AGENDA
ITEM
25 AGENDA
CALEXICO California ITEM
WHIRL GALILORNIA AND MEXIC MELI
25 CITY COUNCIL
AGENDA STAFF REPORT
DATE: September 16, 2026
TO: Mayor and City Council
Benjamin A. Matinez, City Manager (2m
APPROVED BY:
PREPARED BY: Karla Chaparro, Finance Director Je
SUBJECT: Discussion and Direction Regarding Review and Modernization of the City's Business License Program
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Recommendation:
Discuss the City's existing business license program and provide direction to staff regarding whether to proceed with a comprehensive review and modernization of the program, including review of the existing Municipal Code and development of recommendations for future City Council consideration.
Background:
In June 2026, a City Councilmember requested that the City review its current business license structure and compare it with neighboring jurisdictions. The request was placed on the June 17, 2026 City Council agenda for consideration, at which time the City Council directed that the matter be brought back for further discussion.
Following Council's direction, Finance staff began reviewing the City's existing business license program, including the current rate structure, applicable Municipal Code provisions, and the process that would be required to make changes.
The City's business license requirements and rates are primarily established within Title 5 - Business Licenses and Regulations of the Calexico Municipal Code. The existing provisions include various business classifications and different methods for calculating business license charges depending on the type of business.
As part of its preliminary review, Finance staff recognizes that portions of the existing business license program and Municipal Code are outdated and would benefit from modernization to better reflect current business practices and administrative needs.
Finance staff has also been working with a qualified consultant to develop a proposed scope of work and fee proposal for a broader modernization of the City's business license program. No consultant agreement has been approved or entered into at this time. 1 Discussion and Analysis:
Business License Tax Structure and Municipal Code Requirements Although commonly referred to as a business license "fee," the revenue component of the City's business license program is a business license tax established through the Calexico Municipal Code.
Because the existing tax classifications, methodologies, and rates are established in the Municipal code, changes to the business license tax structure cannot simply be implemented administratively or through an update to a departmental fee schedule. Any changes would require review and amendment of the applicable Municipal Code provisions through the ordinance process.
Depending on the nature of any future proposed changes, additional legal requirements, including potential voter-approval requirements applicable to local taxes, may also need to be considered. Any specific changes would therefore require further analysis and legal review before being presented to the City Council for consideration.
For this reason, staff believes the City would benefit from reviewing and modernizing the business license program as a whole before recommending changes to individual classifications or rates.
Preliminary Review of Neighboring Jurisdictions
As part of its initial review, Finance staff examined publicly available business license information from neighboring jurisdictions, including the Cities of El Centro and Imperial.
The preliminary review indicates that neighboring jurisdictions utilize a variety of business license structures depending on the type of business, including flat-rate charges for certain classifications and charges based on gross receipts or other factors for others.
This information provides useful context as Finance staff continues evaluating the City's existing business license program.
Business License Program Modernization
A broader modernization effort would provide an opportunity to review the existing business license structure, update Municipal Code provisions where appropriate, and evaluate the overall administration of the program.
Finance staff is currently working with a qualified consultant to obtain a proposed scope of work and fee proposal for this effort. At this time, the proposal and associated cost have not been finalized.
Once the proposal is received and reviewed, staff will be in a better position to determine the services being proposed and the appropriate next steps.
No specific business license tax structure, rate changes, or Municipal Code amendments are being recommended as part of this item.
Conclusion:
Staff is requesting City Council direction regarding whether to proceed with the comprehensive review and modernization of the City's business license program. 2 If directed to proceed, Finance staff would continue working with the consultant to obtain and review the proposed scope of work and fee proposal. Staff would return to the City Council, as appropriate, for any required authorization.
Specific recommendations regarding business license rates, classifications, tax methodologies, and Municipal Code amendments would be developed through the review process and brought back to the City Council for future consideration.
Fiscal Impact:
There is no immediate fiscal impact associated with the discussion and direction requested by this item.
The cost of a potential consultant engagement has not yet been determined. If Council directs staff to proceed, the proposed scope, cost, and funding source would be presented to the City Council for any required authorization.
Coordinated With:
City Manager
Attachments):
None.