Business license revenue could help bolster budget
By Daily Press staff
(Editor’s note: This is part of an ongoing series that tracks the city’s expenditures which appear on the upcoming Santa Monica City Council consent agenda. Consent agenda items are routinely passed by the city council with little or no discussion from elected officials or the public. However, many of the items have been part of public discussion in the past).
By Daily Press staff
COUNCIL CHAMBERS — A little more than $400,000 will be spent tonight by the Santa Monica City Council on dump trucks and making improvements to low-income housing.
The bulk of the expenses — $300,000 — will be earmarked for the potential hazards of lead-based paint in residents’ units and to make conventional home repairs like plumbing, roofing and electrical improvements. The money will be given to Comprehensive Housing Services, which will administer the program, with a maximum of $60,000 in administrative fees, through June 30.
Another $129,564 will be spent on two new compressed natural gas trucks for the open space management division and the community and cultural services department to haul dirt and grass for landscaping.
The City Council will consider spending an unknown amount of money if it enters into an agreement with a company that would audit businesses in town to see if they have proper business licenses. The company would operate on a contingency basis — the first year it would be paid 30 percent of the revenues recovered, 35 percent the following year and 40 percent the third year.
Business license revenue for the city is substantial — City Hall annually issues about 20,000 business licenses, generating nearly $18 million for the city. But there are plenty of merchants in Santa Monica that operate without a license.
“Given the uncertain budget situation in the city, it is now more important than ever that the city take steps to discover these businesses and recover all revenues to which it’s entitled,” city staff wrote.
The company that would perform the audit services is MBIA MuniServices, which currently provides City Hall with audit services for utility tax users. The agreement would include both discovery and audit services. Discovery is designed to identify businesses subject to taxation that are not properly licensed and are not reporting fees to the city. Audit services are designed to identify businesses that are not properly reporting the full amount to which they are subject.
City Hall hasn’t done any audits of business licenses since 1991.
Originally published in the Santa Monica Daily Press print edition on December 9, 2003. Read the original PDF.