MEETING DATE:
January 28, 2025
SUBJECT:
Title
ORDINANCE NO. 2025-1557 - AMENDING TITLE 3 (REVENUE AND TAXATION), CHAPTER 3.08 OF THE SAN MARCOS MUNICIPAL CODE REGARDING BUSINESS LICENSES
Body
Recommendation
Recommendation
INTRODUCE first reading of ordinance amending Title 3 (Revenue and Taxation), Chapter 3.08 of the San Marcos Municipal Code regarding Business Licenses.
Body
Board or Commission Action
Not Applicable
Relevant Council Strategic Theme
Good Governance.
Relevant Department Goal
Not Applicable
Executive Summary
Chapter 3.08 of the City’s Municipal Code governs the issuance of Business Licenses and the collection of corresponding taxes. That Chapter addresses the issuance of business licenses, and the information required to obtain one but does not currently include provisions regarding the recovery of costs related to regulatory business license processing. As a result, City staff is recommending that Chapter 3.08 be amended to include Business License Administrative Fees.
Discussion
The San Marcos Municipal Code (“SMMC”) currently assesses an occupational license tax, also known as a business license tax, for the purposes of raising general revenues from persons doing business within the City. [SMMC sections 3.08.020, and 3.08.040.] A “Business” shall mean and include professions, trades, occupations and all and every kind of calling, whether or not carried on for profit. [SMMC section 3.08.010.] A business license is obtained by submitting a complete application for the license and payment of the license tax. [SMMC section 3.08.040.]
The license tax cannot be increased without a vote of the City’s residents; however, the establishment or increase of regulatory fees to recover the costs of review of and inspections related to new business license applications for compliance with applicable laws does not require a vote of the City’s residents. Therefore, business license administrative fees will be implemented to recover the cost of business license processing. The City Council adopted the 2024 User Fee Study via City Council Resolution 2024-9389 on November 26, 2024 authorizing the imposition of business license administrative fees. The User Fee Study proposed the following fees for various activities associated with administering the business license program:
Ordinance Amendment re: Business License
The proposed ordinance would amend SMMC Chapter 3.08 to implement business license administrative fees to recoup costs related to review of and inspections related to a business license application. The proposed ordinance will also clarify and clean up the language of SMMC Chapter 3.08. The proposed ordinance amendment, reflecting the revisions in redline/strikeout format, is attached to this report as Attachment 1.
If the City Council passes the ordinance tonight, it will come back for a second reading at the next City Council meeting. It will take effect thirty days after its second reading and passage.
Environmental Review
The proposed actions do not constitute a “project” as defined under section 15378 of the California Environmental Quality Act State Guidelines (CEQA Guidelines) set forth at California Code of Regulations, Title 14, Division 6, Chapter 3. Therefore, pursuant to CEQA Guidelines section 15060(c)(3), no environmental review is required. Notwithstanding the foregoing, the proposed actions contemplated hereunder qualify for an exemption pursuant to CEQA Guidelines section 15061(b)(3) because it can be seen with certainty that there is no possibility of a significant effect on the environment.
Fiscal Impact
The implementation of the business license administrative fee will assist in recovering costs related to the review of new business license applications and associated inspections which is not anticipated to cause a negative fiscal impact.
Attachment(s)
1. Ordinance Amending Chapter 3.08 0f the San Marcos Municipal Code
2. SMMC Chapter 3.08, with Proposed Amendments Reflected in Redline/Strikeout
Submitted by: Helen Holmes Peak, City Attorney
Reviewed by: Michelle Bender, City Manager