Title
Introduction of Ordinance Amending the Alameda Municipal Code by Amending Section 5-7.1 Penalty for Nonpayment of Annual, Quarterly or Semi-Annual Business License. (Finance 2450)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Introduction of Ordinance Amending the Alameda Municipal Code by Amending Section 5-7.1 Penalty for Nonpayment of Annual, Quarterly or Semi-Annual License
BACKGROUND
In the spring of 2015 during the hearings to assign delinquent business licenses for collection on property tax bills, the City Council heard from several business owners that the penalties for non-payment were excessive and that there was no relief except appeal to the City Council. The Council directed staff to propose alternative penalties and collection practices.
The penalty was increased from its original 5% to 10% in 1986. The 10% penalty was applied after the first 30 days of delinquency and each 30 days thereafter until a maximum of 60% of the original amount was reached. In 2013, and in order to help raise revenue during a budget crisis, the amount was increased to 20% up to a maximum amount of 100% of the original amount.
Penalties have been waived only in extreme circumstances based upon substantive proof and with the consent of the City Manager's office.
DISCUSSION
Staff surveyed the nine surrounding communities to determine Business License penalties and maximum amounts. All but one applies the penalty after thirty days of delinquency. The penalty amounts range from 5% to 50%. Seven of the nine communities increase the penalty amount to 25% or 50% after 60, 90 or 150 days. Four communities also apply interest to the principle plus penalties.
Currently, the City's penalty falls at the higher end of this spectrum. However, the maximum of 100% in 150 days is the highest maximum of the nine communities. If an average business license fee is $90 and is not paid with...
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