HomeMy WebLinkAboutStaff Report 3.C 12/21/2009~ ~
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A~enda.Title: Resolution Establishing An Administrative Fee For City Of Meeting Date:
Petaluma Business Tax Certificate Applications And Annual Renewals December 21, 2009
Meeting Time: 7.:00 PM
Category: ^ Presentation ^ Appointments ®Consent ^ Public Hearing ^ Unfinished Business ^ New Business
Department: Director: Contact Person: Phone Number:
Finance Sandra Sato Sue Simmons 778-4352
Total Cost of Proposal or Project: Name of Fund:
Additional revenue to compensate the City for the Finance General Fund
Department's business license processing costs. Account Number:
Amount Budgeted: $40,000 1100.11100.45170
Current Fund Balance:
($5,789,911)
Recommendation: It is recommended that the City Council fake the following action:
Approve Resolution establishing an administrative fee for City of Petaluma Business Tax Certificate
Applications and Annual Renewals. '
1. ^ First reading of Ordinance approved [nlailii~lousiy, or with unanimous vote to allow posting prior to second reading
2. ^ First reading of Ordinance approved without Unaniulous vote: Ordinance has been published/posted pt-ior to second
reading; see Attachment
3. ^ Other action requiring special notice: Notice has been given, see Attachment
Summary Statement: On June 15, 2009,. the City Council approved the adoption of the City of Petaluma Fiscal
Year 2009-2010 Budget. One of the eletilents of the budget is the establishment of a business. tax administrative
fee to cover the cost of processing business tax certificate (business license) renewals and applications. The City
currently does not charge an administrative fee for processing annual business tax certificates, but has the
authority to do so, provided that the fee does not exceed the estimated reasonable cost of providing the service
for which it is charged. Staff completes a number of steps to process a business tax certificate, at an average of
-40 minutes per application. Additional costs are incurred for paper, postage, printing and use of City office
equipment. and facilities. Staff is recommending charging a business tax certificate administrative fee of twenty-
fiwe dollars (~$25,OOj for new business tax applications. Staff also recommends a fee of ten dollars ($10.00) for
business tax renewals, as less time is required to process most renewals. These fees reflect the City's reasonable
costs associated with processing applications, sending renewal notices, collecting the business tax and issuing
business tax certificates. This resolution supports implementation of a new business tax administrative fee.
Attachments to Agenda Packet Item:
L Resolution .
ewed by Finance Director:
Rev Reviewed by City ttorne A rovetd b Cit Marra er:
i
Date: ~ ~ S - Date: Date: Z %~ ~ U
Rev. # 1 ~ , nA.i Date Last Revised: 12/15/09 File: s/agenda/2009-12-21 bus tax certificate admin tee
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CITE' OF PETALUlVIA, CALIF®RNIA
DECEMBER 21, 2009
AGENDA REPORT FOR
APPROVE RESOLUTION APPROVING THE ESTABLISHMENT OF
BUSINESS TAX ADMINISTRATIVE FEES.
1. RECOMMENDATION:
Approve Resolution establishing an administrative fee for City of Petaluma Business Tax Certificate
Applications and Annual Renewals.
2. BACKGROUND:
The City of Petaluma Municipal Code Section 6.01.020 prohibits all businesses within the City or those coming
into the. City to transact and carry on any business .without first having procured a business tax certificate
(business license) from the City. The City's police power airthorizes the City to collect fees to cover the costs of
services provided or for regulatory activities. The California Government Code requires that such fees not
exceed the reasonable cost of providing the service or regulatory activity for which the fee is charged. Staff
recommends charging a business tax administrative fee of twenty-five dollars ($25.00) for new business tax
applications and ten ($10.00) for business tax renewals. These fees reflect the City's reasonable estimated costs
associated with processing applications, sending renewals, and issuing business tax certificates.
3. DISCUSSION:
On June 15, 2009 City Council adopted the City of Petaluma Fiscal Year 2009-2010 Budget. One of the
elements of the budget is the establishment of a business tax administrative fee to cover the cost of processing
business tax renewals and applications. The City currently does not charge an administrative fee for processing
annual business tax certificates. Staff completes a number of steps to process a business tax certificate. These
individual steps average o40 mimites per application, and additional costs are incurred for paper, postage,
printing and use of City office equipment and facilities. The current hourly salary and benefits cost for an
Accounting Assistant II at Step 5 is $3.5.19. To process applications and renewals costs an average of $23.45.
Added costs for paper, postage, printing and use of city office equipment and facilities is estimated to bring the
average cost to $25.00 per transaction. Staff is recommending charging a business tax administrative fee of
twenty-five dollars ($25.00) for new business tax applications and ten dollars ($10.00) for business tax
renewals. The difference of $15 accounts for the larger amount of. time typically spent on new applications.
Chapter 6.01 of the Petaluma Municipal Code provides for certain fees and business taxes to be established by
resolution. This resolution will implement the new business tax administrative fees. The fee, if adopted, will be
added to the City's list of user and services fees, which is periodically updated.
4. FINANCIAL IMPACTS:
The fiscal effect of this action, if taken as recommended, will recoup costs which are otherwise paid by the
General Fund of approximately $40,000 for the remainder of this fiscal year.
RESOLUTION ESTABLISHING AN ADMINISTRATIVE FEE
FOR CITY OF PETALUMA BUSINESS TAX CERTIFICATE APPLICATIONS
AND ANNUAL RENEWALS
WHEREAS, the City of Petaluma Municipal Code Section 6.01.020 prohibits all businesses within the
City or those coming into the City to transact and carry on any business without first having procured a business
tax certificate (business license) from the City; and
WHEREAS, the City Council of the City of Petaluma ("City") has previously established fees and
charges for other City services, with the intent of recovering the City's estimated actual and reasonable costs to
provide such services; and
WHEREAS, with respect to the fees to be established hereby, the City has analyzed said fees and
charges, the costs of providing services, the beneficiaries of the services, anal the revenues produced by those
paying charges for such services; and
WHEREAS, the City wishes to comply with both the letter and the spirit of Article XIIIB of the
California Constitution; and
WHEREAS, in adopting the fees for City services as set forth in this Resolurtion, the City Council of the
City of Petaluma is exercising its .powers under Article XI, Sections 5 and 7 of the California Constitution and
other applicablelaw; and
WHEREAS, the City has a policy of recovering the frill cost of providing voluntary services from those
persons utilizing them so that general taxes are not diverted from general services to unfairly or inequitably
subsidize such services; and
WHEREAS, the fees and charges adopted by this Resolution are consistent with the requirements of
Article XIII D of the California Constitution pursuant to Apartment Association of Los Angeles County v. City
of Los Angeles (2001) 24 Cal. 4th 830, in that such fees are not applicable to incidents of property ownership,
but rather actual use of City services; and
WHEREAS, in accordance with Government Code Section 50076, fees and charges that do not exceed
the reasonable cost of providing the service or regulatory activity for which the fees are charged and which are
not levied for general revenue purposes are not special taxes as defined in Article 3.5 of the Government Code;
and
WHEREAS, the fees described in Exhibit "A" attached hereto are hereby determined to be reasonable
because the amounts thereof do not exceed the estimated reasonable costs described in Exhibit "B" attached of
providing the services for which the charges and fees are made.
NOW THEREFORE, the City Council of the City of Petaluma resolves as follows:
Section 1. Findings. The following findings are true and correct and adopted as the findings of the City
Council:
A. The purpose. of the fees and charges set forth in Exhibit "A" of this Resolution is to
recover up to the full, lawfully recoverable costs incurred by the City in providing various City
services, and such fees and charges not levied for general revenue purposes.
B. After consideration of the data and information set forth in Exhibit B and incorporated
herein regarding the cost of providing the services for which the business tax certificate (business
license) administrative fee is hereby established, the agenda report and the background
documents to~~the agenda. report, (together, "Record"); the City Council approves and adopts the
cost analysis set forth ,in Exhibit B.
C. Adoption of 'the fees <set forth in Exhibit "A`"' is intended to recover costs necessary to
maintain such services within existing service areas of the City and. is not a "project" within the
meaning of the Califoniia Environmental. Quality Act. ("CE'QA") pursuant to I4 Califoriia Code
of Regulations. ("CEQA Guidelines"~) section 153~78(b)`(4). the creation of govenlment funding
ir-echanisms ~oc other government fiscal activities w~hi~ch do not involve any specific conunitment
to any speci~f c project which may result in a potentially .significant impact on the environment.
D'. ~The~ Record establishes that the costs 1'isfed iil-the cost analysis for those fees established
hereby are reasonable estimates of the cost of providing such. services.
Section 2~. Fee Adoption and. Repeal of Prior Inconsistent Fees. and, Charges. The fees set forth in
Exhibit "A", of this Resolution, attached 'h'ereto and incorporated 'herein, by reference, are .hereby directed to be
computed by and. applied by .the various. City departments, and to be collected by the City Finance Department.
for special services listed herein w11en provided by the City or its designated contractors. Any previously
adopted inconsistent fees or charges are hereby repealed to the extent of such inconsistency.
.Section 3. Use of Fee Revenile. The; revenues raised by payment of the fees established by this
Resolution shall be used to fund the estimated reasonable cost of providing.. the services.for which the fees are
charged, and the revenues- from such fees'and charges shall not be used for general revenue purposes.
Section 4. Subsequent Analysis and Revision of the Fees. The fees set herein are adopted and
implemented by the City .Council in reliance on the Record. identified ~ahov.e. The City may continue to conduct
further study and analysis to determine whether the fees and charges .for City services should be revised. When
additional informatiofi~ is available; the City Council may review ~tlie fees and charges to determine that the
amounts do not exceed the estimated reasonable cost of providing the services for which the fees and charges
are charged.
Section 5`. Annual ~Adjustment~. The fees set forth in Exhibit "A" shall be adjusted .by the City Manager
on July 1 st of every year by the percentageincrease or decrease in the Consumer Price Index-All Items Index
(San Francisco-Oakland-San Jose).
Section 6. Effective Date. This Resolution and the .fees adopted hereby shall become effective
immediately.
_~ .
.EXHIBIT A
FEES
BUSINESS TAX CERTIFICATE (BUSINESS LICENSE) APPLICATION FEE - $25.00
BUSINESS, TAX CERTIFICATE (BUSINESS LICENSE) RENEWAL FEE - $10.00
5
EXHIBIT B
COST ANALYSIS
Annual salary + benefits,
Accounting Assistant. LI at Step 5 $73;.193.00
• Divided by 2080 hours per year, cost per hour: $35.19
Average time spent per application @ 40 innutes: ~-23.45
Average cost of materials and equipment pei application: 1.55
Average total cost per application: $25:.00
1330319.1
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