HomeMy WebLinkAbout1. Respondent City of Renton's Motion for Reconsideration1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
{JCN2429419.DOCX;4/07851.000003/ }
RESPONDENT CITY OF RENTON’S MOTION FOR
RECONSIDERATION - 1
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON
RE:
TracFone Wireless, Inc.
Administrative Appeal
RESPONDENT CITY OF RENTON’S MOTION FOR RECONSIDERATION
I. INTRODUCTION
Respondent City of Renton’s (“the City”) seeks reconsideration pursuant to RMC 4-8-100(H)(5)
and RMC 4-8-100(I) of a discrete issue related to the total refund amount due to TracFone Wireless,
Inc. (“TracFone”). Specifically, the City discovered an inadvertent summation error in a formula on the
Excel spreadsheet the parties provided to the Examiner post-hearing for calculating the total interest
refund amount due to TracFone. Ex. H2. Accordingly, reconsideration of the Examiner’s decision,
issued June 9, 2021 (“Decision”) 1, is warranted. The corrected Decision should reflect a refund due as
of the date of the hearing in the amount of $48,161.47, plus refund interest of $2,427.34, for a total
1 The Decision is inadvertently dated May 9, 2021 instead of June 9, 2021. The Hearing Examiner may wish to correct
this to maintain a clear record.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
{JCN2429419.DOCX;4/07851.000003/ }
RESPONDENT CITY OF RENTON’S MOTION FOR
RECONSIDERATION - 2
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
refund of $50,588.81. The per diem interest accrual should be $3.96 from 5/27/2021 until the date
refunded. The City seeks reconsideration of this singular issue as set forth below and as reflected in the
Proposed Order.
II. STATEMENT OF FACTS
The Hearing Examiner’s March 12, 2021 SJ Ruling granted the City’s Motion for Partial
Summary Judgment on tax liability and held as a matter of law that: (1) TracFone is a “telephone
business” under the applicable RMC 2 and RCW 3 provisions (COL Nos. 2-5) and (2) TracFone’s gross
income from its retail agents is taxable and not exempt under the resale proviso in RCW 35A.82.060(1)
(COL No. 6). Thus, the only issue for the appeal hearing related to the amount of telephone utility tax,
interest, and penalties due from TracFone to the City for the audit period. Based on the Excel spreadsheet
jointly submitted by the parties (Ex. H2), the Hearing Examiner held that TracFone is entitled to a refund
of $66,513.50 with per diem interest of $5.20 accruing from 5/27/21.
After receipt of the June 9, 2021 Decision, the City began inputting the refund request into its
system of record. Once inputted, the City discovered a discrepancy in the spreadsheet formula provided
to the Examiner prior to the final ruling. See Exhibit A to Malone Declaration filed herewith (same as
Ex. H2). The error was a summation error in the Excel spreadsheet formula for calculating the total
interest due. Id. The formula inadvertently included only the most recent three years of the audit period
instead of the entire audit period. Id. This error resulted in an overstatement of the amount of refund due
2 RMC 5-11-1(A)(1) (local code authorizing the City to levy and collect a utility tax “for the privilege of conducting
a telephone business within the City limits.”); RMC 5-11-1(A)(2) (defining “Telephone Business” and “Cellular
Telephone Service.”).
3 RCW 35A.82.060(1) (state statute authorizing code cities to impose imposes a tax upon the business activity of
engaging in the telephone business, as defined in RCW 82.16.010, which is measured by gross receipts from the
business); RCW 82.16.010(7)(b)(iii) (defining “telephone business”) and (7)(b)(ii) (defining “network telephone
service”).
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
{JCN2429419.DOCX;4/07851.000003/ }
RESPONDENT CITY OF RENTON’S MOTION FOR
RECONSIDERATION - 3
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
to Tracfone in the amount of $15,924.69, as well as a decrease in the per diem interest rate for
overpayment interest. The City calculated the proper amount, accounting for the entire audit period. See
Exhibit B to Malone Decl., which corrects Ex. H2. Thus, as corrected, the total refund due as of the date
of the hearing should have been $48,161.47 in audit corrections, plus refund interest of $2,427.34, for a
total refund of $50,588.81. The per diem interest accrual should be $3.96 (not $5.20) from 5/27/2021
until the date refunded.
On June 14, 2021, attorneys for the City informed TracFone attorneys of the calculation error,
and asked if TracFone would stipulate to the accuracy of the corrected calculated. TracFone declined to
agree and claimed the June 9, 2021 Decision is not subject to reconsideration and the Hearing Examiner
no longer has jurisdiction. Exhibit 1 to the Declaration of Kari Sand filed herewith. The City disagrees
with TracFone’s positions for the reasons stated herein and submits that the Hearing Examiner still has
jurisdiction over this matter. See RMC 4-8-100(G)(3)(E)(x) (“The jurisdiction of the Hearing Examiner
ends when the Hearing Examiner issues a final decision or recommendation in the matter and the time
limit for all appeals has been exhausted.”) (Emphasis added.).
III. SOLE ISSUE ON RECONSIDERATION
Whether the Hearing Examiner should reconsider the refund amount based on a
formula error in the Excel spreadsheet at Ex. H2 to reflect the amount of interest due
for the entire audit period and reduce the total refund amount to correct the error.
Yes, reconsideration is warranted based on the discovery of the error and to avoid an
unconstitutional gift of public funds.
IV. LEGAL ANALYSIS & ARGUMENT
A. Legal Standard on Reconsideration.
RMC 4-8-100(I)(3) provides in pertinent part that: “[a] party of record to a decision who asserts
the decision was based on erroneous procedure, error of law or fact, or error in judgment may make a
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
{JCN2429419.DOCX;4/07851.000003/ }
RESPONDENT CITY OF RENTON’S MOTION FOR
RECONSIDERATION - 4
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
written request for reconsideration by the decision maker.” RMC 4-8-100H(5) specifically allows for
reconsideration: “Decision Final: The decisions and/or recommendations of the Hearing Examiner are
final unless appealed or a reconsideration is requested and granted.” (Emphasis added.)
The court’s decision on a motion for reconsideration is discretionary. Fishburn v. Pierce County
Planning and Land Services Dept., 161 Wn. App. 452, 250 P.3d 146 (Div. 2 2011); Lilly v. Lynch, 88
Wn. App. 306, 945 P.2d 727 (Div. 2 1997).
B. The Total Refund Amount Must be Corrected Due to an Error of Fact.
Pursuant to RMC 4-8-100(I)(3), the Hearing Examiner may reconsider a decision if it is made
upon an error of fact. Here, the formula in the Excel spreadsheet produced by the parties prior to the
Examiner’s June 9, 2021 Decision (Ex. H2) contained an error that was not discovered until after the
Examiner’s June 9, 2021 Decision issued. This error was then relied upon by the Hearing Examiner and
the City in calculating the total refund amount due to TracFone. The Decision’s Conclusion of Law,
Section 7 therefore contains an error of fact in stating that: “TracFone is due a refund of $66,513.50 plus
an additional per diem rate of overpayment interest of $5.20 per day from May 28, 2021, to the date of
payment.” Decision at p. 20, ¶7.
Specifically, the Excel formula inadvertently included only the most recent three years of the
audit period instead of the entire audit period. Ex. A to Malone Decl. (same as Ex. H2). This error
resulted in an overstatement of the amount of refund due to Tracfone in the amount of $15,924.69, as
well as a decrease in the per diem interest rate for overpayment interest. Accordingly, as corrected, the
total refund due as of the date of the hearing should have been $48,161.47, plus refund interest of
$2,427.34, for a total refund of $50,588.81. The per diem interest accrual should be $3.96 (not $5.20)
from 5/27/2021 until the date refunded.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
{JCN2429419.DOCX;4/07851.000003/ }
RESPONDENT CITY OF RENTON’S MOTION FOR
RECONSIDERATION - 5
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
Moreover, the overstated refund amount of $15,924.69 must be corrected to avoid an
impermissible gift of public funds. The Washington Constitution specifically prohibits a city or county
from giving “any money, or property, or loan[ing] its money, or credit to or in aid of any individual,
association, company or corporation, except for the necessary support of the poor and infirm[.]” Wash.
Const. Art. VIII, § 7. Even more, Wash. Const. Art. VII, § 1 states in pertinent part: “All taxes shall be
uniform upon the same class of property within the territorial limits of the authority levying the tax and
shall be levied and collected for public purposes only.” In deciding whether a public expenditure is
a gift under art. VIII, §§ 5 and 7, Washington Courts focus on two factors: consideration
and donative intent. City of Tacoma v. Taxpayers of City, 108 Wn.2d 679, 702, 743 P.2d 793 (1987).
Thus, to meet the burden of showing violation of the constitutional prohibition against gifts, it must be
shown that the gift amounts to “a transfer of property without consideration and
with donative intent.” General Tel. Co. v. City of Bothell, 105 Wn.2d 579, 588, 716 P.2d 879 (1986)
(emphasis added). Here, the City lacks donative intent and instead seeks to compute the refund due to
TracFone accurately and fairly.
The City therefore seeks reconsideration of the total refund amount owed to TracFone as
reflected in Exhibit B (corrected Excel spreadsheet) to the Malone Declaration.
V. CONCLUSION
For the foregoing reasons, the City respectfully requests that the Hearing Examiner reconsider
the June 9, 2021 Decision to correct the inadvertently overstated refund in the amount of $15,924.69
and to account for a corrected total refund of $50,588.81 as reflected in Exhibit B to the Malone
Declaration (corrected Excel spreadsheet) based on the error in Ex. H2. In all other aspects, the Decision
should stand.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
{JCN2429419.DOCX;4/07851.000003/ }
RESPONDENT CITY OF RENTON’S MOTION FOR
RECONSIDERATION - 6
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
RESPECTFULLY SUBMITTED this 18th day of June, 2021.
OGDEN MURPHY WALLACE, PLLC
By /s/Kari L. Sand
Kari L. Sand, WSBA #27355
Julia Norwood, WSBA #52876
Attorneys for Respondent City of Renton
ksand@omwlaw.com
901 Fifth Avenue, Suite 3500
Seattle, WA 98164-2008
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
{JCN2429419.DOCX;4/07851.000003/ }
RESPONDENT CITY OF RENTON’S MOTION FOR
RECONSIDERATION - 7
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
DECLARATION OF SERVICE
I, Kenya Owens, an employee of Ogden Murphy Wallace, PLLC, certify that on the date below,
I filed and served the Respondent City of Renton’s Motion for Reconsideration, supporting declarations
and exhibits thereto, and a Proposed Order via email on the following parties:
TracFone Wireless, Inc.
Scott Edwards
Lane Powell, PC
1420 5th Avenue, Suite 4200
Seattle, WA 98101
EdwardsS@LanePowell.com
Grant S. Degginger
Lane Powell, PC
1420 5th Avenue, Suite 4200
Seattle, WA 98101
DeggingerG@LanePowell.com
City of Renton Hearing Examiner
Cynthia Moya
Renton City Clerk
1055 South Grady Way
Renton, WA 98057
cmoya@rentonwa.gov
olbrechtslaw@gmail.com
I declare under penalty of perjury under the laws of the State of Washington that the foregoing
is true and correct.
Executed at Seattle, Washington this 18th day of June, 2021.
/s/Kenya Owens
Kenya Owens
Legal Assistant