Loading...
SR-8-E (18) CA:JL:F:atty\muni\strpts\mtt\price city Council Meeting 1-24-94 J~4~ ..'AN 2 5 199't Santa Monica, California STAFF REPORT FROM: city Attorney 3-e ()~ tk ~c.e... Ju,J '4...., 4~~J TO: Mayor and city council SUBJECT: Following the Northridge earthquake on January 17, 1994, numerous businesses which consumers utilized to purchase basic goods, products and services were unable to open due to difficulties associated with the earthquake. Some businesses, which remained open, took advantage of the temporary shortage of businesses offering basic goods and products or the immediate need for vital services and unconscionably raised their prices to exorbitant levels. Since there is no evidence of a shortage of these goods and products or the unavailability of vital services, such price increases are predatory and distort the marketplace at a time when consumers are most vulnerable to this unfair business practice. The ordinance presented for adoption would limit price increases during a state of emergency, and the thirty (30) day period following the termination of the state of emergency, declared by City, state or federal officials. The price charged for goods, products and services would not be permitted to exceed the price charged on the day immediately preceding the proclamation or declaration of emergency by more than 10%. Increases higher than 10% must be justified by unavoidable increases directly attributable to additional costs charged by a supplier of the products or goods or for labor and materials used to provide a service and the further finding that without an increase greater than 10%, the business would not be able to earn a fair rate of return on their business. This ordinance provides for enforcement by criminal prosecution and also through a civil action brought by either the City Attorney's office or the affected citizen. Nothing in this ordinance prevents a business from making a fair profit, but the citizens of Santa Monica should not be forced to unnecessarily expend scarce resources at a time of great need. The ordinance is now presented to the city council for adoption. JAN 2 5 1994 JAN 2 ~ 199't ~-[ RECOMMENDATION It is respectfully recommended that the accompanying ordinance be adopted. PREPARED BY: Joseph Lawrence, Acting City Attorney Martin T. Tachiki, Chief Deputy city Attorney CA:TCB:f:atty\muni\laws\mtt\price city council Meeting 1-24-94 Santa Monica, California ORDINANCE NO. _ (CCS) (City council Series) AN EMERGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ADDING CHAPTER 4.32.160 TO THE SANTA MONICA MUNICIPAL CODE TO REGULATE PRICE INCREASES OF CONSUMER GOODS, PRODUCTS AND SERVICES DURING A STATE OF EMERGENCY AND DECLARING THE PRESENCE OF AN EMERGENCY THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS: SECTION 1. Chapter 4.32.160 is hereby added to the Santa Monica Municipal Code to read as follows: Section 4.32.160. Excessive price increases durinq state of emerqency. Findings. (a) As a result of the state of emergency that commenced on January 17, 1994, the City Council finds that numerous consumers within the City of Santa Monica have sought to purchase consumer goods, products and services such as emergency supplies, water, food, clothing and other consumer items necessary 1 f9 for their health and safety. Al though no general shortage of these consumer goods, products and services exists, numerous residents have reported incidents of excessive price increases for these goods, products and services in many instances, many times above the prices in effect on or before January 16, 1994. Although price increases may be necessary where a business has itself incurred unavoidable higher expenses and the business needs to increase prices in order to obtain a fair rate of return, these exorbitant price increases clearly exceed those that would be reasonably related to any increased operational expenses by a business. (b) The City Council finds that excessive and unjustified price increases during a state of emergency distorts the marketplace, subjects all consumers to predatory and unfair business practices and is unconscionable. (c) The City council finds that protecting citizens from excessive and unjustified price increases during any state of emergency as declared by the City, state or federal officials is vital and necessary for 2 J[ public health, safety and welfare of all consumers. section 4.32 .161. Excessive Price Increases Prohibited. Upon proclamation or declaration by city, state or federal officials of a state of emergency within or including the City of Santa Monica, and for a period of thirty (30) days after the date the emergency is declared terminated, it shall be unlawful for any person within the City of Santa Monica to sell or offer for sale any consumer product or service, including but not limited to clothes, food, water, furniture, building or construction materials, emergency or medical supplies or gasoline for an amount which exceeds ten percent (10%) of the price charged by the person for the goods or services on the day immediately before the proclamation or declaration of emergency was declared, unless the person can prove that an increase in price of greater than ten percent (10%) was unavoidable and directly attributable to additional costs imposed on the person by the supplier of the products or goods or for labor and materials used to provide the service and 3 ~> that without a greater than ten percent (lot) increase the person would not be able to earn a fair rate of return in his, her or its entire business. section 4.32.162. Penalty and enforcement. Any person who shall be convicted of violating the provisions of this Chapter shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not greater than $500 or by imprisonment in the County Jail for not more than six months, or by both such fine and imprisonment. Each day that a violation of this section occurs shall be considered a separate offense. (b) The City Attorney or any citizen may prosecute a civil action to enforce this Chapter and in any action obtain such legal and equitable relief, including the recovery of actual and punitive damages and reasonable attorney fees, as may be imposed as provided by law. SECTION 2. The city Council finds pursuant to City Charter Section 615 that a state of local emergency exists within the City of Santa Monica as a result of severe earthquake damage and that 4 the pUblic health, safety and welfare of the residents of the city of Santa Monica will be threatened if the price of consumer goods is left unregulated and allowed to increase unconscionably far beyond reasonable rates of return. SECTION 3. This Ordinance is declared to be an urgency measure adopted pursuant to the provisions of Section 615 of the Santa Monica City Charter. It is necessary for preserving the public peace, health and safety, and the urgency for its adoption is set forth in the findings above. SECTION 4. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 5. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconsti tutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The city council hereby declares that it would have passed this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion 5 of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 6. The Mayor shall sign and the city Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective upon adoption. APPROVED AS TO FORM: 7~. /J ('42,..:I<ek~ SEPH\~EllCE ting City Attorney 6 ~ CA: TCB: f:atty\muni\laws\mtt\price City Council Meeting 1-24-94 Santa Monica, California ORDJ:BABCB BO. 1723 CCCS) (City Council Series) AN EMERGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ADDING CHAPTER 4.32.160 TO THE SANTA MONICA MUNICIPAL CODE TO REGULATE PRICE INCREASES OF CONSUMER GOODS, PRODUCTS AND SERVICES DURING A STATE OF EMERGENCY AND DECLARING THE PRESENCE OF AN EMERGENCY THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS: SECTION 1. Chapter 4.32.160 is hereby added to the Santa Monica Municipal Code to read as follows: Section 4.32.160. Excessive Drice increases 4urinQ state or emerqency. Pindings. (a) As a result of the state of emergency that commenced on January 17, 1994, the City Council finds that numerous consumers within the City of Santa Monica have sought to purchase consumer goods, products and services such as emergency supplies, water, food, clothing and other consumer items necessary 1 for their health and safety. Although no general shortage of these consumer goods, products and services exists, numerous residents have reported incidents of excessive price increases for these goods, products and services in many instances, many times above the prices in effect on or before January 16, 1994. Although price increases may be necessary where a business has itself incurred unavoidable higher expenses and the business needs to increase prices in order to obtain a fair rate of return, these exorbitant price increases clearly exceed those that would be reasonably related to any increased operational expenses by a business. (b) The City Council finds that excessive and unjustified price increases during a state of emergency distorts the marketplace, sUbjects all consumers to predatory and unfair business practices and is unconscionable. (c) The City Council finds that protecting citizens from excessive and unjustified price increases during any state of emergency as declared by the City, state or federal officials is vital and necessary for 2 public health, safety and welfare of all consumers. Section 4.32.161. Excessive Price Increases Prohibited. Upon proclamation or declaration by city, state or federal officials of a state of emergency within or including the Ci ty of Santa Monica, and for a period of thirty (30) days after the date the emergency is declared terminated, it shall be unlawful for any person within the City of Santa Monica to sell or offer for sale any consumer product or service, including but not limi ted to clothes, food, water, furniture, building or construction materials, emergency or medical supplies or gasoline for an amount which exceeds ten percent (10%) of the price regularly and customarily charged by the person for the goods or services on the day immediately before the prOClamation or declaration of emergency was declared, unless the person can prove that an increase in price of greater than ten percent (10%) was unavoidable and directly attributable to additional costs imposed on the person by the supplier of the products or goods or for labor 3 and materials used to provide the service and that without a greater than ten percent (10%) increase the person would not be able to earn a fair rate of return in his, her or its entire business. section 4.32.162. Penalty and enforcement. Any person who shall be convicted of violating the provisions of this Chapter shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not greater than $500 or by imprisonment in the County Jail for not more than six months, or by both such fine and imprisonment. Each day that a violation of this section occurs shall be considered a separate offense. (b) The City Attorney or any citizen may prosecute a civil action to enforce this Chapter and in any action obtain such legal and equitable relief, including the recovery of actual and punitive damages and reasonable attorney fees, as may be imposed as provided by law. SECTION 2. The City Council finds pursuant to City Charter Section 615 that a state of local emergency exists within the city 4 . ~r. of Santa Monica as a result of severe earthquake damaqe and that the public health, safety and welfare of the residents of the City of Santa Monica will be threatened if the price of consumer goods is left unregulated and allowed to increase unconscionably far beyond reasonable rates of return. SECTION 3. This Ordinance is declared to be an urgency measure adopted pursuant to the provisions of section 615 of the Santa Monica city Charter. It is necessary for preserving the pUblic peace, health and safety, and the urgency for its adoption is set forth in the findings above. SECTION 4. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 5. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion 5 ~ of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 6. The Mayor shall sign and the city Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the off icial newspaper within 15 days after its adoption. This Ordinance shall become effective upon adoption. APPROVED AS TO FORM: ~~~ LAWRENCE City Attorney 6 . . Adopted and approved this 25th day of January, 1994 9tM~ I hereby certify that the foregoing Ordinance No 1723 (CCS) was duly and regularly mtroduced at a meetmg of the CIty Council on the 25th clay of January, 1994; that the said Ordinance was thereafter duly adopted at a meeting of the City Council on the 25th day of January, 1994 by the followmg Council vote: Ayes. Councilmembers' Abdo, Genser, Greenberg, Holbrook, Olsen, Rosenstem, Vazquez Noes Councilmembers: None Abstam' CouncIlmembers None Absent' Councilmembers' None ATIEST- ~.w/ /L1~ .---- -~ - / CIty Clerk