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01-17-1995 - Business License Advisory Committee• City of West Covina Memorandum To: City Manager and City Council FROM: Steven W. Wylie, Assistant City Manager suwEcr: BUSINESS LICENSE ADVISORY COMMITTEE AGENDA ITEM No. K-2b DATEJan 17 1995 ® PRINTED ON RECYCLED PAPER SUMMARY: On December 6, 1994, the City Council approved a proposal to conduct a study of the City's business license tax and business. improvement tax structures. A critical component of that study involves working with an advisory committee of local business owners and operators to ensure that the study's results and recommendations are valid and acceptable among the business community. It is necessary to determine how this committee will be selected. DISCUSSION On December 6, the City Council approved the proposal of Ralph Andersen and Associates to conduct a study of the City's business license tax and business improvement tax structures. This study was originally discussed during the FY 1994-95 budget process, in the context of making certain that business taxpayers are shouldering a burden which is equitable and fair. From the outset, it has been staffs intention, as well as. being reflected in both consultants' proposals, to work with a committee of localbusiness owners and operators throughout the study. It is critical to the study's success that input be received throughout the course of,the study by representatives of the wide spectrum of businesses in West" Covina, and that the study not be perceived as inordinately benefiting or disadvantaging any class of business in the community. Moreover, by using a committee of local businesspersons, the consultant's approach and methodology can be tested against local conditions. At this point, the consultant and City staff are ready to begin the process, and it is now . necessary to determine how the committee should be appointed. It is suggested that the committee should represent the broadest cross-section of the business community, and that any single category not be over -represented. Experience has shown that a committee of approximately fifteen members, meeting periodically over a three to four month period, is a manageable approach. It enables the committee to be representative enough, while still allowing the process to move forward in spite of an occasional scheduling . conflict for a few members. To select the committee, several options are available: Open the committee to volunteers, with a selection process similar that for Commissioners. 2. Direct staff to recruit members from a pre -selected list of representative classes of business, as approved by the City Council (this is somewhat similar to the process used to form the Project Area Committee for the Redevelopment Plan Amendment). 3. Give each Councilmember a designated number of appointments to the committee, to be filled as each member sees fit (this is the process used for the. Citizens' Committee on Public Services and Facilities in 1986). 4. Determine a list of desired representative classes, and assign each Councilmember the task of selecting members from certain'of these classes. This list of options is not exhaustive, and other potential mechanisms may be devised.. 1 The first. option, to create a selection process similar to that for Commissioners is not recommended in.this instance for two reasons: first, it is time consuming for all concerned, and will unnecessarily delay the study; and second, it does. not guarantee an applicant pool that may be diverse enough to create a truly representative committee. The second option, to direct staff to recruit members from a pre -selected list of representative business classes, may be more efficient from the perspective of time, but it does not guarantee that the resulting committee will have the support and confidence of the City Council. The third option, to grant to each Councilmember a certain number of appointees to be selected at will, has the benefits of expediting the appointment process and increasing the level of support and confidence from the City Council (as compared to the second option), but it does not guarantee that the committee will have the desired representative cross-section of businesses. The fourth option would seem to be the best, in terms of expediting the appointment process, creating a committee that has the confidence of the City Council, as well as guaranteeing the diversity of the committee. Should this option be selected, it would be necessary to determine the number of committee members, the classes of business to be represented on the committee, and which classes of business would be recrtuted by each member. Thereafter, each Councilmember would recruit and select the appropriate appointees to the committee, to be confirmed by the City Council at a specified date. If this approach is not desired, staff would recommend option three. Attached to this report is a list of business classifications as defined in the current business tax ordinance. It is suggested that the City Council review this list and determine which classes should be represented, and in which number, on the committee. (It is suggested, for example, that in light of the number of retail businesses in West Covina, the City Council may wish to have more than one retailer on the committee.) It is also suggested that although each member may not be assigned the same number of business classifications from which to recruit (as a result of the above), that each member have the same number of appointments. Following the appointment of the committee, the consultant and staff will meet with the committee to review the scope and methodology of the study. There will be. several milestone meetings with the committee to review the consultant's work progress and tentative conclusions and recommendations. Ultimately, the committee will review the consultant's final, report, prior to transmittal of the report to the City Council. RECONEVIENDATION: It is recommended that the City Council determine the method of appointment to the committee, as well as a date for the process to conclude. Aa::F�N- W �� Steven W. Wylie Assistant City Manager Attachment N BUSINESS CLASSIFICATIONS IN WEST COVINA Suggested No. CLASSIFICATION NO. 'LICENSES Committee Members 1 1 1 .4 2 3 0 3 A. PROPERTY RENTAL - Commercial Property Rental 305 Residential Rental 215 C. CONTRACTORS. Contractors 638 Painting and Pest Control Cont. 33 M.. MANUFACTURERS Manufacturing/Wholesale 34 Commercial Manufacturing/Wholesale 49 Residential P-II. PROF. SERVICES Professional Services- 535 Commercial Professional Services -Residential 439 P-I. PROFESSIONS Professionals -Commercial ' 281 Professionals -Residential 24 R: RETAIL Retail -Commercial 590 Retail -Daily 1. Retail -Residential 101 V. SANITARY LANDFILLS Landfills 1 S. SPECIAL BUSINESSES Microwave Pay Television Syst. 4 EDance Permit 6 . (Skating and Roller Rinks 1 Theaters and Movies 2 Gyms and Figure Salons 4 Billiard Parlors 2 Bowling Alleys 1 Mail Order -Commercial 1 Mail Order -Residential 36 Laundromats 8 Washers/Dryers-Owned by 5 Property Owner Washers/Dryers-Not Owned by 5. Property. Owner Cigarette Vending Machines 3 Photo Vending Machines 1 Stamp Vending Machines 2 Bulk Vending Machines 7 Vending Machines 35 Vending Machines -Per Company 6 Peddlers and Solicitors -Per 4 Company Vending Machine Incidental to 28 Main Business Vehicles for Hire/Commercial- 9 Per Vehicle 520 671 83 974 305 692 1. 706 Vehicles for Hire/Residential-Per 6 Vehicle Vehicles for Hire -Per Company 3 Wholesale Delivery/ Commercial- 121 Per Vehicle Wholesale Delivery/ Residential 6 Per Vehicle Wholesale Delivery -Per Company 1 Food Vendors/Commercial Per 6 Route Food Vendors/Residential Per 22 Route Laundry Routes .11 All Other Route Sales or 7 Rentals/Commercial All Other Route Sales or 1 Rentals/Residential Retail Delivery Trucks/ 13 Commercial -Per Vehicle Retail Delivery Trucks/ 3. Residential -Per Vehicle Retail Delivery Trucks -Per 1 Company Service Vehicles/Commercial-Per 37 Vehicle Service Vehicle/Residential-Per 172 Vehicle Service Vehicles -Per Company 2 Gardeners/Commercial-Per 3 Vehicle Gardeners/Residential-Per 90 Vehicle Video Machines -Gross Receipts 1 Video Machines -Per Machine 26 Small Collection Facilities/ 4 Reverse Vending Machines 15 TOTAL 39952 Note: The suggested numbers in the first column represent a roughly proportionate allocation as compared with the number of licenses issued. Contractors are deliberately underrepresented, due to the fact that most are.not located in West Covina, and pay a business license tax on each job they undertake. 4.