HomeMy WebLinkAbout11-03-1993 City Council agenda packet13777 FRUITVALE AVENUE • SARATOGA, CALIFORNIA 95070 • (408) 867 -3438
7
November 3,
1993
To: City Council
From: City Manager
Subject: Business License Fee Increase Ordinance
COUNCIL MEMBERS:
Karen Anderson
Ann Marie Burger
Willem Kohler
Victor Monia
Karen Tucker
RECOMMENDED ACTION :
1. Hold the Public Hearing and take testimony on the ordinance.
2. Make revisions to the proposed fee structure as deemed
appropriate.
3. Introduce the ordinance as revised and direct the revised
ordinance to be set for second reading and adoption at the
meeting of November 17, 1993.
BACKGROUND:
In reviewing factors to consider for adoption of Fiscal Year 1993-
1994 and 1994 -1995 budgets during the City Council's March 26 -27
Policy Development. Workshop, the City Council considered a number
of options to raise revenues to close an estimated $1.3 million
budget gap between revenues and projected expenditures, including
raising various locally imposed taxes. At that time the City
Council directed the City Manger to present a budget which would:
o Increase the tax on new construction from $0.57 per
square foot to $1.00 per square foot.
o Increase the tax on transient occupancies from 8% to 10 %.
o Increase the business license fee revenue, with the
method to be determined by staff, conditioned upon the
fees being equitably based on the size of the business.
To implement these instructions, the budget document ultimately
adopted by the City Council called for an increase in new
construction tax revenue from $136,000 to $240,000 a year; an
increase in transient occupancy tax revenues from $95,000 to
$120,000 a year; and an increase in business license fee revenue
from $172,300 to $400,000 a year. Ordinances increasing the rates
for the first two tax increase areas were adopted by the City
Council in June. Because the business license renewal cycle is on
Printed on recycled paper.
Business Licenses Fee Increase Ordinance Page 2
November 3, 1993
a calendar year basis and the need to revise the business license
structure was a more complex task when size differential is taken
into account, consideration of a revised rate structure was
scheduled for the fall. During July and August staff reviewed the
business license fee structure of several other cities and made an
initial public contact effort, meeting with the Board of Directors
of the Chamber of Commerce to explain what direction the City
Manager had received from the City Council, how the staff intended
to proceed, and that any proposal would be discussed with the
Chamber of Commerce and with other business organizations prior to
any presentation to the City Council.
On September 9th an initial proposal was sent to the Chamber of
Commerce for review and distribution to the business community.
This initial proposal created 26 categories of business and
proposed a combination of rates based on gross receipts, number of
employees, and flat rates depending on the type of business.
Generally the proposal was to use a gross receipts basis for
merchants, a per employee basis for professions and services, a
flat rate basis for home occupations and seasonal business, and a
percentage of fee basis for the construction industry, including
architects and engineers.
Following the distribution, the City Manager met with
representatives of the Realty Board on October 14th to cover the
proposal and the reasons why the City was seeking more revenue from
the license fees. He met with members of the Village Merchants
Association on the same date and then met with the Board of the
Chamber of Commerce on October 20th. Because of the timing in
setting up these meetings, the public hearing on the ordinance was
moved from its original date of October 20th to November 3rd.
At each of these meeting various points of view were offered
concerning the original proposal. The Village Merchants were
opposed to the use of a gross receipts method. Many felt that the
flat rate method should be maintained and that the proposal to the
City Council should reflect that sentiment. I pointed out that I
was constrained by the directive of the City Council to
differentiate between large and small businesses. Staff of the
Realty Board opposed the fee method for realtors, although it was
exactly the same as they pay the Town of Los Gatos, because large
firms would pay $1,000 to $1,500 if charged $15 per employee.
By letter attached to this report the Chamber of Commerce is
suggesting remaining at a flat rate for all businesses with the
rate being raised to $125 per business.
Business Licenses Fee Increase Ordinance Page 3
November 3, 1993
DISCUSSION:
Calculating the exact revenue the City would raise from any
proposal other than a flat rate is largely educated guess work.
Before making the attempt with the proposal contained here, a
discussion of the overall financial picture is in order to place
the proposed revenue increase in context.
The budget, as adopted, contained a positive cash flow over reserve
assumption of $148,160. Part of this assumption was based on
budget reduction of salaries and benefits all taking place on July
1st. As you know, contract negotiations with the SEA were not
concluded until late August. The new MOU did not go into effect
until September 1 and the health care package did not go into
effect until October 1. Payout of unused leave and continuation of
benefits for laid off employees were calculated in the budget so
they did not have an impact. The City Council has now made five
appropriation adjustments to the budget, some of which impact fund
balance. In summary here are the impacts:
MOU delay costs
$18,500
Layoff costs
-0-
Budget Adjustment 1 -
Leonard Road
-0-
(this $12,000 advance will be repaid from
bond proceeds)
Budget Adjustment 2 -
Animal Control
21,200
Budget Adjustment 3 -
Solid Waste
-0-
(this $65,575 reduction has an offsetting
revenue loss)
Budget Adjustment 4 -
Ravenwood Park
3,100
Budget Adjustment 5 -
Hakone Water System
-0-
(this is a $10,000
transfer from another
project)
TOTAL
$42,800
Our fund balance projection for June 30, 1994, is $4,833,476. Our
September 30, 1993, fund balance was $4,258,771. When loans and
bond reserves are included, the amount for all pooled cash and
investments totals $4,761,832. When comparing revenue and expense
through the first quarter of FY 1994 to the first quarter of FY
1993, revenues are up by $46 thousand and expenditures are down by
$319 thousand. This is a $365 thousand positive variance over a
year ago. However, it is too soon to predict that we should be
taking a more optimistic view of our revenue picture because no
significant property tax revenue has been received and state
subventions are slightly behind last year. What happens here will
demonstrate exactly how much revenue loss we have suffered at the
hands of the state.
Business Licenses Fee Increase Ordinance Page 4
November 3, 1993
On balance there is, at this time, no hard evidence that our cash
flow projection is not accurate, that it will be either better or
worse than projected in June, 1993. On net, barring any further
budget adjustments, we should still expect to have a positive cash
flow (with the above adjustments taken into account) of about $106
thousand. However, I expect that further demands on the balance
will be made in the area of animal control. These could be as much
as $35,000 to carry through a program for the remainder of the
year.
Yet another variable is the half -cent sales tax measure on the
November 2nd ballot. Should it pass it would result, according to
the League of Cities, in the City receiving about $50,000 a year
more in sales tax revenue. Targeted for public safety services, it
should cover the City's future costs for animal control on a net
costs basis after license and shelter fees are paid.
Let me turn now to the specific proposals for the business license
fees.
Exhibit 1: As I indicated, the original proposal dated
September 8, 1993, used a combination approach of gross receipts,
employees, flat rate and percentage of construction permit fees to
levy the business license fee. That proposal is attached as
Exhibit 1. The revenue estimated to be generated is $429,206
Exhibit 2: A schedule showing the calculations for the
September 8th proposal is attached as Exhibit 2.
Exhibit 3: Following the round of meetings detailed earlier, a
revised proposal was prepared which dropped the gross receipts
method. That proposal, dated October 25th, is attached as Exhibit
3. The revenue estimated to be generated is $416,012.
Exhibit 4: A schedule showing the calculations for the October
25th proposal is attached as Exhibit 4.
Exhibit 5: Exhibit 5 is the draft ordinance which would enact
the October 25th proposal.
Article 4 -05 is similar in content to the existing Article 4 -05
except that the definition of employee is expanded to mean a full
time equivalent person for license purposes. This is calculated by
taking the last quarter of the year's payrolls which are closed to
the 15th of the month, totalling the number of employees on
payroll, dividing by three, taking the average number and expanding
hours worked to a monthly equivalent, then dividing by 172. This
represents the number of FTE employees to report on the business
license form to calculate rates. This method avoids the
possibility of understating or overstating the number of employees
Business Licenses Fee Increase Ordinance Page 5
November 3, 1993
depending on the level of business activity. Also included is a
definition of gross receipts should the City Council decide to
adopt such a method sometime in the future. A new section is also
included (4- 05.100) which prorates licenses for most businesses for
the first time.
Article 4 -06 is new and sets forth the fees for the various
categories of businesses outlined in Exhibit 3.
The revenue estimates in Exhibit 4 are primarily based on an
assumed average number of employees per business. While staff
feels these assumptions are reasonable, based on the business
license information, we have no way of quickly or easily making an
accurate verification of whether FTEs are reported.
In his letter to the City Council the Chamber of Commerce
President, Dr. Preston Wisner, proposes a raise of all licenses
from $75 to $125. Based on the 1993 licenses issued during fiscal
1992 -93, this would increase revenue by $96,150, about 40% of what
is needed.
In reviewing these options Council should keep in mind that the
projections may be somewhat optimistic because of the full time
equivalent definition used for employees and the cap which would be
placed on larger businesses which would reduce the income from a
number of larger businesses to no more than $500 each. Also, the
provision on prorationing would also reduce revenues below the
projections, just how much depends entirely on the timing of new
businesses coming into the community. Given these factors, both
options should generate the approximate $400,000 in revenue set
forth in the budget. Should Council feel that it can reduce
revenues, the schedule can easily be modified to show differing
outcomes. For example, if all employee fees were reduced by $5,
the expected revenue would drop by $18,685.
A large part of the fee increase in both options comes from a
surcharge on construction permits. Under the gross receipts
approach architects and engineers were included. Under the
employee approach they are not. The surcharge approach is not
unique, it exists in other California cities but not locally.
While it can be argued that City costs for plan checks and
inspections are currently covered by permit fees, it is also true
that construction activity creates a large demand on other City
services, wear and tear on roads, code enforcement problems,
inspections for erosion, drainage problems, legal costs, etc.,
which would not be a cost burden on the City otherwise. For these
reasons staff feels this approach is both fair and equitable.
Business Licenses Fee Increase Ordinance Page 6
November 3, 1993
Conclusion:
As Council can readily see, there are any number of options to levy
the business license fee. It can be adjusted to bring about
desired revenue results with a relatively small margin of error.
Using a method other than flat rates does create some added
administrative burden but it is minor once the system is up and
running because of automation. The field work to enforce licensing
does not change. In fact by delineating various types of businesses
into categories, field personnel know better what to look for.
This will, in the long run, increase business license revenue by
increasing the number of businesses licensed. That the City has
almost 2,000 businesses licensed currently, demonstrates, I
believe, that with our current resources we are all doing quite
well at administering the program.
1V4't't44 :' Xlt'i
arry Peacock, City Manager
jm
Attachments:
1. Letter from Chamber of Commerce dated 10/26/93
2. Exhibit 1 - Proposed Fee Schedule for Business Licenses 1994, 9/8/93
3. Exhibit 2 - 1994 Business License Tax Assumption - Gross Receipts
4. Exhibit 3 - Proposed Fee Schedule for Business Licenses 94, 10/25/93
5. Exhibit 4 - 1994 Business License Tax Assumptions - Employee Based
6. Exhibit 5 - Draft Ordinance Relating to Business Licenses
SARAT'OGA CHAMBER OF COMMERCE
" 1 20460 Saratoga - Los Gatos Road
SARATOGA Saratoga, California 95070
CHAMBER CWCOMMERCE 1 (408) 867 -0753
Mr. Harry Peacock October 26, 1993
City Manager
City of Saratoga,
13777 Fruitvale Avenue,
Saratoga, CA 95070
Subject: Business License Fee Revision
Dear Mr. Peacock,
To begin with, thank you for giving us the opportunity to respond to the new proposed
business license tax. Together we have generated a great deal of discussion, and your public
appearances have been very much appreciated. I am pleased to say that we have had several
positive suggestions regarding the proposals before the council. This letter outlines some
thoughts and counterproposals for consideration, and these are followed by my interpretations
of the anecdotal comments received. In addition, I am providing you with a packet of all the
written comments and letters received (there were more than 35).
I will outline my perception of the alternative suggestions, which came out of discussions
with the Chamber Directors and other business persons in the community. Almost all persons,
spoken to regarding this, recognized the need to raise additional revenues.
Alternative #1:
Raise the business license tax to $125.00 (a 66% increase) for all businesses in the city.
Prorate this tax for those who seek licenses after July 1 to one half the annual rate.
Alternative #2:
Adopt your alternative fee schedule with some changes (Attachment #1). Make the base
fee $100.00 plus a rate per full time employee (defined as 40 hours per week or 2080
hours per year) with an absolute cap of $500.00 per business per year. Delete the
surcharge of 25% of all permit fees. This could pose a major deterrent to the
construction of new buildings which would in turn deter the opening of new businesses.
Alternative #3:
This proposal is definitely the least desirable. Many persons are opposed to this because
it would make their fees go up astronomically. Included in the anecdotes are comments
setting forth the impact on several businesses. More complaints and screaming were
heard about the gross receipts feature than any other one.
Alternatives 2 and 3 would take less policing than the others. No criteria would have
to be established for alternative A.
Following are my summary of the anecdotes from the letters received. Also enclosed
are copies of the letters themselves. Bear in mind that these letters are in response to your letter
of September 9, which only included the "gross receipts" alternative.
1. This new business tax will deter new business from coming to Saratoga.
2. My license fee will go from $75 to $225 per year.
3. More tax increases will result in less business and fewer sales taxes received.
4. Where will these new dollars be spent?
5. The gross sales component of this new scheme is terrible.
6. More businesses will migrate to Cupertino and San Jose.
7. Eight years ago when I started my business I had 2.5 FTE's, now I have 1 FTE.
Business is bad! ! !
8. The city should cut its costs.
9. Treat all businesses equal.
10. I have been in business in Saratoga for 30 years and consider a 90% increase in license
fees excessive.
11. Comment from a commercial food store - Our fee will increase from $75 to $6,000 - an
8000% increase - WOW.
12. The proposed increase represents a disproportionate increase in fees to businesses and
professions.
13. The city should look at other sources of money i.e. garbage rate surtaxes. This would
tax the homeowners as well as the businesses.
14. The gross receipts factor for licenses is a KILLER! ! !
15. Contractors are being unfairly penalized. For example, to build a 40,000 sq ft building
would cost:
plan check fee $ 8,000
building permit $12,000
Total $209000
The license fees of 25% could be either $3,000 or $5,000 depending upon how you
calculate the "permit & plan check" fees.
16. If any hike is passed consider payments on a quarterly or semiannual basis.
17. Don't give home businesses preferential treatment.
18. We should create a task force of "business professionals" and city representatives to meet
with businessmen and property owners to develop a "long range plan" to insure the
continued viability of Saratoga as a great place to live and work.
19. Your "decision" to increase business license fees will greatly influence our decision to
leave Saratoga when our lease expires in 1994. The (original) proposal is self defeating
and will result in net losses to the city.
20. Whatever is done should include a proration of the fee for those applying after July, i.e.
we opened our business in September and will pay another fee as of January 1.
21. The sliding scale fees proposed would be hard to enforce and would create additional
administrative burdens with resultant requirements for more city staff.
I thought these anecdotes were quite informative regarding the thoughts of businessmen
in this area. Summarizing all, almost everyone recognizes the need for additional revenues.
All persons affected want any new system to be simple and understandable. Many of them feel
that any new efforts to raise taxes should not fall unevenly on the businesses. Much effort
should be made to have both businesses and homeowners bear a proportionate share of any new
costs.
I will be at the City Council Meeting on November 3, 1993 and would appreciate 15 or
20 minutes when a cross section of our business constituents can give their cogent arguments
toward a constructive solution of this dilemma.
Si ly,
Pr ton H. Wisner,
resident
Enclosures:
A. Proposed Fee Schedule dated September 8, 1993
B. Proposed Fee Schedule dated October 14, 1993
C. Packet of Letters from Chamber Members/ Various dates
frame
maters
12201 S. Saratoga - Sunnyvale Rd., Saratoga
Calif. 95070 408/996 -8300
October 7, 1993
City Manager
City :Hall
Saratoga, CA
Dear Sir:
We have just heard that our business license fee will be increased and the method used to determine the
increase. We were amazed at the short sightedness of the City department. Surely, you must realize that
many small store owners will be driven out of Saratoga.
Because of the economy all business is down and most of us are trying to hang on with the hope that the
economy will begin to turn around. And now the City of Saratoga wants to tax our gross sales and take
whatever meager profit, if any, by taking their slice right off the top.
We do not want to go into partnership with the City of Saratoga nor do we need more paperwork to fill
out. Nor do we feel we should have to reveal our gross sales figures, the Internal Revenue Service gets
that information.
When the merchants in Saratoga wanted to hang "Sale" signs in front of their stores to bring in more
business, when we needed the City's help we were told that we could not do that.
There must be a more fair way for the City to raise the license fee. The way it is purposed now will mean
that some of us will not be able to remain within the City of Saratoga. If small business moves away what
gain is there for Saratoga if we all move to Cupertino or San Jose.
Please go back to the drawing board fellas, and come up with a better solution.
Yours truly,
Frame Makers
-:EW
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A Tradition In TtneDtntng
October 5, 1993
4r. Harry Peacock
'ity Manager
'ity of Saratoga
3777 Fruitvale Avenue
CA 95070
Mr. Peacock,
is common knowledge that, overall, business in Saratoga stinks!
is, however, worthwhile saving what little business we have left in Saratoga. I
el that the primary goal of the city should be to find ways to improve the general
dtude toward the local business community and to entice people to seek out
iratoga because it is truly a special place, not just a place that pretends to be a
ecial place to shop and dine. We should create a task force consisting of business
ofessionals and city representatives that can evaluate the current situation, meet
ith local businessmen and property owners, and consequently, develop a long
nge plan that will make Saratoga the place we all want it to be.
rging all kinds of fees will only discourage viable new businesses from
,idering Saratoga as a possible business location. When license fees are based
i gross receipts it's just another way for government to stick its nose in someone
s business, as well as taking away one's motivation to do better.
laus Pache
Saratoga City Council
Saratoga Chamber of Commerce
Saratoga Village Association
14555 Big Basin Way, Saratoga, CA 95070
(408) 867 -4711 Fax: (408) 867 -6919
October 4, 1993
Preston Wisner, President
Saratoga Chamber of Commerce
20460 Saratoga Los Gatos Road
Saratoga, Ca. 95070
Subject: Business License Revisions
Dear Mr. Wisner:
Thank you for your recent letter regarding the letter from the
City of Saratoga in which .there is a proposed ordinance.for rncreased
business license taxes.
It seems that under the "Professional Business, General" category, where
in the past I have been renewing my license for a fee of $75.00, the
fee will increase to $150.00, in effect doubling the current fee.
One important issue not addressed in the city's letter is where the
additional revenue will be spent ??
Thank you for informing us of this matter, and please continue to keep
us updated.
r S- inc " erely,
: / e
herri Lane
S erri Lane & Associates
COMMERCIAL AND RESIDENTIAL INTERIOR DESIGN
October 4, 1993
Preston Wisner, President
Saratoga Chamber of Commerce
20460 Saratoga Los Gatos Road
Saratoga, Ca. 95070
Subject: Business License Revisions
Dear Mr. Wisner:
Thank you for your recent letter regarding the letter from the
City of Saratoga in which .there is a proposed ordinance for increased
business license taxes.
It seems that under the "Professional Business, General" category, where
in the past I have been renewing my license for a fee of $75.00, the
fee will increase to $150.00, in effect doubling the current fee.
One important issue not addressed in the city's letter is where the
additional revenue will be spent ??
Thank you for informing us of this matter, and please continue to keep
us updated.
'ncerely,
I
Myrna aldwin
Bald i Interiors
BALDWIN INTERIORS 408/741 -5003
20465 Saratoga -Los Gatos Road Saratoga, CA 95070
NATIONAL BANK
October 5, 1993
Dear Preston:
Just a brief note on my thoughts with regard to the proposed increase in business
licenses for 1994- I thoroughly understand the need for the city to raise additional revenue,
however I feel that this is to big a jump at one time. I would prefer to see them do this on a
more gradual basis over a 3 year period. The city's current approach in this economic
environment will help break the back of many of our members.
Sincerely,
Richard L. Mount,.
MEMBER FDIC
12000 Saratoga - Sunnyvale Road Saratoga, California 95070 (408) 973 -1111
REALTY WORLDID — Moser & Long
14363 Saratoga Avenue, Saratoga, CA 95070
Telephone: (408) 867 -3491 Fax: (408) 867 -7758
October 11, 1993
Dr. Preston H. Wisner, PhD, President
Saratoga Chamber of Commerce
20460 Saratoga -Los Gatos Rd.
Saratoga, CA 95070
Dear Preston,
In response to your request from the City for Business License increases, I for
one, and also my Broker discussed this issue at length.
The very numerous tax increases inflicted on our small businesses and citizenry
have become too burdensome. We need less cost for our business people to survive this
economy.
Therefore, I'm not in favor of any increase.
Thank You,
Sincerely,
l�
Jeanne Holst
EJH/js
Each office independently owned and operated
REALTY WORLD"
"N RESMYS PEOPLE°
n
eur®desi ; ltd.
g
the world's best furniture systems
October 5, 1993
Dr. Preston Wisner, President
Saratoga Chamber of Commerce
20460 Saratoga -Los Gatos Road
Saratoga, Ca. 95070
Dear Dr. Wisner,
12333 saratoga /sunnyvale road
saratoga, ca 95070
(408) 973 -0606 / fax (408) 973 -1647
This is in response to your letter of September 29 regarding the proposed business license
tax increase.
This proposal is ill- advised and should be rejected and defeated. Saratoga City
government has the reputation of being "anti- business" and this proposal only reinforces that
belief. If the proposed ordinance is passed, it will be even more difficult to do business in
Saratoga and may well result in the loss of business. This means a loss in sales tax revenue which,
I am certain, would be much larger than the anticipated revenues resulting from the license fee
increase.
I have checked fees charged in Cupertino and San Jose. They are both in the $100. to
$150. range. They are not based on gross sales but only on number of employees.
The current lease for Eurodesign expires early next year after ten years in this location.
We have discussed moving to another location. An increase in license fees will make the decision
to leave Saratoga much easier.
Please convey my feelings to the council and staff members. Their proposal is
self - defeating and will result in net losses to the city.
Very truly yours,
L '' - - --
Edward G. Wildanger, President
Eurodesign, Ltd.
mountain view, ca saratoga, ca citrus heights, ca sydney, australia
Manufactured locally since 1974.
Turning Pt
Clare McBride
14524 Oak St #5
Saratoga,Ca 95070
10/4/93
Preston Wisner
Saratoga Chamber of Commerce
20460 Saratoga-Los Gatos Rd
Saratoga,Ca 95070
Dear Preston,
Thank you for your letter of 9/29/93 regarding the new fee
schedule on business licenses. I have just obtained a business
license from the City of Saratoga so I have a somewhat limited
point of view at this time, however I do wish to express my
opinion. If the city needs more revenue to help us all survive, I
definitely support this increase. I personally will go from $75 to
$100 a year in fees. I think this is well within my means as a new
business to pay. I am particularly happy to read about the
prorated idea. I got caught in a September filing and will have to
pay again in January. I think a prorated schedule is much more
fair to someone filing in the second half of the year.
Sincerely,
Clare Mcbride
Protege Marketing
Helping you profit
20225 Ljepava Drive Saratoga, CA 95070 (408)867 -4233 FAX (408) 867 -0422 Member of the Saratoga
Cumber of Commute
October 3, 1993
Preston Wisner, President
Saratoga Chamber of Commerce
20460 Saratoga/Sunnyvale Rd.
Saratoga, CA 95070
Ref: 1) Your September 29 letter on Saratoga's Business License Tax
2) Harry Peacock's September 9 letter "Business License Revisions"
Dear Preston,
Harry's letter says that the objective is to roughly double the business tax income to $400,000
a year. I don't know what the present ordinance is, but it looks like he's adding a sliding
scale to the fixed fee.
Here are my concerns:
How efficient is this money raiser? Think in detail how a business would actually figure
out this fee.
If you're on a non - calendar fiscal year, it appears you have to figure your calendar year
income. If you use the accrual method, you probably have to determine you cash basis
income. If you have business outside Saratoga, you have to isolate just the Saratoga income.
What is the definition of gross income? Does it include returned goods, capital gains,
depreciation recovery, etc.? How would the City verify it? Look at the complexity of the tax
codes. His simple schedule will blossom into a document of definitions, formulas, and
exceptions just like our income tax code.
I think it'll cost the business roughly the same amount in accounting expense as they pay the
City. And I think the City will spend half what they collect administering the plan. If my
assumptions are correct, for each $1 of tax, the business will pay $2 and the City will keep
500. In other words, 75% of the money produces nothing but a drain on the local economy.
Are the license rates equitable? Looking at Harry's list, I noticed these inconsistencies:
• Escort services (6) - They are charged $500. It's interesting their base is 5 to 10 times
higher. Also they have no sliding scale - maybe their income is secret!
• Handbill Distribution (10) - Does anyone do this anymore? The current code makes it
illegal to leave anything at a residence.
• Movies on city property (13) - Don't get caught with a VCR doing a Rodney King shot
or it may cost you $500!
• Security alarms (22) - Their scale kicks in at $25,000 and is $3 per $1,000 whereas
most other businesses start at $50,000 and are 50¢ or 750. Why soak them?
Do we need another tax? Simply put, this sliding scale is a local income tax. If it gets in,
it'll be just like Social Security - every year they'll lower the threshold and increase the rate.
The City should learn to live within its means like the rest of us.
Confidentiality? Harry said the business' income would remain confidential. Unless they
don't print the fee paid on the license to be posted, it'll be easy for anyone to find out the
gross income of a business just by looking up the ordinance's fee schedule.
In summary, the proposal is too difficult and expensive to carry out. It's just another tax. We
don't need more taxes and paperwork. The City's efforts should be to reduce bureaucracy,
reduce expenses, and help businesses keep the money they earn.
Sincerely,
Ray Fro ss
P.S. I'd like to send this letter to the City Council and get it published in the Saratoga News.
Is this Harry's proposal public knowledge? Do you have any comments?
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ip%-P-4-e-u �'oW � tr%4 (C) A-v �e
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MAIL E®XES ETC
October 7, 1993
Preston Wisner
President
Sarau,Dga U,iaiiber of Commerce
201,160 Saratoga/Los Gags Rd.
Saratoga Ca. 95070
Dear Preston,
Regarding the ordinance on the business license taxes, I air, hearing
canna fts such as, not fair, can't afford it, ray fee will triple,
unconstitutional and the city is raising our fee's to balance their
budget.
Some of the questions are, have they taken into consideration the
cost of adirci nistering this ordinance and if so what is that cost?
ccWiat other stuff would ivirain the sanie? v How irtuch of this will go
rack to the community and in w'ilat form? Are city employees going
to take a cut in pay? The beautification of Big Basin Way was ap -
proved in 1990 and businesses have been told there is no money
available. INhy? Where did it go? The city approved six locations
for newspaper racks on Big Basin Way. There are now twenty two.
How did this happen? They are an eye sore and an embarassment to
the businesses.
People are tired of paying higher taxes and getting nothing in re -
turn. With rents high and going higher the raise in the business
license fee could be the last straw.
As I understand it the city has no right to look at a businesses
books but if this ordinance is passed they will have that right.
Those businesses that fit into that category do not believe that
this information would remain confidential, which leads one to
believe there is no trust in our city government. Is there a cap
on the gross or is it never ending? Even an adjustable rate home
loan mortgage has a cap.
Some businesses might be able to pass the higher fee on to the
consumer but others are finding it difficult enough to stay in
business as it is.
P 0 S T A L, B U S I N E S S A N D C O M M U N I C A T I O N S E R V I C E S
14510 A Big Basin Way, Saratoga, California 95070 -6082 Bus 408 867 -7686 Fax 408 867 -7687
AN I NDEPE NDENTLY O\S'N ED AND OPERATED PRANCH ISE
TM
MAIL BOXES ETC"
Now, speaking for myself, time's are hard everywhere and I truly
love the City of Saratoga as do the people that live and work here
but there are too many unanswered questions.
I understand that our city faces the need for additional revenues
and only through cooperation can we help the city and our businesses
survive but I don't think this is the answer.
The city should meet with businesses and civic organizations within
our ccnvunity to discuss our concerns and try to iron out a solutions
Remember, we have no industry in Saratoga and some would say Long's
and Safeway can afford it but that's not fair either. We have to
attract other businesses to Saratoga. What businesses has the city
talked to and what has been the response? What problems do we face
in attracting new businesses to Saratoga? How can we overcome these
problems? The new business license fee will not help.
Last but not least I think we will find a dramatic drop in member -
ship with the Chamber, The Village Association, Gateway Association
and others but maybe most important is the fact that donations to
schools, charitable and non- profit organizations and other worthy
causes may very well be revised or stopped completly simply because
businesses will not have the irony.
�...
Sincerely,
Donald W. CJoLter
P 0 S T A L, B U S I N E S S A N D C O M M U N I C A T I O N S E R V I C E S
14510 A Big Basin Way, Saratoga, California 95070 -6082 Bus 408 867 -7686 Fax 408 867 -7687
AN INDEPENDENTLY O%% N ED AND OPERATED FRANCFI ISE
SARATOGA CHAMBER OF COMMERCE
20460 Saratoga - Los Gatos Road
Saratoga, California 95070 (�
(408) 867 -0753
P O �oK 20 C1
September 29, 1993 ����� L�
Dear Fellow Chamber Members,
The attached correspondence was received at the
Chamber during the week of September 13th. Un-
fortunately it was not discussed with our Board
of Directors until our September 29th board meet-
ing. You are now receiving it as a special mailing.
I am asking each of you to provide me with written
comments not later than October 12, 1993 so that
we can consolidate your comments and present them
as a chamber position on the Business License Fee
Issue at the City Council Meeting on October 20,
1993.
I would appreciate any and all comments to be
submitted to the chamber office in writing. Your
verbal comments and telephone calls, although im-
portant, are difficult to consolidate into a cohe-
rent response.
Our city faces the need for additional revenues.
Only through cooperation can we help the city and
our businesses survive.
Thank you for your attention to this matter.
Sincerely,
Preston H. Wisner Ph.D.
President
K�
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Fam cr l�r mess since 19M g � to Ink& the PM ia�
in h e s ode se ors; r rd .i t Sams inoy*M In the fee sabW& is 11
gar rear, ,� r� 5e tr times' -bes that Iner"10 meter than �
.mod � ``'��'t. POrmR` Seem UOreasonable
i have bean w h.minas fm some my ViUS YOM and Sm Inaeam in e
IMS09 hie, idevartpeiess, In those Jut several lwwa
made it MOre and more cqf QWt to s ine� � nl bad
rod snsaii in eAer a ►1eusi3aesa. i wand ask fttym Owder me
,ess has in the ammunity and ree msidar yam► pwitiffl$ on the hip
faffeases imm the bminea fiaenss few
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Jake's Restau t
TOTAL P.02
October 4, 1993
Preston Wisner, President
Saratoga Chamber of Commerce
20460 Saratoga Los Gatos Road
Saratoga, Ca. 95070
Subject: Business License Revisions
Dear Mr. Wisner:
Thank you for your recent letter regarding the letter from the
City of Saratoga in which.there is a proposed ordinance.for increased
business license taxes.
It seems that under the "Professional Business, General" category, where
in the past I have been renewing my license for a fee of $75.00, the
fee will increase to $150.00, in effect doubling the current fee.
One important issue not addressed in the city's letter is where the
additional revenue will be spent??
Thank you for informing us of this matter, and please continue to keep
us updated.
SincerYobsUnlimited
Ross Jac Ross J
253.3128
1233 3 Saratop—Sur!lynie l?08d near (Prospect Rd. Surwlta, California 45070
la/11/93
Preston H4 Visner
President
Saratoga. Chamber of Commerce
Dear Mr. Wisner,
o possibility ofeaneinereaseei 9the/9usiness licenseefeesgasted
Y as sure that the pityr as well as every other business, is
In -need ofmore more di difficult Increagi ljoense fees and
in
ma king it Saratoga, does not
as
seen& like a solution to the problem.
Saratoga does not need more vs,csnt business planes.
7 dank you for requesting our comments on this matter.
a� �tA
I
David Heed
Aeedes carpets
One last thoughts taking into consideration the &Mount of sales tax
that the city, receives from the retail stores in Saratogap keeping
the business in Saratoga should be a priority.
253 -3128
12333 Saratoga -Sunnyvale Road near Prospect Rd. Saratoga, California 95070
10/11/93
Preston.H. Wisner
President
Saratoga Chamber of Commerce
Dear Mr. Wisner:
In reply to the letter dated 9/29/93, regarding the suggested
possibility of an increase in the business license fees.
I am sure that the city, as well as every other business, is
in need of more revenue. Increasing the license fees and
making it more difficult to do business in Saratoga, does not
seem like a solution to the problem.
Saratoga does not need more vacant business places.
Thank you for requesting our comments on this matter.
SD"- cerely,
/U�l
David Reed
Reed's Carpets
One last thought: taking into consideration the amount of sales tax
that the city receives from the retail stores in Saratoga, keeping
the business in Saratoga should be a priority.
PRESTON WISNER
CHAMBER OF COMMERCE
I WAS EXTREMELY UPSI ;T TO RECEIVE THE NOTICE CONCERNING THE CITY
BUSINESS PERMIT. IF WE ALLOW THIS TO BE PASSED I AM CERTAIN THAT
MANY OF THE BUSINESSES IN SARATOGA WILL GIVE UP. I KNOW IN MY CAST;
IT WILL BE ANOTHER BLOW TO MY PRO_'ITABILITY. THESE DAYS WITH INSURANCE
PLANS BARELY ALLOWING US TO MAKE A PROFIT ON PRESCRIPTIONS IT WOULD BE A
DISASTER TO HAVE ANY COST. WHETHER IT BE RENT.HEALTHCARE OR PERMITS, BASED
ON MY CROSS REVENUES, BECAUSE MY COST OF GOODS IS SUCH A HIGH PERCENT (ALMOST
80%) OF MY REVENUES.
PLEASE PASS THIS ON TO THE POWERS THAT BE. LET'S HOPE THEY COME TO
THEIR SENSES.
SINCERELY
RAY ROSSI
SARATOGA DRUG STORE
Alpine Travel CLIk
October 8, 1993
Dr. Preston Wisner
President
Saratoga Chamber of Commerce
20460 Saratoga -Los Gatos Road
Saratoga, CA 95070
Dear Dr. Wisner:
Thank you for alerting us to the proposed increase in business license fees. As
presented in the rough draft from City Manager Harry Peacock, the proposal is
very troubling.
I understand from Finance Director Patricia Shriver that the city council's
directive to staff was to produce a fee schedule that would double income from
the business license. Unless significant adjustments are made, this plan will
produce far more than double the revenue and will contribute to some severe
financial difficulties for many businesses.
Travel agencies are not included in the list of business categories provided by
Mr. Peacock, but if our agency is numbered among "miscellaneous businesses,"
we would pay anywhere from $350 to $2,300 per year for a business license,
depending on the definition of "gross receipts." Ms. Shriver suggested we might
be categorized as a consulting business, which would mean a $150 fee. We
now pay $75 per year. A 100 percent increase in this tax is onerous enough. If
we were taxed based on the gross receipts criterion, our increase could be
almost 3,000 percent. If we could survive, we would be up -in -arms.
City government clearly needs more money. Are residents being asked to bear
a burdensome 100 percent (or more) increase in their taxes? I doubt it. The
council's directive surely means to discourage business. I would think the
chamber would rather help the city to encourage business formation and
development.
Sincerely,
ffPn Hawkins
General Manager
coda Garrett
Executive Vice President
CORPORATE OFFICE: 18798 COX AVENUE • QUITO VILLAGE o SARATOGA, CALIFORNIA 95070
(408) 379 -3853 • OUTSIDE 408: (800) 829 -4456 • FAX (408) 379 -6751
RUSSELL G. PESRY
ATTORNEY AT LAW
14340 SARATOGA AVENUE
POST OFFICE BOX 2486
SARATOGA, CALIFORNIA 98070
(408) 741 -1401
FAX (40B) 741 -1420
October 11, 1993
Mr. Preston Wisner
President
Saratoga Chamber of Commerce
20460 Saratoga -Los Gatos Road
Saratoga, CA 95070
RE: City of Saratoga Business License Revisions Proposal
Dear Preston:
Referring to the proposed fee schedule for business licenses in 1994 proposed by the City
of Saratoga, I am against such a precipitous increase in fees. While I fully understand that the
city has need to raise funds, these raises are disproportionately borne by the business community.
When garbage rates are increased, rather than increasing the residential rates by a small margin,
the rates on businesses are disproportionately increased in order to lessen the garbage rate
increase for residential services. I am both a business owner and a resident of Saratoga, and
object to disproportionate increases for businesses, when a vast majority of garbage collections
are from residential users.
It seems politically expeditious for the city government to continually try to balance the
budget on the backs of one segment of the population, when they know the votes come from
another much larger majority. This is not fair or equitable, and does nothing to create an
atmosphere under which businesses would thrive in the community. While the tax increase will
solve a short term budget problem, in the long term I believe such taxation tends to discourage
businesses and investments in the city.
Therefore, for the foregoing reasons, I do not support the over 100% increase in business
license fees as proposed by the city. Perhaps a smaller fee increase with proportionate increases
in fees affecting the residential citizens of the city would be more appropriate.
Very truly yours,
/41-0, kt4l
USSELL G. P Y
RGP /cdk
INNOVEST CORPORATION! 12200 SARATOGA - SUNNYVALE ROAD / SARATOGA, CA 95070/408252.5600
1111®� '
October 7, 1993
Preston H. Wisner, Ph.D.
President
Saratoga Chamber of Commerce
Dear Dr. Wisner:
This letter is to respond to the proposed 1994 Fee Schedule
for Licenses by the City of Saratoga.
Although I recognize the City's need for additional revenues,
I must question the wisdom of imposing an excessive burden
on small business, especially on service businesses. It
would seem, in this time of economics decline in our area,
that employment should be encouraged. The proposed fee
schedule achieves the exact opposite.
While the dollar amounts proposed appear insignificant, in
the case of my company they amount to an increase of 520%
compared to the existing fee schedule. When added to new
taxes on the Federal and State levels, plus ever increasing
regulatory costs, this new burden may turn out to be, for
some businesses, the straw that breaks the camel's back.
Sincerely,
David M. Solomon
President
REAL ESTATE LOANS
❑ Residential
❑ Commercial
❑ Construction
ellw Ora'
Colour Shoppe Draperies
& Interiors
Cal. Contractors License #532025
eSPEeic ci in Cofoz O4a¢mot2y
• WALLPAPER • DRAPERIES
• CARPET • SHUTTERS
• UPHOLSTERY • SHADES
12361 SARATOGA- SUNNYVALE ROAD • SARATOGA, CALIFORNIA • PHONE 408 - 996 -1223
Correspondence to: P.O. Box 252 • Saratoga, California 95071 -0252 • FAX 408 - 996 -1224
October 1, 1993
Preston Wisner, President
Saratoga Chamber of Commerce
20460 Saratoga -Los Gatos Road
Saratoga CA 95070
Dear Preston:
Having Just read the new proposed business license fee
schedule I think that it is way out of line and another anti -
business move on behalf of the City.
It is very obvious to me that neither Mr. Peacock or any of
his staff have any entrepreneural experience what so ever. We
know that even though governments have budgets they never pay any
attention to the bottom line.
A license k?ased on gross receipts will create much more
bookkeeping and /or accounting expense and burden for all of those
members to which it applies. The City wants to be a partner in my
business, but does not want to contribute to a positive
environment. The City already shares in the success of my
business in that the more business I do, the more sales tax
revenue they receive.
The City, expecting to have the ri ht to know what my sales
figures are certainly smacks of B�igg Bro her. Whats next? Lets
organize the businesses into coA ct ems: That was tried in other
parts of the world, it didn't work!
The fact that home occupations are singled out for
preferential treatment also u sets me. In any given month 25% of
myy competition comes from ki chen decorators who already have an
advanta a over me because they have no overhead or other expenses
associated with running a store - front.
The letter from Mr. Peacock says that the City hopes to
double the existing revenues being enerated by the existing
business license fees, then why in Ne hell don't they just
double the existing fees and cut out all the b. s. Its robably
too simple an idea. A 100% increase would not make the �ity look
good, but it is still within reason.
It also appears to me that the Cityy must be over staffed if
the could devote all the time it took to work out all the parts
of his plan. They took a simple idea and made it complicated.
Pure government!
You t ly,
Carl Orr
Wood & Associates Registered Investment Advisers
12901 Saratoga Avenue, Suite 8 • Saratoga, CA 95070 (408) 255-2900
2- -
44,
L
174
- 4
A
CA
L
Securi ties Offered through FWG, Financial West Group, Member of NASINSIPOMS11"IA
SACRED HEART CHURCH
13724 SARATOGA AVENUE
SARATOGA. CALIFORNIA 95070
(408) 867-3634
October 9. 1993
Mr. Preston H. Wisner Ph.D
President
Saratoga Chamber of Commerce
20460 Saratoga -Los Gatos Road
Saratoga, California 95070
Dear Dr. Wisner:
Thank you for your communication of September 29 concerning
Business License Fees.
Of course I cannot speak on behalf of the business community.
However, as pastor of Sacred Heart School, a private, non-
profit institution, I would object to any such fee for the
school. Those who support our school also support the Saratoga
community as taxpayers. Further, they relieve our local schools
of the burden of paying for the education of over 300 Children.
The school should not be penalized for providing this service.
Thank you for the opportunity for expressing our point of view.
With sincere regards, I am
Very truly yours,
(Rev.) Thomas F. Ahern
s*
October 4, 1993
3LLGATE INTERIORS
Karyn De Boer
(408) 741 -5177
Preston Wisner, President
Saratoga Chamber of.Commerce
20460 Saratoga Los Gatos .Road.
Saratoga,.Ca. 95070
Subject: Business License Revisions
Dear Mr. Wisner:
Thank you for your recent letter regarding the letter from the
City of Saratoga in which.there is a proposed ordinance.for Increased
business license taxes. ,
It seems that under the "Professional Business, General" category, where
in the past I have been renewing ;my license for a fee of $75.00, the
fee will increase to $150.00, in effect doubling the current fee.
One important issue not addressed in the city's letter is where the
additional revenue will be spent ??
Thank you for informing us of this matter, and please continue to keep
us updated.
Since ely, _
Karyn DeBoer
Tollgate Interiors
20465 Saratoga - Los Gatos Road • Saratoga, California 95070
LA HACIENDA INN
18840 SARATOGA -LOS GATOS ROAD • LOS GATOS, CALIFORNIA 95030 • (408 354 -9230
-- FeBbdA 9505 -_
October 11, 1993
Preston Wisner
Saratoga Chamber of Commerce
20460 Saratoga -Los Gatos Road
Saratoga, California 95070
Subject: Business License Revisions
Dear Mr. Wisner:
Harry Peacock's letter to you on September 9, 1993 states the
objective of the ordinance regarding business license taxes is to
raise $400,000 in revenue (roughly doubling the current revenue).
I assume that the additional $200,000 sought is to cover a deficit
of the like amount, although there is no reference to it in
Mr. Peacock's letter. Assuming the need to cover a deficit is real
I believe the idea of the proposed fee schedule for 1994 business
licenses seems realistic. After all, where else will the revenue
come from? Homeowners? Further cost reductions (with their related
lessening of services)? Or, should cities begin charging entrance
tolls? I don't mean to be facetious (recall San Francisco's proposal
to initiate a commuter tax).
Nevertheless, the new tax proposal will add to the financial
burden of many a business. I only ask, should a business which is
losing money or tottering on the edge of ruin be hit with another
burden? I think not.
Thus, I believe there is a need for a two -tier fee schedule.
I would be interested in learning of the spectrum of opinions
regarding this new tax proposal.
MCM:bf
Sincerely,
Michael C. Morosin
rnF An -fu ( n6 L at k- nA0(1+`*`lll
9
7 . /%la�talf
50
9-a4dafa Goa 95070
October 8, 1993.
Preston H. Wisner, Ph.D.
President, Saratoga Chamber of Commerce
20460 Saratoga -Los Gatos Road
Saratoga, California 95070
(408) 379- &300
SVaz (408) 379 -8773
Re: Proposed Business License fee increase for the City of Saratoga
Mr. Wisner,
We're shocked! A quick calculation tells us our business license fee will
be in excess of $6,000.00. This is an increase of almost 7900 %! Pardon
us if we find this to be a bit excessive.
Gene's Quito Market has always felt that we have a duty and an obligation
to be as supportive as economically possible of the city of Saratoga and
its citizens. We certainly believe that we have a responsibility to pay
our fair share of whatever it will take to help the city and our businesses
survive. However, this business license fee increase puts an unfair burden
on super markets which are within the Saratoga city limits.
I would
to an opportunity to discuss this issue with you further.
l . V • V1 Vllll,
Gene's Quito Market
cc: Mr. Harry Peacock, City Manager
OCT 13 '93 09 :53 LA MERE MICHELLE
P.1 /1
Joseph C,Masek
14467 Big Basin Way
Saratoga, Ca. 95070.
OCt08EFl 11 1893.
The Hon. Council of the City of Saratoga
Fax : 741.1132
RE: PROPOSAL TO INCREASE BUSINESS LICENCE FEES
TO WHOM IT MAY CONCERN :
I SHOULD LIKE TO AIR MY OBJECTIONS TO THE PROPOSED INCREASE 11V THE BUSINESS
LICENCF. FEES, AS THE PROPOSAL IS GROSSLY UNFAIR, A"l BUSIA/ESS AjVp ';N.IlRELy
DISCRl•�1NATING.
IT SEEMS THAT THE CI7 'WANT ;S TO FINANCIALLY I ?U1N 7:N& !/1' 1?Y PEOPZ,,�c WHO INVESTED
THEIR SKILLS AND IVIONEY TO CONTRIBUTE TO THE CITY COFFERS WITH OENERATION OF
' R$ T'`I REVlvCJBS. IN AI11)lTION, 1fiSPECIALI,Y THE fESTAURANTS, ALREADY FIAVE
THE HICFIEST PAYROLL EXPENSE IN T1-IE CITY AS WELL AS THE UICRESI, CONTRIg�/�lUN
Ok' U`!"IL17Y 1"r1_rCES ADD1:D '1'O T'1Z1J? PC & E B14LS . THEYALSO PAYTHE HIGHEST FEES TO
THE COUNIYS HFALTH DEpejRTMENT
THE TIME HAS COME FOR THE CITY 1k9ANAGEMEN1' TD FACE T ODAY'S R Ar rj DES OF. ?h1I;
STILL .SAGGING AND DORMANT ECONOMY.
WE, THE BUSINESS PEOPLE OF SARATOGA HAD TQ SWALLOWMANYA BI77BR PILL 1N ?'HE
RECENT PAST, AND WE FEEL THAT IT SIIOU D BE 7HR CITY'S TUR,1V TO LEARN TO
"TIGHTEN UP THE mr' AS WE ALL WERE FORCED TO DO, AND C,U1' E LPENS� S INSTEAD
OF FDREI'ER L001�ING FOR NEW FEF,S ANA 1NCt1EAS1XG TH,L OPERATING BUDGET,
MAYBE THE DAY WILL COME THAT THE ENT.IJM CITY ADMIIVYSTItATIO,V KU IBIS
REWARDED WITH S12ABLE "ft0)VUSCS' AR0N WHAT THEY CAN SAYi! FROM THE WORKING
BUDGET, INSTEAD OF LOOKING FOR WHATEVER ELSE THEY CAN SQUEELB OUT OF HARD WORKING BUSINESS PEOPLB.
I PERSONALLY SUPPORT A MOVE WHERE EVERYBUSINESS , INCLUDING ANY AND ALL SO
CALLED INDEPENDENT CONTRACTORS, WOULD .BB TREA?^,L'D L'QUALLYAND PAVAN EQUAL
SNARE.
OCT 13 '93 89:53 LA MERE BELLE P.1/1
Joseph C.Mas+ek
14487 Rig Basin Way
Saratoga, Ca. 95070. OCTOBER 11 1993,
The Hon. Council of the City of Saratoga
Fax : 741 -1132
RR: PROPOSAL TO INCREASE BUSINESS LICENCE FEES
TO WHOM IT MAY CONCERN :
I SHOULD LIKE TO AIR MY OBJECTIONS TO THE PROPOSED INCREASE IN THE BUSINESS
LICENCE FEES, AS TILE PROPOSAL IS GROSSLY UNFAXR, AN'I'1 BUUNESS AND EN71R,ELY
DISCRIMINATING.
IT SEEMS THAT THE CI7Y WAMT S TO FINANCIALLY AM 7'HE 1%101ftY PEI op .,I; WHO INVEZED
THEIR SILLS AN J A10iVEY TO CONTRIBUTE TO TIME CITY COFFERS WITH GENERATION OF
SALES TAX REVENUES- IIYADDI'1'IUN, ESPECIALLY THE RESTAURANTS, ALR.EADYFIAVE
THE IIIGIIEST PAYROLL EXPENSE IN THE CITY AS WELL AS THE IIIGIIIr`S!' CONI'1�113UTIOItI
OF U'TII,ITY TAXES ADD4D TO THEIR PG & E BILLS. "HEY ALSO PAYTHE HIGHEST FEES TO
THE COUNTY'S H&1LTH DE'PAIfTMENT.
THE TIME HAS COME FOR THE CITYMANACEMENT TO FA (X 7'ODAYS 1?,EAX.!'!IE'S OF' THE
STILL SAGGING ,&V DORMANT ECONOMY.
WE, THE BUSINESS PEOPLE, OF SARATOGA HAD TO SWALLOW MANYA B77TE.R PILL IN TIIE
RECENT PAST, AND WE FEEL THAT IT ,SHOULD BL" Me C177S TU8N 7`O Z,.E'ARN TO
"TIGHTEN UP THE BELT' AS WE ALL WERE FORCED TO DO, .,jND CUl' EXPENSES XNSTEAD
OF FOREVER LOOXINC FOR IVEW FEES AND INCREEASING TlhrE, OP1;i2 4 INGB tID(F,T,
MAYBE TIIE DAY WILL COME THAT T77!A ENTIRE CITY ADM1AtjSTRA;TIQN WILL BE
REWARDEI] WITH S12ABLE "BONUSES' FROJW WHAT MAY C4N.S4YZ PWOM THE WORKING
BUDGET, IN.STEA.D OF LOOKING FOR WHATEYER ELSE THEY CAN SQUEEZE OL7 OF HARL)
WORKING BUSINESS PEOPLE.
I PERSONALLY SUPPORT A MOVE WHERE EYERYBUSINESS , INCLUDING ANYAND ALL SO
CALLED INDEPENDENT CONTRACTORS, WOULD BB TREA7"11? E QUALI,Y AND PAY AN EQUAL
SNARL:'. '.. .
WARREN B. HEIR • AIA
A N D A S S O C I A T E S
A R C H I T E C T S P L A N N E R S
1 4 6 3 0 B I G B A S I N WAY S A R A T O G A . CALIFORNIA 9 5 0 7 0 • 8 6 7 - 9 3 6 5
October 12, 1993
Preston Wisner, President
Saratoga Chamber of Commerce
20400 Saratoga -Los Gatos Road
Saratoga, CA 95070
Re: Business License Revisions
Dear Preston,
This letter is in response to your request from members of the
Chamber for our input on the Proposed Fee Schedule for Business
Licenses for 1994 as sent to you by City Manager, Harry Peacock. I
have been in business in Saratoga as an architect for almost 36
years and have, in general, agreed in the past with the policy of
our City regarding business licenses and have worked with our city
government.
Naturally, I am interested in the objective of the ordinance to
generate additional funds to run our City, but this method astounds
me and many of my friends in other businesses. Comparing the fee
for Architects, Engineers, Contractors, and Sub - contractors with
two (2) other professional areas, the proposed fee schedule is
unrealistic and unfair.
This office checked with the Building Department today for a 40,000
sq.ft. building, such as the Inn at Saratoga, at a cost of
construction of $4,000,000. The plan check fee would be $8,000 and
the Building Permit would be $12,000. The permit fee for the
electrical, mechanical, and plumbing work is $0.03 per sq. ft. for
each area of work, or 40,000 sq.ft. x $0.03 x 3 for a total fee of
$3,600 for this work. Adding all plan check and building permit
fees you get the total amount of the fees of $23,600, and at 30
percent as proposed, my business license would cost $7,080. This
business license proposal is unbelievably unfair as it pertains to
the architect, engineers, contractor, and sub - contractors. If I
read the proposal correctly, the total fee produced would be the
$7,080 by at least three offices (architect, engineer, and general
contractor) for a total of $21,240 in license costs for this one
building.
I have reviewed several other businesses, but not as carefully as
mine. A real estate office with two (2) brokers and 30 employees
would have a license fee of 2 x $150 plus $15 x 30, or a total fee
Preston Wisner, President
Chamber of Commerce
October 12, 1993, Page 2.
of $750.00. A dental office with three (3) dentists and five (5)
employees would have a license fee of 3 x $150 plus $15 x 5, or a
total fee of $525. I believe that the proposed fee for these two
(2) professions is much higher than comparable license fees in
other cities, but compared with my category as an architect, they
are proportionately low when compared with their volume of work.
I'm sure that the City Manager will hear from these professions
stating that the proposed fee schedule is extremely high.
To sum up my opinion of the proposed schedule, I believe that it is
the requirements of the city government to work for the betterment
of all citizens involved in their City. If you want healthy
businesses, providing sales tax revenue to the City and convenience
to residents for shopping, eating out, or for professional
services, do not tax businesses so that they are forced to leave.
Speaking for my category, I find the proposed fee, as I interpret
the schedule, as absurd and preposterous. An architect, and other
professions, are licensed by the State of California to perform
their services anywhere in the State. A business license is
generally required in the City where an office is located. I
strongly urge our City Manager and City Council to thoroughly
investigate a realistic fee program in all categories for a healthy
business community before changing the business license schedule.
Very truly yours,
ren B.
4Heid IA
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Karen Gafet Interiors
October 4, 1993
Preston Wisner, President.
Saratoga Chamber of Commerce
20460 'Saratoga* Los Gatos Road..
Saratoga, .Ca. '95070
Subject: Business License Revisions
Dear Mr. Wisner:
Thank you for your recent letter regarding the letter from the
City of Saratoga in which.there is a proposed ordinance.for 'increased
business license taxes. ,
It seems that. uhder the "Professional Business, General" category, where
in the past I have been renewing my license fora fee of $75.00, the
fee will increase to $150.00, in effect doubling the current fee.
One important issue.not addressed in the city's letter is where the•
additional revenue will be spent ??
Thank you for informing us of this matter, and please continue to keep
us updated.
Sincerely,
Karen Ga }et
Karen Galet Interiors
20465 Saratoga -Los Gatos Road • Saratoga, CA 95070
(408) 867 -6059
HARMONIE SKIN AND BODY CARE
"Yo U 7- wo11d of beauty and well- being"
Saratoga October 13 th,1993
CITY OF SARATOGA
Attention• H Peacock_, City M na er
Regarding the raise in business license fee.
CC : Saratoga Chamber of Commerce,
Saratoga Village Association,
Dear Mr Peacock,
A City can hardly pretend to attract small businesses by increasing and /or creating new business taxes and certainly not by
creating a system that would penalized the growth of businesses.
As a spa, Harmonie Skin and Body Care has to pay to City of Saratoga, in addition to the business license, a Massage
Therapy License Permit which represents $2100 per year if the growth of the spa is limited to 4 therapists. The proposed
schedule for 1994 represents an additional $225 per year.
25% of Harmonie Skin and Body Care clientele lives in Saratoga and as with most Saratogan they would prefer to see their
beautiful town attract more small businesses then to become an empty town. It is what would happen ultimately as the City
of Saratoga makes it more difficult for small businesses to survive by creating taxes and regulations that limit their growth.
Choosing the City of Saratoga is becoming less desirable for our company as taxes for small businesses are being increased.
When their leases expire, Harmonie Skin and Body Care and many other businesses, will have to reevaluate the sensibility
of their choice of Saratoga as a viable location.
The raise in business taxes will eventually reduce the number of business license applications in Saratoga and as a result,
reduce the taxe amount generated by small businesses.
To the contrary, the solution to generate more revenue for the City, is to increase the number of businesses in Sarato ga by
demonstrating to businesses, through an advertising campaign, that Saratoga facilitates business with reasonable license
fees and other means of encouragement.
Aside from the risk of depleting Saratoga of its small businesses, the business license taxe proposal , will reduce the taxe
amount generated by business licenses. It is a short term remedy that threatened the existence of Saratoga as a town.
ds,
P. Bottero, owner.
408. 741 •4997
14501 BIG BASIN WAY • SARATOGA • CALIFORNIA 95070
October 18, 1993
Saratoga Chamber of Commerce
2060 Saratoga -Los Gatos Road
Saratoga, CA 95070
Honorable Mayor and City Council Members,
I am the owner of lakes Restaurant at 12175 Saratoga- Sunnyvale Road, Saratoga. I have
owned this particular business since 1982. 1 am writing to protest the proposed increases
In business license fees. I realize that some increase in the fee schedule is necessary.
However, In these trying times' fees that increase better than 90 percent seem unreasonable
and excessive.
I have been in business for some thirty plus years and seen increases in everything
Imaginable. Nevertheless, in these last several years large Increases In many areas have
made It more and more difficult to operate my business. 1 would ask that you consider the
role small business has In the community and reconsider your positions on the huge
Increases in the business license fees.
Respectfully yours,
Bernard Tougas
Owner
Jake's Restaurant
TOTAL F. @2
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A 'Tra.d iti on In Fine Dining
Tuesday, October 5, 1993
Mr. Harry Peacock
City Manager
City of Saratoga
13777 Fruitvale Avenue
Saratoga, CA 95070
Mr. Peacock,
OCT rc P9 V VED
1 1993
Ci I
CITY MANAGER'S OFFICE
is common knowledge that, overall, business in Saratoga stinks!
It is, however, worthwhile saving what little business we have left in Saratoga. I
feel that the primary goal of the city should be to find ways to improve the general
attitude toward the local business community and to entice people to seek out
Saratoga because it is truly a special place, not just a place that pretends to be a
special place to shop and dine. We should create a task force consisting of business
professionals and city representatives that can evaluate the current situation, meet
with local businessmen and property owners, and consequently, develop a long
range plan that will make Saratoga the place we all want it to be.
.Ting all kinds of fees will only discourage viable new businesses from
idering Saratoga as a possible business location. When license fees are based
i gross receipts it's just another way for government to stick its nose in someone
s business, as well as taking away one's motivation to do better.
aus
Saratoga City Council
Saratoga Chamber of Commerce
Saratoga Village Association
14555 Big Basin Way, Saratoga, CA 95070
(408) 867 -4711 Fax: (408) 867 -6919
1.
2.
3.
4.
S.
G.
EX#'1617
PIZO130SE-D FEE SCHEDULE FOR BUSINESS LICENSES 1994
RL- CIIEATION BUSINESSES
AMUSEMENT DEVICES
(Pinball, Video Games)
JUKEBOX
CARNIVAL, CIRCUS
'['III A'I'R1CAL PERFORMANCES,
CONCIat'rS, BALLET
ESCORT SERVICES Olt BUREAUS
7. ARCHITECTS, E- NGINEERS,
CONTRACTORS, SUBCONTRACTORS
8. DAY CARL AND PRIV A'L'L• Olt
NURSERY SCHOOLS
9.
10.
11.
12.
13.
14
15.
DELIVERY SERVICES
HANDBILL DISTRIBUTION
HOME OCCUPATION
PROFESSIONAL INSTRUCTION
September 8, 1993
$50 plus $0.75 per $1,000 of gross receipts
in excess of $50,000
$50 a year for eac`n game
i$50 per year
$250 per day
$10 per performance or $100 per
se;tson
$500 plus $100 for each employee
$50 per year plus 30% of all permit
and plan check fees paid
$50 plus $.50 per $1,000 of gross receipts
receipts in excess of $25,000
$ 100 per year
$25 per clay
$ l00 per year
$ i00 per year
PHOTOGRAPHY:
MOVIES Olt VIDEOS ON CI'T'Y PROPER'T'Y $500 per day
MOV.IL:S OR VIDEOS ON U'1'11131t I'ROPER'T'Y $250 per day
S'T'ILL PHOTOGRAPHY ON CI'T'Y PwPI;RTY $ 50 per day
STILL PHOTOGRAPHY ON OTHER PROPERTY $ 25 per day
PROFESSIONAL BUSINESSES, GENERAL $150 per professional plus $15 per employee
PROPERTY LEASING $50 plus $3 per 1,000 square feet of gross
leasable space in excess of 5,000 square feet
EXH181r
Page 2 - Proposed Fee Schedule liar 13usiness Licenses 1904
16. MANUFACTURING, WHOLESALING,
DISTRIBUTION TO RE'TAILE'RS
17. RESTAURANTS, CATERERS,
DI:LICA'1'1:SSL'NS
18. RETAIL BUSINESSES, Gl N1.:RAL
19. 1'001) SERVICES (MARKI ?'1'S)
20. MISCELLANEOUS BUSINESSES
21. SEASONAL BUSINESSES
22. SECURITY ALARMS
23. REAL ESTATE SALES OR 13ROKERAGE
$50 plus $.50 per $1,000 of
gross receipts in excess of $50,000
$50 plus $35 per $1,0(x) of gross
receipts in excess of $50,000
$50 plus $.75 per $1,000 of gross receipt.~ in
excess of" $50,000
$50 plus $.50 per $1,000 oi' gross receipts in
excess of $50,000
$50 plus $.75 per $1,000 of gross receipts in
excess of $50,000
$100 per season
$100 plus $3 per $1,000 of gross receipts in
excess of $25,000
$150 per active broker plus $15 per
employee. Sales persons are employees
24. VENDING MACHINES (MERCHANDISE Olt SERVICE'S)
Cost of $.25 or less
$25 per machine
Cost from $.26 to $1.00
$45 per machine
Cost from $. ?.G to $2.00
$55 per machine
Cost from $.26 to $3.00
$65 per machine
Cost from $.26 to more than $3.00
$75 per machine
25. PERSONAL CARE SALON (BEAUTY, BARBER, $75 for the first chair
NAILS, TANNING, SPAS, MASSAGE) or station, plus $25 for each additional
chair or station
26. RENTAL UNITS (RI?SIDI'sN'TIAI.)
$50 tor&•iw5 units, plus $5 11ir each unit
over 5 in number
EXHIBIT 2
1994 BUSINESS LICENSE TAX ASSUMPTIONS -GROSS RECIEPTS
CATEGORY
REVENUE
ASSUMPTIONS
no.
bus
base fee
rate /emp
g.r. /fee
Consultant
$28,200
188
$150
Contractors
$167,686
634
$50
0.3
$453,286
General Garden Service
$8,100
81
$100
Manufacturers
$5,625
25
$50
0.5
$8,750
Medical Services
$8,850
59
$150
$40
Non - profit
no fee
Other
$400
8
$50
Personal Salon
$4,550
19
$150
68
$25
Professional Services
$26,430
155
$150
212
$15
Restaurants
$31,195
35
$50
0.75
$39,260
Retail
$32,650
275
$50
0.75
$25,200
Services
$49,200
328
$150
Real Estate
$13,320
61
$150
278
$15
Peddlers & Solicitors
$43,000
Miscellaneous
$10,000
TOTAL
$429,206
Building Permits
$453,287
Engineering Fees
$106,792
$772 for $100,000 $2.31 per $1,000 for contractors
$502 plan check fee 65% $1.50 per $1,000 for architects & engineers
PROPOSED FEE SCHEDULE FOR BUSINESS LICENSES 1994
(REVISED OCTOBER 25, 1993)
1.
RECREATION BUSINESSES
$100 plus $25 per
day
MOVIES OR VIDEOS ON OTHER PROPERTY
each *FTE employee
per
day
over 1 in number,
$ 50
per
maximum license fee
STILL PHOTOGRAPHY ON OTHER PROPERTY
$ 25
$500
2.
AMUSEMENT DEVICES
$50 a year for each
(Pinball, Video Games)
game
3.
JUKEBOX
$50 per year
4.
CARNIVAL, CIRCUS
$250 per day
5.
THEATRICAL PERFORMANCES,
$10 per performance
CONCERTS, BALLET
or $100 per season
6.
ESCORT SERVICES OR BUREAUS
$500 plus $100 for
each employee
7.
CONTRACTORS, SUBCONTRACTORS
$50 per year plus a
25% surcharge on all
permit fees
8.
DAY CARE AND PRIVATE OR
$100 plus $20 per
NURSERY SCHOOLS
each FTE employee
over 1 in number,
maximum license fee
$500
9.
DELIVERY SERVICES
$100 per year
10.
HANDBILL DISTRIBUTION
$25 per day
11.
HOME OCCUPATION
$100 per year
12.
PROFESSIONAL INSTRUCTION
$100 per year
13. PHOTOGRAPHY:
MOVIES OR VIDEOS ON CITY PROPERTY
$500
per
day
MOVIES OR VIDEOS ON OTHER PROPERTY
$250
per
day
STILL PHOTOGRAPHY ON CITY PROPERTY
$ 50
per
day
STILL PHOTOGRAPHY ON OTHER PROPERTY
$ 25
per
day
1
0
14. PROFESSIONAL BUSINESSES, GENERAL
15. PROPERTY LEASING
16. MANUFACTURING, WHOLESALING,
DISTRIBUTION TO RETAILERS
17. RESTAURANTS, CATERERS,
DELICATESSENS
18. RETAIL BUSINESSES, GENERAL
19. FOOD SERVICES (MARKETS)
20. MISCELLANEOUS BUSINESSES
21. SEASONAL BUSINESSES
22. SECURITY ALARMS
2
$100 plus $40 for
each additional
professional or non
professional
employee over 1 in
number, maximum
license fee $500
$50 plus $3 per
1,000 square feet of
gross leasable space
in excess of 5,000
square feet
$100 plus $15 per
each FTE employee
over 1 in number,
maximum license fee
$500
$100 plus $20 per
each FTE employee
over 1 in number,
maximum license fee
$500
$100 plus $20 per
each FTE employee
over 1 in number,
maximum license fee
$500
$100 plus $15 per
each FTE employee
over 1 in number,
maximum license fee
$500
$100 plus $20 per
each FTE employee
over 1 in number,
maximumn license
fee $500
$100 per season
$100 plus $5 for
each customer within
the City, maximum
license fee $500
23. REAL ESTATE SALES OR BROKERAGE
$100 plus $40 for
each additional
Professional or non
professional
employee over 1 in
number, maximum
licens,a fee ;500
24. VENDING MACHINES (MERCHANDISE OR SERVICES)
Cost
of
$.25
or less
$25
per
machine
Cost
from-
;.26
to $1.00
$45
per
machine
Cost
from
$.26
to $2.00
$55
per-machine
Cost
from
$.26
to $3.00
$65
per
machine
Cost
from
x.26
to more than $3.00
$75
per
machine
25. PERSONAL CARE SALON
(BEAUTY, BARBER,
$100 for
the
first
NAILS, TANNING,
SPAS, MASSAGE)
chair or
station
plus $25
for
each
additional chair
or station,
maximum
license
fee
$500
26. RENTAL UNITS (RESIDENTIAL)
*Full Time Equivalent
f: \hrp \busfee.rev
3
$50 plus $5 per unit
for each unit in
excess of 4, maximum
license fee $500
EXHIBIT 4
1994 BUSINESS LICENSE TAX ASSUMPTIONS - EMPLOYEE BASED
CATEGORY
Consultant
Contractors
General Garden Service
Manufacturers
Medical Services
Non - profit
Other
Personal Salon
Professional Services
Restaurants
Retail
Services
Real Estate
Peddlers & Solicitors
Miscellaneous
TOTAL
Employees
Building Permits
REVENUE
ASSUMPTIONS
no.
bus
base fee
emp
fee
$31,040
188
$100
306
$40
$145,022
634
$50
$113,322
$10,840
81
$100
137
$20
$2,890
25
$100
26
$15
$13,340
59
$100
186
$40
no fee
$820
8
$100
1
$20
$3,600
19
$100
68
$25
$23,980
155
$100
212
$40
$10,380
35
$100
344
$20
$48,620
275
$100
1056
$20
$55,260
328
$100
1123
$20
$17,220
61
$100
278
$40
$43,000
$10,000
$416,012
3,737
$453,287
FXP19 /'
ORDINANCE NO. 71-
M M G°a ff V
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SARATOGA
AMENDING ARTICLE 4 -05 AND ADDING ARTICLE 4 -06 TO THE
CODE OF THE CITY OF SARATOGA RELATING TO BUSINESS LICENSES
RECITALS
The City Council of the City of Saratoga does ordain as
follows:
Section 1. Article 4 -05 of the Code of the City of
Saratoga is hereby amended to read as follows:
"Article 4 -05 - BUSINESS LICENSES
4- 05.010 Purpose of article
4- 05.020 Definitions
4- 05.030 Compliance with other laws
4- 05.040 Unlawful businesses not authorized; license void
4- 05.050 License required
4- 05.060 Separate license for each business and location
4- 05.070 Application for license
4- 05.075 Application for license, failure to file
affidavit, fee determination
4- 05.080 Issuance of license
4- 05.090 Term of license
4- 05.100 License fee payment, when
4- 05.110 Penalty for delinquency
4- 05.115 License fee payment method
4- 05.120 Display of license
4- 05.130 Duplicate license
4- 05.140 Transferability of license
4- 05.150 Revocation of license
4- 05.160 Exemptions from license requirement
4- 05.170 Exemption from license fees
4- 05.180 Claims for exemptions
4- 05.190 Enforcement; License Collector's duty
4- 05.195 Enforcement inspection authority
4- 05.200 Violation of article, penalties
4- 05.010 Purpose of Article.
This Article is enacted for both regulatory and revenue
purposes pursuant to Section 16000 of the Business and Pro-
fessions Code and Section 37101 of the Government Code, and all
other applicable laws. It requires the registration and the
licensing of all businesses not expressly excluded therefrom, and
1
M M G°� ff V
the payment of license fees by all businesses not specifically
exempted therefrom.
4- 05.020 Definitions.
For the purposes of this Article, the following words and
phrases shall have the meanings respectively ascribed to them by
this Section, unless the context or the provision clearly
requires otherwise:
(a) Business means each and every business, commercial or
industrial enterprise, trade, profession, occupation, vocation,
calling or any means of livelihood, whether or not carried on for
gain or profit, either on a continuous or occasional basis. The
term shall include solicitors and peddlers hereinafter defined.
The term shall include any person, whether having a fixed place
or business in the City or not, who operates a motor vehicle over
the streets of the City for the purpose of pick -up or delivery of
personal property in the City, or who uses such vehicle for any
other purpose in connection with the transaction of any business
of such person, including without limitation, and by way of
example, the route delivery of bread, bakery products, milk,
groceries, laundry and cleaners, and the nonroute delivery of
building materials, goods, wares or merchandise of any kind or
description.
(b) Employee means any person engaged in the operation or
conduct of any business, whether as an owner, partner, officer,
agent, manager or administrator, and any and all other persons
employed or working in said business, either on a continuous or
occasional basis, in either a full time or part time capacity.
In determining the number of employees for the purpose of
fixing the license fee due under this Article, the employer shall
take the number of employees as defined in this subsection,
employed within the City of Saratoga, earning wages during pay
periods nearest the fifteenth day of each month, as reported to
the State Department of Employment on forms which are used for
reporting payments due under the Unemployment Insurance Act, for
each month of the previous calendar quarter, adding the same and
dividing by three; then adding together the total number of hours
worked by all employees and dividing by 172. This figure shall
be used as the number of full time equivalent employees for
fixing the license fee. If an employer has been in business for
less than one year, he may use the average number of full time
equivalent employees who will be employed by him during the
remainder of the calendar year. If the employer has been in
business less than one year he may use the average number of
employees who will be employed by him during the remainder of the
calendar year.
2
M M p ff V
(c) Engaged in business means the conducting, operating,
managing or carrying on of a business, whether done as an owner,
or by means of an officer, agent, manager, employee, servant or
otherwise. Whenever any person shall by the use of signs,
circulars, cards, telephone books or newspapers advertise, hold
out or represent that he is in business in the City, or whenever
any person holds an active license or permit issued by a
governmental agency indicating that he is in business in the
City, or whenever any person makes a sale, takes an order,
renders a commercial service or performs any other similar act
within the City, then such fact shall be considered prima facie
evidence that such person is engaged in business within the City.
(d) Fixed place of business means the premises within the
City where a business is continuously conducted from day to day
and regularly kept open for the purposes of such business. The
term "regular place of business" shall have the same meaning as
"fixed place of business." A fixed place of business shall
include the residence of the licensee where the business is
conducted from such residence; provided, that the conduct of the
business from such residence does not violate any provision of
this Code or other law.
(e) Gross receipts means the total amount of the sale price
of all sales, the total amount charged or received for the
performance of any act, service, or employment of whatever nature
it may be, whether such act, service or employment is done as a
part of or in connection with the sale of goods, wares, merchan-
dise or not, for which a charge is made or credit allowed,
including all receipts, cash, credits, or property of any kind or
nature, any amount for which credit it allowed for the seller to
the purchaser without any deduction therefrom on account of the
cost of the property sold, the cost of materials, use, labor or
service cost, interest paid or payable, losses or any other
expenses whatsoever; provided, that cash discounts allowed or
taken on sales shall not be included. Gross receipts also
includes the amount of any federal, manufacturer's or importer's
excise tax included in the price of the property sold, even
though the manufacturer or importer is also the retailer thereof
and whether or not the amount of such tax is stated as a separate
charge. But gross receipts shall not include the amount of any
federal tax imposed on or with respect to retail sales whether
imposed upon the retailer or upon the consumer and regardless of
whether or not the federal tax is stated to the customer as a
separate charge, or any California State, city or city and county
sales or use tax required by law to be included in or added to
the purchase price and collected from the consumer or the
purchaser, or such part of the sales price of any property
previously sold and returned by the purchaser to the seller which
is refunded by the seller by way of cash or credit allowances,
given or taken as part payment on any property so accepted for
resale.
3
M M � � V
(f) License means the certificate issued by the City to the
licensee after such person has registered his business in accord
with this Article, and where a license fee is imposed by this
Article, after payment of such fee.
(g) Licensee means each person subject to be licensed under
the terms of this Article, whether or not such a license has
actually been procured.
(h) Person includes all domestic and foreign corporations,
associations, syndicated, joint stock corporations, partnerships
of every kind, clubs, California business or common law trusts,
societies, and individuals transacting and carrying on any
business in the City of Saratoga, other than as an employee of a
person licensed hereunder.
(i) Peddler means any person who goes from house to house,
or from place to place, in the City, selling and making immediate
deliveries or offering for sale and immediate delivery to persons
other than manufacturers, jobbers or retailers of such commodi-
ties, any goods, wares, merchandise or any other thing of value
in possession of such person, or who offers services to be per-
formed immediately, and shall include any itinerant vendor who
sells merchandise or property from any vehicle.
(j) Solicitor means any person who goes from house to
house, or from place to place, in the City, soliciting orders
from persons other than manufacturers, wholesalers, jobbers or
retailers of such commodities, for any goods, wares, merchandise
or other thing of value for future delivery, or soliciting orders
from any person for services to be performed in the future, or
making, manufacturing, or repairing any article whatsoever for
future delivery, or soliciting information for use in the
compilation of any listing, directory or information designed for
use in compilation or analysis of data for commercial purposes,
or soliciting contributions of money or other property or
services for any charitable, social service, political, benevo-
lent or patriotic purpose, regardless of whether or not such
solicitation is by or on behalf of any nonprofit organization.
The term "solicitor" shall include a person taking subscriptions
to newspapers, periodicals, magazines or other publications or
tickets of admission to entertainments or memberships in any
clubs.
(k) License collector means an officer or person appointed
by the City Council by resolution or ordinance to perform the
duties of tax collector as set forth in this code. The Sheriff
of Santa Clara County, or his deputies, may assist the license
collector in the performance of his duties, as hereinafter set
forth.
12
M M R ff V
4- 05.030 Compliance with other laws.
Nothing contained in this Article shall be deemed to repeal,
amend, be in lieu of, replace or in any way affect any
requirement for any license or permit, or license fee or permit
fee, required by, under or by virtue of any other provision of
this Code or any other ordinance or resolution of the City.
Where a particular business activity is the subject of any other
provision contained in this Code, or in any other ordinance or
resolution of the City, the requirements of such other provision
shall be satisfied in addition to the requirements of this
Article.
4- 05.040 Unlawful business not authorized; license void.
No license issued under the provisions of this Article shall
be construed as authorizing the conduct or continuation of any
illegal or unlawful business, or any business conducted in
violation of any provision of this Code or any other ordinance or
resolution of the City. Any license issued under this Article to
such illegal or unlawful business or to any business conducted in
violation of any provision of this Code, or any license issued
contrary to the terms of this Article, shall be void.
4- 05.050 License required.
It shall be unlawful for any person, whether as principal or
agent, clerk or employee, either for himself or for any other
person, to commence, engage in, conduct or carry on any business
in the City not otherwise excluded by this Article, without first
having registered such business with the City and having procured
a license from the City to conduct such business, or without
complying with any and all provisions contained in this Article.
4- 05.060 Separate license for each business and location.
A separate business license must be obtained and a separate
business license fee must be paid for each separate business
engaged in, regardless of whether one or more of such businesses
are conducted from the same location, and a separate business
license must be obtained and a separate business license fee must
be paid for each branch, establishment or location in the City at
or from which the business engaged in is carried on, the same as
if each such branch establishment or location were a separate
business. Each license shall authorize the license to engage
only in the business licensed thereby at the establishment or
location designated in such license.
4- 05.070 Application for License.
(a) Every person required to have a license under the
provisions of this Article shall make application for the same,
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or application for renewal of the same, to the License Collector.
Such application shall be a written statement on form or forms
provided by the License Collector, shall be signed by the
applicant under penalty of perjury, and each such application
shall be permanently filed at said License Collector's office and
shall constitute a registration of the business. Each
application shall set forth such information as may be therein
required, and in all events shall include the names and addresses
of all owners of the business, the nature of the business, the
location of the principal place of business and the location and
zoning classification of each place of business within the City.
(b) No statements shall be conclusive as to the matter set
forth therein, nor shall the filing of the same preclude the city
from collecting by appropriate action such sum as is actually due
and payable hereunder. Such statement and each of the several
items therein contained shall be subject to audit and
verification by the license collector, his deputies, the sheriff
of Santa Clara County, or his deputies, or authorized employees
of the city, who are authorized to examine, audit, and inspect
such books and records of any license or applicant for license as
may be necessary in their judgment to verify or ascertain the
amount of license fee due.
(c) All licensees, applicants for licenses, and persons
engaged in business in the city are required to permit an
examination of such books and records for the purposes aforesaid.
(d) The information furnished or secured pursuant to this
code shall be confidential to the extent permitted by the
California Public Records Act (Government Code Section 6250
et sea.) and any successor statute.
4- 05.075 License Application; Failure to File Affidavit;
Fee Determination.
(a) If any person fails to file any required statement
within the time prescribed, or if after demand therefor made by
the license collector he fails to file a corrected statement, the
tax collector may determine the amount of license fee due from
such person by means of such information as he may be able to
obtain.
(b) If such a determination is made, the license collector
shall give a notice of the amount so assessed by serving it
personally or by depositing it in the United States mail at
Saratoga, California, postage prepaid, addressed to the person so
assessed at his last known address. Such person may, within
fifteen days after the mailing or serving of such notice, make
application in writing to the license collector for a hearing on
the amount of the license fee. If such application is made, the
tax collector shall cause the matter to be set for hearing within
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fifteen days before the city council. The license collector
shall give at least ten days' notice to such person of the time
and place of hearing in the manner prescribed in this subsection
for serving notices of assessment. The council shall consider
all evidence produced and shall make findings thereon, which
shall be final. Notice of such findings shall be served upon the
applicant in the manner prescribed in this subsection for serving
notices of assessment.
(c) In addition to all other powers conferred upon him, the
license collector shall have the power, for good cause shown, to
extend the time for filing any required sworn statement for a
period not exceeding thirty days, and in such case to waive any
penalty that would otherwise have accrued, and shall have the
further power, with the consent of the council, to compromise any
claim as to the amount of license fee due.
4- 05.080 Issuance of license.
(a) Except as otherwise provided in this Section, upon the
receipt and filing of the license application, and in those cases
where a license fee is required, upon receipt of the requisite
license fee therefor, the License Collector shall prepare, sign
and issue to every such person a license certificate in such form
as said Collector shall provide, which license shall state the
amount of the license fee paid therefor, the duration of the
license, the name and address of the person to whom the license
is issued, the nature of the business and the address of each
location within the City where such business will be conducted.
(b) The License Collector shall have no duty to issue a
license for any unlawful business or a business to be conducted
at any unlawful location. Prior to the issuance of any license
to a new business with a fixed location in the city, or to any
other business for which a previous license has expired, the
License Collector shall cause an investigation to be made to
determine that the proposed place of business is not in violation
of any zoning or building regulations of the City. Any refusal
or denial by the License Collector of a business license may be
appealed to the City Council in accordance with the procedure set
forth in Section 2- 05.030 of this Code.
(c) In the event that, for any reason, a license is issued
for any unlawful business or a business to be conducted at any
unlawful location (whether the same be unlawful because of
violation of any zoning or building regulation or for any other
reason), the same shall not constitute any permit for, nor any
approval of, any such violation; nor shall such license, or the
act or omission of the City, its officers, agents or employees in
issuing the same, either prevent or estop the City from enforcing
the regulation, ordinance or Code provisions so violated; nor
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shall the City or any of its officers, agents or employees be
liable for any act or omission in issuing such a license.
(d) Where a peddler's or solicitor's license is issued and
the licensed person or organization plans to operate through one
or more employees, a single license may be issued to the
employer- applicant, together with business license identification
cards for each of such applicant's employees, and a separate
business license for each such employee shall not be required to
be issued. ,
4- 05.090 Term of licenses.
_ All licenses required to be obtained pursuant to this
Article shall be annual licenses issued for the period commencing
January 1st of each year and expiring on December 31st of the
same year, except that peddler's and solicitor's licenses may be
issued on a daily, weekly, monthly or annual basis.
4- 05.100 License Fee Payment; When.
(a) Unless otherwise specifically provided, all annual
license fees under the provisions of this Article shall be due
and payable in advance on the first day of January of each year.
License fees for initial periods of less than one year shall be
prorated as follows:
(1) For periods of nine months or more, one hundred
percent of annual fee;
(2) For periods of more than four months and less than
nine months, seventy -five percent of the annual fee; and
(3) For periods of four months or less, fifty percent
of the annual fee.
(b) There shall be no refund of license fees.
(c) Except as otherwise herein provided, license fees,
other than annual, required hereunder shall be due and payable as
follows:
(1) Semiannual license fees on the first day of
January and the first day of July of each year;
(2) Quarterly license fees on the last day of January,
April, July and October of each year. Whenever a license fee is
a quarterly fee measured by gross receipts, the applicant for the
license shall, at the time of making application therefore, file
with the city a statement setting forth the nature of the
business and its location, and the expiration of the first
quarterly fee period subsequent to commencement of business, and
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for every quarter thereafter, such person shall file with the
city a statement setting forth the gross receipts of the business
for the quarter then expired and shall pay at the time a license
fee computed at the rate specified for that classification of
business;
(3) Daily flat rate license fees, each day in advance.
4- 05.110 Penalty for delinquency.
Any person who fails to pay any business license fee within
30 days after the time it is due and payable under the terms of
this Article, shall pay a penalty of ten percent of the amount of
the fee in addition thereto, and shall pay an additional ten
percent of the amount of such fee for each month of continued
delinquency after the first month; provided, however, that the
amount of such penalty shall in no event exceed the amount of the
original license fee.
4- 05.115 License Fee Payment; Method.
(a) Unless otherwise provided in this section, all fees,
owing to the city may be paid by personal check if the financial
institution upon which the personal check is drawn is located in
California, and the person drafting the personal check is a
resident of California and provides proof of residency.
(b) Any person whose personal check is returned to the city
without payment shall pay a penalty charge of ten dollars. The
ten dollar penalty charge shall be added to the fee, for which
the personal check was drafted and that monetary obligation shall
not be deemed to have been paid until both the monetary
obligation and the ten dollar penalty charge have been honored
and paid by the financial institution.
(c) For a period of two years, the city may require a
person whose personal check was returned to the city without
payment to pay all fees, by cash, a cashier's check or postal
money order.
(d) In addition to the provisions of this section, a person
whose personal check is returned to the city without payment is
liable for all civil penalties authorized by California Civil
Code Section 1719.
(e) All negotiable instruments shall be made payable to the
order of the city.
(f) The penalties provided in this section shall be imposed
in addition to penalties due under Section 4- 05.200.
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4- 05.120 Display of license.
Every person having a license under the provisions of this
Article for engaging in business at a fixed place of business in
the City shall keep such license posted for exhibition while in
force in some conspicuous place in his place of business. Every
person having such a license and not having a fixed place of
business in the City, shall carry such license with him at all
times while carrying on the business for which the same was
granted. Where such business is conducted through the operation
of a motor vehicle over the streets of the City, such license or
an exact copy thereof shall be carried in each such motor vehicle
by the operator thereof at all time during which such motor
vehicle is in operation in the conduct of such business within
the limits of the City. Every person having a license shall
produce and exhibit the same whenever requested to do so by any
police officer or any person authorized to issue or inspect
licenses or to collect license fees. Every person licensed as a
peddler or solicitor shall wear the identification card issued to
him in a prominent position on his outer clothing so it is
legible to each prospective customer at all times.
4- 05.130 Duplicate licenses.
A duplicate license may be issued by the License Collector
to replace any license previously issued hereunder which has been
lost or destroyed, but which is still in full force and effect,
upon the license filing an affidavit attesting to such fact, and
at the time of filing such affidavit paying the License Collector
a duplicate license fee of One Dollar.
4- 05.140 Transferability of license.
Licenses and identification cards issued pursuant to this
Article are not transferable or assignable by either the licensee
or by the holder of any such identification card, to any other
person, nor shall any license issued to a licensee be construed
as authorizing any person other than the named licensee to engage
in the licensed business. Any attempted transfer or assignment
of any license or identification card shall automatically revoke
the license, and any revocation of a license shall automatically
revoke all identification cards issued thereunder.
4- 05.150 Revocation of licenses hearings; new license
after revocation.
(a) Grounds for revocation. Any license issued pursuant to
this Article is subject to revocation for cause on any one of the
following grounds:
10
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(1) A false or fraudulent statement or
misrepresentation of any material fact in the application for the
license.
(2) Violation by the licensee of any provision of this
Code or any other ordinance or regulation of the City.
(3) The existence of any ground for which an initial
application for a license would be denied, except for a change in
zonirg regulations subsequent to the issuance of the license
which results in the business constituting a lawfully established
nonconforming use, in which case, the use shall be subject to all
of the zoning regulations pertaining to nonconforming uses.
(4) Conducting the business in an illegal, improper or
disorderly manner, or in a manner which endangers the public
health, safety or welfare.
(b) Notice of revocation. The City Clerk shall give notice
to the licensee of the City's intention to revoke the business
license and the grounds for such revocation. The notice shall
also set forth the time and place when the matter will be heard
by the City Council. The notice shall be sent to tha licensee,
at the address of the principal place of the business shown on
the application for the license, at least ten days prior to the
date of the hearing.
(c) Hearing and determination by City Council. At the time
and place indicated in the notice of revocation, the City Council
shall conduct a public hearing to determine whether the business
license in question should be revoked. The Council shall render
its decision within ten days after the conclusion of the public
hearing. Until -such decision is rendered., the licensee may
continue to operate his business. The Council may revoke the
business license, based upon a finding that one or more grounds
for revocation exist, or the Council may permit the licensee to
continue the operation of his business pursuant to the terms of
the original license or subject to compliance with such
additional conditions as the Council may impose in lieu of
revocation. The decision of the City Council shall be final.
Any revocation of a business license shall automatically revoke
all identification cards issued in conjunction therewith and
shall automatically revoke any permit issued to the licensee
under any other provision of this Chapter.
(d) New license after revocation. Whenever a license has
been revoked pursuant to this Section or for any other reason, no
new license shall be issued to the same applicant or for the same
business unless satisfactory proof is first made to the License
Collector that the violation or other matter causing the previous
revocation has been corrected and that there is no likelihood of
any repetition of the same. The burden of proof shall be on the
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applicant, and he may appeal any adverse decision of the License
Collector to the City Council in accordance with the procedure
set forth in Section 2- 05.030 of this Code.
(e) Fee Refund Not Made, Reissuance Prohibition Period.
Upon revocation of a license, no part of the fee collected shall
be returned.
4- 05.160 Exemptions from license requirement.
Except as otherwise provided i,i Section 4- 05.170, the
following persons, organizations and activities shall be exempted
from the provisions of this Article and shall not be required to
obtain a business license hereunder.
(a) Any business conducted for a religious, educational,
benevolent or charitable purpose from which no profit is derived.
(b) The conduct of any entertainment, amusement, dance,
concert, lecture, exhibition or athletic event where the
receipts, if any, are used solely for benevolent or charitable
purposes and not for private gain of any person.
(c) The conduct of any entertainment, amusement, dance,
concert, lecture, exhibition or athletic event by a nonprofit
religious, educational, charitable, fraternal, amateur theatrical
group, military, state, county or municipal organization or
association where the receipts, if any, are for the purposes and
objects for which the organization or association is formed, and
from which no private gain is derived, directly or indirectly, by
any person.
y (dy_ Any water, sewer, gas, electricity or telephone public
utility company or district.
(e) Any person conducting business pursuant to a franchise
agreement with the City which provides for the payment to the
City of a franchise fee or other consideration.
(f) Occasional and incidental deliveries of goods, wares
and merchandise into the City by persons not having a fixed place
of business in the City.
(g) Any natural person engaged in any business solely as an
employee of any other person conducting, managing or carrying on
such business in the City and not an owner, partner, associate or
principal in such business, where such business is otherwise
licensed under this Article, unless such person is a peddler or
solicitor.
(h) Every natural person of the age of eighteen years or
under whose annual gross receipts from any and all business does
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not exceed Four Thousand Dollars, unless such person is also a
peddler or solicitor other than a completely self employed or
solicitor.
(i) Banks, including national banking associations, to the
extent provided by Article 13, Section 27 of the State
Constitution, and insurance companies and associations, to the
extent provided by Article 13, Section 28 of the State
Constitution.
(j) Any person whom the City is not authorized to license
for revenue or regulatory purposes by virtue of any law or
Constitution of the United States or of the State.
4- 05.170 Exemption from license fees.
A business license issued pursuant to this Article, shall be
required for the following persons, organizations and activities,
but the same shall be exempted from payment of the license fee
set forth in Section 4- 05.100:
(a) Any person engaged in a business or activity, otherwise
exempted under Paragraph (a), (b) or (c) of Section 4- 05.160, who
conducts such business or activity through the use of one or more
peddlers or solicitors. Such person shall furnish to the License
Collector as part of his application for a business license, the
name and address of each individual peddler or solicitor,
together with a statement of all times during which the peddling
or soliciting will be carried on and a sample of the
identification to be used by each peddler or solicitor.
(b) The business of conducting a boardinghouse,
lodginghouse, or apartment house containing less than four
sleeping rooms for hire, or any private boardinghouse or other
place where meals are sold having less than four boarders.
4- 05.180 Claims for exemption.
(a) Every person engaged in business in the City is
rebuttably presumed to be subject to the licensing requirements
of this Article. Except as otherwise provided in this Section,
no person shall be exempted from the licensing requirements until
a determination has been made by the License Collector of the
existence of facts entitling the person to such exemption. The
burden of proof of any such claim of exemption shall be upon the
applicant.
(b) No claim for exemption from this Article based upon
Section 4- 05.160 shall be required unless and until a demand
therefor is made by the License Collector, in which event, the
person claiming such exemption shall file a verified statement of
the reasons for the exemption together with such other
information and documents as may be requested by the License
13
Collector in order to determine
Upon a determination being made
an exemption, such determination
applicant's statement, signed by
in the City offices, with a copy
applicant.
M M & f� V
the status of the applicant.
that the applicant is entitled to
shall be endorsed upon the
the License Collector, and filed
thereof being delivered to the
(c) Any person claiming to be exempt under Section 4-
05.170 from the payment of a license fee shall make application
therefor to the License Collector on such form as he shall
prescribe. The application shall be accompanied by such
information and documents as the License Collector may require in
order to determine the status of the applicant. Upon an
determination being made that the applicant is entitled to an
exemption from the payment of a license fee, and provided the
applicant is otherwise entitled to a business license, the
License Collector shall issue such license, without charge, and
shall indicate on the face thereof that the license is exempted
from the license fee.
(d) In any case where a license or an applicant for a
license believes that his individual business is not properly
classified because of circumstances peculiar to it, as
distinguished from other businesses of the same kind, he may make
a claim to the License Collector for reclassification. Such
application shall contain such information as the License
Collector may deem necessary and required in order to determine
whether the applicant's individual business is properly
classified. The License Collector shall then conduct an
investigation, following which he shall assign the applicant's
individual business to the classification shown to be proper on
the basis of such investigation. The proper classification is
that classification which, in the opinion of the License
Collector, most nearly fits the applicant's individual business.
Any resulting reclassification shall not be retroactive. No
business shall be reclassified at the request of the licensee
more than once in one year.
(e) Any decision or determination made by the License
Collector under the provisions of this Section may be appealed to
the City Council in accordance with the procedure set forth in
Section 2- 05.030 of this Code.
(f) Any determination by the License Collector or City
Council that a person or business is exempt from the licensing
requirements of this Article, or is exempt from the payment of a
license fee, shall not be conclusive upon the City and may be
reopened at any time by the License Collector or the City
Council.
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4- 05.190 Enforcement of Article.
It shall be the duty of the License Collector and he is
hereby directed, to enforce all of the provisions of this
Article. In the exercise of such duty, the License Collector may
enter and inspect all places of business in the City to ascertain
whether any provisions of this Article 4 -06 have been violated.
4- 05.200 Violation of Article; penalties.
(a) The violation of any provision contained in this
Article is hereby declared to be unlawful and shall constitute a
misdemeanor and a public nuisance, subject to the penalties as
prescribed in Chapter 3 of this Code. The enforcement of this
Article pursuant to Chapter 3 shall be in addition to any
proceedings conducted under Section 4- 05.150 to revoke a business
license by reason of the same violation.
(b) The amount of any license fee and penalty imposed by
the provisions of this Article shall be deemed a debt to the
City, and any person carrying on any business without having
first procured a license hereunder from the City to do so shall
be liable in an action under the name of the City in any court of
competent jurisdiction for the amount of such license fee and
penalties imposed on such person, together with reasonable
attorney's fees and all costs of suit, as provided in Article 3-
10 of this Code.
(c) Any person who knowingly or intentionally misrepresents
to any officer or employee of the City any material fact in
applying for a license under this Article, or in claiming an
exemption under this Article, shall be guilty of a misdemeanor,
and any business conducted without a license in violation of this
Article shall be deemed to be a public nuisance, and may be
summarily abated as such, and each day such condition continues
shall be regarded as a new and separate offense.
(d) The conviction and punishment of any person for failure
to pay the required license fee or for conducting a business
without a license shall not excuse or exempt such person from any
civil action for the license fee debt unpaid at the time of such
conviction, nor shall any civil action prevent a criminal
prosecution for any violation of the provisions of this Article
or of any State law requiring the payment of all license fees."
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Section 2: Article 4 -06 is hereby added to the Code of the
City of Saratoga, to read as follows:
Sections:
4- 06.010
4 -06 -020
4- 06.030
4- 06.040
4- 06.050
4- 06.060
4- 06.070
4- 06.080
4- 06.090
4- 06.100
4- 06.110
4- 06.120
4- 06.130
4- 06.140
4- 06.150
4- 06.160
4- 06.170
4- 06.180
4- 06.190
4- 06.200
4- 06.210
4- 06.220
4- 06.010 Generally.
"LICENSE FEE SCHEDULE
Generally.
Recreational Businesses; Amusement Devices.
Architects, Engineers, Contractors and
Subcontractors.
Day care, private and nursery schools.
Delivery services.
Handbill distribution.
Home occupations.
Professional Instruction.
Photography.
Professional businesses, general.
Property leasing.
Real estate sales or brokerage.
Manufacturing, packing, processing,
fabrication wholesaling, distributing.
Restaurants, Caterers, Delicatessens.
Retail Business, General.
Food Services (Markets).
Miscellaneous Businesses.
Seasonal businesses.
Security alarms.
Vending machines.
Personal Care Salon (Beauty, Barber, Nails,
Tanning, Spas, Massage)
Residential Rental Units.
The amount of license fees to be paid to the city by any
person engaged in or carrying on any profession, trade, calling,
occupation or business hereinafter designated, is fixed and
established as hereinafter in this chapter provided.
4 -06 -020 Recreational Businesses; Amusement Devices.
For every person engaged in the conducting, managing or
carrying on of any business hereinafter in this section
mentioned, such license fee shall be in the amount as set forth
herein:
(a) For any recreational business not otherwise licensed or
classified including but not limited to, bowling alleys, movie
theaters, riding academies, tennis facilities (public or
private), golf courses (public or private), miniature golf
courses, and ice and roller skating rinks, the annual license fee
shall be one hundred dollars plus twenty -five dollars for each
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employee over one in number. The maximum license fee shall not
exceed five hundred dollars per year.
(b) For any skee ball or bat ball or handball court,
shuffleboard, or mechanical or electronic amusement device, or
any device, equipment or means of entertainment, the annual
license fee shall be fifty dollars for each alley or device. The
name and address of the owner of each such alley or device shall
be posted conspicuously thereon.
(c) For the business of conducting, managing or operating
on their premises jukeboxes, devices for playing of records or
music automatically upon the deposit of a coin, slug or other
device, or any other mechanical musical device or machine of like
character not licenses hereunder, the annual license fee shall be
fifty dollars.
(d) For conducting, managing or carrying on a carnival,
circus or other similar exhibition, the license fee shall be two
hundred fifty dollars per day.
(e) For conducting, managing or carrying on the operation
of a theater of the performing arts which features lectures or
theatrical performances, such as a comedy, spoken drama, opera,
musical, dance or concert, the annual license fee shall be ten
dollars per performance or one hundred dollars per year.
(f) For conducting, managing or carrying on the operation
of an escort service or escort bureau, the annual license fee
shall be five hundred dollars plus one hundred dollars for each
employee.
4- 06.030 Architects, Contractors, Engineers and Subcontractors.
For every person conducting, carrying on or engaging in the
business of architects, building design, engineering, general
contracting, construction subcontracting, electrical, mechanical,
plumbing or grading contracting in the city the annual license
fee shall be fifty dollars plus 25% of the permit fee for such
business set by resolution of the City Council. The license fee
shall not be prorated.
4- 06.040 Day Care, Private and Nursery Schools.
For every person engaged in the business of operating a
private school of general curriculum, a nursery school or day
care center the annual license fee shall be one hundred dollars
plus twenty dollars for each employee over one in number. The
maximum license fee shall not exceed five hundred dollars per
year.
17
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4 -06 -050 Delivery Services.
For every person not having a fixed place of business within
the city, and not being herein otherwise licensed or classified,
who delivers goods, wares, or merchandise of any kind by vehicle
or who provides any service by the use of vehicles in the city,
the annual license fee shall be one hundred dollars. The license
fee shall not be prorated.
4- 06.060 Handbill Distribution.
For every person engaged in handbill, circular and /or
pamphlet distribution within the city the license shall pay a fee
shall be twenty -five dollars per day. The license fee shall not
be prorated.
4- 06.070 Home Occupations.
For every person engaged in a home occupation in accordance
with the provisions of Chapter 15 of this Code the annual license
fee shall be one - hundred dollars.
4- 06.080 Professional Instruction.
For every person engaged in the business of professional
instruction, the annual license fee shall be one hundred dollars.
The license fee shall not be prorated.
4- 06.090 Motion Picture; Photography.
(a) For every person, company or business engaged in the
making of motion pictures on location within the city the license
fee shall be as follows: in commercial areas or on public
property, five hundred dollars per day, nonproratable; in all
other areas of the city, two hundred fifty dollars per day,
nonproratable.
(b) For every person or business engaged in taking still
photographs for advertisements the license fee shall be twenty -
five dollars per day, nonproratable; where the location is on
city property, the fee shall be fifty dollars per day,
nonproratable.
(c) Fees paid shall be exclusive of payment to city for
special public services required to protect the public health,
safety and welfare.
4- 06.100 Professional Businesses, General.
For every person conducting, managing, carrying on or
engaging in any professional business or occupation not otherwise
specifically licensed by the other sections of this Chapter, the
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M M � � V
annual license fee shall be one hundred dollars plus forty
dollars for each professional or non - professional employee over
one in number. The maximum license fee shall not exceed five
hundred dollars per year.
4- 06.110 Property Leasing.
For every person engaged in the business of leasing property
located in the various commercial and industrial zoned districts
in the city the annual license fee shall be fifty dollars, plus
three dollars per one- thousand square fee, or fraction thereof,
of gross leasable floor space either leased or available for
lease in excess of five thousand square feet.
4- 06.120 Real Estate Sales or Brokerage.
For every person conducting, managing, carrying on or
engaging in the business of real estate sales or brokerage, the
annual license fee shall be one hundred dollars plus forty
dollars for each professional or non - professional employee over
one in number. For the purpose of this section, licensed real
estate sales persons shall be deemed to be employees. The
maximum license fee shall not exceed five hundred dollars per
year.
4- 06.130 Manufacturing, Packing, Processing, Fabrication,
Wholesaling or Distributing.
For every person carrying on a business engaged in
scientific research, experimental development of materials,
methods or products, and prototype fabrication and assembly of
products associated with such research efforts including
providing management, administrative, technical, hardware or
software support for research development, aerospace, electronic
and associated high technology activities, or every person
engaged in or carrying on a business consisting mainly of
manufacturing, packing, processing, fabricating, wholesaling, or
distributing any goods, wares, merchandise or produce, the annual
license fee shall be one hundred dollars plus fifteen dollars per
employee over one in number. The maximum license fee shall not
exceed five hundred dollars per year.
4- 06.140 Restaurants, Caterers, Delicatessens.
For every person engaged in the business of selling prepared
meals and /or mixed drinks the annual license fee shall be one
hundred dollars plus twenty dollars per employee over one in
number. The maximum license fee shall not exceed five hundred
dollars per year.
EV
ME I � V
4- 06.150 Retail Business General.
For every person carrying on the business consisting of
selling at retail any goods, wares, merchandise, commodities or
for conducting, maintaining or carrying on any trade, occupation,
calling or business not otherwise specifically licensed by other
sections of this Chapter, the annual license fee shall be one
hundred dollars plus twenty dollars per employee over one in
number. The maximum license fee shall not exceed five hundred
dollars per year.
4- 06.160 Food Services (Markets)
For every person on the business consisting of the selling
of food or food stuffs not manufactured or consumed on the
premises, the annual license fee shall be one hundred dollars
plus fifteen dollars per employee over one in number. The
maximum license fee shall not exceed five hundred dollars per
year.
4- 06.170 Miscellaneous.
For every person conducting any business not otherwise
classified or taxed under the provisions of this Article, the
annual license fee shall be one hundred dollars plus twenty
dollars per employee over one in number. The maximum license fee
shall not exceed five hundred dollars per year.
4- 06.180 Seasonal Businesses.
For every person engaged in a business which is seasonal in
nature, such as Christmas tree sales, Christmas or Easter
photography or other such goods, services or wares offered
seasonally, the annual license fee shall be one hundred dollars
and is nonprofitable.
4- 06.190 Security Alarms.
For every person engaged in the business of installing,
selling, leasing, renting, maintaining, servicing or responding
to a burglary, robbery or fire alarm system, the annual license
fee shall be one hundred dollars plus five dollars for each
customer in the City. The maximum license fee shall not exceed
five hundred dollars per year.
4- 06.200 Vending Machines.
For every person engaged in the business of conducting,
managing or operating any machine or device for the vending of
merchandise or services, the annual license fee shall be twenty -
five dollars if the cost of the vended item(s) are $.25 or less;
forty -five dollars if the cost of the vended item(s) ranges
20
M M I �V
between $.25 and fifty -five dollars if the cost of the vended
item(s) ranges between $.25 and sixty -five dollars if the cost of
the vended item(s) ranges between $.25 and $3.00, and seventy -
five dollars if the cost of the vended item(s) ranges between
$.25 and more than $3.00.
4- 06.210 Personal Care Salon (Beauty, Barber, Nails, Tanning,
Spas, Massage).
For every person engaged in the business of providing
personal care or grooming, the annual license fee shall be one
hundred dollars for the first chair or station plus twenty -five
dollars for each additional chair or station. The maximum
license fee shall not exceed five hundred dollars per year.
4- 06.220 Residential Rental Units.
Every person engaged in the business of leasing residential
property located in the city shall pay an annual license fee of
fifty dollars, plus five dollars per unit for each unit over four
in number. The maximum license fee shall not exceed five hundred
dollars per year."
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 court of competent
jurisdiction, such decision shall not affect the validity of the
remaining portions of the 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.
21
DGu^l��
Section 4: This Ordinance shall be in full force and
effect thirty (30) days after its passage and adoption.
The above and foregoing Ordinance was regularly
introduced and after the waiting time required by law, was
thereafter passed and adopted at a regular meeting of the City
Council of Saratoga held on the day of
1993, by the following vote.
AYES:
NOES:
ABSENT:
ATTEST:
City Clerk
October 26, 1993
j: \wpd \mnrsw \273 \ord \4 - 05.406
22
MAYOR
u7b'? 3 oB
NOV Y 1993
Ci i tt ' o -- .TOGA
14463 Big Basin Way CITY 14 ANAG.E:R'S Or, FICE
,Sarntnara, 95070 October 29, 1993.
Notes re : Proposed Business License Fees.
This letter refers to my letter of October 11th mailed to the City Manager, and the
Honorable Council of the City of Saratnaa.
To date much has been said about the increase o f license fees and several proposals have
been made, Well there is one more of these proposals.
The various proposals presented recently by Mr. Peacock are unfair and discriminatory,
as I believe that ,eryme engaged in whatewer business within Saratoga should pay the same fee
as everyone else.
At the present the City's financial department has some 2000 licenses on file.
Howevver there are se_,eral hundred more unlicensed operators , independent contractors, sub -
contractors, real estate agents, beauticians, lawn &garden, services who never" had or paid any
city business license fee.
It is unfair, for example, that a real estate office should be paying $ 100.00
for the entire office where as mar y, as 60 agents share space and f acilities to persue their business
activity - this $ 100.00 fee theca equals to less the 16 cents per agent per year ! Thus I believe
that every agent .should have a business license when engaged in business within the city.
Equally unfair is the licensing of beauty parlors where each and eve? y `Station" or "Chair"
should be licensed on equal basis.
As far as the Proposed fee for contractors is concerned , the same fee should
be applied. However the contractor then should report to the city the names o f all subcontractors
Used in all the various jobs from the grading to the completion off the project. All these subs should
A
hen be required to have a busi4wss license to perform whatever work on projects within the city.
I believe that by `harnessing" all the unlicensed operators under the same
bm1 1vess license "am_brella•" anti, by apply ing the same $ 100. oo flat fee to every license, the city,
would have much higher, income then expected from the other proposals.
oLZ
Saratoga Plaza &leery
Quality Baked Goods NOV 1993
14440 Big Basic, Way CITY W SERA OGA
Saratoga, Ca 95070 CITY MANAGER'S GERMS OFFICE
� 1 �
a4lt 6L
9rfi
WwA c� diet ��,WxM4
r
yew; ��iT
� ��,f f �/�x�u
October 28, 1993
Mrs. Karen Tucker
Mayor
City of Saratoga
13777 Fruitvale Avenue
Saratoga, CA 95070
Dear Mayor Tucker:
�%U t d
Los Gatos- SaMoga Board of REALTORS®
20454 Blauer Drive, Saratoga, California 95070
Telephone 408 867 -0922
FAX 408 867 -5406
First, I would like to thank Saratoga City Manager, Harry
Peacock, for taking the time to meet with the Board's
Local Government Relations Committee to discuss the
proposed business license tax increase. Based on the
discussion and comments from local real estate offices and
the Board of Directors, I am writing to express the real
estate community's concerns and to recommend alternative
business license tax structures and rates.
From our discussion, it was clear that Realtors recognize
the financial position of local governments given the
continued state raids on local property tax revenues.
Further, the real estate community understands the
importance of maintaining viable municipal services.
Finally, we realize that businesses and residents have a
responsibility to contribute their fair share to ensure
the well being of Saratoga.
There is no question that Saratoga's business license tax
rate is currently one of the lowest in Santa Clara County.
However, we do not believe that Saratoga should move from
one of the lowest to one of the highest business license
tax cities in the county. Under the current proposals,
the rates increase to amounts that are excessive and
inconsistent with the many surrounding communities.
PLAN #1
Under Plan #1(Broker pays $150 plus $15 for each
agent /employee), the business license tax rate would
increase from $75 to more than $1,000 for several brokers.
This represents more than a 1,000% increase. Single
broker offices would see a 100% rate hike or more.
Plan #1 proposes rates that are excessive and inconsistent
with business license tax rates of other communities in
Santa Clara County. With the exception of Los Gatos, with
the second highest tax rate in the valley, most other
cities levy taxes which are less than this amount.
113 REALTORm - is a registered mark which identifies a professional in
real estate who subscribes to a strict Code of Ethics as a member of
aEauor> ' the NATIONAL ASSOCIATION OF REALTORSm
The Board of Realtors recommends that the council reject
Plan #1, the hybrid of gross receipts and employee based
tax structure.
PLAN #2
Under Plan #2,(Broker pays $150 plus $25 for each agent)
the tax rate for real estate brokerage increases even
further, from $75 to more than $1,500 for many brokers.
Several brokers would see their tax rate increase more
than 2,000 %. The tax rate for small brokers would more
than double. Plan #2 is even more out of line with what
other communities levy for real estate offices. In fact,
only one other city in the valley charges more.
The Board recommends that the council reject Plan #2.
PLAN #3
Under plan #3,($100 for Broker; $40 for each agent; cap at
$500) brokers would be charged an even higher amount for
each agent. Most of the larger offices would see an
increase in excess of $2,000 if a cap is not included.
Should the council adopt an employee based method, a cap
on maximum rates must be included in the ordinance.
Further, we believe the proposed cap of $500 should be
reduced to $300. This should apply not only to the real
estate community, but to all businesses. The $40 per
agent charged to brokers is also excessive. As stated
above, this rate, without a cap in place, would create an
unfair tax rate.
The Board of Realtors recommends that the council consider
the following alternatives:
ALTERNATIVE #1
Maintain the "flat rate" method of business license
taxation and increase the rate to an amount not to exceed
$125.00 per business.
While size of business is not addressed in this
alternative, the method is simple and straightforward.
This type of tax is easier for the city to administer and
enforce.
ALTERNATIVE #2
Adopt an employee based method, with brokers \businesses
paying $100 plus $10.00 per employee \agent, with an
absolute cap of $300.00. With the cap at $300.00, Saratoga
Y
will be levying a higher tax rate than most Santa Clara
County cities.
The real estate community urges you to modify the proposed
rates in accordance with the recommendations of the Board
of Realtors and other business groups. The Board is
interested in working with the city to devise reasonable
and workable business license tax structures and rates.
If you have questions regarding the Board's
recommendations, please contact Eric Morley, the Board's
Legislative Advocate, 867 -0922.
Thank you for your time and consideration.
Sincerely,
bq"�
al Anderson
P re dent
SARATOGA FACED A BUDGET CRISIS AS IT
WENT ABOUT DEVELOPING ITS STRATEGIC BUDGET
PLAN FOR THE NEXT TWO YEARS. WHY THE
CRISIS EXISTED AND HOW SIGNIFICANT IT WAS
WERE RATHER STRAIGHTFORWARD PROPOSITIONS.
HOW TO RESOLVE THE CRISIS WAS NOT SO
STRAIGHTFORWARD.
LET'S RETURN TO JUNE 1992. BY THIS
TIME THE STATE HAD ALREADY ENACTED LAWS
WHICH CUT CITY REVENUE AND INCREASED
MANDATORY EXPENDITURES BY $163,00 A YEAR.
THE CITY COULD, JUST BARELY, ABSORB SUCH A
LOSS BY INCREASING USER CHARGES AND
DRAWING DOWN ON RESERVES. THE 1993 FISCAL
YEAR BUDGET ADJUSTMENTS ADOPTED THAT JUNE
1
DID JUST THAT.
BUT AS YOU WILL REMEMBER, THE STATE
DIDN'T ADOPT A BUDGET IN JUNE, OR IN JULY,
OR IN AUGUST. IN FACT NO BUDGET WAS
ADOPTED UNTIL SEPTEMBER 2ND. WHILE THE
STATE WAS IN FISCAL GRIDLOCK, MUCH OF THE
TAX MONEY DUE THE CITY REMAINED FROZEN IN
SACRAMENTO. THE REASON GIVEN: LACK OF
BUDGET AUTHORITY. THE RESULT, SARATOGA
AND OTHERS HAD TO EXPEND DEEPLY INTO
RESERVES TO MEET OPERATING CASH FLOW
NEEDS. ONCE ADOPTED, THE STATE BUDGET
TOOK AWAY 16% OF THE CITY'S PROPERTY
REVENUE, ALL ITS REMAINING CIGARETTE TAX
MONEY, AND MADE PERMANENT THE LOSS OF
2
PREVIOUSLY ALLOCATED CITY REVENUES. THIS
ADDED LOSS TOTALED SOME $312,000 A YEAR.
THEN IN LATE SEPTEMBER THE COUNTY CUT
ANIMAL CONTROL SERVICES LEAVING THE CITY
THE RESPONSIBILITY OF PICKING UP AND
DISPOSING OF DEAD ANIMALS AND CHARGING THE
CITY FOR ALL VETERINARY SERVICES FOR
INJURED BUT UNCLAIMED ANIMALS. THIS COST
RESPONSIBILITY ADDED ANOTHER $4,000 TO THE
CITY'S BUDGET PROBLEM.
THE TOTAL BUDGET IMBALANCE NOW TOTALED
ABOUT $480,000 A YEAR, WITHOUT TAKING INTO
ACCOUNT THE REVENUE LOSS BEING EXPERIENCED
BY THE CITY FROM A PROLONGED RECESSION AND
RAPIDLY FALLING INTEREST RATES. THIS
3
IMBALANCE CONTINUES TO GROW EACH YEAR AS
MANDATED COSTS GO UP AND NORMAL REVENUE
GROWTH IS FROZEN OR WIPED OUT BY STATE
ACTIONS.
TO ADDRESS THE SHORT TERM PROBLEM, THE
CITY COUNCIL REOPENED THE BUDGET LAST
OCTOBER AND CUT $571,000, FULLY AWARE
THAT, IN ALL PROBABILITY, THIS ACTION
WOULD NOT REPRESENT A PERMANENT SOLUTION.
I WAS DIRECTED TO ASSUME THE WORST FOR
FISCAL 1994 AND REPORT TO THE COUNCIL IN
EARLY 1993 HOW TO PLAN FOR FURTHER CUTS
AND TO MARE RECOMMENDATIONS AS TO HOW TO
EXPAND THE CITY'S TAX BASE.
4
SINCE THAT TIME HERE IS WHAT HAS
HAPPENED. AS COUNCIL FACED THE 1994 AND
1995 BUDGETS, THE OVERALL IMBALANCE THEY
FACED WAS $1.3 MILLION FROM THE ESTIMATE
MADE IN 1991 (BEFORE THE MANDATES, THE
CUTS AND THE ECONOMY RADICALLY CHANGED THE
PICTURE).
TO ADDRESS THE IMBALANCE, THE CITY
COUNCIL ORDERED A 10% CUT IN CITY STAFF, A
10% CUT IN STAFF BENEFITS COSTS, AND CUTS
IN ALL SERVICE AREAS. THE RESULT IS AN
OPERATING BUDGET WHICH IS THE SAME IN COST
AS THE 1992 BUDGET DESPITE A 7% COST OF
LIVING FACTOR OVER THE SAME TWO YEAR
PERIOD. THEY ORDERED SIGNIFICANT MOVES
TOWARD FULL COST RECOVERY FOR SERVICES
WHERE SPECIFIC CHARGES ARE MADE. FINALLY
THEY RAISED SOME TAXES AND AGREED TO RAISE
THE BUSINESS LICENSE TAX BY ABOUT
$200,000.
OVERALL THE $1.3 MILLION GAP WAS CLOSED
BY:
BUDGET CUTS - $700,000
FEE INCREASES - $265,000
TAXES - $335,000
IN JUNE THE CITY COUNCIL PASSED
ORDINANCES RAISING THE TAXES ON NEW
CONSTRUCTION AND TRANSIENT OCCUPANCY.
11
THESE INCREASES SHOULD GENERATE ABOUT
$105,000 AND $30,000 RESPECTIVELY.
THE BUSINESS LICENSE ORDINANCE IS TO
RAISE THE REMAINING $200,000 FROM ALL
BUSINESS LICENSES AND PERMITS ISSUED BY
THE CITY.
AS YOU ARE AWARE, THE PRESENT LICENSE
STRUCTURE CHARGES A FLAT RATE OF $75 FOR
ALL BUSINESSES. THE PROPOSED STRUCTURE
USES A VARIETY OF RATES BASED ON TYPE OF
BUSINESS AND IS INTENDED TO MEET THE CITY
COUNCIL OBJECTIVE OF HAVING LARGER
BUSINESSES PAY MORE THAN SMALLER ONES.
THE PROBLEM FACED BY THE CITY STAFF IN
COMING UP WITH A RATE SCHEDULE IS THAT WE
7
HAVE VERY LIMITED DATA ON WHICH TO
CALCULATE RATES. INITIALLY RE HAVE CHOSEN
A GROSS RECEIPTS STRUCTURE CURRENTLY USED
BY THE TOWN OF LOS GATOS. OUR PER
EMPLOYEE STRUCTURE IS A HYBRID BASED ON
LOS GATOS AND LOS ALTOS. FLAT RATES ARE
STILL USED FOR SEVERAL CATEGORIES OF
BUSINESS INCLUDING HOME OCCUPATIONS,
GARDENERS, DELIVERY SERVICES AND SEASONAL
BUSINESSES.
AT THIS POINT THE PROPOSAL IS JUST
THAT. IT IS NOT SET. REMEMBER THAT OUR
OBJECTIVE IS TO CLOSE THE BUDGET IMBALANCE
ONLY TO THE EXTENT NECESSARY AND TO
ESTABLISH A RATE STRUCTURE WHICH
0
RECOGNIZES DIFFERING TYPES OF BUSINESSES.
TO THE EXTENT YOU CAN SHARE WITH ME THE
SIZE OF THE INCREASE YOU FACE, I CAN
ADJUST NY PROPOSAL BEFORE IT IS CONSIDERED
BY THE CITY COUNCIL ON NOVEMBER 3RD.
o: \SPEECH
I
1
fax transmittal of Pam 10
7-,3,13
-- then adding together the total number of hours worked by all
employees and dividing by 172. This figure shall be used as the
number of full time equivalent employees for fixing the license
fee. If an employer has been in business for less than one year,
he may use the average number of full time equivalent employees who
will be employed by him during the remainder of the calendar year.
NOV- 02 —'53 TUE 14:36 ID:MEYERS NAVE ET AL
TEL NO:510/351 -4481
MEYERS, NAVE, RIBACK, SILVER & WILSON
.A Professional Law Corporation
Michael R. Nave
Steven R. Moyers
Gateway 1'I$%*
Elizabeth H. Silver
777 Davis Street. Suite 300
Michael S. Riback
San L*Andro. CA 94577
Kenneth A Wilson
'Telephone: (510) 351-4300
Facsimile: (510) 3514481
Clifford F. Campbell
Michael F. Rodriquez
Kathleen Faubion
Wendy A. Roberts
David W. Skinner
Steven T. Mattes
Rick W. Jarvis
Vesnaica A. Nebb
Of i J. Saltzman AndrCa J. Sa MEMORANDUM
To
FROM:
RE 1.1
City Manager
Michael S. Riback, City Attorney
1220 Howard Avent+s. Suite 250
13uditIpme, CA 940104211
Telephone: aj �acsi it (34�
Santa Rosa QQ2
555 Fiftb Street, Suite 230
Santa Rosa, CA 95M
(7n 50 -M
(707) 345-6617 (Fate)
Reply to:
Sae L=Ndm
DATE: November 2, 1993
.t
Recent Urgency Legislation Affecting Proposed Business
License Fee Amendments
As we discussed, SB 376 went into effect immediately upon
its recent adoption. This legislation amended Section 54954.6 of
the Government Code to clarify the type of "tax" or "assessment"
ordinances that are required to comply with the two- hearing
process set forth in that section, prior to enactment.
This legislation now clarifies that section 54954.6 does
apply to any new or increased fee which exceeds the reasonable
cost of providing the services facilities or regulatory
activity for which the fee is charged. The proposals to alter
the method of calculating the business license fee (first a gross
receipts assessment and now a flat rate plus a per employee
assessment) are not based upon the cost of providing the
services, facilities, or regulatory activity for which the fee is
charged. Therefore the process for amending the business license
fee ordinance to enact one of these two methodologies must comply
with the procedure set forth in section 54954.6.. This procedure
requires:
1. That the City council conduct at least one public
meeting at which public testimony is allowed regarding the new or
increased business license fee. This is in addition to the
public hearing at which the City council actually takes action to
enact the new or increased fee.
NOV- 02 -193 TUE 14:37 ID:MEYERS NAVE ET AL TEL NO.:510i351 -4481 #622 P03
TO: City Manager
PROM: Michael S. Riback, City Attorney
RE: Recent Urgency Legislation Affecting Proposed Business
.License Fee Amendments
DATE: November 2, 1993
PAGE: 2
2. That a joint public notice of both the public meeting
and the public hearing must be prepared by placing a display
advertisement of at least one - eighth page in a newspaper of
general circulation for three weeks pursuant to Government code
Section 6063 and by a first class mailing to those interested
parties who -have filed a written request with the City for mailed
notice of public meeting hearings on new or increased taxes or
assessments. [There is no requirement that notice be provided to
each individual business affected by the proposed business
license fee increase.]
3. That the public meeting referenced in the joint notice
shall take place no earlier than ten days after the first
Publication of the joint notice. The public hRarina shall take
place no earlier than seven days after the public meeting, but in
no event shall take place earlier than 45 days after the first
publication of the joint notice.
4. That the joint notice shall include, but not be
limited, to the following:
fee. (a) The amount or rate of the existing and proposed
(b) The activity to be "taxed ".
(c) The estimated amount of revenue to be raised by
the fee annually.
(d) The method and frequency for collecting the fee.
(e) The dates, times, and locations of the public
meeting and public hearing.
(f) The phone number of an individual that interested
persons may contact to receive additional information about the
fee.
The city may recover the reasonable costs of the public
meeting, public hearing, and the notice required by section
54954.6 from the proceeds of the fee.
Please give me a call if you have any questions regarding
NOV- 02 -193 TUE 14:38 ID:MEYERS MAWE ET AL' fi L''J0:510/351 -4481 #622 PO4
TO: City Manager
FROM: Michael S. Riback, City Attorney
M$: Recent Urgency Legislation Affecting Proposed Business
License Fee Amendments
DATA= November 2, 1993
PAa$S 3
this statutorily required process.
Michael S. Riback
City Attorney
MSR:dsp
anrsw \373 \memo \1993 \lees.leq
aw
October 28, 1993
Mrs. Karen Tucker
Mayor
City of Saratoga
13777 Fruitvale Avenue
Saratoga, CA 95070
Dear Mayor Tucker:
?b
Los Gatos -S toga Board of REALTORS®
20454 Blauer Drive, Saratoga, California 95070
Telephone 408 867 -0922
FAX 408 867 -5406
First, I would like to thank Saratoga City Manager, Harry
Peacock, for taking the time to meet with the Board's
Local Government Relations Committee to discuss the
proposed business license tax increase. Based on the
discussion and comments from-local real estate offices and
the Board of Directors, I am writing to express the real
estate community's concerns and to recommend alternative
business license tax structures and rates.
From our discussion, it was clear that Realtors recognize
the financial position of local governments given the
continued state raids on local property tax revenues.
Further, the real estate community understands the
importance of maintaining viable municipal services.
Finally, we realize that businesses and residents have a
responsibility to contribute their fair share to ensure
the well being of Saratoga.
There is no question that Saratoga's business license tax
rate is currently one of the lowest in Santa Clara County.
However, we do not believe that Saratoga should move from
one of. the lowest to one of the highest business license
tax cities in the county. Under the current proposals,
the rates increase to amounts that are excessive and
inconsistent with the many surrounding communities.
PLAN #1
Under Plan #1(Broker pays $150 plus $15 for each
agent /employee), the business license tax rate would
increase from $75 to more than $1,000 for several brokers.
This represents more than a 1,000% increase. Single
broker offices would see a 100% rate hike or more.
Plan #1 proposes rates that are excessive and inconsistent
with business license tax rates of other communities in
Santa Clara County. With the exception of Los Gatos, with
the second highest tax rate in the valley, most other
cities levy taxes which are less than this amount.
113 RFALTORO- is a registered mark which identifiesa professional in
real estate who subscribes to a strict Code of Ethics as a member of
nE Al1OP . the NATIONAL ASSOCIATION OF REALTORS°
211
Gil
The Board of Realtors recommends that the council reject
Plan #1, the hybrid of gross receipts and employee based
tax structure.
PLAN #2
Under Plan #2, (Broker pays $150 plus $25 for each agent)
the tax rt.te for real estate brokerage increases even
further, from $75 to more than $1,500 for many brokers.
Several brokers would see their tax rate increase more
than 2,000 %. The tax rate for small brokers would more
than double. Plan #2 is even more out of line with what
other communities levy for real estate offices. In fact,
only one other city in the valley charges more.
The Board recommends that the council reject Plan #2.
PLAN #3
Under plan #3,($100 for Broker; $40 for each agent; cap at
- $500) brokers would be charged an even higher amount for
each agent. Most of the larger offices would see an
increase in excess of $2,000 if a cap is not included.
Should the council adopt an employee based method, a cap
on maximum rates must be included in the ordinance.
Further, we believe the proposed cap of $500 should be
reduced to $300. This should apply not only to the real
estate community, but to all businesses. The $40 per
agent charged to brokers is also excessive. As stated
above, this rate, without a cap in place, would create an
unfair tax rate.
The Board of Realtors recommends that the council consider
the following alternatives:
ALTERNATIVE #1
Maintain the "flat rate" method of business license
taxation and increase the rate to an amount not to exceed
$125.00 per business.
While size of business is not addressed in this
alternative, the method is simple and straightforward.
This type of tax is easier for the city to administer and
enforce.
ALTERNATIVE #2
Adopt an employee based method, with brokers \businesses
paying $100 plus $10.00 per employee \agent, with an
absolute cap of $300.00. With the cap at $300.00, Saratoga
will be levying a higher tax rate than most Santa Clara
County cities.
The real estate community urges-you to modify the proposed
rates in accordance with the recommendations of the Board
of Realtors and other business ..groups. The Board is
interested in working with the city to devise reasonable
and workable business license tax structures.and rates.
If you have questions regarding the Board's
recommendations, please contact Eric Morley, the Board's
Legislative Advocate, 867 -0922.
Thank you for your time and consideration.
Sincerely,
al Anderson
P re dent
o�
N
Y�'7o -�0
n� 13777 FRUITVALE AVENUE • SARATOGA, CALIFORNIA 95070 • (408) 867 -3438
5t���000; COUNCIL MEMBERS:
November 9, 1993 Karen Anderson
Ann Marie Burger
Willem Kohler
To: City Council Victor Monia
Karen Tucker
From: City Manager
Subject: Business License Fee Increase
As directed by the City Council, the staff has completed its
analysis of charging a basic business license fee of $100 plus $10
per employee with a $300 cap for any one business. This effort is
based on a new computer run which organized all businesses by
category and number of reported employees as of November 4, 1993.
The 340 page computer run was analyzed using Lotus 1 -2--3
spreadsheet software to calculate revenues received to date in
calendar 1993 as if the fee proposal had been in place for all of
1993. The result is an annual revenue of $253,430. When business
permits, delinquencies, and late fees are included and an allowance
is made for miscellaneous business as previously proposed, the
total projected revenue is $306,430. These calculations are shown
on the attached spreadsheets.
The basis for this amount of revenue is not on a full time
equivalent employee basisfbut solely on the basis of the number of
employees reported, regardless of whether their status is full or
part time.
Council had instructed that the amount of revenue raised be only
sufficient to keep the reserve funds balance requirement intact.
To update you on that calculation, the following is presented:
Fund balance surplus per budget on 7/1/93
Net increase in budget appropriations to date
Anticipated additional funding for animal
control (Nov. 15 through June 30, 1994)
Less animal control revenue (Nov. 15 through
June 30, 1994)
Sales tax extension revenue (January 1 through
June 30, 1994)
Net fund balance surplus
Business license fee revenue required to
balance
TOTAL to meet budget requirements
Printed on recycled paper.
$148,160
(42,800)
(40,500)
1,125
25,000
$90,985
$309,015
$400,000
N N
Business License Fee Increase
November 9, 1993
Page -2-
Staff continues to be concerned about applying a per - employee
approach to contractors because more than 300 report no employees.
An alternative approach, which would raise the same amount of
revenue, is to charge contractors $45 for a basic license plus a
15% surcharge on building permit fees. The revenues would be
$100,078 using this method versus $99,790 using the per - employee
method. Staff continues to believe this is more equitable than the
per- employee method, since many contractors who do only a few small
jobs a year would be treated more fairly under such an arrangement
and not have to pass the entire cost on to one or two clients.
A revised fee schedule for all businesses is attached for Council
review.
Council is requested to approve a fee schedule on November 9, 1993,
so the proper legal notices can be provided to the print media by
November 10, 1993.
Follow Up Actions:
1. Prepare required notice by 11/10/93.
2. Redraft the ordinance based on the revised schedule, dropping
the FTE definition.
3. Advertise on 11/17, 11/24 and 12/1/93.
4. Conduct public meeting on 12/1/93.
5. Conduct public hearing on 1/5/94.
6. Adopt ordinance on 1/19/94.
Harry R. Peacock
City Manager
jm
Attachments:
1. 1994 Business License Tax Assumptions - Employee Based
(11/8/93)
2. Proposed Fee Schedule - (11/9/93)
N
11/8/93
1994 BUSINESS LICENSE TAX ASSUMPTIONS - EMPLOYEE BASED
BUSINESS
CATEGORY
NUMBER
BASE
TOTAL
CHARGED
BUS.
FEE
EMP.
EMP.
fee
Consultant
$21,170
200
$100
117
117
$10
Contractors
$99,790
713
$100
3930
2849
$10
General Garden Sery
$9,340
83
$100
137
104
$10
Manufacturers
$2,760
25
$100
26
26
$10
Medical Services
$7,390
60
$100
239
139
$10
Non- profit
$0
15
$0
317
132
$0
Other
$910
9
$100
1
1
$10
Personal Salon
$6,780
61
$100
68
68
$10
Professional Servic
$17,720
156
$100
212
212
$10
Real Estate
$8,160
61
$100
339
206
$10
Restaurants
$6,400
37
$100
349
270
$10
Retail
$34,110
279
$100
1057
621
$10
Services
$38,900
337
$100
1126
520
$10
Sub -total
$253,430
2,036
7,918
5,265
Peddlers & Solicito $43,000
Miscellaneous $10,000
TOTAL $306,430
Building Permits $453,287
-BASED ON COMPUTER RUN ON NOVEMBER 4,1993
- ASSUMES A BASE RATE OF $100 PLUS $10 PER EMPLOYEE,
BOTH FULL AND PART TIME
-CAP ON ALL LICENSES OF $300
- DIFFERENCE IN TOTAL EMPLOYEES VERSUS CHARGEABLE EMPLOEES
RECOGNIZES THE EXISTENCE OF THE CAP
F: \WKS \BUSLICEB.WK1 iJEAN)
N M
BUSINESS CATEGORY Number of Number of Total $100 $10 Total
Businesses Employees Employees Base Fee Emp, Fee Fee
Consultant
136
0
0
$13,600
$0
46
1
46
$4,600
$460
10
2
20
$1,000
$200
1
3
3
$100
$30
2
4
8
$200
$80
2
5
10
$200
$100
2
6
12
$200
$120
1
18
18
$100
$180
Alt, Base
Surcharge
Sub total 200
117
$20,000
$1,170
$21,170 Fee
15%
$45
$453,287 Building
Contractor 301
0
0
$30,100
$0
$13,545
51
1
51
$5,100
$510
$2,295
57
2
114
$5,700
$1,140
$2,565
47
3
141
$4,700
$1,410
$2,115
56
4
224
$5,600
$2,240
$2,526
41
5
205
$4,100
$2,050
$1,845
18
6
108
$1,800
$1,080
$810
11
7
77
$1,100
$770
$495
17
8
136
$1,700
$1,360
$765
4
9
36
$400
$360
$180
21
10
210
$2,100
$2,100
$945
2
11
22
$200
$220
$90
11
12
132
$1,100
$1,320
$495
1
13
13
$100
$130
$45
2
14
28
$200
$280
$90
18
15
270
$1,800
$2,700
$810
3
16
48
$300
$480
$135
1
17
17
$100
$170
$45
1
18
18
$100
$180
$45
1
19
19
$100
$190
$45
13
20
260
$1,300
$2,600
$585
1
21
21
$100
$200
$45
1
22
22
$100
$200
$45
1
23
23
$100
$200
$45
6
25
150
$600
$1,200
$270
2
28
56
$200
$400
$90
3
30
90
$300
$600
$135
1
32
32
$100
$200
$45
5
35
175
$500
$1,000
$225
3
40
120
$300
$600
$135
1
45
45
$100
$200
$45
1
47
47
$100
$200
$45
4
50
200
$400
$800
$180
i
60
60
$100
$200
$45
1
65
65
$100
$200
$45
1
95
95
$100
$200
$45
2
100
200
$200
$400
$90
1
150
150
$100
$200
$45
1
250
250
$100
$200
$45
Sub total 713
3,930
$71,300
$28,490
$99,790 $32,085
$67,993 $100,078
2
N
Garden Service
48
0
0
$4,800
$0
14
1
I4
$1,400
$140
8
2
16
$800
$160
6
3
18
$600
$180
3
4
12
$300
$120
1
7
7
$100
$70
1
8
8
$100
$80
1
9
9
$100
$90
1
53
53
$100
$200
Sub
total
83
137
$8,300
$1,040
$9,340
Manufacturer
15
0
0
$1,500
$0
4
1
4
$400
$40
3
2
6
$300
$60
2
5
10
$200
$100
1
6
6
$100
$60
Sub
total
25
26
$2,500
$260
$2,760
Kedical Services
22
0
0
$2,200
$0
10
1
10
$1,000
$100
6
2
12
$600
$120
7
3
21
$700
$210
7
4
28
$700
$280
4
5
20
$400
$200
2
7
14
$200
$140
1
14
14
$100
$140
1
120
120
$100
$200
Sub
total
60
239
$6,000
$1,390
$7,390
Non- Profit
4
0
0
$0
$0
1
3
3
$0
$0
2
4
8
$0
$0
1
7
7
$0 <
$0
1
10
10
$0
$0
2
12
24
$0
$0
1
25
25
$0
$0
1
30
30
$0
$0
1
60
60
$0
$0
i
150
150
$0
$0
Sub
total
15
317
$0
$0
$0
Other
8
0
0
$800
$0
1
1
1
$100
$10
Sub
total
9
1
$900
$10
$910
3
N
Salon Services
40
0
0
$4,000
$0
8
1
8
$800
$80
6
2
12
$600
$120
I
3
3
$100
$30
2
4
8
$200
$80
1
5
5
$100
$50
1
6
6
$100
$60
1
12
12
$100
$120
1
14
14
$100
$140
Sub total
61
68
$6,100
$680 $6,780
Professional Services
76
0
0
$7,600
$0
35
1
35
$3,500
$350
17
2
34
$1,700
$340
10
3
30
$1,000
$300
3
4
12
$300
$120
5
5
25
$500
$250
5
6
30
$500
$300
2
8
16
$200
$160
1
9
9
$100
$90
1
10
10
$100
$100
1
11
11
$100
$110
Sub total
156
212
$15,600
$2,120 $17,720
Real Estate
33
0
0
$3,300
$0
7
1
7
$700
$70
4
2
8
$400
$80
1
3
3
$100
$30
4
5
20
$400
$200
1
6
6
$I00
$60
2
7
14
$200
$140
1
8
8
$100
$80
2
10
20
$200
$200
1
23
23
$100
$200
1
25
25
$100
$200
1
34
34
$100
$200
1
41
41
$100
$200
I
60
60
$100
$200
1
70
70
$100
$200
Sub total
61
339
$6,100
$2,060 $8,160
N
4
so
Restaurants 6
0
0
$600
$0
3
1
3
$300
$30
3
2
6
$300
$60
2
3
6
$200
$60
5
4
20
$500
$200
2
5
10
$200
$100
2
6
12
$200
$120
2
8
16
$200
$160
3
10
30
$300
$300
1
12
12
$100
$120
1
15
15
$100
$150
2
20
40
$200
$400
1
22
22
$100
$200
1
25
25
$100
$200
1
40
40
$100
$200
1
42
42
$100
$200
1
50
50
$100
$200
Sub total 37
349
$3,700
$2,700 $6,400
Retail 152
0
0
$15,200
$0
29
1
29
$2,900
$290
31
2
62
$3,100
$620
21
3
63
$2,100
$630
11
4
44
$1,100
$440
8
5
40
$800
$400
2
6
12
$200
$120
5
7
35
$500
$350
2
8
16
$200
$160
1
10
10
$100
$100
1
11
11
$100
$110
1
12
12
$100
$120
1
15
15
$100
$150
1
16
16
$100
$160
2
18
36
$200
$360
1
20
20
$100
$200
1
25
25
$100
$200
1
26
26
$100
$200
1
31
31
$100
$200
1
35
35
$100
$200
1
38
38
$100
$200
1
50
50
$100
$200
1
63
63
$100
$200
1
80
80
$100
$200
1
85
85
$100
$200
1
203
203
$I00
$200
Sub total 279
1,057
$27,900
$6,210 $34,110
rte,
5
N
Services 208
0
0
$20,800
$0
58
1
58
$5,800
$580
18
2
36
$1,800
$360
17
3
51
$1,700
$510
6
4
24
$600
$240
3
5
15
$300
$150
3
6
I8
$300
$180
5
8
40
$500
$400
2
9
18
$200
$180
5
10
50
$500
$500
2
12
24
$200
$240
1
14
14
$100
$140
l
15
15
$100
$150
1
18
18
$100
$180
1
19
19
$100
$190
1
20
20
$100
$200
1
21
21
$100
$200
1
30
30
$100
$200
1
35
35
$100
$200
1
40
40
$100
$200
1
580
580
$100
$200
Sub total 337
1,126
$33,700
$5,200 $38,900
TOTAL
Peddlers & Solicitors
Miscellaneous
GRAND TOTAL
F : /bus1ic.w%1
N
2,036 7,918 $202,100 $51,330 $253,430 $253,718
$43,000 $43,000
$10,000 $10,000
$306,430 $306,718
I
N M
1.
Amusement Devices
$50 a year for each game
2.
Jukebox
$50 a year
3.
Carnival, Circus
$250 per day
4.
Theatrical Performances
$10 per performance or $100 per
season
5.
Escort Services or Bureaus
$500 plus $100 per employee
6.
Delivery Services
$100 per year
7.
Handbill Distribution
$25 per day
8.
Home Occupation
$100 per year
9.
Photography:
Movies or videos on City property
$500 per day
Movies or videos on other property
$250 per day
Still photograph on City property
$50 per day
Still plmtography on other property
$25 per day
10.
Property Leasing
$100 plus $3 per 1,000 sq. ft.
of gross leasable space in
excess of 5, 000 sq. ft. to a
maximum of 72,000 sq. ft.
11.
Seasonal Businesses
$100 per season
12.
Security Alarms
$100 plus $5 for each customer
in Saratoga to a maxima of 40
13. Vending Machines
Cost of $.25 or less $25 per machine
Cost from $.26 to $1.00 $45 per machine
Cost from $.26 to $2.00 $55 per machine
Cost from $.26 to $3.00 $65 per machine
Cost from $.26 to more than $3.00 $75 per machine
14. Rental Units (Residential) $100 plus $5 per unit over 4 in
number to a maximum of 40
15. All other businesses $100 per year plus $10 per
employee to a maximum of 20
employees