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10-02-1967 - Regular Meeting - MinutesMEL®R • MINUTES OF THE ADJOURNED RFGULAR MEETING OF THE CITY COUNCIL CITY" OF WEST COVINA9 CALIFORNIA OCTOBER 29 1967. The adjourned regular meeting of the City Council was called to order by Mayor Krieger at 7a.35 p.m. in the West Covina City Hall. Pledge of - Allegiance was led by Councilman Gleckman. ROLL CALL Presents Mayor Krieger, Councilmen Gillum, .Nichols, Gleckman, Snyder. Also Presents George Aiassa, City Manager H. R. Fast, Public Service Director Ray Windsor, Deputy City Clerk Furry Peacock, Administrative Aide BUSINESS LICENSE ORDINANCE REVISION Mayor Krieger - anyone present this evening (No objections.) Is there speak on this subject? Robert 0. Brink General Telephone Co. Santa Monica,, California The order of business is the Business License Revision. Does the council desire to receive any comments from before going into the.,report? Any objections? anyone present this evening that wishes to Mr. Misamore, who could not be here until about 9 p.m. this evening asked if I would appear in his place. I have no formal presentation, just some comments regarding the proposed Ordinance. While General Telephone does not oppose realistic and -necessary takes for the support of government operation, nevertheless, some aspects of the proposed Ordinance would have to be clarified in order to gain our support. First, them; " -so-me -real question in our . : as to the c4mstitutional .validity of ..s_ ...an..Once. The California Constitution in Article 139 Section 14 specifically states that -no tax shall be levied or assessed upon the telephone Company in any manner different.from or at a higher rate than that imposed upon mercantile .-manufacturing. ,and busineB-s corporations. Yet, if I read the proposal correctly, ours would be the only tax to be computed on the basis of gross receipts. In all other cases it is on a flat fee based on empployee population or the number of real estate units. Secondly, if this question of constitutionality could be reconciled, we would still have a question concerning the method proposed for computing gross receipts, if this were determined to be the proper way to assess use To compute our gross receipts in the City of West Covina under the present method would be unacceptable for a couple of reasons, the principal one because such a formula would have to exclude inter -state tolls, because taxing inter -state tolls has already been preempted by the Federal Government. Now we would be happy to discuss either of these matters or both with the appropriate people. Certainly our attorneys -are read- to discuss the constitutionality problem with your attorney, Mr Will�ams, and if, in fact, the use of gross receipts as a basis -on which to compute taxes against us were to be decided upon then we .have. in the. past-, developed a formula. for determining. that proportion of our gross revenues which are generated within a City°s boundaries which we would be glad to discuss with the appropriate people. This is all I really have to say, is we would like to be consulted in the drafting of the Ordinance itself when the time comes so as to try and avoid some of the gross problems which we see in the informational material provided 'to us. 1 ADJ. C. C. 10-2-67 Wage Two BUSINESS LICENSE ORDINANCE REVISION - Continued Mayor Kriegero Thank you Mr. Brink. Will you please stay with us in case the council would have any questions to direct to you? 0 Mr. Brink-, I will be very.?aappy too. Phil Wax In a meeting prior to the council 1014 W. Garvey meeting of last Mondays, with staff, West Covina council representations, Chamber repre- sentation - we worked out a corrected list that we felt should be clarified and spelled out and I believe all the councilmen have a copy of it. We will be glad to answer any questions. (MAYOR KRIEGER THEN STATED THAT THIS WAS NOT A PUBLIC HEARING. COUNCIL DISCUSSION WAS IN ORDER.) Councilman Gillum-, Mr. Mayor ® Dr. Snyder and I served as the liaison of the Ad -hoc Committee on Business License and as you gentlemen are aware we approached the Business License .I r om the standpoirit' of gross receipts. We had a meeting with the Chamber to discuss this and found that there were many oppositions to the gross receipts; and I would have to go along as one councilman supporting many of these oppositions, because our firm has been brought into this in the. City where we operate and I find it very hard to take as far as a Business License. We worked with the Chamber -and they -did tell us there was a feeling that there was a reed to .rais.e the .-Business -Licenses because of the addition s-ervices. Thy --staff contacted -other ioit -pan t1r- -main t} -ems-- the.. bu-si;neals cemmunity-we-r,o�eencerned -with. -*e trued to cover --such things as vehicles coal-ngg thLte the City, people doing. bus:A`ess. with: n.:the �Cdty who do not have a- bus1ne-s-s license, -etc. s, and also 'you -will find --a, recommendation that the- council approve the employment- of a, license- .ins-pector. I think the .Anformation you ..have .on the program is vary thorovgh. There --are some. -areas., -.-after our ..meeting. -with the -Chamber Comittee last Fridays, -as Mr 'Wax -stated, that brought t out this Business License Committee report on some areas they thought possibly could be changed or clarified. I think some areas have to be -legally .clarified. I ._am _quite satisfied with it.g Dr. Snyder is. _q_uite a-a.tl fled with. it_,. -._and -I .think__tha Chambez .o.ther - than .the areas brought forth,, feels it has been approached with a fair thought in mind. If there are any questions Dr. Snyder and I will, try and answer them. I feel personally it is about as fair as we can__.,get and covers all the loopholes and I think the license inspector is a very important part of theL total-_ program._ Councilman Snyder-, I would like to comment that I personally believe in a gross receipts tax and that is partly due to the fact of my experience with the League of California Cities on Revenue Taxation. They strongly recommended gross receipts as the most equitable way for determining the tax. However, it is obvious that we haven't been able to get this concept across to the businessmen. of.West Covina, they are not ready for it. And I think this is a sort of alternative. I think one of the big things we are doing here is tightening up our methods of . determining the tax and also by adding a license inspector we will, hopefully, be finding a lot of people that have not been paying, the tax in the past. I could name. you right now 6_signs-_near -my office that are su pg posed tea :have. -,a -6, 00 permit to be put :up and none of them :have ever obtained a permit. -This is where we are remissive in not having a license inspector. I think this is about as fair as we can make this new Ordinance with the exceptions, perhaps of including or not including the owner in the minimum fee. I personally feel that if we do not include the owner then the -minimum -.fee should be 440. instead of 036.. 2 ADJ. 0. C. 10-2-67 Page Three BUSINESS LICENSE ORDINANCE - Continued Because in this very approach in itself we hopefully obtain some more reventt and by the Chambers' own recommendations after our last meeting, they in effect recommended we raise our fees, I believe it was by $10. 0 In regard:,:-.. to the gross receipts, there is no intent to select out the Telephode Company, except as we saw it gross receipts is the only way to fairly tax the utilities. The other utilities pay a franchise and would thereby be exempt from the gross -receipts and since the Telephone Company, same as Edison Company, use our right of way,, etc., I think it is only right and fair that they contribute their share to the city revenues. Councilman Nichols: I have a recommendation for the ,employment of an inspector. I believe this is a recommendation that is long overdue. I am confident there is a very large amount of business that is operating in this City, based here or not based here, that is escaping the regulatory powers of the City and escaping paying its share of the cost of those regulatory powers. I would be reasonably certain that the cost'of sustaining a full-time inspector in this areawould be far offset by the increasa.in revenues by the employment of an inspector. I support that wholeheartedly as a recommendation. Among the points that were somewhat in an area of contention I believe was one on the minimum fee as to whether it would or would not include one person. It seems to me the way we have - worded the --Ordinance isratherinconsistent with logic. If you state a •minimum fee is X number of dollars but that the first employee will pay an.additional ,...sum,, you are saying in effect that the minimum fee of X do.11ars.does.not exist because no business would be operating without a person. Therefore, if a man owned a shop and he was the onl employee his minimum would not be the $40. but in fact would be the 445, because of the additional figure. I therefore, think the council should give cansideratIzu either to adjusting -the-minimum figure or leaving it as It is but in any event to include the first employee as being covered under tha,t,m1nimum, f ig-ure, - The. -last....go-int-1 woul-d.-,like .to. -raise is in respect to the gross receipts tax. I am not really knowledgeable enough to know for certain that this -form of taxation is an equitable one in the particular instance. It is true the Telephone Company was not being Sll..,w�ed out but in practice it becomes the only utility that Is subject to this type of tax, so I would like to raise a couple of points in this area. First a question ® on Page 7 of the report, Category U which defines the application of the gross receipts tax, states a minimum of 450.00 a year plus 2% of gross receipts over 425,000 a year, and then defines gross receipts as being that portion of the business which corresponds to the percentage of total capital assets located in the -.City of West Covina computed by the formulao....600 I would have some question as to whether this is an equitable method of arriving at a gross receipts tax and I would like to see that explored in greater detail., The next question is the example that is raised, I am evidently confused because the example states what I think is •a figure of 2%-X the gross receipts of $100,000 and comes up with $200. I assume this report was -prepared carefully and whether I am misunderstand- ing the symbols here or someone's computation is off about $1800. May I have a. clarification from the staff? Mr. Alassa, City,Manager,o of the research work on this opportunity to explain this. Yes. Mr. Peacock do you want to address the Council. I would like to express to the councilmen that Mr. Peacock did most which is why I would like to give him an Harry Peacock ffAiniitiattirp -A de Gy 'Covina To answer your question Councilman Nichols, we do have the ecimal point in the wrong - 3 - ADJ. C..C. 10-2-,67 BUSINESS LICENSE ORDINANCE - Continued place, it should be_#2,-OOO instead of 4200. Councilman Snyderg • it computed in the same way? Mr. Peacocka, Councilman Snyder: Mr. Brink-, Page Four Could I ask Mr. Peacock a question while he is here? I understand the City of Norwalk uses this method, is With the decimal point in the correct place - yes, it is. I believe Norwalk has the same Telephone Company? Yes sir. Councilman Nichols: In summary then I would accept whole- heartedly the recommendation for obtaining an inspector-oI believe the minimum fee area as applicable to the first employee should be re- considered and I would like to see a.greater explanation by staff for t4e.-method of applying the gross receipts tax. Councilman Gleckman: I have several-q-ue-stions as to Category S. I think these questions would be of staff. I am talking specifically about Page 8. Mr. Peacock,, you have "Retail Delivery Trucks -(place of business not in City) ® #20.06/yr. or 0200.00/yr. per company','- Would you explain that? • Mr; Peacock.- As an example- Sears & Roebuck have any number of delivery trucks de vera§__;_rjp tte'lr v'arlous stores - a. around Southern California, ratheran a e em We a license out for each one that could conceivably enter the -City of West Covina and charge them '#'20.00 each,, when in fact one truck may come in one day and another truck may come in another -day, ---it is fairly -standard practice with -most other cities that a fleet rate be charged to the Company with the unders-tanding. tlwt any trucks tliey..have may enter the -City for the period for the fee of #200. If they have less than 10 trucks and want a license then they would pay #20. per truck. Councilman Gleckman:' Are we doing that now? Mr. Peac o.ck o Councilman -Gleckman: Mr. 'Peacocko. Councilman Gleckman: Mr. Peacock: • Go unc.11man. Gle.ckmq n:, Mr. Peacock. - Councilman Gleckman: Yes - to an extent. With wholesalers we do have a fleet rate for over 5 trucks. You --mean outfits like -Admiral and . freight delivery trucks are paying us now? Yes sir. -Not as much but they are paying, something.. We are collecting from Sears & -Roebuck now on the-retai-L delivery trucks..? I couldn't say exactly that we are but we do have a provision in the Ordinance now to collect the fees. This -.doesn't exempt anybody now? No sir. If they are in the retail .or wholesale.business in any shape or form they would be included in this. I ca-4?t understand how you would enforce something like this. ADJ. C. C. 10-2-67 Page Five BISINESS LICENSEORDINANCE - Continued Councilman Gillum- This is done with your license inspector. I asked Mr. Peacock to investigate the communities in the general area that have this type of Ordinance and there is a tag issued. For instance, . he used Sears, I will, use Shell. They say so many trucks come into the area and they pay the #200. another instance, an air conditioning service company in Glendora that has two trucks comes into the City and he would therefore pay #20. for each truck and have a license sticker on the back of his trunk saying he paid so much. In other words what this. is in a sense is paying their share of the business license and also making them pay their share as we charge the local merchants for a business license. Also in the case of Sears, they may have 200 trucks in their El Monte store,, they don't put a tag on all of them, but our enforcing officer or polices should be aware that they have paid their fleet rate because the trucks that enter the City may not have a tag. Councilman Gleckmans. I think the idea is great if you can collect it. I don't know about the legality, I can just imagine if this situation stood up in Baldwin Park, LaPuente and in ;dust about every City, a company would have to spend about 45000 in order to make deliveries in every one of these communities. And I can't imagine a multiple of stores paying this. I am not talking about one or two, but about all of them. I think if you collected from all the trucks in our City we could do away with some of this tax. I am trying to look at it from the realistic point of view rather than the idealistic, and I was just curious as to the basis on which you came up with these kind of things. I think it is mice to sit down and say this is what tee would hike to have, but is the thought and follow-through on the legality 40 that we can enforce. this? Councilman Snyder- We checked with the City of Anaheim and they do this and it has never been challenged. Mr. Massa, City Manager - The staff has checked out all the Cities that ale om ar 1e in ize t us and use a )us a e�s tense ax ana we are actually using their methods that have been in use for several years. So we .are not .Oreating .__some.thing. This fleet _system was used in the other two cities that I was working in. One problem, one year the might roll 12 true�a a d t e next ear. only 8 or . But over a periodofyears cure average ou fa rly well. Councilman Gillum- f it is a large concern they pay -the 1200 _-and the license __inspector is etc., have paid. notified that Shell, Barker Bros., Sears, Councilman Gleckman- I am not fighting it, this is fine but realistically I would like to see it enforced and given a chance. Also on what classification Mould we put the man that comes in and does a roofing job or fixes a garbage disposal., etc., in scJneonal s home? Mr. Peacocks We should normally charge them as a retail delivery. Many cities to get • around the wage of the term "delivery"use the term "wheel taxes but then they do delineate between wholesale trucking anrd. retail trucking. and, trucking of a service nature. Councilman Snyder- A roofing -job is a contractor. Councilman Gleckmans My paint is Mr. Jones is having a new roof put on and the roofer is doing the job and he doesn't have a license. He was called in from Glendora by the individual home owner. Wheat happens? I u a st d h too iss ouat have here but I am trying to get to the Me n co9eh na a a egos es. 5 ADJ. C o 0 a 10-2-67 Page Six BUSINESS LICENSE ORDINANCE - Continued Mrs Peacooko then he is under contracting. • Councilman Gleckmano If he does not require a building permit then he is under the trucking and if he does require a building permit Either way he has to pay. standard procedure of cities to ment that has already been made Mrs Peacocks Alright, I just wanted it clarified. for my own thinking. You also have in here Land mills and Dumps. Is this a charge that over and above the arrange® with. B & K? This is the same rats they are paying - under the present business license Ordinance. There will be no increase. Mr, Aiassa, City Manager. For council information - the dump procedure was reviewed a short time back and I think at -the time we made the report to the council on some of the provisions of the dump operations we showed a chart.on such operation in various cities including the County and ours is in good line as far as the dollars and cents is concerned. There are a few cities that are using gross receipts, the City of Irwindale 3% and San Dimas uses 4% on the gross base but on the newer sites they have not, Councilman Gleckmans Thank .you, Mrs Peacock, The other comment I would.. -like to make is that I a2rethey have not been consulted on this p that the Telephone Company, given his articular _matter shoulif d be iven an opportunity to sit with the staff and.discuss this. prior to adoption. • Mrs Aiassa, City Managers Mr, Brinks Mrs Aiassa, City Managers particular information -and should call me and we would being here tonight. Councilman Glackmano Chris Tambe, Manager Chamber of Commerce 1500 W. Service Avenue This- was -implied but it is incorrect, Right, What I meant to imply was that I had seen nothing of its I had a s ecial meeting with Mr. Misamore Who actually represents the Telephone Uompany and I gave him all the data and suggested i -sae had -any questions he answer them. I did not anticipate Mrs Brink I would like to ask Mrs Tambe a question. Councilman Gleckmans The reason -for asking this question has to do with the types of businesses in'rolved :and their :usages -within this code that was talked about with the Chamber of Commerce. I have some knowledge of the representation you had at the meeting with the city staff, my only comment would be this takes in a wide variety of businesse-s.and usages other than represented within that Committee. Has your Committee prior to finalizing their comments here, looked into •the other cities with regard to the different fields other than those that were represented on the committee, to make sure they were all getting the -same consideration as the people sitting on this Committee and who owned such businesses and could then relate the opinions and experiences? Mrs Tambe s -The direct answer to your question is that the most recent meeting we had with the Committee the answer is B9noB° However, the report that -you had submitted to you several months ago. in response to the -gross receipts proposal, lists the composition of the..c-ommunity in terms of those people. who -actually attended the two meetings. There were some half dozen..others who were asked to sit in with the Committee and did not attend the first meeting several months 6 ADJ. C. C. 10-2-67 Page Seven BUSINESS LICENSE ORDINANCE - Continued ago nor the most recent meeting. So the Chamber Board has taken the womd...of the Committee as it relates to those people who did participate and conduct the study on behalf of -the whole business community, which • is the only way we can operate. All of the people on the Committee, everyone listed in that initial communication of several months ago, received a copy of the recent staff proposal with a letter stating that a special meeting was being called, urging them to attend, inasmuch as we needed to come up with some action for the council meeting last Monday night.. Everyone was mailed that letter with a copy of the staff report. Councilman Gleckmans Thank you. I have no further questions. Councilman Snyder. You brought up the subject of the small contractor and I think this is one of the places where the greatest hardship may be worked. The small contractor who works in several cities. This can be an economic burden and the only way to get around this is to have a reciprocity agreement, but there is... -no inclination of any of these cities to set up such an agreement, so for the present we can do nothing else but use this. approach-, Councilman Gleckman.- I wasn't against it Doctor, dust trying to find out how they might enforce it. Councilman Snyder- But I have had some reservations on this with. --regard to the ...small contractor who does. remodeling in several cities. Also, I don't know what procedure is to be set here tonight but the only big area -of question is regarding the minimum fee. Mayor Krieger- Let's _get into this a. little further. then. On the business license inspector ;job description, under whose supervision would he work? This is blank in my draft. Mr. Aiassa, City Manager- The -only -reason. -we- heftit blank, we are. .-working .up .-an -organizational chart administratively, . ,which is not reader for council approval. Presently, I think he would be under my jurisdiction and the City Clerk. Mayor Krieger.: I haven't heard any basic hen eement- b Council with the creation of the posim that cite correct? "Non of Business License. Inspector. Is q (Agreed, correct. J _Alright, I would -.suggest that .a mot -ion would be in order .on Item -#3 of the .staff report of September 22, 1967, having to do with the License Inspector. (Councilman Snyder asked if a report_ had 'been received from the Personnel Board on this; Mr. Aiassa advised no, that the position has to be created before it goes to the Personnel Board.) Motion by Councilman Gillum, seconded by Councilman Snyder, and carried, that Council approve the position of Business License Inspector being created, and that the City Manager be instructed to proceed with the • necessary program to institute the position. of License Inspector, Mayor Krieger- A question to the Ad -hoc Committee. We started back in April of 167 with ome_ c nsid rthaPt mfewe werern® ipts taro As. I remember the council d1scus.s�,on a primarily concerned with increasing. our revenues but with the more equitable allocation of the business license among our commercial entities in the City of West Covina. Now, why in the `recommendation of the Committee, is this present formula more equitable than the gross receipts tax? 7 ADJ. C o C o 10-2-67 Page Eight BUSINESS LICENSE ORDINANCE ® Continued Councilman Snydero Not necessarily more equitable, but it has been used and still used in many cities since they have been formed, and within this structure of the number of employees or the category of ,business this has been by experience made as equitable we felt as possible. Secondly, not only on recommendation of the Chamber Committee but also to be more in line with what other cities charge, did we advocate this raise of the minimum fee. It is not really claar cut, but probably the equitability between 'this form of business license and the gross receipts method is not that much differences as to which is more fair. I feel after studying this though that the gross receipts is really the more accurate and more susceptible to enforcement and determination of ghat business you are actually doing. For instance telephone solicitation, which operates out of a store, they can bring in one employee, where- in fact they have 12 employees, Councilman Gillumo I think this is the one area the two members of the Ad -hoc Committee differed on, and I can understand Dr. Snyder°s feelings on this. We did, with the City Manager and Mr. Peacock, spend a day ith the a le t eim to et a background n th it g oss rece pts whic icy nsti uted in �95® and revised In 19�0. asked them the question o if there were areas that concerned them that were -not equitable and they said Beyes". And they have had it 17 years, and there are areas such as automobile,agency, that they knew and felt very strongl was not fair tax but didn't know how to cure its M own to feeling is we are in a sense, penaliz.ng a man for bung able to do a better ob than his competitor. Because the more he is capable of increasing his business through his own business efforts, we in turn • add a tax to it. As I said earlier, our own Company in E1 Monte under their form, were hurt by a gross receipts .tag. 'It .is not a lot of -money but the principle of the thing, And I looked at it through our Company in El Monte. We have tried, I think, -as --best we can to group these thing-s into areas that are Yike businesses, I don't think, honestly we can find this type of 'fax and this is what we are talking about *i a business license `but a tax, that is completely equitable to -all concerned, I think by covering_._many of .these areas that -have been -Left open in the past that we are do-izg a better J-ob on it, To 'be honest with you, IM or -Krieger o I didn° t' -appproach it o we talked about it being more equlta`�le o but I approacheel it with the idea of realizing additional funds for the City, Councilman Snyder.- On.gross receipts what you are doing with a business license tax, although we :are not supposed to say it, you are yaying, for the services of police, fire, streets, etc., so there is rea ly no way except by.a, direct cost accounting of -what store gets what amount of service -and ghat -amount they -should pay; So you set up a. flat rate for just a category of businesse-se However gross receipts does give you, and this.is where we make a mistake, aliho-ugh it is not our -intent on gross receipts to tax -income, we are merely _.naing this as -,.a -.-measure of business activity and hopefully by again putting them in different categories, like obviously some stores have a lot less net profit for a bigger volume of business and they would have to be selected out by various methods, but really the purpose of gross receipt is not to tax income but to measure activity and.thereby determine.,hopefully, the • services they are receiving -and this is really where I feel it is a better measure of activity than this method. But again I think it is probably pretty close and neither method as long as it has been tried is refined enough to make it completely fair. I Just feel that gross recei is and I believe it is demonstrated in the cities that use it, is a �etter measure of activity, and thereby the services they are receiving. j ADJ. 0. C. 10-2 6 0 BUSINESS LICENSE ORDINANCE d Centinued Councilman Gillum.- 0 Councilman Snyder. - Councilman Gillum. - Mayor Krieger-, Dr..Snyder and I could sit and debate this issue all evening because we hs&e discussed it at some lengths. I don't think though it was really ever intended as an income tax or a penalty tax. Again, I said it was my own personal feeling that it is penalizing a person able to increase their volume through sales. Is this a report that shaves your endorge- ment, Dr. Snyder? Councilman Snyder*, Put it this way A I approve the.gross receipts method, however, we have not been able to convince the business. community that we -are right and I have not been able to convince my fellow committee member that it is right, so this method has been used for a long time and let's make this method as fair as possible. I think maybe we will go to gross receipts eventually but I don't think we are ready for it yet. Mayor Krieger.- I think it is an important area of the community that we have to c-on salt with •and be cognizant of the feelings of the community, but our responsibility is just a little broader than just the area that speaks for the business community and I wanted to make sure that the ..part of the community that hasn't been consulted is being con- sidered also. Councilman Snyder.- If you fall back on the principle that you are establishing a tax or license technically if .you ac-tualTy fee to pay for services than I think say that you have to do cost accounting and charge .for --services .according to -services rendered and we -don't do that and these fees are mostly set by experience over years for the different categories- in relation to each. _other. Mayor Krieger*, I bring these questions up because I think now is the time and -place to dis- cuss this -and I. -am not indicating a pre® yions disposition on my.part. It is just...as_lang as we have opened this box up we .might. .as well take a goo-d look at it. Councilman Gleckmano I.hav- ..a..feelizag._.which I .u.oicad -bat-ore that I-am..against gross receipts tax for several reasons. First of -all you have the Landlords to contend.with. Many businesses are on a plus business, if they do X amount of business they pay X amount of more rent, but we are not charging the landlords X amount of more valuation for the amount of business being done by those businesses. I can't sit here and tell the business --community that we are going to give them dollar for .dollar service and collect. dollar for dollar gross receipts. I don't think this City is capable of doing it. Unless we are going.to take the gross receipts by the businessess and put in a separate fund and fix -their streets and fix their everything and I don't think it can be done.. Councilman Snyder-, It is not legal--. Councilman G,leckmans I understand that Doctor. There are -mahy -mare inadequacies that I see in the.-fross receipts tax compared to a business license ordinance such as beng.proposed here, I don°t think i is a perfect method but it- is a better method than anything I have sib*n on the books. 9 ADJ. Ca C. 10-2-67 Page Ten BUSINESS LICENSE ORDINANCE m Continued Councilman Gill -am-, Mayor Krieger, you were saying that there was a certain part of the community that you were concerned with. We have • communicated with the general business community, are you referring to the business people that do not belong to the Chamber? Mayor Krieger: No, I am simply saying which is an obvious fact and there is no way to avoid the situation that you do have an organized segment Of the community represented by the business community, represented by the Chamber of Commerce, that are aware of this situation and naturally are concerned with it and they have studied it and.c.ome in with ideas which are sought and welcome, but it Is also'recognized that when we deal with the area of business license that we are not Just dealing with the person that pays the tax but the._Gendral Fund in which that business tax goes for disbursements and we are dealing with the community as a whole. That is the only Justification for the business license to begin with, is as the community as a whole. I just want to justify in my own mind that we are dealing not just with -it fairly with the business community but as the community as a whole. Is the community as a whole underwriting some service o that is the basic question. If in essence what we are trying to do is allocate with equity this matter of licenses or taxation or whatever revenue resources you have then .I think you. --have. to .c-onsider the...alternative.s, ®. to what we have Dr. Snyder, has commented many times on his background on the Revenue Taxation Committee for the State and I don't have that background myself and that a number of communities were using the gross receipts. I don't •know how successful or unsuccessful, there is common conception that we live in "Camelot" in this community, and I wish it were true but we don't, so there must be analogies to other communities as to why it is working or why it is not working. Councilman Snyder: I think if you are going to comment on the community as a whole, that we are not really as you analyzed it ® the business community already pays enough taxes. For instance property tax, the total property tax 50% 16 paid by commercial property and again if you are asking.for.abs.olutes here., I don't think there are any absolutes. The only conclusion you can draw is by'the experience of some cities. I _think....the biggest value _of .._gross re.ce.ipt.s is it ..gives ,you .a better way to. -Check on -the activit of -that :-business -and it --given -you ..a .more accurate method of checling and gives you something you have access to. Councilman Gillum: Councilman Snyder. - employees. We have a right employees. Under the gross receipts and as a matter of . Councilman Gillum: Dr. ' er _.of` My o-bJ8-c-tions to it. 140o ° t think ..we have any right to check on businesses. Well when they take out their business license they sign a statement under penalty of perjury on the number of to go in and check out the number of receipts method they estimate their gross course it is not usually checked. receipts, but I cannot accept it. Councilman Snyder: As I said, you and I could sit and debate this pro and con all evening. I agree there are some good point in the gross Well I am not fighting it. ® 10 ADJ. Co C. 1O-2-67 Page Eleven BUSINESS LICENSE ORDINANCE m Continued Councilman Gillum. I know. I am just trying to clarify it for other members of the council. •We started out talking about gross receipts and then we come back with a revised program of what's been in effect. Mayor - you were mentioning -the community as.a whole and I do believe this City is at the -point now of retaining our current business establishments and attracting new ones and I think the City has taken a step in that direction, for instance the Sign Ordinance, and I think this is another step and if we were to put a pro- hibitive _ cost on business licenses, it would make some certain types of business reconsider whether to locate in West Covina or locate in Covina where they could draw from West Covina, and I think we have to take this into consideration. In some areas on some of these classifica- tions that we have looked into their business license may be $35 or 440 a year over and above. what they are paying. I have talked to some of these people who have received the largest increase and they have no objection. They realize the cost of running.government-and the services the City supplies have gone up also. Our pay increase to our City employees, our equipment that we have to service these areas, and I can honestly say after talking, to the Chamber.people that they realize the Est of -business has gone up therefore the cost of business license .is going to have to go up in order to pay their share of what is required to service the bustners-cnmmunity. -This is -not ---a --perfect plan and I don't think anyone can come up with a perfect plan. • Mayor- Krieger.- -The -only im-disput-able point--abo-ut the program as I -_Gae it is that -we are now discussing in fact the realizing of more..revenue, I only br.ought our .attention to the first .question was whether it-acc-omplished the application in the manner the council expr.es.s-ad itself .as desiring to implement. Any form of license, regardless of whether it is a fixed fee, gross receipts-, or what have yo.u, .it_has a certain effect on the person paying it or the business activity that might consider moving into the community. I would like to get some type of consensus from the council at this juncture without any desire to -preclude this .discussion further, _as to whether or not there is any strong interest on the part of the council to pursue the gross receipts further. If not, then I think we are beating it to death and we ought to get into some questions that I have, at least, on this recommendation we have before us. Is there any objection to getting a 0.1.1 of the council at this time on the subject of gross receipts? None....) Councilman Snyder.- I do believe the staff is going to run a parallel study in the next year or two under gross receipts and what would to determine what would have happened have happened under this method, if adopted. I do think they should be allowed to do this because the data they turn up. with this may change the future council°s thinking. Mayor Krieger.- This has been batting around for the last • 2-2/yrs., why wasn't this comparative study done before this? Oaunc.ilman_Snyder° I don't believe they had any direction to do- it. Mayor Krieger: I can remember a meeting andwhere you and I sat and a representat ve from the and this -same question was -asked City Manager's office andthe Chamber 2m1,-7yrs. ago. ADJ. C. Co 10-2-67 Page Twelve BUSINESS LICENSE ORDINANCFr- Continued Councilman Snyder: All I am saying is I am willing to drop the gross receipts for now. I don't think we are ready for it yet, • I can't tell you why this comparative study wasn't done in the past but I would like to see it done in the future. Mayor Krieger: Councilman Snyder: Councilman Gleckman: Councilman Nichols: But you are willing to drop the approach to the gross receipts, except as reflected in your report? That's right. I have no desire to pursue it further, I don't have any desire to see anymore taxes. Mayor Krieger: Mr. Gillum, you expressed yourself as not wanting to pursue the gross receipts furthers Then let's go into some questions on the report itself. Under category R, which is Retail Business, The Chamber made two comments on this as to definitions. Dr. Snyder and Mr. Gillum, do you have any comments as far as definitions are concerned? Councilman Gillum: Yes under the first category the explanation should be amended to read - "retail business including, but not •limited to, those listed below." I gave this a lot of thought and I talked with the staff on it today and our concern is that there could be a loop hole letting someone out of this thing. I would like to submit this to replace that - "retail businesses listed below and_ all of er persons en1gaged in businesses of making. sales at retail where 1576 thinkhthis-mi revenue replace such hcoverntheeareae derived from such sales,'' g P Councilman Snyder: I thought you didn't believe in checking their Income. Councilman Gillum-, The thing is that the sales tax is not made to check on them it just falls in if 50% retail and 50% wholesale a category of saying a company does then they would fall in the wholesale, Mayor Xrlager-, Where _does the definition come from Mr. Gillum - the,75%? Councilman Gillum-, We checked other City ordinances .... Mr. Peacock.- We looked at several others but the one that comes to my mind is the City of Pomoma. Councilman Gillum.- This is what they used as a definition to cover what the Chamber is requesting here - "retail business including but • not limited to those listed below.'' Mayor Krieger.- I found some problem with that because you have- other categ-orisations- of - businesses which would be retail businesses also and if you use that definition I think you have opened up a question of interpretation. much more than if you use some kind of a formula approach. I would like to see some pinning down of this,. I think.the- question raised is a good question and I think the definition has to be spelled out a little more and perhaps this is the way to spell it out. Councilman Gillum.- On the second one, Mr. Nichols, made a ® 12 - ADJ. C. C. 10-2-67 Page Thirteen BUSINESS LICENSE ORDINANCE o Continued very good points Without the manager or owner there wouldn't be a business license. At first I felt we were right in -what we were saying as not including the owner/manager but it didn't enter my mind the point you brought out m without the owner or the manager there wouldn't . be any need for the #40. to begin with, Mayor Krieger, But how does a mama and papa store have have are employee?. I had some trouble with this. Why to a sole proprietorship an employee? Say a fellow opens a store and he owns it and works in it that doesn't make him an employee. So we have a minimum of $40. for that store m o you have that even where you say a minimum of $40. a year plus. But when you say 05.00 for each of the first 5 employees he doesn't fall within the category of an employee. Councilman Nichols;. The staff's interpretation of that as worded would be an employee, as I understand it and including any person working on the premises. Your taking the definition of the employee as in the connotation that them must be an employee. Councilman Snyder, If his wife worked therefor nothing o If he. didn° t .have .her _he would have to have ..an employee, so you have to count that. Mayor Krieger, Has the staff application of this 436. • been a sole proprietorship plus the owner? Mr. Aiassa, City Manager, It is 436. plus any owner/manager. Mayor Krieger.. Then there is no such thing as a 036, license fee in this City, is that right? Mr. Aiaaaa.,_ .City Manager. You mean existing? Councilman. Snyder, Now they have a 3,employee. Mayor Krieger, If ya�u were to -take that interpretation and apply it to this formula you would not have --a -$40. license fee. I want to see if this is a problem of interpretation or draftsmanship. Councilman Gillum, May I clarify one thing? What you are speaking too now is what the staff has recommended -of the Chamber is suggesting' Mayor Krieger, Whet. the staff. has. recommended... Councilman Gillum, What I said was that at first I felt this was just In what we were saying here. This was just o #40. for the business license and include the owner/manager as an employee, as stated here, Councilman Snyders. By definition it is proprietor or employee. Mayor Krieger-, The point is in your report itself I did not see the question raised because it says employees. Councilman Snyder. The Intent was to include proprietor or employees. Mayor Krieger, For an additional 45.2 13 • i • ADJ. C, C, 10-2-67 BUSINESS LICENSE ORDINANCE - Continued Councilman Snyder. - Mayor Krieger. - Councilman Snyder. - Mayor Krieger. - Councilman Gleckmans taken place here? Page fourteen Right for an additional #5,000 I didn't read it right then. That's the trouble, it doesn't come out that way but I am sure at the meetings that was the intent. Then as Mr. Nichols says you would not have a _$40, license fee, Mr. Tambe, what was the terminology behind the Chamber°s recommendation? Pending upon the discussion that has Mr, Tambe, Manager It is precisely what you gentlemen have Chamber of Commerce been talking about or related to those points, When Mr, Zartman, Mr, Wax and myself met with the staff and Councilman Gillum, we too asked the question ® does the new base fee of #40, include the first person in the store, whether it be an owner/manager/partner or what have you, and we got as Tnany.answers .as there were people in the room. So that in the course .of-relatimg..the new schedule to how thecurrent schedule is_.be.ing applied it appears in most cases that the current $-16, fee does include the first person in the store. The question was ra sed m what if there is five partners are they all considered managers or proprietors, and we didn't think that was fair, so as a result of that particular phase we felt to clarify the entire situatio-n we would make this suggestion to you.that your schedule clearly state that the.minimum, whatever you agree that shall be, include the first person regardless of what title that person has, We are saying the first person in the store on a given day, given week, or given month, not the first person in terms of seniority in business Councilman Snyder.- I don't understand.that, Mr, Tambe.- Them perhaps that can be _further explained9- but we are tacking about the same thing, Councilman Gillum.- In our -discussions the C_hamb had no objection to the base fee -of- 40, it was the clarification of whet er the owner/manager fell into the 040, bracket or out of it, Mr, Tambe-, That is correct, Councilman Gillum-, This_ was. a -matter of clarification., whether the owner was considered an whether he was accepted under theemployee,or the -manager an employee and $40.00 and then we started from that point on, Mr, Tambe.-. That is correct. And this is a suggestion of how to get there. If your City Attorney comes up with better language that is fine, it is the intent we are concerned abo-tt, Councilman Gillum-, I think Councilman Nichols brought out a good point o if it wasn't for the owner/ fee to start with, So I would manager there wouldn°t be the $40,-base accept this recommendation of the Chamber, that it would be $40. including the owner/manager or whatever first person m m whatever legal term could be worked out and start from that point on, - 14 - ADJ. C. C. 10-2-67 BUSINESS LICENSE ORDINANCE - Continued Councilman Snyder: • exempt? Councilman Gillum: Mayor Krieger: Councilman Gillum: Councilman Nichols: Councilman Gleckman: Councilman Snyder: Mayor Krieger: Page Fifteen Then if you do that to be fair you have to go over to the professions - the attorney or doctor working alone, is he I think we have covered this further down, as far as anyone holding a State License, Then you agree including the first person in the base fee, whatever the figure is? I agree, By all means,, whatever the fee may be. Right I couldn't agree to that unless you also went over to the professions where they are also charged. Right now we are discussing retail business, when we get to professions we will discuss it, Councilman Snyder: I couldn't agree to that without a raise 0 in the minimum fee. Councilman Gillum: Why Dr. Snyder? Councilman Snyder: Because Number 1 - one other purpose of this study was to bring our license fees more in line with other cities of comparable size and our license fees are not in line with cities of comparable size with what you are suggesting - so you are failing to accomplish this one part, Councilman Gillum: Do ��rrou agree with Mr. Nichols statement thJ without that first person there wouldn't be any base fee? Councilman Snyder-, No I don't. There are some businesses that do not have a proprietor.on the premises. A laundr-omat,,,,, Councilman Gillum-, They have to have someone come in to service it and they still have to take out a business license, Councilman Gleckman: Gentlemen, what are you discussing really-? The question is the first one. o'nly-,. whether it be an owner/manager/partner or employee, or what - one person, an individual and if that is included and Dr. Snyder doesn't agree with it you have a 4 to 1 vote. Councilman Nichols-, That's my point, when gentlemen have we reached the point of having to hwve complete unity? Mayor Krieger: The point of discussion really that I was driving at was the amount of the license fee, Now Dr, Snyder has been talking about amount and he served on the Ad -hoc Committee and I would like to find out from him when he recommended $40. as a base if he felt he was recommending #40. without any connotation of any individual. 15 ADJ. Coco 10-2-67 Page Sixteen • 0 BUSINESS LICENSE ORDINANCE - Continued Councilman Snyder.* have a 4 to 1 vote or not ® there Councilman Gillum.* it would be more equitable if the bus ines-s. license fee. Councilman Snyder: Mayor Krieger: I thought I was recommending $45. but to go further I know what you said was meant factitiously but whether you is no point in even talking. May I say I also thought it would be $45. but after what Mr. Nichols said and in giving it consideration I think first person were to be included in the I would go -along with this if you would raise the minimum.._ Your suggestion is then $45. Councilman Snyder: .Alright Q $45. I would lake to go back to Category A. At the Committee meeting we discussed nursing homes plus privately operating hospitals. I would exclude nonprofit hospitals but I would include privately operated hospitals. Mayor Krieger: Councilman Snyder. - Councilman Nic:hals s Mayor Krieger: Councilman Snyder: service, Why should we burden not really, but they are. Is this any place else in your recommendation? No. I thought they would &WX .be i-nc]„uded, Why exclude nonprofit institutions? The question has been raised Dr. Snyder, why you would exclude non-profit institutions? Because they have been excluded under the Federal Income Tax and many other taxes and they in effect offer a community them when they are giving you something, Councilman Nichols: Dr. Snyder m irrespective of what _individuals -may.. -have .come-e-ived ...as the main function. of the -business license, I believe ..directly, basically, _it is to regulate the operation -of busine:ss_es. -within..the. City and the funds -derived :therefrom are to help pay the cast for the .service.a .derive.d from the City. Now if you exclude the non. -profit organization from this act ---based upon the fact that it does not ._make ..a -pro-fit, .rather ..in _my _.mind .accepts the thesis that the entire act is no more or no less thaj2 a tag device -and if we --accept that thought then let's approach it as a tax agency rather than a regulatory one, Councilman Snyder:, I think it is both, My only argument for excluding nonprofit hospitals is a service., non-profit hospital furnibhes a community Councilman Gillum: They require the same services and someone has to pay for the services and we keep talking about making this equitable and so we are going to take the services applied to that hospital and dump them on a pxIYately owned hospital - and we are back to an inequity. Councilman Snyder: The prvvately run hospital is run for profit, it does furnish.c-ommunity service-, 'but the nonprofit hospital for ins.tanae, under certain Cpunty contacts has to offer services to indegent patients at no cost. Tou cannot require this of a privately owned hospital, Councilman Gleckman: Dr, Snyder, can you name a one non-profit hospital that charges less than a profit making hospital for services? Q 16 ADJ. Co Co 10-2-67 Page Seventeen BUSINESS LICENSE ORDINANCE - Continued Councilman Snyder-, They are about the same.. Councilman Gleckmano Right. They just have a different write off. In order to have a non-profit organization as a hospital they have to conform to certain Federal and State regulations, which makes it a non-profit, but not in the manner of which you are speaking of as a non- profit„ they do.n't.__generate nor do they give anymore services than the private hospital does. Councilman Snyder: But_ -they .peerform _a .service for the community... -and that is why they are granted this non-profit status in the beginning.. Councilman Gleckmant, There are many private institutions that are giving this same service to the community that do not claim non-profit. Now I know that in fact, Council -man Snyder: This is not fact but more philosphyo Mayor Krieger: Under Category A you suggested Dr. Snyder, that certain categories were not included - you suggested -nursing homes. Councilman Snyder: Nursing Homes which are different from Comvalescent- Homes_and Hospitals, excepting non-profit Hosi3italso • Councilman Gleckmano How about Old Age Homes? CouncAlman Snyder: That is the.same.as Convalescent Homes, in essence it is. Mayor Krieger: Council, Gillum ® include or not include the nonmprof t? Cauncilman -Gillum: I cannot -support him on the non-profit. Include. Councilman Nichols-, I...am_afraid if we started -exempting nan.®pro..fit organizations, we would .have to exempt most of the businesses in the City. Councilman Gleckmano Include, w Councilman Snyder: By. definition. ® nonm.pr-.fit-organizations e:spe,cially in the_ -hospital. -class. have to --perform -a community -service or they cannot fall in this category. They cannot get their'Federal permits not to pay taxes. Councilman Gleckmano What does that have to do in regard to business licenses? Councilman Snyder: They are already giving the City something 40 in service. Councilman Gleckmano Community service, but not city, Councilman. Snyder: But- mostly in the, - .City, Mayor Krieger: Let's move on to Category Pe Let me ask the Committee this question m are banks immune from this? Mro Aiassa.,. City Manager: Yes., they are interstate, 17 ADJ.. Co Co 10-2m67 Page Eighteen BUSINESS LICENSE ORDINANCE - Continued. Mayor Krie-gero We here a lot of businesses in this community that are int.6rstateo Councilman Snyder.- Technically you can't legally requirean interstate business to pay a business license, because they fall under Federal classification. Mayor Krieger.- How about Savings & Loans and.Finance Companies? Has this been checked out that banks- cannot and Savings & Loans can? Councilman Gillum.- I can assure you that all these areas at sometime or other, either myself or Dr. Snyder, or the Chamber Committee, brought these areas out and then staff checked them out. We had a thorough .investigation _in other cities on..all these categories. We are not doing.anything here in this City that isn't being done in some City of our size In. Southern. Calif ornia,. Mayor Krieger.- In Category P, the comment was made how do we handle the professionals under our resent setup. Say you have a firm .with two attorneys, does each one pay 936.? Mr, Peacock.- No sir. $36. and that includes the first 3 employees, A firm of 4 attorneys would be 939.00. • Mayor Krieger.- The fourth attorney is considered an employee. Then the recommendation here goes beyond that and.s.uggests you treat the .professional category in an entirely different c-iassification and count the number of -professional licensed individuals you have. What do you say to that Pro Gillum? Councilman Gillum.- I feel that if two attorneys share an office then they should each have a business license -because they -are in business for -themselves. and the same with doctors. But if they are in partnemship._then Ithink .it would befall under the business category of 040 and the additional charge for the other attorney or doctor in that partnership, Councilman Snyder.- I don't really agree with this..because either- you -are -assoetated or in --par.tner.ship in -a-medical office, you . are no.t going to have anymore services generated whether you are a partnership or an associate. You won't have anymore =cyses as a rule, so ihy penalize these people because they are in fact cutting down the need for services by sharing an office, Councilman Gillum.- Let; me mane you an example, the other way. We have all the attorneys in the Valley deciding to go into the Roelle Building and make this the Nest Covina Law Association and they are all in there together, not in partnership but running a law business within that building. Councilman Snyder.- They all have separate -suite -a, Conn. ilman Gillumo But they -are all in the same building in an association, Cauncilman.Snyder-, That is different, they come off a public hallway into separate suites, Councilman Nichols: Mr- Mayor. ® on this matter I believe there isa very good and valid reason why the. application of the license fee is olgo ADJ. C. Co 10-2-67 Page Nineteen BUSINESS LICENSE ORDINANCE Continued different, - in these categories. The retail business category there is. acceptance that someone. is running.. -the- business, and that all. others in that business are subordinate to that individual, that they don't make the major or primary decisions that involve the capability of that .business to bring money i-nto the community. In the professions the granting of a license by the State implies an area of professional capability on the part of the individual and unless it would be clearly stated in some sort of certification to the City that a person holding such a license was an employee of some other person and was in no sense generating business through the independent use of this license granted by the State, he is in fact carrying an equal share of the pro.ge.ssional generation of the business whether he is a partner or associate or sharing an office, or however you might want to describe it. I think perhaps there could be some area of question. For instance, if a well known attorney brought two young gentlemen, who had just -passed their Bar exams, and they in fact were engaged in liability research and doing -no practicing of law, there would be some question in that case, but I think those cases are quite rare in this community. I think in most cases where an individual is carrying a professional license he is in fact engaged in a personal practice. I would accept the classification for this area as it was indicated here, Councilman Snyder-, I would disagree with you with regard to association or partnership. You are not in a separate business. It is no different than two men running a store, Councilman Nichols-, I didn't say that. I didn't say they were in a separate business. I said they were generating.a separate business. Councilman Snyder-, Alright, two men running a store, .generating more business than one man running a store. Mayor Krieger-, I would say this m the State Bar doesn't care whether you _are in practice by yourself or a.hundre.d.man firm. When it comes to paying p y ng your dues to the State Bar if you are licensed in the State you pay, your dues. Councilman Snyder.- That ..is. _different, _That is a permission to__practic.e _law. Your reasoning just leaves- me- cold-- - Councilman Gleckman-, I.s_.e_e.with.Dr, Snyder m with the anology that. -has -been used here. I don't think -whether -a--man ks -a licensed physician, a lie-e:nsed electrical contractor, -stock broker, etc., Edon°t feel he should have to take out an individual license if he is in an office with-1.0 othe.r...da.etors9 _br.okers, etc, If .he .is running an Engineering firm_..and _has. 10 electrical engineers working for him, because the man has a license as an Electrical Engineer, does that mean that he should pay the same fee as the owner? I feel that if three doctors share an office it should be $40 for the office which includes the one doctor holding the •license and so much for each other doctor in that particular office. I am not talking about buildings but about an office. The same thing with regard to private patrol. If you have twenty people licensed by the State as private patrol officers and they work for one company, does thtLt mean eacY'patrolman should have a business license? Swimming instructors, Veterinarians, etc. etc. I disagree, I don't think you can tax or try to license an individual on the basis on Which he is licensed from the State. We are talking about how he is working within our community. If there are ten attorneys in one office - one attorney and so much for each one of the others, whether it be a partnership or an association. Councilman Snyder-, Your license from the State is based 19 A1ado Co Co 10-2-67 Page Twenty BUSINESS LICENSE ORDINANCE - Continued on his competence to do the work. Councilman Gillum: You made the statements Mr. Gleckman, that if an engineer has ten licensed • engineers working for him - you are corrects I agree about the ten licensed engineers, because of the man running the business, but when it gets down to a doctor's offices he doesn't have a doctor working for him, does he? Councilman Snyder: Yes. Councilman Gillum: shoes _from, but you go into a and so. When you go into the retail store you .go in to buy a pair of shoes as example, you don't ask for one person to buy the doctor's office and you can have Doctor so Councilman Gleckman: Councilman Gillum, I think you are not familiar with your subject by making that kind of statement. I have a brother-in-law that is an anesthetist and he has four licensed M.D. anesthetists working -for -him in.his Department and they are all accredited by the State and Torking_for a salary. Mayor Krie.gero But then you classified them as an employee - they are receiving a salary, Councilman Gleckman: Let's go back further, • Gillum, are you telling me then that every automobile dealer within the City of West Covina who has a repair shop that is on a percentage basis that has a manager or owner type of thing, they should have a separate license within our City? Every single discount house within the bounda3ie s of West Covina, each department may be independently owned by a master concessionnaire outside of the City - each one of those should pay a license fee? I think you are asking for trouble here and I don't agree with your analo:gy"p Mayor Krieger: We got into this discussion on the category of professional individuals. It seems to -me in the professions you are either a principal or an employee. You can't be both and you must be one or the other. If it is an association or partnership -or whatever you want to call it of a professional classification within the City I challenge you .t.o_s.ay _which.. man .in that ..office ._is the .principal. They are _all principals.-and.-.-as.,-far.-.as the City _of West Covina is concerned I think they should be treated all equally. I do agree with the recommendation, that there should be a reduction in the amount of license to be paid, in that type of...a principal relatie`iship 'but I cant see why it is so inconceivable in the professional classification where either a Doctor or Attorney or whatever defines classification. Either he is in that.office as a principal or an employee, Councilman Gleckman: I will give you an example. The professional hairdresser. I will show •you ten shops in this town where each one.of the hairdressers who is in the shop has his own chair. Now.are you going to go in there and ask those ten hairdressers to take out a license when they are in business for themselves? Mayor Krieger: Now what is this difference, as fay° as the City of West Covina is concerned? If ten individuals get together and act as contractors in one store and they say let's do it this way. As far as the regulatory aspects of the City of West-Govina is concerned, as far - as the services of the -Ci-t7- are concerned. -__what is the impact as far as we are concerned? There are ten individuals operating under one roof. Are we going to say -it is the physical barrier of the wall between them - 20 ADJ. Co Co 10-2-67 Page Twenty-one BUS IUS,S..LICENSE ORDINANCE m Continued or .the separate identity of the street location that determines the license? The fact is for their convenience and own business objective they have associated themselves together`. • Councilman Snyder: • • Mayor Krieger: Councilman Snyder: Then why dt doctors do it? For the same reason, Bqt if they have associated themselves together as principals them we should treat them as principals. How is it any different than the hairdressers? Mayor Krieger: If they associated themselves together as principals we should treat them as principals. They are not employees, they don't fall within any of your classifications. You are defining your own calssification when you want to treat them as an employee. Councilman Gleckman: In a retail operation such as the May Company, where the jewelry concession may be owned by someone else, the shoe concession by somebody else - why don't we go into these departments and say we want a separate license for each single department? We don't do that:, Councilman Snyder: by the State as hairdressers, Mayor Krieger: Councilman Snyder: Mayor Krieger. - Councilman Snyder: Mayor Krieger: Councilman Snyder: Councilman Gillum: place of business. Dr. Jones? Councilman Snyder. Mayor Krieger: The hairdresser is a perfect analogy. I don't see how it is any different than doctors. They are also licensed Yes but they may work in an employee or principal classification. The same as a doctor may. But if they are working separate contracts. But let's not talk about people as employees in our licensing ordinance, if they are not employees. If.I have a doctor working for me and he .-makes-a mistake in malpractice, it is my liability. Then we are treating him as an employee of yours. If he is subject to your direction in your activitie.s.then.he is an employee. I would agree with that if you would also charge a license to each hairdresser. If you have an establishment, what does the sign on front say? Does it list the ten of them? It says the name of one A Doctor's office m does -it not say Dr. Snyder and You necessarily don't have a sign. It could just- say medioal. center-.. That is the key to_ vour .wk4ole classifica® tioh9 you have a numberof principals. ® 21 ADJ. 0. 0 . 10-2-67 BUSINESS LICENSE ORDINANCE - Continued Councilman Gillumo with the major name of the store, fuiiation under the name of Zody°s you take something back you think with someone that is responsible Councilman Snydero Page Twenty-two Answer this question, Dr, Snyder, In a retail store you have this and this and this m apparently they have a contract For instance they have a contract to it doesn't list each separately. When you are going to Zody°s and you deal for all returns, You are assuming that doctor°s offices list everybody In there, but they do not, (MAYOR KRIEGER CALLED A 10 MINUTES RECESS AT 90015 P.M. Councilman Snyder advised that he would have to leave and he would not be able to return after the council reconvened. COUNCIL RECONVENED AT 9030 P.M.) Mayor Krieger - So we can clarify the discussion on Category P o it is with the idea in mind as we are talking about money, that the first principal would pay a fixed f6e and that subsequent principals or additional principals after the first principal would pay less of a fee but still more than an employee classification.,. • Counc-ilman. Gleckmano I have no. argument with .that, Mayor Krieger.- Do we have agreement then on this that there should be a differentiation between ..different principals -and the employee classification in the professional classification? Councilmen Nichols, Gillum and Gleckman agreed, Councilman Snyder was absent, Mayor Krieger:; Does the staff .appreciate the council discussion on that matter? (Mr.�Aiassa replied "yes go. ) Councilman Gleckman: How are you going to -handle the insurance agent, brokers, adjusters,. etc. Page 6, Mayor Krieger.- Still Code P o just speaking for myself the way I would 1QQk at it, for instance an insurance agency may, c.nrsist. of . anar .,_n ilore principals r� and the number of insurance agents mb&7brokers but working in the agency classification, at least in my mind"they are employees. If they are working with their name on the State license,: speaking of an Insurance Agency where all the principals have to be li�s�ed then they are not in an employees classification and I think that is the distinction we ought to .draw. If he is operating as an employee then I think our definition fits. The office is going to pay $5.00 for him. • Councilman Gillum: In an automobile agency, the dealer is the principal and a salesman therefore becomes,an employees but if he were to go out and start his own used car business then that category would. changes Mayor Krieger: Even ,if he were- -w.trie commission basis, if ttE�e contractIIwhich is usually hours, manner of sales m someone &fie°s okay is necessary before there is a contract. This type of classification which is fairly well recognized criteria of employment. It is not his pay which determines whether he is an employees it hew he is able to operate, m 22 m • ADJ. Co Ca 10-2-67 Page Twenty-three BUSINESS LICENSE ORDINANCE - Continued Councilman Gleckman: For an example and this field is a wide field o I think of the swimming pool maintenance where the company is --in Covina and servicing pools in West Covina, where do you draw the: line on services then? Councilman Gillum: I don't know whether there are pool maintenance people within the City, but let's assume there are. They take out a business license. People call for service to another City and the man comes into the City and does not pay a thing for the service that is provided. Therefore the provision under the trucks applies. He has to have a means of getting into the City and therefore I think he would be paying his share of the cost of the services provided by the City. Do you agree or disagree? Councilman Gleckman: I agree in the idealistic sense. I am trying to figure out what you call services are are taxable and what you call services that are untaxable?.. Councilman Gillum: and people doing business in this the area and doing business in the city services and not paying their the air conditioning man, termite, If his business address is in the City he normally pays the tax. This is one of the areas that concerns the Chamber City ® ® the people coming from out of area and picking up revenue and using share for the services. The plumber, etc,, and Councilman-_Gleckman:. And the doctor. Co, uncilman.Gillumo The doctor has an office in the City. Councilman ..Gle.ckman: What .if...the -Doctor has an office in the City of Covina? Mayor Krieger: I�think the-C-it -Attorney commented. on this once. �f you remember we were talking about real estate brokers in putting signs up,_.and'_as I remember what Mr. Williams said, if the man was. ..aomIng _in__not -on .a .continuing .course _of bus.i.n.e.ss _activity but coming in ,to, -.the-..City for ..the pperfor_ma.nae of a _s.pe.cific .zervric,e for one .instance that he. _di.dn.°..t ..fe.e1 ._that ._fe11. _under the _clas-sifi.c,a,ti.om of _do-i.ng business within the City, .And I think this is really the question, whether or not the person is doing business within the City and required more of an access than saying this specialist is coming out and performing a service in one.:opera'dom. Councilman Gillum: They.are doing ness license in service. Mayor Krieger: business in the other are -as but Councilman Gleckman: Speciality contractors? Mr, Peacock: Well attorneys right here at Citrus Court they come from all over the San Gabriel Valley to defend clients in Court. City, yet they are probably payizzg-a buss® they are only coming in one time for that, Gentlemen, is there further discussion on Category P? (None,). :Category C - Contractors, You have -General Contractors and then Speciality Contractors, What are you talking about when you say Someone other than a General Contractor. ®23® ADJ. Co Co 10-2-67 BUSINESS LICENSE ORDINANCE m Continued Councilman Gleckman-, 9 Mr, Peacocks amount of time do one job over ratp, basis or Page Twenty-four You have a man in the audience tonight that is a pest control contractor. Would he be considered a Specialty Contractor? Yes, If his place of..busd,ness is in the City he would pay $50.00. If it were out of the City. thm..=It would depend on the -it would take him to. do a job. .If. a... c,ontrac.tor came in to a period of 4 months he. would only be charged on a prom for a half year or #25-00 rather than a whole year. Councilman Gleckman-, Mr, Peacock: Councilman Nichols West.. Co, ina to fix her garbage present ordinance he is subject one he would be subject to that delivery truck section? And if he is in the City for 2 days to do a job -that he has been called in to do? $25.00 for a half year. This is.the application under the present license. If an electrical contractor has an office in Covina and he has no office in West Covina and he is called by a woman in disposal, are.you saying that under the to an $18.00 fee? And under the new rather than the tax applicable to the • Mrs Peacock: This is open to interpretation as to whether he should be under retail or wholesale delivery trucks or what. Normally we think of cpntractors working on buildings. Electrical contractors installing electrical wiring in a building then he is contracting in that bolding, and &s a subcontractor or a specialty contractor. If he is called in to do repair work he is performing a service and not doing oontracting,. Councilman Nichols-, It seems.to me that this law -can only be equitably enforced if there is some clear interpretation placed upon its Obviously, and this is the point that Councilman Gleckman has raised here several times, it is going to be literally impossible to enforce fairly a law which depends on t)ie ability of the City ta._.catch some individual that may.be making a quick trlp.into this City for business purposes and I would not personally want to lend my support to a law that I know at the outset would be unenforceable except by accident or by information that would not normally in a routine manner come into possession of the City. Now certainly the interpretation that.Harry Williams put on the -law same -time back...if...an._individua.l As -in -fact -s.ol_icitdag _buzi.nes.s in the City and.._is_, adve.rosing_.�is .__aysilab.ility to .c.ome.._%.nLo-the City .or 3.s In .other ways .o.peningly .promoting business, then he- _shd.u: by all means be subject to a tax, but if he comes in on such minor degree- into the City for business or semi -business to include that for enforceability would be ;just an impossibility. It would be a matter.of liking a hundred speedsters on the street as to who the police car sees first, • Councilman Gleckman: o utbalde.., Councilman Gillum: Councilman Gleckman:. How about TV repair? I can think of only about 2 or 3 places_ in the City of West. Covina and all the rest are The 2 or 3 in the City are taking out a business license. N.ot for TV service, For TV Service and s,ale.s.o . Councilman Gillum: Alright.if they are listed in the yellow - 24 - • ADJ. C. Co 10-2-67 Page Twenty-five BUSINESS LICENSE ORDINANCE - Continued pages as TV service they will..be notified that they are required to take out a business license to function in this City, Therefore they take out a business license and pay their share, Councilman Gleckman: make outside of the City. information. Councilman Gillum-. I hate to think of those same businesses that you are trying to protect paying for all those calls they I would like to have them volunteer that protect them from outside people of the city services, yet taking have an obligation to the people and supply the City with revenue? Well do you agree or disagree that we have a certain obligation to the business community in this City to coming through without paying any share revenue income 9 ut of the City? Do we who have established a business here Councilman Gleckman: To what. Ext.ent:..are you talking .about? Give me an ..example. If .you are trying to tell me that you are going to say to our citizens that we have two repair outfits in our City and it is our job to protect those two repair outfits, so if you are going to €aa.11 anybody outside of those two repair outfits we are going to have to tag them. It all reflects back to the people using the services. If we --are going to charge them to come into this City they in turn will charge the people in the City accordingly, Councilman Gillum: I think you are underselling the competitive market, Mr. Gleckman. Councilman Nichols: In answer, if I may. Yes, I think we do have a responsibility and we have a responaibilit7 where ever it is reasonable to attempt to provide that protection, as you used the term, within the community-. That is if it is an overt solicitation of business or_.advertising business or any reasonable way that we can determine that business based outside the City where they are seeking business within the City, then I think they should be taxed, but to have it in the books that every business transaction 'that occurs within the City that is based outside of the City must be taxed, I think we .are attempting to stretch the law beyond that point wliere it can be applied. Mayor Krieger: I don't think the proposal is attempting to do anything of that type, I think there arE certain times that these activities will come in contact with our Building Department or other ag.encie_s...._o.f. _our City staff.. Councilman Nichols: But it lists them here,.,.. Mayor Krieger: We are talking about a Category C that lists Specialty contractors, Councilman Nichols: This is what I am talking about. Mayor Krieger: I think we have to have such a classificat.ian orcategory on the _books and then we g-e-t- into the g ue sti-on of what is our implementation beyond the obvious and the -obvious being those businesses under classifications that are now within our City and there is no question there, Councilman Nichols: That- is corre.ot, but I raise the q,.ueatio.n of staff ® as to -what, int.erpretat.ion would be given if_ an_ -outside.. pers.on..came.. in. and I used for example the garbage disposal re.p.air and the.answer was "Yes"'it would be subject to this tax. So the question was valid ® what are we going to apply here? What does this category include? So I don't think ®25® ADJ. Co 0o 10-2-67 Page Twenty-six BUSINESS LICENSE ORDINANCE ® Continued it is extraneous, Mayor Krieger: I am not saying it is extraneous. I am simply saying we -can go so far in setting up . these categories and go so far in establishing what the licenses are. But I am sure at City Hall, eight hours after the Ordinance is effective, it will bring forth a number of judgment areas as to how that Ordinance will be applied. I don't think we can be so all knowing as to set down the guidelines or the rule by which administratively that Ordinance is going to be enforced. I think it is still going to leave judgment decisions for the staff, but I think they ought to be able to accomplish D r:_.e-quate by the Ordinance as closely as possible with those business establishments that have their home in West Covina and those that have their home outside of the City but do business within the City of West Covina. In such instances where they come in contact with these businesses based outside of the City but do business in the City then I think that the -Ordinance ought to be broad enough to take into comprehension these businesses.-We..might. theoritically .draw. _.a.n..-O.rdinan.c.e..that ...says .if a TV repai.r.._.man ._.co.me.s _into the .City .five times within. -.a .fixed p.er.iod o.f time. he. therefore. is .going to be subject to this license but I can't see where that will solve the problem. I think it is a ,question o_f drawing up and adopting an Ordinance that is as broadly and equitably based as possible. If there are abuses they will be brought to our attention by the people who feel they have been abused, Councilman Nichols: There is merit in what you say. • Mayor Krieger: Anything further on category C? Category U Mr,. Brink -.had some comments in•this particular -category and I noti-ce Mr. Misamore is now here., Ray Misamore General Telephone Company I would like to apologize to the council for not informing you previously that•Mro Brink would be here in my place. I was unable to. -get here at the start of the meeting. Actually I have nothing to add. I would be happy to answer any questions. I have.gone over the statement that Mr. Brink made and it covers the areas of concern. Mayor Krieger: We understand, Mr. Misamore, whether correctly or not, that this formula is presently in use in another community in this State serviced by your Company and is this a fact that you have knowledge ofY Mr. Misamore: It is my understanding that it is universally .applied to .all businesses, they .all pay a difference here, gross receipts tax and that would -be the Mayor Kri-e'ger: -So you take •exeept on on the --constitutional basis that...Mr.o. Brink .referred to? Mro Misamore:. • Yes, that. is .right., Councilman Gillum: Mr. Misamore, do you know if there -are an other communities ® other than gross receipts �mdoes the telephone company not -a franchise, but a the pay any type of form of business license, or their equal share of services provided by the City? Mr. Misamore: I know of none. We pay for a business license, communityon pays in that of courseq where we have an office, but it is the same basis that the rest of the business of, othethan regular community. We pay no in lieu taxes, that I am aware business license fee. ® 26 m ADJ. C. C. 10®2-67 Page Twenty-seven BUSINESS LICENSE ORDINANCE - Continued Councilman Gillum: And the area you are now paying the gross receipts - the complete business .community is on the gross receipts? Mr. Misamoreo_ That is my understanding. I am sorry I can't testify ap an expert on that. Mayor Krieger-, Mr. Aiassa,,,,,City Managers Mayor Kriegerf Mr. Peacocks Mayor Kriegers Mr. Aiasaa.,..City Manager.: Mayor Krieger: Mr. Misa.more: Mr. Aiassa, doee the staff have any Further information? The only information we --have is the City of Norwalk and you have a copy of it in your report. Is Norwalk o: gross receipts? No- sir, it is not. Has this been discussed with our City Attorney m �4e drafting of this? No it has net. De you have an opinion of your co,48e1, Mr. Misamore? Yes, we have an opinion © that the proposal, by the.City of West Covina is unconstitutional. Mayor Kriegers I gather your Company would have no objection tad having your house counsel state this opinion in writing to our City Attorney so we can get an opinion on thie? Mr. Misamores We would be happy to do that or sit down with your attorney and discuss the raml Jeationainvolved. Mayor Krieger: Thank you. It is obvious, gentlemen, .that the questions that have been brought up ...under .public utilities are legal in nature __and I think we would necess-arily .ha` a to have an opinion of our City Attorney before we can pass upon the adoption of this particular pertian.- Councilman. Gillum: Might I suggest that this portion be held over unttl some type of meeting could be set up between our City Atterney.and get the legal determination on this area regarding the Telephone Company, and hold it out for further discussion. Mayor Krieger: I would like to see this thing go forward as soon as possible and therefore I think we should_ direct the City Attorney • through the City Manager to ...immadiat.ely research this ques-tion zad..if further discussion is needed..it--should be done In consideration with the attorneys of the Telephone Company. I feel we weed an answer to this question as soon..as-possible. Mr. Brink: Mr. Mayor did you want us to solicit a lett from ® attor, a t..Mr. lliams other way, or woulyou prer to go to Mayor Krieger: I think as a matter of record the -- Telephone Company would be well advised to have an opinion from their- legal, staff in a letter addressed to the CitManager to be referred to the 2 C' 0 • ADJ. C, Co 10-2-67 Page Twenty-eight BUSINESS LICENSE ORDINANCE m Continued City Attorney on this matter, (Council members agreed,) Mayor Krieger-, Category S m Nonprofit community organizations. Is there any disagree- ment? Councilman Gillum -, I think in this 4rea it is a matter of interpretation, Mayor Krieger: As I remember in times past the organization has merely filed an application to waive the fee. I don't think we have to take it item by item, Mr. Aiassan_City Managers No, that is correct, Mayor Krieger: Peddlers and Solicitors should include Avon, etc. etc, etc. I gather there was a message here someplace m Why, is it necessary that we spell out these activities when they are cloArly. .sallc.itor.s_? Councilman Gillum: In this area. what concerned -me. about spelling_ them -out, I--am--wonderi-ng if we missed one or two that were not called out in thisarea9-would they get through a hole_? Mayor Krieger: That is my point. Councilman Gillum: Mr. Tambe, why did.you spell out this area of peddlers and solicitors? Mr, Tambe: The name...-paint_-app:l.le-s to. _this ._.c_o.mmemt in our outline as the one earlier we discussed. At the time we met a week or so ago, we asXed.this question specifically o what does this category of peddlers and solicitors include - and we get as many answers different as there were people .present, It is particularly -significant 1n this certain instanc-e.. be.ca=—e-.-the._c tegory -D-f pe_d.dlers_..-and _-solic-itors is brand .new, we have ..&at..1ad -one .,before, _.sn .we wanted to be ..clear between.. -all ..of us what wasto be included,. or at least what kind. of activities. would. .he. .include.do Councilman Gillum: be acceptable net to Mr. Tambe: If the City Attorney would be able to come up with.a legal _definition of what _a p.e.ddl.er or solicitor is then it would include all of these? Avon:, etc, etc,, but that we get clarify the matter, Mayor Krieger: 40 the problem in our present Mr, Tambe: -De-ti.ne...what the .pe-d.dl-e.r .or ..solicitor is the intent-, -We are- not _.-s.ug.geating that .the -language _be _such that it _.do.es _state some sort of a definition that would Bankruptcy and like sales. We have a provision in the code now that onvers this situation. No, 6235.01 What is definition of Bankruptcy, Mr. Tambe? John Gardner has just arrived and is most familiar with this particular sub- ject. ADJ. Co Co 10-2-67 Page Twenty-nine BUSINESS .LICENSE ORDINANCE - Continued John Gardner It was our feeling that in this 1018 W. Garvey Avenue particular phase of the license code that in all probability this would be better and more in vision if it were with the going -out -of -business code we have in the City, which could stand some revision and improving, rather than be included in this part of the code. We were concerned in the case of a man in business for over a year and he then goes through bankruptcy proceedings or out -of -business proceedings, he would not actually require a permit, he has a permit already to do 'business, but this should be strengthened and spelled out to cover these particular businesses where they bring- in outsiders to run these types of sales, They bring in outside merchandise other than what the manes original, inventory was ® and it really shouldn't be a part of this Ordinance, Mayor Krieger. - of as.p.e c t s and shall not -appl in busJji" far Mr, Gardners y In reading 6235.1 it clearly states there that all these sections are inter -related in the code in a number we. -.are disrus-sing.one ® "the provisions of the section to a bonafide closing out.sale where merchants have been more than - a year" ..® It says. thatright. now in the- code. to run. a..going.-out®of business Mayor Krieger: Mr. Gardner. - Right, but. on .the-- same.. token, there. is nothing -stopping a-p-erson that has been in bus nes.s- or over a year if he wants sale for 3 years he could do it. theactual going -out -of business category. Councilman Gillum: Mr. Gardners Councilman Gillum: Mr, Gardner: This question comes in under more unfair business competition, rather than licensing. This is true. So we raise the quest1on ._whether it _.shoul,d .be. _..actually..included in this particular ordinance or more in or require special permits under that I ... zLm.,_und..e r s tand your...c olio a rn.... _This _:wa s -Air-ected at _these ,.people that ..come in and bring in other merchandise And do business under the other manes license. Well he is still under it. And -aren't the -se -bankruptcy ..sales ® _.auctioneer sales- 11c:ensed by the State? Not all of th-emo Some Bankruptcy -sales that are.actually, ordered. by the. court. Councilman Gillum:.. That is what this is directed at, Mr. Gardner: But on the- sa- a tea-k-en where it --says "and like -sal-es" m how ---about the one where- ou hire- outsides --promoters and they br-ing..in.merchandise. and keep bring n it in as _long as he can run that sale ® and pays nothing to the City other than the sales tax you get from the. reveau:e.s. of the.. original. ,license.. Councilman Gillum-, Are you asking us to enact something here to protect the merchants from this type of operation? Is this in a sense what you are trying to convey to us that there should be some type of ordinance to protect the - let's say ® honest jeweler in town against some of these sales, against the fellow coming .in..-an:&_r-unning, these sales? Mr. Gardners No, what I am trying to say and which most people are not aware of including, the business community, is that the.City of West Covina does.not have a going -out -of business sale ordinance. If this became general knowledge I think you would have almost likean auction city open up overnight. Most people think we have one like other cities. They could come in and run a real bang up auction sale until an m29m ADJ. Co Co 10-2-67 Page Thirty BUSINESS LICENSE ORDINANCE m Continued Ordinance is enacted to stop it, Mayor Krieger: .-Thank. you, Mr. Gardner. My own comments on this particular thing is • that we are discussing license procedures rather than strengthening the existing code section we ha°�e and if there is sufficient interest by the council we can look into this as a special item. Councilman Gillum, I think 'it is something we should look Into. Mayor Krieger: At the appropriate time make a motion then -that 6235.1 be studied. Councilman Nichols A question in this area m why would a separate license in fact be required over .an .-individual that -is _in husIness .in the community and has a valid business _license - why would a separate license be required for him to h'aget, going, out'of business sale? Mayor Krieger, I don't think it would under section 6235.1 be required now, because you would go to that section in determining what a bankruptcy and the like, sale was. Councilman Nichols, What is the definition of a bankruptcy? • Mayor Krieger: you have about a 20 line definition, but it says at the bottom that o „the provied.ons..o.f this _section. shall .not ap.ply to a bonafide going out of business sale for a period of one year of such sale94 ® so we may want to reword that section because it applies to a lot' more than licensing. Mayor Krieger, Carnivals and Circuses, Subsection 18 should.provide for different license scheduling for such events sponsored by local business groups and organizations. Do we presently charge, Mr. Aiassa? Mr, Aiassa, City Manager, No, if .they -are sponsored by a -co-mmercial -group or part of a program they are -usu 11 -exam to ,This -is when they come up before the council and the counc l equirps that action. Councilman Gillum: I take a:g-ein, Xro Krieger-, that -this- -etas. more of .--a. teranino -0gy to -clewup_ the_ ar-ea...as far as, the..licenaes were._..c.onc-erned to define that .as it .has been do the -past. It is not spelled out in here. It just states carnivals and eircuseso If it were accepted this way wit1jout any interpretation it could be possibly not legally enforced as to what they are referring to here. Mayor Krieger, I think the past procedures worked out . quite well as far as these non-profit organizations. Councilman Nichols, If _.a totally outside organization .wanted to set up in West Covina _the lic:enae. . would then apply. Is that correct? (answer, yes) If the West Covina Plaza Merchants Association a,p moored the circus the license would not apply? (Answer, correct) On what basis would. it_..be, exemp-t.? Mr. Aiassa, City Manager, It is spanso:r.ed by a._lo.cal.organization such as the merchants or the Kiwanis Club and- on. the- r premises. a30- ADJ. Co Co 10-2-67 Page Thirty-one BUSINESS LICENSE ORDINANCE ® Continued Councilman Nichols: Is that normally a qualification? Mr. Aiassa, City Manager: Yes and we hold some of the businessmen '---�,^ or someone in the organization responsible for the operation of it. There are very few carnivals anyway. Most of the activities are kiddie rides. Mr. Phil Wax: May I ask a question? Twice a year we have amusement rides that we use as a promotion sale. They come on the Plaza parking lot. In the past there was an accident and they require now an eggineering license to show that the equipment is in good shape. Is there a charge now to these people when they come in? Mr. Aiassa, City Manager: I think there is an inspection fee. That Is the only charge I know of, Mr. Wax: This $200 for the first day and $100 for the ensuing days does not apply to them? They charge for the amusement ride but not the full price... They charge the stores for the rides and we.give the tickets -out to the children and parents for half price, Mr. Aiassa, City Manager: In other words you are sponsoring it? Mr. Wax: Yes but they still charge something. Mayo3° Krieger: I think the staff would be well advised • whenever these questions come up and it_ is a matter of policy definition, to bring it up on the council._agendao The rule we have applied in the past has been that if it was under the auspices of a local organization there was no charge. Mr. Aiassa, City Manager: We would charge for the required inspection, Mr.. Wax. - Thank yo-u. I was just speaking from the money point. Mayor Krieger: Solicitation. I don't quite understand the concern hereof the Chamber of Commerce,_-Mro .Tamb.eo -I -understand you have:. -a solicitation ..control -program which .-is -an .excellent program and seems to work-out quite well. This would not damage the effect of that program in any manner, Why are you c.onaerned? Mr. Tambe o If it d--s- -not in fact -damage the --effect -of the -existrr ram. 'then there i no need . o s u s. t.o Our stat.emen begins by saying that the provision in the proced-ure.manual that you have is. -all .encampass. -ng., It -is very well done but under :current procedures you still have._a-solicitation provision that is also all encompassing. In spite of that, traditionally all efforts. --in the area of charitable solicitation by businesses have been automatically referred by the City to the Chamber. So our point is we would like to see the traditional • arrangemeat continuedwith complete disregard for what is printed in the code,. which is the way that has..been written. Mayor Krieger: It is really a question of mechat.ism, isn't it? Mr. Tambe But included in the procedural manual I think.you have stated by implication if no- other. way, that this_ is a matter within the purvue of the city .government- and we_ think it ought to be such, but as it ha H en thoueh the Chamber h b en erf min the service not onl on behaff the ity but on behaff o thpe en� re ommunitya We would like to retain the status -quo. 31 ADJ. Co Co 10m2-67 Page Thirty-two • n U BUSINESS LICENSE ORDINANCE m Cont-inued Mayor Krieger: ita present condition.. Mr. Tambeo Mr. Aiassa, City Managers Chamber -of Commerce but by Mayor Krieger: You don't speak the code but bo. excluded by the That is correct, about its inclusion in w it can best be City and that is under Mr, Mayor, I think if we explored it a little -deeper - at the time this -came. -up _I ..dca.n't think the .council should legally -give that authority to the administration,... I don't think. ire delegated the responsibility, Is --there -further discussion on any aspect of this? Councilman Nichols: Well. m I suppose before it come-s.-back to us and comments later might land as a complete bomb ® I would like to make a brief observation -and in all deference to the creditable job performed b th;atetouncil ifcommittee and.tlhe Chamber committee, sometime ago when ej firstositioupt at I b lieve the council minutes. would Eefkiaot time p support the proposals -made a at which initially were .-aging. tbe_-11 es of the gross receipts tax, if it were ins fact `an effort, to pr 6viae.. a more equitable license but I couldn't accept it if it became increasingly the device for the imposition of additional taxes and I haven_'t changed my opinion in light of the very heavy additional tax burden imposed on all segments of the economy. I -am all for making our business license schedule. equitable, I am all for achieving improvement of. -that by all possible means and if that results -in increased kevenue, I am all for that ® but I am very reticent to escalate the very schedule for the purpose of increasing revenue. Councilman Gillum: I would _like t_o __dir.ect .my comments along, tb.a.t ...line , I can -under -stand -Mr. Nichols' feelings- in this area that e are all- going to be Yiit -with re taxesccording tv. the code think under business license, states pit s a source of revenue. Also,, _-we ..have -d.i.acus.se_d._this._-with __the..... businers...c_nmmuni ty, .a ...small portion -of it. -at tines_,. -but they realize that. the.. -additional ;co,s:t. of government service-s --have 1-ncreased -and they at their sug-gestion -said finer -ease the base rate and make the ad ju-stmentso :We have tried to -make in-mo-at -areas o equitable. This was my one• -abjection to the statement made. when we started on -gross receipts, We started out by telling .these people we were going to .make _it _more equitable, I .couldn't .quite believe that -and I still don't. The fact remains that we have tried in many ar_e_as to -make itmore equitable by closing the many loopholes in the present. _.busines.s.._1ic.ense -ordinance _and ..making sure that everyone pays their equal -share of this c-ost. We haven't.said that everybody in this category pays so much and I defy anyone to come up with the absolute solution to this, because it is a very difficult and knotty problem. I stated to the Chamber Committee that I felt we -were going to bring this prQgr- m..about to increase revenue _and_. I .think___we-are kidding ourselves and the business community if we tell them anything.else. Additional revenue is needed by the City for the additional services provided by the City, and I think the Chamber has accepted that as an honest fact and this was their recommendation that if we were going to do anything raise the present system that we have. It is not perfecto It .is far from. it o I .am sure we will run into soma areas, that we will. have problems with,_ but I think under the resent business nonditions and under this type of program,. it is the Test we can do at this time. I think it serves its purpose quite well to cover these areas that we have.missedo I think the bigge-st thing will be this license inspector to make it more equitable, if we can make it that. Councilman Gleckman: I would like to compliment the two councilmen as well as the Chamber Committee -for 11 thetime- and.-e.ffort. put into this study. I think with some of the.14it®picking we did this evening we came up with some of the answers not defined in this report. I am very much satisfied with what has been presented to us, if m32m ADJ, Ca Co 10-2-67 Page Thirty-three BUSINESS LICENSE ORDINANCE m Continued nothing.. else it is an improvement over anything else we have had. As far as the gross receipts o I have not changed my opinion. Once again I am willing to.go along and accept the report and the recommendations from the two liaison members and the West Covina Chamber of Commerce and adopt the Ordinance as written and given to us for adoption by the City Manager and the City Attorney. Mayor Krieger- I believe a motion would be in order tonight to direct the City Manager and the City Attorney to prepare an amended business license ordinance consistent with the council discussion this evening. So moved by Councilman Gleckmano Seconded by Councilman Gillum, and carried, AYES: Councilmen Gillum, Gleckman, Mayor Krieger NOES: Councilman Nichols ABSENT: Councilman Snyder COUNCIL COMMITTEE REPORTS Mayor Krieger: Under City Council Committee reports is there any councilman that desires to attend a meeting in the City of Monrovia, October 4th having to do with this Mun,cipal.Data System for the purpose •of redrafting the agreement and by-laws for clarification? (None) Mr. Aiassa, do you have any desire to send staff representation? (Mr. Aiassa said he did.) PROCLAMATION PHILHARMONIC WEEK Mayor Krieger: Without objection from October 5, 1967o the Council I will -declare October 5th as Philharmonic Week in West Covina.. No objection. So declared. (Mayor Krieger a,sked.Mra Windsor to prepare the proclamation.) Mayor Krieger: I wo.u1_d.._1.lke. _to _add to the ..agenda.. -next Monday -night, .the _.pro-cl.amation _of Unite.d.._Nati.ona...Day m ..0-ctober .24tho I state that so the council can be prepared to discuss the matter, if they wish. Councilman Gillum: I have two things, Mr, Mayor, I requested some information through the City Manager on the spreading of rem •plenishment water. I received a communication from the Metropolitan Water District and I -in turn have written a letter to the chairman of the Upper Water District requesting the information as to why this was purchased and if there --was a legal contract that had to be satisfied by the -District. I am not happy With the answer received from the District and' have contacted Mr. Vachep to clarify some of these points. f ®33- _T1 ADJ. C.O. 10-2-67 COUNCIL COMMITTEE RBPORTS m 0aztbxued Councilman Gillum0 • &allow Cab Oompany requesting companies. l believe you all, staff should communicate with `balking about at this time so storming in here later one b (00uuncil agreed. Page Thirty-four Secondly, geing along with this business license, we received on September 18th a letter from the an additional consideration for the cab have copies of this letter. I think the these people and inform them what we are they -.re aware of it and not came s this agreeable with the._Council? One other thing, Mr. Gardner brought UP this bankruptcy and going -out -of business and I would like to have the staff look into this section 6235.1 and report back to us at the meeting of October 23rd. Also contact the Chamber and find out this area that concerns them that we might not have covered. ------------- Councilman Gleckmano We have had two or three meetings now with the Huntington Beach Freeway co- chairman -and the subcommittee-chi.irmen and they are moving right along. I am very well pleased with the talent we have on this Committee. They are very knowledgeable and very much interested. • I also attended a meeting Friday with SLAG of which there are 91 cities members now. Their committees _.axed funds have all been received and they have now formed five planners fbr their -planning area and it seems that the services that they will be rendering to the member cities will be will worth our membership,. Motion by Councilman Gillum, seconded by Councilman Gleckman, and carried, that Council adSourn at 10.015 p.m., to October 9, 1967, at 70 30 p.m. at City hall. ATTEST. - City Clerk APPROVED ayor ? � /94�7 _. m 34 -