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recommendation that the ordinance be repealed.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be repealed.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."