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SR-208-010 F:/finance/Treas/share/business license application fee.doc City Council Meeting: May 13, 2003 Santa Monica, California TO: Mayor and Council Members FROM: City Staff SUBJECT: Ordinance to Create a Business License Processing Fee and Resolution Setting Fee INTRODUCTION: This report recommends that the City Council create a business license processing fee. The resolution setting the amount of the fee will be submitted to Council with the second reading of the ordinance. BACKGROUND: A fee is proposed to recover the cost of processing the business license tax application and business license renewal payments and for issuing the business license tax certificate. DISCUSSION: The City currently processes approximately 20,000 applications for new and renewed business license tax certificates annually. A minimal fee of $10 per application is recommended to partially recover the cost of staff time to review applications, enter applications into the business license system, follow up on incomplete or delinquent applications, and other activities associated with the business license process, as well as the cost of related supplies and expenses. The actual cost of the process is 1 approximately $19 per application. Staff recommends the lower $10 fee to lessen the impact on small businesses. A number of cities in California assess a similar fee. A list of those is attached. BUDGET/FINANCIAL IMPACT: Implementation of the business license processing fee will generate approximately $200,000 in General Fund revenue annually. The fee amount will increase annually by a CPI factor, and will also be reviewed periodically as part of comprehensive City-wide fee studies that are conducted every five years to ensure that the fee is adequately recovering costs. The impact of this fee increase will be included in the Proposed FY 2003-04 Budget. RECOMMENDATION: It is recommended that the City Council introduce an ordinance creating a business license processing fee. The resolution setting the amount of the fee will be submitted to Council with the second reading of the ordinance. Submitted by: C. M. Dennis, Director of Finance David Carr, Acting City Treasurer Debby Sowers, License, Permit & Parking Citation Supervisor Attachments: Attachment 1 - Survey of Business License Processing Fees Charged by other Cities (NOT ATTACHED) – SEPARATE Ordinance Establishing Business License Processing Fee 2 f:\atty\muni\laws\mjm\businesslicensefeesord-1.wpd City Council Meeting 5-13-03 Santa Monica, California ORDINANCE NUMBER ____ (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ESTABLISHING A FEE FOR PROCESSING BUSINESS LICENSE APPLICATIONS THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Section 6.04.030 is hereby added to the Santa Monica Municipal Code to read as follows: Section 6.04.030. Business license application processing fee. Business license applicants shall pay a fee to cover costs related to processing business license applications. The amount of the fee may be set, and from time to time amended, by Resolution of the City Council. SECTION 2. 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, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 3. 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 3 court of 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 of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. 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 30 days from its adoption. APPROVED AS TO FORM: _________________________ MARSHA JONES MOUTRIE City Attorney 4