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SR-11-D (12) - Santa ~onlca, call~nla, March 15, 1978 :z- tJ 7J -~O t/ liD TO: Mayor and City ~ouncIl AfAR 2 8 1978 FROM: CIty Staff SUBJECT: .\mendment to SolIcItatIon PermIt Ordinance Introduction ThIS report transmIts InformatIon regardIng a new SolIcitatIon PermIt OrdInance pertaIning to charItable, patrIotIc, CiVIC and SImIlar organIzatIons that would alter the current procedure for acquirIng a SolIcItatIon PermIt, IncludIng the InstItutIon of a $50.00 applIcatIon fee, and transfer the dutIes of admInIstration of SolIcItatIon PermIts from the CIty Manager's Office to the License DIvIsion. Background Pursuant to an earlier request of the CIty Council, a staff report dated AprIl 1, 1976, transmItted to CIty CouncIl an ordInance amendIng the SolIcItatIon Permit procedure, whereby a $200 00 fee was charged for the InItIal permIt and a SSO.OO fee for each permIt thereafter, and the admInIstration of SolIcItatIon PermIts was to be transferred to the CIty Clerk. The CouncIl had introductIon and fIrst readIng on the ordInance on AprIl 13, 1976 EarlIer In November 1975, a laWSUIt entItled "International SocIety for KrIshna ConSCIousness, Inc. vs George P. TIelsch, et all1 '''as flIed agaInst the CIty. ISKCOKalleged that Section 3336 of the Santa Monica MunIcIpal Code (generally prohIbItIng all solicitatIon, sellIng and distrIbutIon in the bUSIness dIstrIct) was unconstitutIonal. Furthermore, the plaIntIffs liD MAR 2 8 1978 TO: Mayor and C~ty4ltuncl1 -- March 15, 1978 -2- cla~med that Sect~on 6243 et seq. of the Santa MonIca Mun~clpal Code (SolIcitation PermIt Procedure) could not be const~tutionally applIed to rellg~ous groups. The proposed ordInance was not brought back for second readIng and adoptlon because of the pendency of thIS case. Thereafter, on ~ay 20, 1976, the Superior Court issued a partlal judge- ment as a step towards br~ngIng the dlspute to a conclUSlon. The effects were. 1 Judge RIttenband dld not rule the ordInance unconstitulonal. 2. ISKCO~ was requIred to comply wlth the present Sollcltatlon procedure despIte Its assert~ons to the contrary and the C~ty was requlred to process a properly flIed appllcatlon and Issue a SolIc1tatlon Permit; 3. Although the CIty was successful 1n defendIng the solIcitatIon and handl~ng ordInances from constltut~onal attack, the City IS afforded an opportunIty to amend the ordInance provlslons by maklng them less suscept1ble to a successful constItutIonal challenge 1n the future; 4. DespIte the broad Immun1tles from leglslative controls granted to rel~glous groups under the FIrst Amendment of the United States Constltutlon the Clty IS provIded WIth an occasion to Impose reasonable regulatIons as to the tlme, place and manner of sollcltation and handb1lling. TO: Mayor and City tlJnCIl - March 15, 1978 -3- Current Procedure for ObtaInlng a SollcItatIon PermIt As stIpulated by the ~mnIclpal Code, In order to obtaIn a SolIcitatIon PermIt the sollcitor(s) for charltable, patrIotIC, ciVIl and SImIlar organizations must fIle an applicatIon WIth the CIty ~anager's OffIce. Once the applIcation IS flIed, the fOllOWIng procedure transplres: 1. The CIty ~anager submIts the completed applIcatIon to the Pollce Department for lnvestlgatlon 2. The PolIce Department investIgates the InformatIon contaIned in the applIcatIon and flIes a report WIth the CIty Manager wIthln forty-flve days. 3. If after receIpt of the investIgatIon report from the PolIce Department, the CIty Manager fInds that there 1S no substantlal evidence of untruth or that a fraud would be perpetrated upon the publlc, he must lssue the appllcant a SolICItatIon PermIt for the perIod not exceed1ng SlX months from the date of lssuance. Transfer of Sollcitatlon Perrnlt Responslblllty Sollcitatlon permlts are very simIlar to bUSIness lIcenses presently lssued by the LIcense Dlvlslon. In effect, SolICItatIon PermIts are lIcenses to conduct bUSInesses withIn the CIty; the maJor dIfference IS the manner In WhIch the generated funds are used. It would be more effiCIent to place the responSIbIlIty of SolICItatIon Permlts WIth the LIcense D1VIslon WhICh IS currently organized to prOVIde this servIce. TO. Mayor and Clty~nc~l - March 15, 1978 -4- ApplIcatIon Fees for SolIcItatIon Permits ~~lle there are currently no fees for Sol~cltatLon PermIts, the PolIce Department has estImated that It takes between 1~ to 2 working days for a detectlve to adequately InvestIgate and submIt a report wIth recommenda- tIons concernIng the truthfulness of the informatIon listed on the appllcatlon. The cost to the CIty for polIce personnel Involvement In the investIgatIve process for each permIt ranges from ~50 00 to $250.00 dependIng upon the number of hours reqUIred. Staff contacted nIneteen cItIes In Southern CalIfornIa as well as Los Angeles County In order to fInd out what fees were charged for solICItation permIts by these agencIes. SIX cItIes (Burbank, Compton, Costa Mesa, Downey, Orange and SImi Valley) charged fees to non-profit organIzatIons for solic~tation permIts. Fees ranged from $5.00 to $15.00. Therefore, a maJor change Instituted by the attached ordInance summary IS that a S50 00 appllicatIon fee be Imposed In order to partially offset the expenses Incurred in the admInIstratIon and InvestIgatIon of solIc~ta- tlon permIts. The recommended fee may be substantIally less than the actual maXImum cost. Th~s fee IS recommended SInce the applIcants represent relIgIOUS or charitable organIzatIons and causes. It IS antICIpated that the TO e Mayor and CIty ~ouncll -- }.larch 15, 1978 -5- applIcatIon fee WIll generate approxImately $2,000 per year. Summary of Proposed OrdInance The proposed ordInance would dIffer from the current ordInance by these maJor pOInts 1) defInIng a "rellglous" organIzatIon as opposed to a "charItable"organlzatlon, 2) requIrIng more Infomatlon on the back- ground of the applIcant before a solICItatIon permIt may be Issued, 3) reqUIrIng a $50 00 applIcatIon fee from any organIzatIon WIshIng to SOlICIt, 4) reqUIrIng more personal background informatIon on those who SOlICIt for the organIzatIon; 5) prOVIdIng for a hearIng If a permIt applIcatIon IS denIed, 6) transferrIng to the LIcense DIVISIon the dutIes of admInIstratIon of SolICItatIon Pemlts from the CIty Manager's OffIce; 7) statIng that relIgIOUS and charitable organi- zatIons may SOlICIt only between hours of g.OO a ffi. and 7"00 p m. RecommendatIon It IS recommended that CIty CounCIl dIrect the CIty ~ttorney to prepare an ordInance which would transfer the dutIes of solICItatIon admInIstratIon from the OffIce of the CIty Manager to the LIcense DIVISIon, InstItute a $50 00 applIcation fee, and adopt the other aforementIoned amendments to the ~unlclpal Code relatIng to SolICItatIons. PREN.RED BY ~~RK C PUSINELLI ~dmlnlstratlve AIde ~fCP dvl Attachment . . l/16/78 -C~I:~ICP:dvl Comparlson of ~rent APPENDIX and Proposed SOllcitation~rmit OrdInance Current OrdInance 1. II. III. Appl1cation for permit (data requJred); I) Name and address of app1Jcant 2) ~ame and address of any organizatIon the applicant 1S affIliated with other than the organIzatIon the permi t is for. 3) Location of all natIonal, state, local headquarters. 4) Kames, addresses, physical descrIption, blrthdates, socJal security numbers of all officers and those solICItIng 5) Purpose for which proceeds are to be used. 6) The dollar goal to be raised 7) The bank or place where any part of. or all of. the funds raised by the solIcitatIon will be put. 8) What records of funds will be kept and where; and what will be open to the pubhc. Proposed OrdInance T. DefInItions of terms SOlICIt. charitable, relIgious contributions, person, promoter. LIcense DiVIsion. II Exemptions from PermIt: ReligIOUS, charItable, et~. (organIzations are exempt if contrIbutions gIven from o~~ membershIp), III ApplIcatIon for permIt (data required); 1) ~ame and address of applIcant 2) Name and address of officers of the organizatIon the applI- cant is affilIated WIth and a copy of the resolution from that organizatIon authoriZIng the solIcitation. 3) The purpose of the solIcitation dollar goal, and use of contri- but ions. 4) A statement showing the need of the soliCItatIon. 5) Kames and addresses of person or persons by whom receipts of the solIcitatIons will be dispersed. 6) The names and addresses of person or persons who will be In charge of conductIng the soli- CItation and the names of all promoters of the solIcitation. 7) An outlIne of methods used ln sohclting. 8) Time when soliCItations wIll be made starting and ending dates of solIcitatIon e -1- Current Ordinance 9) Certified financial statements of the appl~cant for the current year and the year precedlng the date and budget breakdm.,l1. 10) Statement whether their unlform or dress 10) resembles that of any group in the area conducting a simllar type of activlty. 11) Statement whether or not the organ- 11) ization 1S uSlng those under elghteen years of age as sollcltors IV. Investigation . APPENDIX Proposed Ordlnance 9) Estimated cost of solicltation. 12) The amount of wages, fees, commlSSlons, expenses or emoluments to be spent or paid to any person in connection wlth such solicltatlon, and the names and address of those persons. A flnanclal statement for the last proceeding fiscal year of any funds collected for charitable purposes. A full statement of character in the extent of the charitable work belng done by the applicant ln the City. A statement that the actual cost of the sollcitatlon wlll not exceed 25% of the total amount to be ralsed. 13) 14) A statement that if a permlt lS granted by the Clty lt will not be used by the organlzation as an lndorsement by the Clty 15) Statement whether thelr uniform or dress resembles that of any group in the area conducting a similar type of activlty. 16) Other information as may be reasonably required by the License Dlvision Director so he/she may ohtaln "character" of the proposed solicitation for the public welfare. IV. Investlgatlon The Clty ~mnager, upon receipt of an application with approprlate infor- mation, sends applicatlon to the Police Department for lnvestigation. Police return appllcatlon to Clty Manager's Office withln forty-five days of receipt. a) The appllcant must notify the Llcense Division of any changes in the character of the organ- ization durlng the tlme the permit lS pending; or when granted. b) The License Divls10n can lnvest- 19ate so as to obtain proper information. e -2- Current OrdInance V. Permit 1. If the applIcatIon IS In order then the permIt IS Issued for not more than SIX months. VI. Exception J. No permIt is required for solIcitation by charItable organizations that have been In the CIty for 5 years or more (provided that durIng the last five years a p~rmit has been granted to the organi- zation). 2. No person exempted by provIsIons of this sectIon from obtainIng a permIt shall conduct any sale or bazaar. etc. that needs a Sales Tax Permit without fIrst contacting the LIcense DiVIsion of the intended sale or haVIng obtained a Sales Tax Permit from the LIcense DiVIsion. e APPENDIX Proposed Ordinance c) It is approprIate to investigate the applicant's fInancIal records. V. Standards for LIcense DiVIsion's actIon for GrantIng or Denying ApplIcatIons for CharItable SolICItation Permits. PermIt is Issued when: 1. The statements in the appli- catIon are true. 2. The applIcant is of good character. 3. Reliable persons are in control of the organization. 4 The applIcant IS not engaged in fraud. 5. The soliCItation will not defraud the public 6. The solIcitatIon IS not for private profIt. 7. The cost of raising funds WIll be reasonable (any cost greater than 25% of the amount collected IS unreasonable unless specIal facts are given). VI. Fee for SolIcitation's Permit 1. The applicant pays a ~50.00 permit ~ee. 2. The applIcant pays 10~ per copy of permIt deSIred. e -3- Current Ordlnance VII. Permlts Revocatlon 1. Permlt can be revoked lf the organlzatlon has not followed proper gUldellnes 2 Permlt revoked at the dlrectlon of the Clty Manager, wlth a letter from the License DlvlSlon. VlrI Unlted States Mall ~o permlt lS requlred for Sollcltatlons made through the Unlted States Mail. IX. Rummage Sale A $5.00 fee lS to be pald for each two-day perlod or portlon thereof that the rummage sale lS held by a charltable organizatlon havlng ltS headquarters or the majority of ltS members outslde Santa Monlca. x. Telephone Sollcltatlon No one may use the phone In any general Sollcitatlon except those .In the organlzatlon ln whose name a perm1t has been lssued, provlded there 1S no compensatlon for the Sollc1tatlon. _ APPENDIX Proposed Ordlnance VII. Charltable Sollcltatlon Permlt - Form-T1me Llm1t 1. Certain facts to be on permlt. 2 Permlt 15 not an endorse- ment by the Clty_ 3. Permlt slgned by L1cense D1V1Slon 4. Organlzatlon cannot soliclt longer than 180 days; but Llcense D1V1Slon may extend time llmlt for additlonal 180 days. 5. Charltable organlzatlons may SOllClt only from 9 a.m to 7 p.m., seven days per week. VIII. Permlt ~on-Transferrable -- Return of Upon Explratlon Any permlt lssued under thlS ordlnance lS non-transferrable and shall be returned to the Llcense Dlvlsion wlthln two days of lts date of explration; \\'1 th all coples. IX. Agents and Solicltors fQr Charltable Sollcltatlon Permlt Holders 1. Credentials glven by permlt holders to their agentsr credentlals must have certaln pertlnent facts. 2. ~ copy of credentlals flIed wlth Llcense Divlslon. 3. Credentlals for publ1c Vlew ln Clty flIes. X. Wrltten Recelpts Requlred Any contrlbutlon greater than $1 00 must have a wrltten recelpt; the name and permlt number of SOllC1IDL must be on the recelpt. . . . -4- e APPENDIX Proposed Ordinanc~ XI. Hearlng After Denial of Permlt 1. Wlthln five days of recelving by mail, any appl1cant may fl1e a written request for public hearlng before the License Review Board. 2. The License Review Board sets time and place, in five days of request fl1e. 3. License ReVlew Board glves a decision wlthin ten days after the conclusion of the hearing. 4. The License Dlvislon must file a report stating how and why the Llcense Review Board reached thelr decision; the public may Vlew a copy of the report. XII. Revocation of Permlts Permit revocations will be processed pursuant to current License ReVlew Board procedures. XIII. Notice of Suspension of Revocatlon of Permit to Chlef of Pollce 1. The Police Chlef must be notlfled by the License Dlvlslon of any suspenslon or revocatlon of a solicitation permlt. ~ e e -5- APPENDIX Proposed OrdInance XIV. Books and Records of Permit Holders No person may SOlICIt any contributions for a charItable purpose ~lthout havIng an accountIng system showing all records of payments, revenue, etc. XV. Report Required from PermIt Holder 1. Thirty days after the SolIcitatIon a report must be submitted to the LIcense DIvIsion by the organizatIon; this must be a detaIled report showIng the amount raised, spent, IncludIng wages, fees. etc.; ~nd the report must show the dIsposition of the balance of funds collected by the solIcitatIon. thIS is for publIc VIew. 2. The License DivisIon may extend the period for an addItIonal 30 days. 3. The permit holder must make available to the License DivisIon a representatIve for whIch the accuracy of the report can be checked. \~I. ReligIous SolIcItations A certificate from the License Division IS necessary for solicItatIon InformatIon ~eeded~ 1 Name and address of headquarters of person applYIng for permIt. 2. Names and addresses of applIcants. prInCIpal manager; copy of resolution stating need for solicitation. 3. Purpose of soJicitatlon; dollar goal; use of receipts. 4. Statement showIng need for solicitatIon 5. Names and addresses of solIcitors 6 Names and addresses of those in charge of conductIng the SOlIcItation; names of promoters of solicltation. 7. OutlIne of methods used conducting sollcitatlon. 8. Time when solicitatIon IS to be made; beginnIng. ending, dates_ 9. Estimated cost of solicitatIon. e -6- e APPENDIX Proposed Ordinance la, Amounts of wages, fees, etc. (costs of SOlIcItation), wIth names and addresses of those paid. 11. FInancial statement for the last fiscal year for any religious funds collected by the applicant wIth a statement giving the amount of the dollar raised; costs; fInanCIal dIstributIon of money collected. 12. Full statement of character of the relIgious work carrIed on by the organIzatIon. 13. Statement that the permIt IS not an endorsement by the Clty. 14. Statement whether theIr uniform or dress resembles that of any group in the area conductIng a simIlar type of activIty. 15. Other pertInent InformatIon Also: If there is any change in policy, then the LIcense Division must be notifIed In wrIting wi thin 24 days. $50 00 permit applIcatIon fee. The permit IS good for 6 months; It is issued by the License DIVISIon. RelIgIous organizatIons may sollClt only from 9 a.m. to 7 p.m., seven days per week. Permit must contaIn the above requirements (1-14) . The solICItor must carry credentials and a copy of the solicitation permit granted to hIs/her organizatIon CollectIons taking place WIthIn a church, synagogue does not requIre a solicitatIon permi 1. XVII. InvestIgatIon of AffaIrs of Persons SolicitIng for RelIgIous Purposes and Persons Exempt from Permit and Certlficate Require- ments -- PublIcation of FIndings 1 The License DIVIsion can InvestIgate the affairs of anyone soliCItIng for religIous purposes under the certificate Issued by the CIty for solicitation. 2. The applicant shall furnish necessary information to the LIcense DIVIsion. 3. FIve days before the release of the fIndIngs of the InvestIgation, a report must fIrst be gIven to the person ~ . -7- . APPENDIX Proposed Ordlnance being investigated - the person being investigated then must file a statement or statements conflrrnlng or denying the results of the lnvestlgatlon. XVIII. The religlolls organ1zation cannot misrepresent themselves. XIX. Penaltles 1. Any vlolatlon of the prov1slons of this ordlnance 1S a misdemeanor. XX. Separabllity Each provisIon of this ordlnance is independent of all other provisIons (if one section is inval1d then the other sections are stIll valid). XXI. Repeal of Conflicting Ordinances All ordlnances or parts of ordInances in conflIct with the provisIons of this ordinance are repealed.