BALLOT MEASURES - FUNDING FOR CHAMBER OF COMMERCE

 

Objective:

To provide information for the City Council to consider to determine whether or not a ballot measure will be placed on the November 6, 2001 ballot.

Background:

The City Council, at its meeting of June 12, 2001, directed staff to return with ballot measures to provide funding for the Chamber of Commerce. Two separate ballot measures are attached for your review.

One of the measures increases the business license tax by 10% and would be a "general tax" as defined in Article XIIID of the California Constitution and revenues from the tax may be used for any municipal purpose. This requires the City Council to place this on the ballot by a 4/5 vote. The City Council could then provide funding to the Chamber of Commerce under agreement to provide services to the City. The City Council could enter into such a contract now without placing this measure on the ballot. The ballot measure simply increases the business license tax by 10%. There is no guaranteed funding to the Chamber of Commerce as it is dependant on the City and Chamber of Commerce reaching an agreement for services.

The second measure also increases the business license tax by 10%. The measure is defined as a "special tax" as defined in Article XIIID of the California Constitution and revenues from the increase would be used to support the activities of the Hermosa Beach Chamber of Commerce subject to a contract with the City. In the event that they are unable to agree on the terms of a contract in any given year, then the funds could be used for any municipal purpose. The "special tax" requires a majority vote to be placed on the ballot and a 2/3 approval of the voters.

The business license tax is expected to generate $600,000 in 2001-02 Fiscal Year. This would result in $60,000 per year for the Chamber of Commerce.

Other options for funding

The City Council could consider other options if it wished. It would be possible to have a purely advisory measure on the ballot asking the voters whether or not the City should work with the Chamber of Commerce to develop a stable funding source in lieu of the Fiestas that has been its mainstay over the years. This could be considered in conjunction with dropping one of the 3-day events and substituting this alternative revenue source.

A business assessment process could be explored which would be similar to forming a Business Improvement District that could provide direct funding from the business community to the Chamber of Commerce. The City would serve as the collecting agent in this type of set up. This process could be initiated by the Chamber of Commerce with some assistance from the City.

Recommendation:

That the City Council review and consider the several options. Staff needs to prepare any potential ballot measures for final review and adoption at the July 24, 2001 City Council meeting.

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