ITEM 8-A
City Council Meeting 6-27-95 Santa Monica, California
TO: Mayor and City Council
FROM: City Attorney
SUBJECT: Ordinance Amending Sections 2 and 3 of Ordinance
Number 725 (CCS) Reestablishing A Penalty for
Nonpayment of Assessments Due in the Downtown
Parking and Business Improvement Area
Introduction
The Finance Department has requested that Ordinance Number 725
(CCS) be amended to include a penalty provision for businesses
which do not pay on time the assessment created by Ordinance
Number 725 (CCS). In response to this direction, the
accompanying ordinance has been prepared and is presented to the
City Council for its consideration.
Discussion
The Downtown Parking and Business Improvement Area was created by
Ordinance Number 725 (CCS) at the request of the Santa Monica
Chamber of Commerce on behalf of the downtown merchants.
Ordinance Number 725 (CCS) established an assessment to be levied
on the businesses within the district, which is used for the
general promotion of retail trade activities in the area. The
City acts as the collector of the assessment and retains 1% of
assessments to offset collection costs. Ninety-nine percent
(99%) of the assessment funds go to the Chamber of Commerce which
administers them on behalf of the downtown merchants.
Currently Ordinance Number 725 (CCS) provides that for failure to
pay the assessment on the due dates penalties will be exacted as
set forth in Municipal Code Sections 6109 and 6112. Since the
adoption of this Ordinance on November 22, 1966, the Municipal
Code has undergone revision and renumbering. In addition, in a
general revision to the City's business license code, Sections
6109 and 6112 were repealed by ordinance on May 8, 1990.
Therefore, although Ordinance Number 725 (CCS) is still in
effect, the penalty provision has been rendered ineffective.
According to the Business License Office, 506 businesses pay the
assessment created by Ordinance Number 725 (CCS). As of June,
1995, 50 of those businesses were delinquent in paying the
assessment due on March 10, 1995. The Business License Office
would like to collect these assessments and believes that it
would have a better chance of doing so if a penalty was included
in Ordinance Number 725 (CCS) for nonpayment. The two other
Parking and Business Improvement Areas, Main Street and Montana
Avenue, have the penalty incorporated into the ordinances which
establish them. Penalties are charged as prescribed by each of
those ordinances.
The accompanying ordinance amends Section 2 of Ordinance Number
725 (CCS) by adding a sentence which creates a penalty for
nonpayment (15% of the amount of the assessment plus an
additional 5% for each month or portion of a month thereafter
that the assessment is not paid). The ordinance also amends
Sections 2 and 3 to reflect that Ordinance Number 725 (CCS)
created an assessment, not an additional business license tax.
RECOMMENDATION
It is respectfully recommended that the accompanying ordinance be
introduced for first reading.
PREPARED BY: Marsha Jones Moutrie, City Attorney
Claudia Thompson, Legal Admin. Staff Asst.
ORDINANCE NUMBER ____
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA AMENDING SECTIONS 2 AND 3 OF ORDINANCE
NUMBER 725 (CCS) REESTABLISHING A PENALTY
FOR NONPAYMENT OF ASSESSMENTS DUE IN THE
DOWNTOWN PARKING AND BUSINESS IMPROVEMENT AREA
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY
ORDAIN AS FOLLOWS:
SECTION 1. Section 2 of Ordinance Number 725 (CCS) is
hereby amended to read as follows:
SECTION 2. That in addition to the
general business license tax (sometimes
called business license fee) an additional
business license tax assessment is hereby
imposed upon merchants holding a retails
sales tax permit and occupying premises in
the area. The additional license tax
assessment shall be at the rate of 1/15 of 1%
of taxable sales (taxable sales as defined by
the Sales and Use Tax Law), subject to an
annual maximum license fee of $1,000. Said
additional license tax assessment shall be
payable March 10 and October 10 of each year
and shall be computed on the taxable sales
occurring during the six month periods,
January 1 through June 30 and July 1 through
December 31, preceding the payment dates of
March 10 and October 10 respectively. For
failure to pay said additional license tax on
the due dates thereof penalties shall be
exacted as set forth in Sections 6109 and
6112 of the Santa Monica Municipal Code. The
penalty for nonpayment of the assessment on
the due date shall be fifteen percent (15%)
of the amount of the assessment plus an
additional five percent (5%) of the amount of
the assessment for each month or portion
thereof that the assessment is unpaid after
the due date. In no case shall the total
penalty exceed fifty percent (50%) of the
original amount due.
SECTION 2. Section 3 of Ordinance Number 725 (CCS) is
hereby amended to read as follows:
SECTION 3. That the use to which the
proceeds of the additional business license
tax assessment, less one percent (1%) thereof
as the cost of collection, shall be put is
the payment of contract fees to the Santa
Monica Chamber of Commerce for general
promotion of retail trade activities in the
area as prescribed by contract between the
City and said Chamber of Commerce.
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,
is 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 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 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 30 days from its adoption.
APPROVED AS TO FORM:
_________________________
MARSHA JONES MOUTRIE
City Attorney