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HomeMy WebLinkAboutAgenda Statement 1982/01/05 Item 5, 5a.. ~, • ITEM TITL SUBMITTED BY: The City provide "Lindber promotio reaction Subseque city Cou has not The asso the so c December group, b suggeste tive mos reasons formula BOARD/ DISCUSSI~ the pres~ dollar ai formula, Under th~ the tota approxim and supp pay appr accrue t generate the sole under th Mr. Lind original think th address professi the mone n t ded fessona COUNCIL AGENDA STATEMENT Item 5 , 5a Meeting Date 1/5/82 Continued Public Hearing - Consideration of Modifying Current Tax for Business & Professional Area and Modifying the Boundaries of Said Area Ordinance ~~G- ~ - Modifying Current B~usli n~ess Tax and Boundaries of Area G~ (4/5ths Vote: Yes No X ) Assistant City Manager/Finance Director Council continued this item at their December 22, 1981, meeting in order to 11 part es an opportunity to study an alternate proposal characterized as the Amendm nt" as that proposal related to a revised formula for the levy of the tax. epresentatives of the professional group expressed an initial negative to the roposal while the association representatives appeared receptive to it. t to th December 22 meeting, the City Attorney furnished members of the cil and the association still another alternative proposal that to our knowledge een acc pted as a viable alternative to either the association or the professionals. iation eld a meeting Monday, December 28,1981 and went on record as favoring lled "Lindberg Amendment" that was placed before the City Council at their 22 meeting. We have had no input as to the official position of the professional t we ha e every reason to believe that they feel the first proposal originally by the professional group and accepted by the association represents the alterna- equita le to all parties concerned. We, preparers of this report, for the tated b low, believe that the original alternative represents the most equitable f the v rious proposals under consideration. It is, therefore, our TION: ISSION N: Att nt form ounts i the pro initia fees c tely 31 rted by ximatel the pr the lea profess curren erg, th "Lindbe curren he ineq nals as than t e p rornc and der s, howe That the City Council adopt the ordinance as originally submitted tNith one modification: We would propose that a cap of $200 be placed on the total tax levied against any multiple professional group. RECOP1MENDATION: N/A ~chment "A" summarizes the four alternative proposals including maintaining ala under consideration. The exhibit summarizes the key provisions and evolved under each proposal. That exhibit shows that under the current Fessional group is paying approximately 45% of the total revenue generated. I "Lindberg Amendment," the professionals would ply approximately 36% of ~llected. Under P1r. Lindberg's last proposal, the professionals would pay i of the total. Under the compromise proposal offered by the professionals, the Finance Director and Assistant City Manager, the professionals would ~ 23% of the total monies collected. Under each proposal, less money would emotion area than under the present formula. The recommended formula would >t amount of money, although we believe it is the most equitable because Tonal would pay an amount slightly below the average assessment per business t formula. Under the present formula, or either amendment proposed by sole professional would still be required to pay $100 each under the rq Amendment," and $75 each under the City Attorney's later proposal. We t formula, as well as both of the Lindberg amendments, fail to adequately cities if any recognition w~~a.tsoever is given to the contention that the a group receive to some degree a lesser benefit from the expenditures of ~e typical retail business. We do not contend that the professionals located tional area do not derive some benefit from the efforts and activities acted 6y the Downtown Association. We do believe in fairness to the pro- ver, that one times the annual business license fee, which in the case of Form A-11~ (Rev.lll/79) • most they and empl turn The gro som as gro the in am ass Item 5, 5a Page 2 1/5/82 prof es ionals is $50 a year, is a realistic assessment for the benefit that derive Many retailers in the area have a basic annual license fee of $25 Without additional employees, pay a promotion tax of $50. For each additional ~yee, t e retailer pays in addition to the $25, $3 per employee, which in costs hat retailer $6 per employee additional on the promotion tax. Lindbe q Amendment" essentially only benefits the multiple professional and f ils to recognize the inequity and maintains the status quo for 24 sol professionals and 23 real estate brokers. The original ordinance afted rovides relief to the sole professional and the multiple professional ,as we 1 as the real estate broker. In addition, we would propose that ~ultipl professional group not be expected to pay for any single group cess o $200 per year professional tax. The assessment cap proposed for tiple rofessional group would allow for ten practitioners or more to fate i a corporation and pay a maximum of $200 per year. FIN NCIAL I PACT: N/A ERA bb • • G2s~-~~(' .-/ ~_ f,., _, ~ ,._ ..,-3 of r~ t,d ~ -? -- kV\ ,~ ~t o ,hula Vista Cali ornia y f ~' ~ f OFFICE F THE CITY ATTORNEY Gh,YIKCb' Ll. /.ti'UBBKG City Atlurne_ DA E TO FR SU JECT: • ,~,o C~ TH(J,b1A5.1. HAKKUN Assi.ti~hntt CII~~ Atha'~tE•v January 7, 1982 The Honorable Mayor and City Council Lane F. Cole, City Manager Gordon K. Grant, Director of Finance George D. Lindberg, City Attorney Parking and Business Improvement Area Ordinance - Second Reading In Novem er of 1971, the City Council adopted an ordinance cr ating the parking and business improvement district and es ablis ing an additional business license levy. The Council, at it meet ng of January 5, 1982, adopted an ordinance, one of a se ies s nce 1971, adjusting the additional business license levy. Th t ordnance erroneously stated that it was to be adopted on fi st re ding. It is necessary since the fees thus levied do not go into general fund of the City, that the ordinance be adopted in the p escribed manner of first and second reading and become of ectiv thirty-one days after the second reading . Th ordi ance as proposed would modify the existing additional le y for professional businessmen within the area imposing a levy am untin to $100 for any professional and a maximum of $100 for an prof ssional group. This, of course, means that the sole pr ctiti ner, of which there are some 40 in the district, would pa the ame amount as professional groups ranging from 2 to 10 pe sons, of which there are over 30. In addit on, the Council, in accordance with the provisions of the st to la as amended in 1979 determined to establish a zero as essme t in the area of the district south of "H" Street. The di trict law as amended in 1979 made few but very significant ch nges ver the law as it was originally adopted in 1965. In 1965, on of the primary purposes of the law was "the general pr motio of retail trade activities in the area". In 1979, CIVIC CEl'~TER • 2176 FOURTH AVENUE • CHULA VISTA, CALIFORNIA 92010 • TELEPHONE (714) 575.5037 • J It cl. Hono able Mayor and Council uary , 1982 e Two th~ law ~as amended to provide that one of the purposes was the "g neral promotion of business activities in the area". Th law as also amended to add Section 36526 which reads as fo lows: §36526 Establishment and modification of separate benefit zones The city council may, for each of the purposes set forth in Section 36521, establish and modify one or more separate benefit zones based upon the degree of benefit derived from the purpose and may impose a different assessment or charge within each of the benefit zones. also dded a clear determination of benefit for the purpose of ~ssifi ation of businesses. That section reads as follows: X36563 Determination of benefit The assessments or charges need not be imposed on the different classes established pursuant to Chapter 3 (commencing with Section 36540) of the business on the same basis or at the same rate. However, the assessments or charges imposed for the purpose of the acquisitrion, construction, or maintenance of parking facilities for the benefit of the area sall be imposed on the basis of benefit determined by the city council after giving consideration to (a) the total cost to be recovered from the businesses upon which the assessment or charge is to be imposed, (b) the total area within the boundaries of the parking and business improvement area, (c) the assessed value of the land and improvements within the area, (d) the total business volume generated within the area, and (e) such other factors as the city council may find and determine to be a reasonable measure of benefit from the construction or maintenance of parking facilities. 1979~amendments make it clear that certainly all businesses prof ssions located within a district do derive a benefit. • ~1 ~ ~~~ • Th Hon Ja uary Pa e Th • able Mayor and Council 1982 It is no intended to limit it to benefits for retail trade only. I eliev that all of the parties speaking at the public hearing wo ld co cede that to be the case. However, certainly it is in umben upon the Council to evaluate the benefits derived from th oper tion of the district and to establish an appropriate levy in accor ance with the benefits derived . S ince this levy is not in the n ture of a tax, but does represent a fee for doing bu iness within the district, it, therefore, requires some re sonab e relationship between the benefit dervied and the amount of asses ment. I ould int out that in the City of San Diego although legal se vices pay the highest fee of professionals in the downtown im rovem nt district, being $70 per professional office plus $4 fo each partner or employee in the office, (which is si nific ntly less than the formula approved by the Council for ou busi ess improvement district), the retail merchants in the do ntown area of San Diego pay a higher additional levy than any of the p ofessionals. Th ord i ~ re ding. G L:lgk nce as directed by Council is now presented for second 4 ~v m _._._. - _ .. _ _ _.- • ~ry~a ~~k