tax by one-fourth of a cent, or 0.25 percent. If this option is approved, Nevada City residents would see their base sales tax rate increase from 8.5 percent to 8.75 percent until April 2018. The tax rate would decrease to 8.375 percent after April 2018, when Measure L expires. This adjustment would generate $290,000, which would be used to provide funding for fire staffing.



Another option is to continue the city’s general purpose tax under Measure L beyond April 2018. This would continue to implement the current 8.5 percent sales tax rate and would generate $432,000 for the city, which would be used for general municipal purposes.

The hike for the sales tax would be placed on the June 7, 2016 ballot and is subject to voters’ approval.




Also on Wednesday, the city council will vote on a resolution that would adjust the monthly sewage rate for residents affected by the blended sewage user charge, a new rate calculation rolled out by the city in January that combines flow charges and a fixed rate.

Under the new strategy, 40 percent of the sewage rate is fixed and 60 percent of it is determined by flow charge calculated based on customers’ water usage during the months of January and February.

According to city documents, staff chose January and February because the months reflect typical user flows. Staff would also recalculate the flow charge every year based on residents’ meter readings during these two months.

Since the implementation of the new rate in July, the city has received complaints from some residents who have gotten an increased sewage bill and who are claiming “extenuating circumstances” such as a water leak or visitors in the house.

If the city council passes the adjustment this Wednesday, city staff would be able to review and adjust consumers’ sewage rates through comparing the residents’ current usages to their previous usages. If no irregularity is spotted, staff would also have the option of analyzing the customer’s water usage in the upcoming year and adjust rates accordingly.

In other business, the city council will vote on a second reading regarding the state mandate to streamline permitting procedures for small residential rooftop solar system son residential rooftops. Another item undergoing a second reading is the proposal to enact a simplified business tax structure.

For more information, visit: http://www.nevadacityca.gov/

To contact Staff Writer Teresa Yinmeng Liu, call 530-477-4236 or email tliu@theunion.com.


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