HomeMy WebLinkAboutItem 08a - City's Business License Fees Update
DATE: January 16, 2024
TO: Honorable Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director
Lisa Flores, Deputy Development Services Director
By: Alejandra Smith, Business License Officer
SUBJECT: RESOLUTION NO. 7538 UPDATING THE CITY’S BUSINESS LICENSE
FEES TO REFLECT THE CHANGES IN THE CONSUMER PRICE INDEX
(“CPI”)
CEQA: Not a Project
Recommendation: Adopt
SUMMARY
The City’s Municipal Code allows for an annual increase in business license fees each
year to accommodate cost of living increases. Due to recent cost-of-living adjustments,
the applicable business license fees should be increased by 1.8% to reflect the change
in the Consumer Price Index (“CPI”) and to recover the costs to process applications. It
is recommended that the City Council adopt Resolution No. 7538 updating the City’s
business license fees.
BACKGROUND
Pursuant to Government Code Section 53750, the City Council has the authority to
increase taxes and fees and make changes pursuant to a CPI adjustment formula.
Arcadia Municipal Code Section 6220.1 allows for the adjustment of business license fees
on January 1 of each year to reflect changes in the Consumer Price Index (“CPI”) from
the previous October. The business license fees that the City maintains cannot exceed
the actual cost to process the applications nor can they be adjusted without consideration
of economic conditions such as recessions and other pressures on local businesses.
The fees are reviewed on an annual basis to assess cost recovery and keep pace with
inflation. Incorporating an annual review and potential changes will help avoid any drastic
and unplanned changes for Arcadia businesses.
DISCUSSION
The Arcadia Municipal Code requires that the City compute the changes to the CPI for All
Urban Consumers for the Los Angeles-Anaheim-Riverside metropolitan areas. This
Resolution No. 7538 – Business License Fees Update
January 16, 2024
Page 2 of 3
provision of the Municipal Code allows the business license fees to keep pace with
increased costs for services without having to conduct an entire study each year. Based
on the CPI reflected from October 2023, the year-over-year increase is 1.8%. Thus, all
relevant fees will be adjusted using this figure.
Resolution No. 7538 (Attachment No. 1), includes an exhibit that provides the current
business license fees as well as the new fees with the proposed increase of 1.8%. These
increases are fair and reflect the current cost of doing business. It is not anticipated that
these increases will be detrimental to new business start-ups, renewals of existing
licenses, or the number of applications received. Additionally, as part of ongoing
discussions with the City Council, and recommendations from the Citizen’s Financial
Advisory Committee, it has been established that the City would like to recoup all relevant
costs for the provision of City services. As such, the Development Services Department
will review the CPI each year and apply adjustments as they are warranted and as the
Code allows.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”) Section 15061(b)(3) because it can be seen with certainty it will
have no impact on the environment. Thus, this matter is exempt under CEQA – refer to
Attachment No. 2.
PUBLIC COMMENTS/NOTICE
A public hearing notice was published in the Arcadia Weekly on December 28, 2023. As
of January 11, 2023, no public comments have been received on this proposal.
FISCAL IMPACT
By recovering more of the costs to provide Business License services, the net impact to
the General Fund is expected to be positive and a slight increase in revenue will be
generated. The annual revenue anticipated from Business License Fees for the current
Fiscal Year is $1,364,200. Given this estimate, it can reasonably be projected that the
proposed fee increase of 1.8% would add approximately $24,555 in annual revenue.
RECOMMENDATION
It is recommended that the City Council determine this action does not constitute a
project; and adopt Resolution No. 7538 updating the City’s business license fees to reflect
the changes in the Consumer Price Index (“CPI”).
Resolution No. 7538 – Business License Fees Update
January 16, 2024
Page 3 of 3
Attachment No. 1: Resolution No. 7538 with Business Fee Schedule – Existing and
Proposed Fees
Attachment No. 2: Preliminary Exemption Assessment
Attachment No. 1
Attachment No. 2
Preliminary Exemption Assessment FORM “A”
PRELIMINARY EXEMPTION ASSESSMENT
1. Name or description of project: City of Arcadia Business License Fees Update to reflect the
changes in the Consumer Price Index (CPI) for 2024
2. Project Location – Identify street
address and cross streets or
attach a map showing project site
(preferably a USGS 15’ or 7 1/2’
topographical map identified by
quadrangle name):
Citywide
3. Entity or person undertaking
project:
A.
B. Other (Private)
(1) Name City of Arcadia
(2) Address 240 W. Huntington Drive
Arcadia, CA 91006
4. Staff Determination:
The Lead Agency’s Staff, having undertaken and completed a preliminary review of this project in
accordance with the Lead Agency's "Local Guidelines for Implementing the California Environmental
Quality Act (CEQA)" has concluded that this project does not require further environmental
assessment because:
a. The proposed action does not constitute a project under CEQA.
b. The project is a Ministerial Project.
c. The project is an Emergency Project.
d. The project constitutes a feasibility or planning study.
e. The project is categorically exempt.
Applicable Exemption Class: 15301(a) – Class 1 (Use of an existing facility)
f. The project is statutorily exempt.
Applicable Exemption:
g. The project is otherwise
exempt on the following basis:
h. The project involves another public agency which constitutes the Lead Agency.
Name of Lead Agency:
Date:
December 19, 2023
Staff:
Alejandra Smith, Business License Officer