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HomeMy WebLinkAbout1985-09-24; City Council; 7224-3; Repealing Municipal Solar Utility0 co ro W 5 X a. CL Q Z O_` J U Z M O 0 CIT �'OF CARLSBAD -- AGEND.� BILL to - AB# 7224-#.3' TITLE: DEPT. HD. MTG. 9/24/85 REPEALING THE CARLSBAD CITY AM CA iiiri3iCiFAL SOLAR Uln*rT iTi DEFT. CITY MGR._� RECOMMENDED ACTION: if Council concurs your action is to introduce Ordinance No. pia( ITEM EXPLANATION The City Council at your meeting of December 7, 1982 adopted Ordinance No. 8099 establishing the Carlsbad Municipal Solar Utility (CMSU). The CMSU was established in response to new legislation providing that taxpayers who leased solar equipment from a company with a permit from a municipal solar utility could get a 55% tax credit for their lease payments. At that time you could only get the credit if you lived in a city that had a municipal solar utility. That law was changed in 1983 to allow the tax credit without regard to the permit but only if they were not within a solar utility's jurisdiction. If there was such a utility then the taxpayer could only get the credit if the person they leased the system for held a permit from the utility. This creates a trap for the unwary and could result in a citizen who had leased a solar system being denied his tax credit because of the City's action. Since that is exactly contrary to the City's intention in adopting the ordinance in the first place it is our recommendation that the ordinance be repealed. The Utilities and Maintenance Director reports that in the three years since the City's utilty was established we have had zero use. The City has issued no permits. Since the existence of the utility is not having any practical good effect and its continuing existence has the potential for hurting a citizen by invalidating a tax credit it is recommended that the ordinance be repealed. Similar action was taken by the City of San Diego in 1984. A copy of their city manager's report on the issue and an accompanying news story are attached for your information. Oceanside has issued a number of permits and hired city staff to administer their program and elected to continue their utility for consumer protection purposes. FISCAL IMPACT None EXHIBITS Ordinance No. A.06 San Diego City Manager's report and news story I c m 1S o LL Z O � 2 t W 14 r '� 1 m 15 O LC J O z�z cP 16'' z0 'Q 17 Y U ►- O 18 19 20 21 22 23 24 2511 26 27 28 ORDINANCE NO. 8106 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AMENDING TITLE 18, CHAPTER 18.30 OF THE CARLSBAD MUNICIPAL CODE BY THE DELETION OF SECTION 18.30.030 TO REPEAL THE CARLSBAD MUNICIPAL SOLAR UTILITY. NOW, THEREFORE, the City Council of the City of Carlsbad does ordain as follows: SECTION 1: That Title 18, Chapter 18.30 of the Carlsbad Municipal Code is amended by the deletion of Section 18.30.030. SECTION 2: That Resolution No. 7417 adopting rules and regulations for the Carlsbad Municipal Solar Utility is repealed. EFFECTIVE DATE: This ordinance shall be- effective thirty days after its adoption, and the City Clerk shall certify to the adoption of this ordinance and cause it to be published at least once in the Carlsbad Journal within fifteen days after its adoption. INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City Council on the 24th day of September 1985, and thereafter , PASSED AND ADOPTED at a regular meeting of said City Council held on the 1st day of October 1985 by the following va'te, to wit: AYES: Council Members Casler, Lewis, rmlchin, Chick and Pettine NOES: None ABSENT: None APPROVED AS TO FORM AND'-' GA TCY ey VINCENT F. BIO Oyt.d .r 2 3 4 5 6 7 8 r 9 10 11 0 12 a 13 m m o0,u.'a 14 z 0 "a" 15 m y w U Wza 16 >��� a a 17 >. U 18 19 20' 21 22 23 24 25 26 27 28 -1 r- MARY �H.CASLER, Mayor ATTEST: L.THA L. RAUTENKRANZ, City C r M1 The City of San .Diego MANAC!,FR'S Wdm DATE ISSUED: April 20, 1984 REPORT N0. 84-154 _ ATTENTION: Public Services and Safety Committee, Agenda of April 25, 1984 Mqy' SUBJECT: Repeal of the Municipal Solar ,Utility MVlj�9614 Ordinance U, q�NrF FS�, r Q�prA�� SUMMARY Issue - Should the City Council repeal the ordinance which established the Municipal Solar Utility Pro- gram (MSU) ? Mana er's Recommendation - Repeal Ordinance 0-15863 which established t e MSU. Other Recommendations - The San Diego chapter of the California Solar nergy Industries Association (CALSEIA) supports the repeal of the MSU ordinance. Fiscal Impact - This action will reduce the Proposed r5 Budget et for the Building Inspection Department by 1.00 Building Inspector II position at a total annual savings of $35,814. RAr,Vr.RnTTTn Because the law has been changed which affects tax credits for the leasing of solar equipment, the City of San Diego Municipal Solar Utility (MSU) is no longer needed, and it is therefore recommended that the ordinance establishing the MSU be repealed. In October, 1982, the City Council approved an ordinance which established the City of San Diego Municipal Solar Utility ;MSU). The MSU had been established because legisla- tion in effect at the time said that taxpayers who lease J� -2- solar equipment from a lessor granted could claim•a 55% tax credit on their that time, lessees could claim the tax lived in a City that had an MSU. a permit from an MSU lease payments. At credit only if they Subsequently, there was little activity in leasing, because the solar tax credits were in jeopardy. That issue was resolved in July, 1983, when the solar tax credits were included in the budget package: approved by the State Legisla- ture. Energy Program staff began wrking with two solar leasing companies to change their leoase agreements so that they could be permitted under the City's MSU. No permits have been issued at the present time. Meanwhile, new legislation was enacted in September, 1983, which now allows lessees to claim the solar tax credit without restriction unless there is an MSU. If there is an MSU, then the lessor must hold an MSU permit. Some leasing has been taking place outside the MSU program. The lessees_of these systems are not now eligible for the tax credit. To attempt to avoid an unfairness to such lessees, the proposed repeal -ordinance contains wording which says that it is the intent of the City Council that such lessees be treated as if the MSU had not been available to prospective leasing company permittees. DISCUSSION One of the advantages of the MSU would have been to provide - consumer protection through the permitting of leasing companies, the monitoring of lease provisions, and the establishment and enforcement of standards for the sizing and installation of leased solar systems. Energy Program staff, with the assistance of the California Solar Energy Industries Association (CALSEIA) could make information available to consumers which would help them in their decision to purchase or lease solar energy systems. Such information has already been prepared by CALSEIA. Disadvantages of retaining -he MSU include providing another arena for potential City liability and imposing regulation on otherwise -private business transactions. ALTERNATIVE Do not repeal the Municipal Solar Utility. Respectfully submitted, X01 Sue Williams Deputy City Manager y ifaTr TWAnra T4.� �� iri"i .L/jouallu 1(a0 Solar" Mmicipal Utility BY DAVID WMTWER D YIXAAmMM8uff kWr Lees1han a year after the City - of San Diego created a Solar Municipal Utility, the city may dis• band it. At the end of April, the Public Services and Safety comittee ap. proved a city manager's reeomen• dation to repeal the ordinance that created the agency. ' '&Mors" September. 19M, the state allowed those persons leasing solar energy saviae devices to' deduct tax credits only if the ,system went through ` a' ''Solar .,ii wmcipal Utili«y. The law was changed to allow 'anyone leasing a solar system to take tax credits, but only if they were not within a solar utility's jurisdiction. If the apartment, condominium or-•homeowaw .were within .the utWrty, s jurisdiction, thin he'liad to go through the utility. "I realized we were preventing some people from obtaining tax .credits because of the solar utility, ifthe Isisiag company did not have a permit liom the city," said Ruth Ann Hageman, the city's energy coordinator who help create the utility and aW-AsW that 'it be dissolved. Since numerous out of state solar companies were getting headaches trying to obtain the city's . permit, Xageman said she recommended dissolving the utility. "It hurt to +iirite 'ito demise alter so ;nuch time and Fort," said Hsgeiaan,''it.thw is the onq timfl `-bitr .cy t ssinuied a.pcagram iiageman"s department will eontfnue to provide consu�wr. infor- Mation about -# lwvirir. solar ,rpp�atua,� ��,,v�ill atiA haw* jab ,I..%o city still basapoo• Ram to *Am euWo -eoa'ump- tion in • city operstions and that takes Plot of 4", ! 0 did. , 7Us atiy oatiiicli will take up the city nuuVr's r9commonda. tion within the next few weeks. % r�drih�fih'�fifda�b, coor- dinstor for the City of Oceanside, Which has had a solar municipal utility operating for two years, said th* lass of the San -Diego pr''oBmm was unfortunate. ms tax credit is only one iaue. MW other issue is consumer protection." The Oceanside utility will con. tinue to operate, Sansome said. it services about 1,000 dwelling units 1 0 v `R)k ` , does and ..collecting ef•leasor'r rmt own the solar systems. ., , Ub.. 41$ fivhu.i Mark Zimmernuu, a founding director of the local chapter of the California Solar Energy Industries Ann. and a marketing director at Solaramith Corp., said the solar in. dustry wouldn't lose anything. "The lessee can still take the solar tax credits. But I can we why the city wanted to drop the liability and headaches of the program."