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HomeMy WebLinkAbout2026-31 - Resolution Calling Election for MeasureCITY OF COSTA MESA RESOLUTION N0. 2026-31 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, ORDERING THE SUBMISSION TO THE QUALIFIED ELECTORS OF THE CITY OF COSTA MESA "THE COSTA MESA FAIR BUSINESS LICENSE REFORM, SMALL BUSINESS PROTECTION MEASURE" AT THE GENERAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 3, 2026, AS CALLED BY RESOLUTION N0. 2026-21 WHEREAS, the City of Costa Mesa's business license tax was first adopted over 41 years ago, in 1985, and requires all businesses to obtain a business license to operate in the City; and WHEREAS, the purpose of the business license tax is to raise revenue for the City to provide for the public safety services, transportation network such as roads and sidewalks, and other general services provided to the businesses within the City; and WHEREAS, addressing homelessness, preventing crime and maintaining 91 'l emergency, fire and police response are top community priorities; and WHEREAS, the business license tax is based upon the gross receipts of each business; and WHEREAS, the maximum business license tax imposed by the City since 1985 is $200, regardless of how much revenue a business earns; and WHEREAS, over time, the business license tax cap of $200 has shifted a larger and larger portion of the total business license tax onto smaller businesses, while big box stores and luxury companies earning millions pay no more than $200, thousands of dollars less than these stores pay in some other nearby cities; and WHEREAS, reform is needed to fairly set the business license tax to protect small businesses from increases, while requiring larger businesses to pay their fair share of taxes for the services they receive; and WHEREAS, this measure does not increase taxes on residents, and WHEREAS, at its December 2, 2025 meeting, the City Council directed staff to explore the potential placement of a Business License Reform Measure on the Resolution No. 2026-31 Page 1 of 5 November 3, 2026 Ballot; and WHEREAS, the City's Finance and Pension Advisory Committee considered potential revisions and reform to the business license tax and made a recommendation to the City Council; and WHEREAS, the City's year-over-year expenses for City operations are increasing at a faster pace than its year-over-year revenues; and WHEREAS, the City Council has caused to be completed needs assessments of its city facilities, its city parks, its pavement management system and its information technology, resulting in identified needs totaling approximately $11 million per year to implement, over and above existing operations costs; and WHEREAS, the City Council has directed staff to streamline systems to improve services to the public and reduce costs, and to seek grants and other funding sources for the City's most critical needs; and WHEREAS, the property taxes paid by residents and property owners have increased over time as properties have changed hands and been improved, to provide revenue to the City to fund essential city services; and WHEREAS, user fees for services which primarily benefit the individual receiving the service are able to be increased periodically to help offset the cost of providing those services; and WHEREAS, a General election on Tuesday, November 3, 2026 has been called by Resolution No. 2026-21, adopted on June 2, 2026, and WHEREAS, the City Council also desires to submit to the voters at the election a question relating to "The Costa Mesa Fair Business License Reform, Small Business Protection Measure." NOW, THEREFORE, THE CITY COUNCIL OF THE CITY' OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. That the City Council, pursuant to its right and authority, does order submitted to the voters at the General Municipal Election the following question: Resolution No. 2026-31 Page 2 of 5 Measure _: The Costa Mesa Fair Business License Reform, Small Business Protection Measure Response Vote Without taxing residents, shall the measure be adopted, updating Costa Mesa's 41-year-old business license tax, ensuring large businesses pay their proportionate share and helping fund general city services including keeping public areas safe/clean; preventing crime/burglaries; addressing homelessness; maintaining Costa Mesa's financial stability; revising the tax rate to 50$ per $I,000 gross receipts, with no increase for small businesses; generating approximately $5,600,000 annually until ended by voters, requiring audits, spending disclosure, funds locally controlled? Yes No SECTION 2. That the proposed measure submitted to the voters is attached hereto as Exhibit A. SECTION 3. That the vote requirement for the measures to pass is a majority (50% + 1 ) of the votes cast. SECTION 4. That in all particulars not recited in this resolution, the election shall be held and conducted as provided by law for holding municipal elections. SECTION 5. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law. SECTION 6. That the City Clerk shall certify to the passage and adoption of this resolution. Resolution No. 2026-31 Page 3 of 5 PASSED, APPROVED, AND ADOPTED THIS 22"d DAY OF JULY, 2026. Jo 'tepneri ATTEST: Kimberly Hall Bar'ltiw, City Attorney STATE OF CALIFORNIA ) COUNTY' OF ORANGE ) CITY OF COSTA MESA ) SS 1, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 2026-31 was duly passed and adopted by the City Council of the City of Costa Mesa at the adjourned regular meeting held on the 22nd day of July, 2020, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: GAMEROS, MARR, REYNOLDS, CHAVEZ, AND STEPHENS. NOES: COUNCIL MEMBERS: BULEY AND PETTIS. ABSENT: COUNCIL MEMBERS: NONE. IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 23rd day of July 2026. Resolution No. 2026-31 Page 4 of 5 CITY-SPONSORED INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS The City Council for the City of Costa Mesa submits the following measure to the voters of the City for approval and enactment: The People of Costa Mesa find: (a) The City of Costa Mesa's business license tax was first adopted in 1985, and requires all business to obtain a business license to operate in the City. (b) The purpose of the business license tax is to raise revenue for the City to provide for the public safety services, transportation network such as roads and sidewalks, and other services provided to the businesses within the City. (c) The business license tax is based upon the gross receipts of each business. (d) The maximum business license tax imposed by the City since 1985 is $200, regardless of how much revenue a business earns. (e) Over time, the business license tax cap of $200 has shifted a larger and larger portion of the total business license tax onto smaller businesses, while companies earning millions pay no more than $200. (f) Reform is needed to fairly set the business license tax to protect small businesses from increases, while requiring larger businesses to pay their fair share of taxes for the services they receive. NOW, THEREFORE, THE PEOPLE OF THE CITY OF COSTA MESA DO ORDAIN AS FOLLOWS: SECTION 1. Code Amendment. This ordinance amends the Costa Mesa Municipal Code as follows, and supersedes any provisions that are inconsistent with this ordinance, and shall be known as "The Costa Mesa Fair Business License Reform, Small Business Protection Measure," and shall be referred to herein as the "Measure." SECTION 2. Purpose. The purpose of the Measure is to revise the Costa Mesa Municipal Code to retain the current business license tax for businesses earning $500,000 or less, and update the business license tax to fifty cents per one thousand dollars of gross receipts for businesses with annual gross receipts exceeding $500,000, subject to a maximum annual tax of fiffeen thousand dollars for businesses earning $30 Million dollars or more annually. SECTION 3. Section 9-25 of Chapter 1 of Article 9 of the Costa Mesa Municipal Code is amended to read: Every business not otherwise provided for in this article shall pay a business tax based upon the annual gross receipts of the business according to the following schedule: Total Gross Receipts From To $0 $1,000 $0 [no change] $I,001 $25,000 $25 [no change] $25,001 $40,000 $35 [no change] $40,001 $75,000 $45 [no change] $75,001 $200,000 $60 [no change] $200,001 $500,000 $IOO [no change] $500,001 $1 ,000,000 Rate of $0.50 per $1,000$1 ,000,001 $5,000,000 $5,000,001 $30,000,000 Greater than $30,000,000 Maximum Rate $15,000 SECTION 4. The City Council may, by adoption of an ordinance, decrease the rate or total tax for a particular category or sub-category of business based on its determination that such lower rate or total is warranted by differing economic conditions affecting such businesses, provided, however, that nothing herein shall prohibit re-imposition up to the maximum rate or tax on such businesses by subsequent ordinance. SECTION 5. Inconsistencies. Any provision of the Costa Mesa Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. SECTION 6. Severability. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The People of the City of Costa Mesa hereby declare that they would have adopted this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional, without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 7. Effective Date. This Ordinance shall take effect according to law ten days affer certification of the election at which it is adopted. SECTION 8. Publication. Upon approval by the voters, the City Clerk is directed to certify the passage of this Ordinance and cause it to be published in the manner required by law.