Agenda packet, first session — Los Gatos City Council, August 2, 2022 (part 2 of 2)

COUNCIL POLICY MANUAL
TITLE: Commission Appointments, Residency and
Attendance Requirements, and Establishing a Quorum
POLICY NUMBER: 2-11
EFFECTIVE DATE: 2/28/1990 PAGES: 7
ENABLING ACTIONS: REVISED DATES: 6/13/1994; 6/16/2014;
4/7/2015; 10/18/2016; 2/21/2017;
2/6/2018; 3/19/19; 9/3/2019; 6/1/2021;
12/7/21, 3/15/22
APPROVED:

PURPOSE
To establish a policy to encourage participation by the Town’s residents on Town Boards, Commissions and Committees (hereinafter referred to as "Commissions"). The Town of Los Gatos is committed to inclusivity. We value all our community members, regardless of religion, immigration status, ethnicity, race, disability, gender, sexual orientation, or gender identity. The Town will encourage residents to participate on Commissions by advertising vacancies on Commissions for at least 30 days, preparing easily understood applications, maintaining clear descriptions of the role of each Board, Commission, and Committee and its respective members, providing current meeting schedules, and conducting public interviews of all Commission applicants, except as provided by this Policy.

SCOPE
This Policy applies to all applicants to Town Boards, Commissions and Committees.

POLICY
The Town Council encourages public participation in all decision-making and to be successful residents must be assured both that the participation is meaningful and that their input will be valued. The widest representation from the community can only be achieved if vacancies are well advertised so that anyone interested will have the opportunity to apply.

Interviews of the applicants conducted in public by the Town Council demonstrates that it values these appointments and that all have an equal opportunity to be appointed.

Applicants may apply to more than one Commission, and shall rank their choices in their preferred order, during each recruitment cycle.

Small Town Service Community Stewardship Future Focus
ATTACHMENT 2

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To ensure the greatest possible participation by the public, it is the Town's policy that no person shall be appointed to more than one Commission except in those cases where they are ex-officio members of other Boards, Commissions and Committees. This Policy does not apply to Commission members serving as representatives of their Commission who have been appointed by the Town Council.

RESIDENCY REQUIREMENTS
Residency within the incorporated municipal limits of the Town of Los Gatos, California is required for appointment and continued membership on all Town of Los Gatos Boards, Commissions, and Committees, with the exception of the Youth Commission.

Youth Commission:

The members shall be students who are entering grades 8 through 12 in the fall.

Membership for the students requires either residency in the incorporated limits of the Town of Los Gatos or residency in the unincorporated areas of the County of Santa Clara, which have a Los Gatos mailing address.

ATTENDANCE REQUIREMENTS

1. All members of all appointive Town Advisory Bodies should attend all regular and special meetings of said Advisory Bodies.

2. Any member not in attendance at a regular meeting of said Advisory Body for at least 70% of the meeting shall be considered absent.

3. Any member of an appointive Town Advisory Body who is absent from the number of regular meetings listed below appropriate to his or her Advisory Body shall, as a result, surrender his or her office on the Advisory Body and the office shall be considered vacant.
a. For an Advisory Body which holds six (6) or more regular meetings per a consecutive twelve (12) month period: three (3) regular meetings. b. For an Advisory Body which holds five (5) or fewer regular meetings per a consecutive twelve (12) month period: two (2) regular meetings. c. For an Advisory Body which holds sixteen (16) or more regular meetings per a consecutive twelve (12) month period: eight (8) regular meetings.

4. The vacant position shall be filled by appointment by a majority vote of the Town Council, for a term equal to the unexpired portion of the office vacated. Any member removed from office due to non-attendance may re-apply to serve on a Town Advisory Body but will not be treated as an incumbent in any subsequent application to the same Advisory Body.

5. If a Youth Commissioner liaison misses three meetings of a liaison Commission during a *consecutive twelve (12) month period, the Youth Commission shall appoint a different Youth Commissioner as liaison.

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*Consecutive twelve (12) month period is defined as any consecutive twelve-month period beginning with the first absence. A regular meeting shall not be cancelled and replaced with a special meeting in order to alleviate an absence by an advisory body member.

QUORUM REQUIREMENTS
The number of members needed to constitute a quorum on any Town Advisory Body shall be a majority of the total number of filled seats.

PROCEDURES
The following procedures will be followed by the applicant, the Town Clerk, and the Town Council for the appointment of applicants to Town Commissions:

Responsibility and Actions: Town Clerk
A. Annual Recruitments
Adult Commission members' terms begin on January 1st and end December 31st, Youth Commissioners’ terms follow the academic year and begin on August 1st and end on June 30th.

The Town Clerk shall perform the following duties in conducting an annual recruitment for Commission members:

1. Notify Town Council of vacancies on Commissions by indicating the names of the Commissions, the number of terms expiring or being vacated, names of individual(s) with expiring terms or vacating seats, advertising periods (at least 30 days) and the date of interview.

2. Advertise the vacancies, including the application deadline and the interview date.

Interviews and appointments for Adult Commissioners shall occur after annual Mayor and Vice Mayor selection, and in the case of election years, after new Council Members have been seated. Interviews and appointments for Youth Commissioners shall occur by the fourth Wednesday in May, no earlier than 4:00 p.m.

3. Prepare and maintain easily understood applications for appointment to Commissions.

Applications shall include the following policy information:
a. Prior to initial appointment to any Commission, non-incumbent applicants must be interviewed by the Town Council. The applications of those not appearing will be held for the next recruitment.
b. If an incumbent Commissioner is requesting reappointment to the same Commission, the incumbent may submit a request to be interviewed by telephone, with their application, instead of attending the interview or must submit a letter prior to the interviews, describing the reason why the applicant cannot be present telephonically or in person for the interview, and why the applicant should be reappointed to the Commission.
c. Submissions deadlines are mandatory; no exceptions are permitted.

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4. Applications:
a. For adult applicants — Accept applications, verify eligibility, and distribute copies of the applications of eligible applicants to the Town Council prior to the interviews for appointment.
b. For student applicants — Accept applications, verify eligibility, and distribute copies of the applications of eligible applicants to the Town Council Selection Committee, consisting of the Mayor, Vice Mayor, Police Chief, and Youth Commission Chair (if not reapplying), prior to the interviews for appointment.

5. Notify the applicant by letter or email as to the date and time of the interview and provide the option for an in person or teleconference interview.

6. Facilitate the Council voting process set forth below by informing Council as to how many votes are possible on each Commission, calling out applicants' names, and identifying the applicants receiving sufficient votes for appointment. This process does not apply to student applicants.

7. Applicants:
a. For adult applicants — After the interviews and Council vote are completed, notify all applicants of the Council's action, and explain Town policy of keeping application active for one year with notification of subsequent openings on that Commission to the interested applicants. b. For student applicants — After the interviews are completed, notify all applicants of the Council Committee's action, and prepare a staff report for the Town Council to ratify the Committee's appointment at the first Town Council meeting in June.

Interview Process
To ensure the interview process is consistent, fair, and equitable, each applicant shall be asked the same standard questions, as provided below. Notwithstanding, no Council Member shall be prevented from asking appropriate questions of applicants.

1. If appointed, what ideas would you like to see the Commission explore?

2. Please expand beyond the written response on your application: your experience, interest, and/or expertise that you feel would be most useful to the Commission.

3. Please elaborate on any written response provided in the application to assist the Council learn more about you.

4. If you did not answer any of the questions on the application, please explain why.

Given that most interviews are only three to approximately five minutes due to the size of the applicant pool, the standard questions are limited in number to allow an applicant sufficient time to respond. While the intent is for each Council Member to be able to ask one question of each applicant, tThe Council may decide or may not to ask all of the provided questions, change, in the same the order of the questions, or rotate which by the same Council member asks a specific question. Interview questions will be reviewed annually by the Town Council in advance of the interview process for any potential modifications.

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Balloting Process
Unless determined otherwise, the Council shall conduct a ballot vote for the appointment of individuals to fill the vacancies for each Commission. Such ballot vote may be conducted at either a regular, adjourned, or special meeting of the Town Council. The ballot vote process shall be conducted as follows:

1. The Town Clerk shall provide a ballot to each Town Council member listing the names of all applicants and “None of the above” for each respective Commission. Prior to the vote, the Town Clerk shall publicly announce the position vacancy and all applicant names that are listed on the ballot.

2. Each Council member may vote for the same number of applicants as there are current vacancies on the respective Commission. In no case, can a Council Member cast more votes than there are vacancies; or vote for the same candidate more than once on each ballot (i.e. cumulative voting -- e.g. where there are three vacancies, a Council member may not give all three votes to the same candidate). A Council Member is not required to vote for any of the candidates or for the total number of vacancies available.

3. The Town Clerk shall collect all ballots and shall publicly announce the name of each Town Council member and how that Council member cast his or her vote. In the case of a tie vote, the Town Clerk will announce that there is a tie and that a run-off vote shall be conducted but will not announce the names of the applicants in the run-off. Once all voting is concluded and a decision made, the votes will be made public. The run-off ballot will also include a “None of the above” option.

4. Applicants receiving a majority number of votes shall be deemed appointed to the Commission. In the event of a tie, a run-off vote shall be conducted among the applicants receiving the highest number of votes from the previous round. This shall continue until a majority consensus on an applicant(s) is reached for the number of vacancies to be filled. In the event of an unbreakable tie, the Council may determine an alternative method for selecting the appointee(s) or direct the Town Clerk to re-advertise the vacancy.

5. If an applicant(s) is appointed to an Advisory Body which has vacancies for both full and partial, unexpired terms, the length of the appointee’s term will be determined by the Mayor.

B. Mid-Term Recruitments
During the year, Commissions may experience vacancies that drop the number of filled seats to a number of members that is not sufficient to conduct Commission business. The Commission may request the Council to conduct a mid-term recruitment to fill seats. To the extent possible, the Town Clerk will consolidate mid-term recruitments to minimize the number of recruitments occurring throughout the year. In the event of a vacancy on the Planning Commission, the Town will automatically conduct a mid-term recruitment. Midterm recruitments will not be conducted for Youth Commissioners. The Town Clerk shall advertise mid-term vacancies on Commissions for at least 15 days.

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Responsibility and Action: Applicant

1. Read the Commission Appointments, Residency and Attendance Requirements, and Establishing a Quorum Policy, complete and submit to the Town Clerk the application for appointment to a Town Commission by the advertised deadline date and time.

2. For adult applicants: Attend the Council meeting to be interviewed for Commission appointment. The applicant is required to notify the Town Clerk no later than 4:00 p.m. the Friday before the scheduled interview date whether they will attend in person or via teleconference.

3. For student applicants: Attend the Council Selection Committee interview session. The applicant is required to notify the Town Clerk no later than 4:00 p.m. the Friday before the scheduled interview date whether they will attend in person or via teleconference.

4. If an incumbent Commission member is requesting reappointment to the same Commission and is not available on the date of the interview, the incumbent must submit a letter by 4:00 p.m. the Friday prior to the interviews, describing the reason why the applicant cannot be present telephonically or in person for the interview, and why the applicant should be reappointed to the Commission.

5. If appointed, prior to starting the Commission term, appointees are required to attend a Commissioner Orientation and take the "Oath of Office."

6. Attend Advisory Body meetings once term begins.

7. Read the Commissioners’ Handbook. Hard copies of the Handbook are to be returned to the Town Clerk when the term is complete.

Responsibility and Action: Town Council

1. Review applications.

2. For adult applicants – Interview applicants individually by Commission at a public meeting with all applicants present.

For student applicants – Town Council Selection Committee interviews applicants.

3. Determine if the incumbents not in attendance and having submitted a letter pursuant to this Policy should be considered for reappointment.

4. If there are limited applications for any vacancy to a Commission, the Mayor, on behalf of the Council, may request that the Town Clerk re-advertise the vacancy, reschedule the interviews, and notify all applicants of the new interview date.

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COMPLIANCE - GROUNDS FOR DISMISSAL
A member may be removed from the Advisory Body prior to the end of his or her term by a three-fifths (3/5) vote of the Town Council and may not be reappointed for the following reasons:

1. Failure to attend Advisory Body meetings.

2. Failure to file the following documents required by the Fair Political Practices Commission (Adult Commissioners):
a. Form 700 – Assuming Office, Annual, and Leaving Office when term is complete. b. Planning Commissioners are also required to complete AB 1234 Ethics Training and file the original certificate with the Town Clerk every two years.

3. Failure to comply with all Town Policies, Guidelines, and Handbooks.

CONFLICT OF INTEREST
Under the Fair Political Practice Act, an advisory board member has a disqualifying conflict of interest in a governmental decision if it is foreseeable that the decision will have a financial impact on his or her personal finances or other financial interests. In such cases, there is a risk of biased decision-making that could sacrifice the public’s interest in favor of the official’s private financial interests. To avoid actual bias or the appearance of possible improprieties, the public official is prohibited from participating in the decision.

The Fair Political Practice Act does not prohibit an advisory board member from participating in a decision simply by virtue of holding a position as a board member, director, officer, or employment with a nonprofit corporation. However, the Town strongly encourages that in the event that a decision concerns a nonprofit corporation for which an advisory board member is a board member, director, officer, or employed with that nonprofit corporation, the person should recuse him or herself and at a minimum shall disclose the potential conflict of interest before any discussion and decision.

APPROVED AS TO FORM:
________
Gabrielle Whelan, Town Attorney

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SCOPE
This Policy applies to all applicants to Town Boards, Commissions and Committees.

Interviews of the applicants conducted in public by the Town Council demonstrates that it values these appointments and that all have an equal opportunity to be appointed.

Applicants may apply to more than one Commission, and shall rank their choices in their preferred order, during each recruitment cycle.

Small Town Service Community Stewardship Future Focus
ATTACHMENT 3

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Youth Commission:

The members shall be students who are entering grades 8 through 12 in the fall.

ATTENDANCE REQUIREMENTS

1. All members of all appointive Town Advisory Bodies should attend all regular and special meetings of said Advisory Bodies.

2. Any member not in attendance at a regular meeting of said Advisory Body for at least 70% of the meeting shall be considered absent.

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QUORUM REQUIREMENTS
The number of members needed to constitute a quorum on any Town Advisory Body shall be a majority of the total number of filled seats.

PROCEDURES
The following procedures will be followed by the applicant, the Town Clerk, and the Town Council for the appointment of applicants to Town Commissions:

The Town Clerk shall perform the following duties in conducting an annual recruitment for Commission members:

2. Advertise the vacancies, including the application deadline and the interview date.

3. Prepare and maintain easily understood applications for appointment to Commissions.

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5. Notify the applicant by letter or email as to the date and time of the interview and provide the option for an in person or teleconference interview.

1. If appointed, what ideas would you like to see the Commission explore?

2. Please expand beyond the written response on your application: your experience, interest, and/or expertise that you feel would be most useful to the Commission.

3. Please elaborate on any written response provided in the application to assist the Council learn more about you.

4. If you did not answer any of the questions on the application, please explain why.

Given that most interviews are only three to five minutes due to the size of the applicant pool, tThe standard questions are limited in number to allow an applicant sufficient time to respond.

While the intent is for each Council Member to be able to ask one question of each applicant, tThe Council may decide or may not to ask all of the provided questions, change, in the same the order of the questions, or rotate which by the same Council member asks a specific question. Interview questions will be reviewed annually by the Town Council in advance of the interview process for any potential modifications.

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5. If an applicant(s) is appointed to an Advisory Body which has vacancies for both full and partial, unexpired terms, the length of the appointee’s term will be determined by the Mayor.

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Responsibility and Action: Applicant

5. If appointed, prior to starting the Commission term, appointees are required to attend a Commissioner Orientation and take the "Oath of Office."

6. Attend Advisory Body meetings once term begins.

7. Read the Commissioners’ Handbook. Hard copies of the Handbook are to be returned to the Town Clerk when the term is complete.

Responsibility and Action: Town Council

1. Review applications.

2. For adult applicants – Interview applicants individually by Commission at a public meeting with all applicants present.

For student applicants – Town Council Selection Committee interviews applicants.

3. Determine if the incumbents not in attendance and having submitted a letter pursuant to this Policy should be considered for reappointment.

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1. Failure to attend Advisory Body meetings.

3. Failure to comply with all Town Policies, Guidelines, and Handbooks.

APPROVED AS TO FORM:
________
Gabrielle Whelan, Town Attorney

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SCOPE
This Policy applies to all applicants to Town Boards, Commissions and Committees.

Interviews of the applicants conducted in public by the Town Council demonstrates that it values these appointments and that all have an equal opportunity to be appointed.

Applicants may apply to more than one Commission, and shall rank their choices in their preferred order, during each recruitment cycle.

Small Town Service Community Stewardship Future Focus
ATTACHMENT 4

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Youth Commission:

The members shall be students who are entering grades 8 through 12 in the fall.

ATTENDANCE REQUIREMENTS

1. All members of all appointive Town Advisory Bodies should attend all regular and special meetings of said Advisory Bodies.

2. Any member not in attendance at a regular meeting of said Advisory Body for at least 70% of the meeting shall be considered absent.

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QUORUM REQUIREMENTS
The number of members needed to constitute a quorum on any Town Advisory Body shall be a majority of the total number of filled seats.

PROCEDURES
The following procedures will be followed by the applicant, the Town Clerk, and the Town Council for the appointment of applicants to Town Commissions:

The Town Clerk shall perform the following duties in conducting an annual recruitment for Commission members:

2. Advertise the vacancies, including the application deadline and the interview date.

3. Prepare and maintain easily understood applications for appointment to Commissions.

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5. Notify the applicant by letter or email as to the date and time of the interview and provide the option for an in person or teleconference interview.

1. If appointed, what ideas would you like to see the Commission explore?

2. Please expand beyond the written response on your application: your experience, interest, and/or expertise that you feel would be most useful to the Commission.

3. Please elaborate on any written response provided in the application to assist the Council learn more about you.

4. If you did not answer any of the questions on the application, please explain why.

Interviews occur at a consistent time of 4 p.m. Given that most interviews are only three to five minutes due to the size of the applicant pool, tThe standard questions are limited in number to allow an applicant sufficient time to respond. While the intent is for each Council Member to be able to ask one question of each applicant, tThe Council may decide or may not to ask all of the provided questions, change, in the same the order of the questions, or rotate which by the same Council member asks a specific question. Interview questions will be reviewed annually by the Town Council in advance of the interview process for any potential modifications.

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5. If an applicant(s) is appointed to an Advisory Body which has vacancies for both full and partial, unexpired terms, the length of the appointee’s term will be determined by the Mayor.

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Responsibility and Action: Applicant

5. If appointed, prior to starting the Commission term, appointees are required to attend a Commissioner Orientation and take the "Oath of Office."

6. Attend Advisory Body meetings once term begins.

7. Read the Commissioners’ Handbook. Hard copies of the Handbook are to be returned to the Town Clerk when the term is complete.

Responsibility and Action: Town Council

1. Review applications.

2. For adult applicants – Interview applicants individually by Commission at a public meeting with all applicants present.

For student applicants – Town Council Selection Committee interviews applicants.

3. Determine if the incumbents not in attendance and having submitted a letter pursuant to this Policy should be considered for reappointment.

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Attendance Requirements, and Establishing a Quorum
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1. Failure to attend Advisory Body meetings.

3. Failure to comply with all Town Policies, Guidelines, and Handbooks.

APPROVED AS TO FORM:
________
Gabrielle Whelan, Town Attorney

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SCOPE
This Policy applies to all applicants to Town Boards, Commissions and Committees.

Interviews of the applicants conducted in public by the Town Council demonstrates that it values these appointments and that all have an equal opportunity to be appointed.

Applicants may apply to more than one Commission, and shall rank their choices in their preferred order, during each recruitment cycle.

Small Town Service Community Stewardship Future Focus
ATTACHMENT 5

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Youth Commission:

The members shall be students who are entering grades 8 through 12 in the fall.

ATTENDANCE REQUIREMENTS

1. All members of all appointive Town Advisory Bodies should attend all regular and special meetings of said Advisory Bodies.

2. Any member not in attendance at a regular meeting of said Advisory Body for at least 70% of the meeting shall be considered absent.

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QUORUM REQUIREMENTS
The number of members needed to constitute a quorum on any Town Advisory Body shall be a majority of the total number of filled seats.

PROCEDURES
The following procedures will be followed by the applicant, the Town Clerk, and the Town Council for the appointment of applicants to Town Commissions:

The Town Clerk shall perform the following duties in conducting an annual recruitment for Commission members:

2. Advertise the vacancies, including the application deadline and the interview date.

3. Prepare and maintain easily understood applications for appointment to Commissions.

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5. Notify the applicant by letter or email as to the date and time of the interview and provide the option for an in person or teleconference interview.

1. If appointed, what ideas would you like to see the Commission explore?

2. Please expand beyond the written response on your application: your experience, interest, and/or expertise that you feel would be most useful to the Commission.

3. Please elaborate on any written response provided in the application to assist the Council learn more about you.

4. If you did not answer any of the questions on the application, please explain why.

Given that most interviews are only three toThe interviews are scheduled for a minimum of five minutes per applicant. dDue to the size of the applicant pool, the standard questions are limited in number to allow an applicant sufficient time to respond. While the intent is for each Council Member to be able to ask one question of each applicant, tThe Council may decide or may not to ask all of the provided questions, change, in the same the order of the questions, or rotate which by the same Council member asks a specific question. Interview questions will be

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reviewed annually by the Town Council in advance of the interview process for any potential modifications.

Balloting Process
Unless determined otherwise, the Council shall conduct a ballot vote for the appointment of individuals to fill the vacancies for each Commission. Such ballot vote may be conducted at either a regular, adjourned, or special meeting of the Town Council. The ballot vote process shall be conducted as follows:

5. If an applicant(s) is appointed to an Advisory Body which has vacancies for both full and partial, unexpired terms, the length of the appointee’s term will be determined by the Mayor.

B. Mid-Term Recruitments
During the year, Commissions may experience vacancies that drop the number of filled seats to a number of members that is not sufficient to conduct Commission business. The Commission may request the Council to conduct a mid-term recruitment to fill seats. To the extent possible, the Town Clerk will consolidate mid-term recruitments to minimize the number of recruitments occurring throughout the year. In the event of a vacancy on the Planning Commission, the Town will automatically conduct a mid-term recruitment. MidPage 176 TITLE: Commission Appointments, Residency and
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term recruitments will not be conducted for Youth Commissioners. The Town Clerk shall advertise mid-term vacancies on Commissions for at least 15 days.

Responsibility and Action: Applicant

5. If appointed, prior to starting the Commission term, appointees are required to attend a Commissioner Orientation and take the "Oath of Office."

6. Attend Advisory Body meetings once term begins.

7. Read the Commissioners’ Handbook. Hard copies of the Handbook are to be returned to the Town Clerk when the term is complete.

Responsibility and Action: Town Council

1. Review applications.

2. For adult applicants – Interview applicants individually by Commission at a public meeting with all applicants present.

For student applicants – Town Council Selection Committee interviews applicants.

3. Determine if the incumbents not in attendance and having submitted a letter pursuant to this Policy should be considered for reappointment.

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1. Failure to attend Advisory Body meetings.

3. Failure to comply with all Town Policies, Guidelines, and Handbooks.

APPROVED AS TO FORM:
________
Gabrielle Whelan, Town Attorney

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PREPARED BY: Arn Andrews Holly Young
Assistant Town Manager Town Manager Administrative Analyst Reviewed by: Town Manager, Town Attorney, and Interim Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 08/02/2022
ITEM NO: 18
DATE: July 29, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution of the Council of the Town of Los Gatos for Model 3, Calling a Municipal Election for November 8, 2022, Requesting that the County Consolidate the Municipal Election with the General Election on November 8, 2022, and Submitting to the Qualified Electors of the Town at the November 8, 2022 Consolidated General Election a Measure to Amend Chapter 14 of the Los Gatos Town Code Relating to Business License Taxes RECOMMENDATION:

Adopt a Resolution of the Council of the Town of Los Gatos for Model 3, calling a municipal election for November 8, 2022, requesting that the County consolidate the municipal election with the general election on November 8, 2022, and submitting to the qualified electors of the Town at the November 8, 2022 consolidated general election a measure to amend Chapter 14 – Licenses and Miscellaneous Business Regulations (Chapter 14) of the Los Gatos Town Code relating to business license taxes.

BACKGROUND:

On September 13, 2021, the Town Finance Commission reviewed the Town’s Business License Tax Program and recommended that the Town Council authorize the Town Manager to issue a Request for Proposal (RFP) for consultant services to evaluate and recommend modernization options for the Town’s Business License Tax Program. The Business License Tax supports all municipal services that are enjoyed by the businesses, including but not limited to streets, other infrastructure, and public safety.

On October 19, 2021, the Town Council received the Finance Commission recommendation and directed staff to engage a consultant to review the Town's 1991 Business Tax Ordinance and recommend options for modernizing the Ordinance.

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PAGE 2 OF 8
SUBJECT: Business License Modernization
DATE: July 27, 2022
BACKGROUND (continued):

On December 17, 2021, the Town issued an RFP for Business License Tax consulting services.

Hinderliter, deLlamas & Associates (HdL) Companies was selected given their significant experience in business license review and analysis, including having performed dozens of tax study and modernization programs in California.

HdL submitted their Business License Analysis and Ordinance Review (Report) to the Town on June 8, 2022.

On June 13, 2022, the Finance Commission discussed the HdL Report and voted unanimously to move forward to continue research and public outreach on business license tax modernization.

On June 21, 2022, the Town Council unanimously directed staff to continue conducting research and public outreach and prepare options for proposed ballot measure language for Council consideration on August 2, 2022.

DISCUSSION:

Per Council direction, staff has been coordinating extensive business outreach and working with HdL to refine potential business license modernization models. Following are summaries of both efforts:

Business Outreach
The Town set up a dedicated webpage at www.LosGatosCA.gov/BLModernization with information regarding the current business license tax program, background on modernizing the tax, discussions to date, the options being considered, and the timeline for a ballot measure. The Town also set up a unique email address of [email protected] for public comment and received several communications on this topic from a variety of businesses (see Attachment 1).

The Town hosted a community workshop on July 25, 2022 at 7:00 p.m. via teleconference. The Town publicized the potential business license modernization ballot measure and the July 25 informational workshop via the Town website homepage, weekly Newsletter, multiple posts on the Town’s official social media accounts (Nextdoor, Facebook, Instagram, Twitter, and LinkedIn), and a postcard mailing. The postcard went out to every business the Town has on file and was mailed to a total of 5,167 valid business addresses with receipt occurring between July 15 and 21.

The community meeting provided an opportunity for Town residents and businesses to learn more about the potential business license modernization, discuss each of the proposed options

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PAGE 3 OF 8
SUBJECT: Business License Modernization
DATE: July 27, 2022
DISCUSSION (continued):
under consideration, ask questions, and provide feedback. The materials from the webinar are available at www.LosGatosCA.gov/BLModernization. Though lightly attended, the community answered a series of Zoom poll questions following the initial staff presentation:
 75% felt the Town should update the business license tax.  100% felt the Town business license program should be equitable.  100% preferred the proposed Model 3.

After further discussion and a question and answer session, the poll was launched again with an additional participant and the following results:
 60% felt the Town should update the business license tax.  100% felt the Town business license program should be equitable.  20% preferred the proposed Model 1 and 80% preferred the proposed Model 3.

In addition to the community meeting and other outreach efforts, staff sent emails directly to the five largest businesses discussed within Model 3 and also had separate discussions with community stakeholders including the Los Gatos Chamber of Commerce and Netflix.

Analysis of Potential Models
Model 1 – Would retain the existing structure while modifying the tax amounts for each category by 20%. The drawback of Model 1 is that the tax remains regressive. In fact, because it would increase the flat fees, it becomes more regressive. In addition, since 1991, inflation has risen approximately 117% or five times as much as the recommended increase. The advantage of this model is that the increases for each business type are minimal. This Model would increase revenues approximately $255,000 annually primarily from the Services category ($101,000).

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PAGE 4 OF 8
SUBJECT: Business License Modernization
DATE: July 27, 2022
DISCUSSION (continued):

Model 2 – Introduces the concept of converting the Town tax to a gross-receipts model for all businesses. This means that every business would pay based on their gross receipts, utilizing different single rates for five different business classifications. This Model also lowered the annual base rate to a uniform $25 flat rate for the first $25,000 to provide some additional tax relief for smaller businesses. This model affords the most flexibility for increasing revenues while accommodating certain business categories with differing rates. This Model would increase revenues approximately $2,861,000 annually primarily from the Services category ($2,321,000).

Categories Base Rate Gross Receipts Tax Rate
General Commerce/Retail
$25 Flat Rate per Business
(first $25,000 in Gross)

0.0005 X Gross
Services 0.001 X Gross
Contractor 0.001 X Gross
Professional 0.002 X Gross
Rental Commercial/Residential 0.002 X Gross
Model 3 - Maintains the existing gross-receipts structure for Manufacturing, Wholesaling, and Jobbing except for updating the rate of $75.00 for each $550,000 more than $12,000,000 to $300 for each $550,000 more than $12,000,000. For purposes of this schedule, Manufacturing refers to any manufacturing or processing of goods, wares, merchandise, articles, or commodities. Wholesaling refers to the sale of goods, wares, or merchandise for the purpose of resale. Jobbing is the business of selling goods, wares, or merchandise to wholesale

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PAGE 5 OF 8
SUBJECT: Business License Modernization
DATE: July 27, 2022
DISCUSSION (continued):
merchants for resale at wholesale. This model also includes the E-commerce category which includes commercial transactions conducted electronically on the internet.

This model would have the least change to the existing structure, only impacting businesses with gross receipts above $12,000,000, while helping to offset some of the inequities associated with the lower effective tax rates of larger businesses presented earlier. This Model would increase revenues approximately $1,100,000 annually.

Finance Commission Alternative Model
On July 28, 2022, the Finance Commission held a Special Meeting to discuss the results of community outreach and business feedback and the three models under consideration. At the conclusion of their discussion, the three resident Commission members present voted to provide the Town Council with an alternative Model. The proposed Model is an enhanced version of Model 1. The Commission Model would increase all flat fees and the gross receipts tax schedules for E-Commerce, Manufacturing, Wholesaling, and Jobbing and Retailing 100% to account for inflation. In addition, the Commission expanded the Retailing gross receipts table to include two additional payment levels above the current $2,000,000 (and above) threshold.

The following table illustrates the additional payment levels.

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PAGE 6 OF 8
SUBJECT: Business License Modernization
DATE: July 27, 2022
DISCUSSION (continued):

At Least But Less Than Tax
$1,900,000 $4,000,000 $1,950
$4,000,000 $8,000,000 $3,900
$8,000,000 $16,000,000
(and above)
$7,800
Like Model 1, the drawback of this Model is that the tax remains regressive. This model would make up most of the inflation since 1991. This Model would increase revenues approximately $1,600,000.

Ballot Initiative Process
A ballot measure to modernize the Business License Tax requires a 4/5 vote of the Town Council to place it on the ballot. A General Tax can be expended on any program, service, or capital need at the discretion of the local government's governing body. A simple majority vote (50 percent of voters plus one additional voter) is required for approval of a general tax.

A resolution with corresponding ballot language and its draft ordinance have been prepared for each of the three models. For Model 1, see Attachment 2; for Model 2, see Attachment 3; and for Model 3, see Attachment 4. If the Council decides to move forward with one of the models, then the Council should adopt the resolution it would like, which would submit the Council's ballot measure to voters at the November 8, 2022 regular municipal election. Provided below is the ballot language for the three models.

Model 1
Shall the measure to fund critical Town needs such as public safety by imposing a 20% increase to all flat fees and the gross receipts tax schedules for E-Commerce, Manufacturing, Wholesaling, and Jobbing and Retailing , raising about $255,000 yearly for general fund purposes until ended by voters, and which have not been increased since 1991, be adopted?
YES
NO

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PAGE 7 OF 8
SUBJECT: Business License Modernization
DATE: July 27, 2022
DISCUSSION (continued):

Model 2
Shall the measure to fund critical Town needs such as public safety by incorporating gross receipts reporting for all businesses at rates between $0.50 and $2.00 per $1,000 after a $25.00 flat fee for the first $25,000 in gross receipts, replacing the existing regressive taxing system of flat fees and gross receipts, raising $2.3 million yearly for general fund purposes until ended by voters, and increasing equity among small, medium and larger businesses, be adopted?
YES
NO
Model 3
Shall the measure to fund critical Town needs such as public safety by amending the gross receipts tax schedule for E-Commerce, Manufacturing, Wholesaling, and Jobbing for businesses with gross receipts above $12,000,000 from $75 per each $550,000 in excess of $12.0 million to $300 per each $550,000 in excess of $12.0 million, raising about $1.0 million yearly for general fund purposes until ended by voters, and increasing equity , be adopted?
YES
NO
Should the Town Council choose to pursue a ballot measure, final approval including the ballot measure language will need to be submitted to the Santa Clara County Registrar of Voters by August 12, 2022. Provided below are ballot measure milestone dates:
 August 12, 2022: Last day for Resolutions calling a measure  August 12, 2022: Deadline for submitting primary arguments in favor of or against a measure
 August 17, 2022: Last day to amend or withdraw a measure  August 19, 2022: Town Attorney submits impartial analysis to the Town Clerk  August 19, 2022: Deadline for submitting rebuttal arguments to primary arguments in favor of and against a measure.

The proposed resolutions authorize the Mayor, or his designee(s), to prepare a written argument in favor of the proposed measure on behalf of the Town Council. At the Mayor’s discretion, the Argument may also be signed by bona fide associations or by individual voters eligible to vote in Los Gatos.

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PAGE 8 OF 8
SUBJECT: Business License Modernization
DATE: July 27, 2022
CONCLUSION:

Based on business and community feedback to date staff recommends that the Town Council adopt the resolution for Model 3 and call a municipal election for November 8, 2022, requesting that the County consolidate the municipal election with the general election on November 8, 2022 and submitting to the qualified electors of the Town at the November 8, 2022 consolidated general election a measure to amend Chapter 14 of the Los Gatos Town Code.

COORDINATION:

This staff report was coordinated with the Town Manager, Town Attorney, and Finance Director.

FISCAL IMPACT:

If approved by voters in November, the estimated additional revenue generated by the three models is between approximately $255,000 and $2,800,000 annually. These funds would be locally generated and therefore be safe from seizure by the State. In addition, they would enable the Town to invest in services and infrastructure that the community values. The cost of the ballot measure is approximately $59,000 and incorporated in the FY 2022/23 adopted budget.

ENVIRONMENTAL ASSESSMENT:

In accordance with CEQA Guidelines Section 15378(b)(4), placement of a ballot measure on the ballot to amend the Town's business license tax is not a project subject to CEQA, because it is a government fiscal activity.

Attachments:

1. Public Comment

2. Model 1 Resolution with corresponding Ordinance as Attachment A

3. Model 2 Resolution with corresponding Ordinance as Attachment A

4. Model 3 Resolution with corresponding Ordinance as Attachment A

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ATTACHMENT 1
Dear Town Council:

I have three comments regarding your proposed Models for the Business License Modernization program.
1) If you charge smaller businesses what they perceive to be too much or considerably more than they have been paying, some may decide not to get a business license. Especially small Mom and Pop and home based businesses. You will chase them undercover and then lose that revenue. New businesses may decide to go elsewhere. You must make Los Gatos business friendly and welcoming. 2) Locate and require at home businesses to have a business license. Many people now work from home, yet have no license.
3) Basing a license fee on gross receipts is unfair because the fee is based on overall sales receipts, not the profit made.

Example: A Ferrari dealer sells expensive cars and a used car dealer sells inexpensive cars. The Ferrari dealer could sell a few cars and have a large gross receipts record. The used car dealer could sell a lot of cars, have a higher overall profit, but a much lower gross receipts total, thus pay less for a business license than the Ferrari dealer. If you base the license fee on gross receipts, you could potentially be penalizing the person that sells more expensive products than someone who sells less expensive products.

Thank you for asking for feedback.

Sincerely,
Dennis Grist
Grist Construction
Hello:

I am a small business owner so the potential changes to fix the regressive tax structure is welcome. My concern as a citizen of Los Gatos is that ramping up the tax on large businesses, like Netflix, should be considered very carefully and not be too aggressive. The whole dollar amount contributed by Netflix and other large organizations, regardless of the tax rate in terms of percentage, I would imagine makes up a material portion of the cash coming into the Town of Los Gatos to support the many programs, services, and infrastructure.

Said more simply, don't scare away or anger the big tax contributors with a material increase in tax rates. As evidenced by many large companies in the Bay Area over the past few years, they will take action and move to TX or FL, or some other tax-friendly jurisdiction.

Kind regards,
Casey Pittock

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ATTACHMENT 1
I am not in favor of raising the business license tax. If you must do this Model 4 would be preferred. I am a small business with fluctuating revenues which make financial planning difficult. Raising the BL tax based on gross receipts would cause me great financial harm as ALL COSTS within the business are closely scrutinized to ensure that we can continue to operate during economic downturns. A large BL tax increase would be difficult for my small business to absorb as we have multiple entities that we must pay fees to in order to operate in California’s highly regulatory and competitive environment.

Michael Shields, CCIM
Apartment / Investment Broker / Founder
Silicon Valley Multifamily Group
To Whom It May Concern,
If there are any tax increases, I would ask you to exclude the medical specialties. Our reimbursements are going down and we can't even recruit new doctors to this area. Most of the primary care doctors in practice in Los Gatos have dropped Medicare or have gone concierge. In 10 years there will be an even worse shortage of specialists in this area. So please consider excluding Medical businesses from this tax hike.

Dr. Manjula Noone
Just received notification of potential increases in our Town's business license fees. If I read this correctly, currently I am paying $975/year for my license. If my gross receipts are $25,000,000 annually according to the charts I'm seeing, that results in a license fee of $37,500...I believe that is outrageous. You know that in the automobile business, we don't have the same margins that another retailer might have. To base the fee solely on gross receipts is highly unfair. There should be some sort of setoff regarding the sales tax that a business generates for the town. I would embrace a slightly higher annual fee, but nothing like what I'm seeing. There should be a cap on the fee, certainly no more than $2000/year.

John Moore
Moore Buick GMC

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ATTACHMENT 1
How would the modernization in models 2-4 look like in practical terms:
- For example, would the town licensing process get coupled to the CA and/ or federal tax return of the business?
- And of which year? It seems the past year would make sense, then the town license renewal would continue to take place at the end of the year, based on the return of the past year. - If it is meant for the actual year of the town license, what would happen if the business has filed for an extension?
Overall, as a two-people husband-and-wife consulting business, we understand and support the rationale behind the modernization plans. The details will just have to be worked out.

Thank you for your consideration.

Gabi Neubauer
Dr. Gabi Neubauer
VP Semiconductor Technologies
AFGN LightVantage
Hi Los Gatos, I work from home and have a HR Consulting Business.

Will our fees be based on our gross income? If we earn 60k what will the estimated business license fee be?
If the fees are NOT based on gross income what will the fees be based on in the future?
I don't like the idea of having to pay more money, the pandemic has taken its toll on my business and now we are dealing with inflation.

This is not the time to be raising fees!! I am sure alot of businesses will feel the same.

Let me know. Thanks, Sylvia Carrillo
Sylvia Carrillo, PHR
Human Resources Consultant

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ATTACHMENT 1
HelloThank you for information re business license modernization. A few inputs I have - 1) not raise the business taxes for small business, 2) please have a form to update via website, 3) send out business tax reminders PRIOR to December as it can be a scramble to pay at end of the year (if have website to pay fees would eliminate some of this stress). Thank you!
Warm RegardsJulie Williams

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1 ATTACHMENT 2
Resolution No. ______
Resolution of the Council of the Town of Los Gatos
Calling a Municipal Election for November 8, 2022,
Requesting that the County Consolidate the Municipal Election with the General Election on November 8, 2022 and
Submitting to the Qualified Electors of the Town at the November 8, 2022 Consolidated General Election a Measure to Amend Chapter 14 of the Los Gatos Town Code

R E C I T A L S
A. WHEREAS, the Town’s business license tax ordinance was adopted in 1968 and the amount of the tax has not increased since 1991.

B. WHEREAS, the Town Council desires to adjust the business license tax to increase revenue to fund critical Town needs
C. WHEREAS, a proposed ordinance attached hereto and incorporated herein by reference as Attachment “A” (“the Ordinance”) would amend Chapter 14 of the Los Gatos Town Code to revise the license tax on businesses operating in the Town of Los Gatos.

D. WHEREAS, a statewide general election is scheduled for November 8, 2022. The Town Council wishes to call a municipal election for the Town to be held on November 8, 2022 and to request the County of Santa Clara to consolidate the municipal election with the statewide general election.

The Town Council of the Town of Los Gatos now resolves as follows:

Section 1. Findings. The Town Council finds and determines that each of the findings set forth above are true and correct.

Section 2. Calling the Election. The Council calls for a municipal election to be held on November 8, 2022 (“the Election”).

Section 3. Measure. Pursuant to Government Code Section 53724 and Elections Code Section 9222, the Town Council hereby submits the Ordinance attached hereto as Attachment A to the voters at the Election and orders the following question to be submitted to the voters at the Election:

Shall the measure to fund critical Town needs such as public safety by imposing a 20% increase to all flat fees and the gross receipts tax schedules for E-Commerce,
YES

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2 ATTACHMENT 2
Manufacturing, Wholesaling, and Jobbing and Retailing
raising about $255,000 yearly for general fund purposes until ended by voters, and which have not been increased since 1991, be adopted?
NO
This question requires the approval of a majority of those casting votes.

Section 4. Notice of Election. Notice of the time and place of holding the election is hereby given, and the Town 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 5. Impartial Analysis. Pursuant to California Elections Code Section 9280, the Town Council hereby directs the Town Clerk to transmit a copy of the measure to the Town Attorney. The Town Attorney shall prepare an impartial analysis of the measure, not to exceed 500 words in length, showing the effect of the measure on the existing law and the operation of the measure, and transmit such impartial analysis to the Town Clerk on or before 4:00 p.m. on August 19, 2022.

In the event the entire text of the Measure is not printed on the ballot, nor in the voter information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10-font bold type, the following: “The above statement is an impartial analysis of Ordinance or Measure __. If you desire a copy of the ordinance or measure, please call the Town Clerk at 408-354-6888 and a copy will be emailed at no cost to you.” Section 6. Ballot Arguments. Pursuant to Elections Code Section 9286 et. seq., August 12, 2022, at 4:00 p.m. shall be the deadline for submission of arguments in favor of, and arguments against, this measure. Arguments in favor or against the measure shall not exceed 300 words in length. The Mayor, or his designee(s), is hereby authorized to prepare a written argument in favor of the proposed measure on behalf of the Town Council. At the Mayor’s discretion, the Argument may also be signed by bona fide associations or by individual voters who are eligible to vote in the Town of Los Gatos. Each argument shall be signed, filed with the Town Clerk, and include the printed name(s) and signature(s) of the author(s) submitting the argument. If more than one argument for or against is received, the priorities established by Elections Code Section 9287 shall control.

Section 7. Rebuttal Arguments. Subdivision (a) of section 9285 of the Elections Code shall apply to the Election and shall control the submission of any rebuttal arguments for this measure. If an argument in favor and an argument against the measure have been selected to be printed in the voter information guide, the Clerk shall send a copy of the argument in favor of the measure to the authors of the argument against the measure and a copy of an argument against the measure to the authors of the argument in favor of the measure. The rebuttal authors or persons designated by them may prepare and submit rebuttal arguments not to exceed 250 words in length. Rebuttal arguments must be submitted not later than August 19, 2022, by 4:00 p.m.

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3 ATTACHMENT 2
Section 8. Consolidation Request. The Council of the Town of Los Gatos requests that the Board of Supervisors of Santa Clara County consolidate the municipal election and the election on this measure with the November 8, 2022 statewide general election. The Council further requests that the Board of Supervisors of Santa Clara County include on the ballots and sample ballots, all qualified measures submitted by the Town Council to be submitted to the qualified electors of the Town of Los Gatos. The Council acknowledges that the election will be held and conducted according to procedures in the Elections Code, including Section 10418.

Section 9. Request for County Services. Pursuant to Section 10002 of the California Elections Code, the Council of the Town of Los Gatos hereby requests the Board of Supervisors of Santa Clara County to permit the Registrar of Voters to render services to the Town of Los Gatos relating to the conduct of the Town’s Municipal and Special Elections which are called to be held on Tuesday, November 8, 2022. The services shall be of the type normally performed by the Registrar of Voters in assisting the clerks of municipalities in the conduct of elections including, but not limited to, checking registrations, mailing ballots, hiring election officers, and arranging for polling places, receiving absentee voter ballot applications, mailing and receiving absent voter ballots, and opening and counting ballots, providing and distributing election supplies, and furnishing voting machines.

Section 10. Transmittal of Resolution. The Town Clerk is hereby directed to submit forthwith an original copy of this resolution including the measure attached hereto as Attachment “A” to the Santa Clara County Board of Supervisors and a certified copy to the Registrar of Voters.

Section 11. Placement on the Ballot. The Town Clerk is hereby authorized and directed to take all steps necessary to place the measure on the ballot and the full text of the Measure shall not be printed in the voter pamphlet. A statement shall be printed in the ballot pursuant to Section 9280 of the Elections Code advising voters that they may obtain a copy of this resolution and the Measure, at no cost, upon request made to the Town Clerk, as well as a link to the ballot measure materials on the Town’s website.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSENTIONS:

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4 ATTACHMENT 2
ATTEST: APPROVED:
_____________________________ ______________________________ Town Clerk Mayor
______________________________
APPROVED AS TO FORM: Town Manager
_____________________________ ______________________________ Town Attorney Interim Director of Finance

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5 ATTACHMENT 2
Attachment A
Ordinance No. _____
Ordinance of the Town of Los Gatos
Amending Chapter 14 of the Town Code
The People of the Town of Los Gatos ordain as follows:

Section 1. Chapter 14 of the Los Gatos Town Code is hereby amended by adding, deleting, and modifying provisions as set forth in this section below. Additions are indicated by underscoring and deletions are indicated by strike through type. Portions of the Chapter not included in this Ordinance or not shown in underscoring or strike-through type are not changed.

Chapter 14

LICENSES AND MISCELLANEOUS BUSINESS REGULATIONS
ARTICLE I. IN GENERAL
Sec. 14.10.010. Definitions.

For the purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section:

Business means professions, trades and occupations and every kind of calling carried on for profit or livelihood, including the business of renting or leasing apartments.

E-commerce means commercial transactions conducted electronically on the Internet.

Fixed place of business means the premises occupied for the particular purpose of conducting the business thereat, and regularly kept open for that purpose, with a competent person in attendance for the purpose of attending to such business. Included in such term is the premises rented or leased by persons owning apartments located in the Town.

Gross receipts means the total amount of the sale price of all sales and the total amount charged or received for the performance of any act, service or employment of whatever nature it may be, for which a charge is made or credit allowed, whether or not such service, act or employment is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in such term shall be all receipts, cash, credits and property of any kind or nature, and any amount for which credit is allowed by the seller to the purchaser without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor, or service costs, interest paid or payable or losses or other expenses whatsoever.

Excluded from such term shall be cash discounts allowed and taken on sales, any tax required by law to be included in, or added to, the purchase price and collected from the consumer or purchaser, and such part of the sale price of property returned by purchasers upon rescission of the contract of sale as is refunded either in cash or by credit.

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6 ATTACHMENT 2
Home occupation has the same meanings as it does in the zoning ordinance.

Jobbing business means any business conducted solely for the purpose of selling goods, wares or merchandise in job lots to wholesale merchants for resale at wholesale to the trade by such wholesale merchants.

Quarter means a period of three (3) calendar months. The quarters begin on the first day of January, April, July and October of each year. The quarter shall include fractions thereof.

Real estate broker means the managing broker and/or partner of any real estate office.

Retail business means any business conducted for the purpose of selling, or offering to sell, any goods, wares or merchandise, other than as a part of a wholesale business and jobbing business.

Tax and license collector is the Finance Director or designee.

Vehicle means any device in, upon or by which any person or property is or may be transported or drawn upon a public street or highway, except devices moved by human power or used exclusively upon stationary rails or tracks.

Wholesale business means any business conducted solely for the purpose of selling goods, wares or merchandise in wholesale lots to retail merchants for resale at retail to the trade by such retail merchants.
(Code 1968, § 15-1; Ord. No. 1929, § I, 1-19-93; Ord. No. 2026, §§ V, VI, 2-18-97) Cross reference(s)—Definitions and rules of construction generally, § 1.10.015; zoning ordinance definitions, § 29.10.020.

Sec. 14.10.040. Statements required—Upon application for original business license. (a) Upon a person making application for the first business license under this chapter, or for a newly established business, in all cases where the amount of business license tax to be paid is based upon gross receipts or is graduated according to some other sliding scale, such person shall furnish to the Tax and License Collector, for guidance in ascertaining the amount of business license tax to be paid by the applicant, a written statement upon a form provided by the Tax and License Collector, signed and certified under penalty of perjury to be true and correct.
(b) If the amount of the business license tax to be paid by the applicant is based upon the amount of gross receipts, the applicant shall estimate the amount of gross receipts for the period to be covered by the business license for the purpose of determining the licensing bracket which will be applicable for the period to be covered by the license to be issued.

Such estimate, if accepted by the Tax and License Collector as reasonable, shall be used in determining the amount of business license tax to be paid by the applicant. The tax so determined shall be tentative only and such person shall, by not later than January 31st May fifteenth next following the period for which the license was issued, furnish the Tax and License Collector with a certified or sworn statement upon a form furnished by the Tax Collector, containing the data required to show the licensing bracket properly applicable to such person during the period of such business license, and the business license tax for such period shall be finally ascertained and paid in the manner provided in this chapter, after

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7 ATTACHMENT 2
deducting from the payment found to be due the amount paid at the time such first business license was issued. The Tax and License Collector shall not issue to any such person another license for the same or any other business until such person shall have furnished the written statement and paid the business license tax as required in this chapter. (c) If the amount of the business license tax to be paid by the applicant is graduated according to some sliding scale other than gross receipts, the applicant shall furnish to the Tax and License Collector for guidance in ascertaining the amount of business license tax to be paid, a certified or sworn statement upon a form provided by the Tax and License Collector setting forth such information as may be therein required and as may be necessary properly to determine the amount of business license tax to be paid by the applicant and which statement shall show, among other things, the number of vehicles or tonnage thereof or the number of seats, chairs, rooms, tables or other units used or involved in such person's business as of the time of filing such application. Such person shall thereupon pay the required license tax in advance, computed in accordance with the information contained in such statement.
(d) Repealed.
(Code 1968, § 15-7; Ord. No. 1929, § IV, 1-19-93; Ord. No. 2026, §§ VIII, IX, 2-18-97) Sec. 14.10.095. Term.

A business license issued under this chapter shall expire at the end of the term year for which the license or renewal is issued unless the license is renewed for an additional period. (Code 1968, § 15-18; Ord. No. 2026, § XIII, 2-18-97)
ARTICLE II. LICENSES
DIVISION 2. SCHEDULES
Sec. 14.20.110. Gross receipts tax.

When the business activities of one (1) person, taxable under the provisions of this section, involve both retail and e-commerce, manufacturing, wholesaling or jobbing transactions, the total gross income is apportioned between the two (2) schedules, according to its source.

RETAILING
At Least But Less Than Tax
$ 0 $ 50,000 $ 75.00 $90.00
$ 50,000 $ 100,000 112.00 $135.00

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8 ATTACHMENT 2
$ 100,000 $ 150,000 150.00 $180.00
$ 150,000 $ 200,000 187.50 $225.00
$ 200,000 $ 250,000 225.00 $270.00
$ 250,000 $ 300,000 262.50 $315.00
$ 300,000 $ 350,000 300.00 $360.00
$ 350,000 $ 400,000 337.50 $405.00
$ 400,000 $ 450,000 375.00 $450.00
$ 450,000 $ 500,000 412.50 $495.00
$ 500,000 $ 600,000 450.00 $540.00
$ 600,000 $ 700,000 487.50 $585.00
$ 700,000 $ 800,000 525.00 $630.00
$ 800,000 $ 900,000 562.50 $675.00
$ 900,000 $ 1,000,000 600.00 $720.00
$ 1,000,000 $ 1,100,000 637.50 $765.00
$ 1,100,000 $ 1,200,000 675.00 $810.00
$ 1,200,000 $ 1,300,000 712.50 $855.00
$ 1,300,000 $ 1,400,000 750.00 $900.00
$ 1,400,000 $ 1,500,000 787.50 $945.00
$ 1,500,000 $ 1,600,000 825.00 $990.00
$ 1,600,000 $ 1,700,000 862.50 $1,035.00
$ 1,700,000 $ 1,800,000 900.00 $1,080.00
$ 1,800,000 $ 1,900,000 937.50 $1,125.00
$ 1,900,000 $ 2,000,000 and above 975.00 $1,170.00

E-COMMERCE, MANUFACTURING, WHOLESALING AND JOBBING
At Least But Less Than Tax
$ 0 $ 200,000 $ 150.00 $180.00

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9 ATTACHMENT 2
$ 200,000 $ 300,000 187.50 $225.00
$ 300,000 $ 400,000 262.50 $315.00
$ 400,000 $ 500,000 337.50 $405.00
$ 500,000 $ 600,000 450.00 $540.00
$ 600,000 $ 800,000 562.50 $675.00
$ 800,000 $ 1,000,000 675.00 $810.60
$ 1,000,000 $ 1,200,000 787.50 $945.00
$ 1,200,000 $ 1,400,000 900.00 $1,080.00
$ 1,400,000 $ 1,600,000 1,012.50 $1,215.00
$ 1,600,000 $ 1,800,000 $1,125.00 $1,350.00
$ 1,800,000 $ 2,000,000 1,237.50 $1,485.00
$ 2,000,000 $ 2,500,000 1,350.00 $1,620.00
$ 2,500,000 $ 3,000,000 1,462.50 $1,755.00
$ 3,000,000 $ 3,500,000 1,575.00 $1,890.00
$ 3,500,000 $ 4,000,000 1,687.50 $2,025.00
$ 4,000,000 $ 4,500,000 1,800.00 $2,160.00
$ 4,500,000 $ 5,000,000 1,912.50 $2,295.00
$ 5,000,000 $ 5,500,000 2,025.00 $2,430.00
$ 5,500,000 $ 6,000,000 2,137.50 $2,565.00
$ 6,000,000 $ 6,500,000 2,250.00 $2,700.00
$ 6,500,000 $ 7,000,000 2,362.50 $2,834.40
$ 7,000,000 $ 7,500,000 2,175.00 $2,970.00
$ 7,500,000 $ 8,000,000 2,587.50 $3,105.00
$ 8,000,000 $ 8,500,000 2,700.00 $3,240.00
$ 8,500,000 $ 9,000,000 2,812.50 $3,375.00
$ 9,000,000 $ 9,500,000 2,925.00 $3,510.00
$ 9,500,000 $ 10,000,000 3,037.50 $3,645.00

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$ 10,000,000 $ 10,500,000 4,500.00 $5,400.00
$ 10,500,000 $ 11,000,000 4,612.50 $5,535.00
$ 11,000,000 $ 11,500,000 4,725.00 $5,670.00
$ 11,500,000 $ 12,000,000 4,837.50 $5,805.00
$ 12,000,000 4,837.50 $5,805.00
plus $75.00 $90.00 for each
$550,000 or fraction thereof
in excess of $12,000,000
(Code 1968, § 15-27; Ord. No. 1857, §§ I, II, 6-3-91)
Sec. 14.20.115. License taxes for specified businesses.

Every person doing any of the kinds of business specified in this section shall pay the business license tax specified. The fees are annual unless otherwise specified.

Advertising signs
Signposting and painting .....$ 420.00 $504.00
Amusements
Shows, concerts, and the like (per day) .....42.00 $50.00 Circuses, menageries and the like:

Less than 2,000 seating capacity
First day .....420.00 $504.00
Each succeeding day .....$ 52.50 $63.00
More than 2,000 seating capacity
First day .....630.00 $756.00
Each succeeding day .....105.00 $126.00
Sideshows (per day): ..... $50.00
Entrance fee not exceeding $0.10 .....21.00
Entrance fee exceeding $0.10 .....42.00
Circus procession or parade (each) .....210.00 $252.00
Carnivals (per day) .....42.00 $50.00
Ferris wheels, merry-go-rounds, and the like (per month) .....210.00 $252.00 Public dances (per dance) .....21.00 $25.00

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Apartment rental and mobile home parks (per unit) .....7.50 $9.00 The term "apartment" includes all buildings or groups of buildings on the same premises, composed of a total of three (3) or more dwelling units Auctioneers .....112.50 $135.00
Billiard and pool rooms (per table) .....52.50 $63.00
Boardinghouses
Boardinghouses licensed by the state or county as boardinghouses for pensioners, and who board pensioners exclusively, are exempt from the business license tax.

For first 4 boarders .....21.00 $25.00
For each person over 4 .....4.50 $5.30
Cleaning and dyeing laundry delivery
Vehicles (annual, per vehicle) .....168.00 $202.00
The tax applies to those who have no fixed place of business in the town.

Contractors (annual) .....224.00 $269.00
A separate fee for each type of work activity, such as general engineering, building, plumbing, plastering, painting, masonry, termite service, installation or other specialty, in addition to any sales or jobbing license fee. Contractors with businesses not located in Los Gatos but doing a short-term work activity may pay the daily fee when the job including inspection is finished within a day.

A contractor must show proof of a valid California Contractor's License or a signed Declaration of Exemption from California Contractor's License law.

Contractors (daily) .....105.00 $126.00
Day care facilities
Day care facilities provide day care for children under eighteen (18) years of age who are unrelated to the licensee.

Small family day care home (a facility providing day care for six (6) children or less, including resident children) .....No fee
Large family day care home (a facility providing day care for seven (7) to twelve (12) children, including resident children) .....No fee
Nursery school (a facility providing day care for thirteen (13) or more children) .....No fee
Hospitals, rest homes, and the like:

Annual, or .....$140.00 $168.00
Per bed, if that is larger .....10.00 $12.00
Hotels and motels (annual, per guest room) .....7.50 $9.00

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Business activities other than renting rooms, conducted in connection with a hotel, are taxed separately.

House movers
Annual license .....105.00 $126.00
Additional, per structure moved .....84.00 $101.00
Itinerant photographers(annual) .....210.00 $252.00
Itinerant vendors (daily) .....105.00 $126.00
The words "itinerant vendor" mean any person, both principal and agent, who engages in a temporary and transient business in the Town selling goods, wares and merchandise with the intention of continuing such business in the Town for a period of not more than ninety (90) days, and who, for the purpose of carrying on such business, hires, leases or occupies any room, building or structure for the exhibition or sale of such goods, wares, or merchandise, or from which room, building or structure the sales shall be made or business solicited by means of samples or delivery from house to house. The person so engaged is not relieved from the provisions of this section by reason of associating temporarily with any local dealer, trader, merchant or auctioneer, or by conducting temporary or transient business in connection with, or as a part of, or in the name of any local dealer, trader, merchant or auctioneer. The provisions of this section do not apply to commercial travelers or selling agents selling their goods to dealers, whether selling for present or future deliveries, by sample or otherwise, nor to hawkers on the street, nor peddlers from vehicles, nor to persons selling fruit, vegetables, butter, eggs, or other fruit or ranch products.

Junk collectors (annual, per vehicle) .....$ 84.00 $101.00 Junk collector means any person who has no fixed place of business in the Town and who engages in or carries on the business of collecting, buying or selling any old rags, sacks, bottles, cans, papers, metals or other articles of junk.

Junk dealers (annual) .....420.00 $504.00
Junk dealer means any person who has a fixed place of business in the Town, and who engages in or carries on the business of buying or selling, either at wholesale or retail, any old rags, sacks, bottles, cans, papers, metals or other articles of junk.

Peddlers
Peddlers of wares other than food, per person, per day .....21.00 $25.00 Peddlers of food, except lunch wagon operators:

Using a vehicle (per vehicle, annual) ..... 210.00 $252.00 Not using a vehicle, carrying wares by hand .....42.00 $50.00 Lunch wagon operators (per vehicle, annual) .....210.00 $252.00

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Peddlers engaged in the business of selling any personal property at a sale conducted by an organization exempt from the business license tax under the provisions of section 14.10.030 of this chapter shall pay a license tax of $7.50 9.00 per day. This rule applies only when all fees, commissions or other remuneration of any kind paid by the peddler to the organization conducting, sponsoring or promoting the sale is devoted exclusively to the business license tax-exempt purposes of the organization and the organization has obtained prior approval from the Town Council to conduct the sale, per day $7.50.

A "peddler" is every person not having a regularly established place of business in the Town who travels from place to place, or has a stand upon any public street, alley or other public place, doorway or any building, unenclosed or vacant lot, or parcel of land, who sells, offers for sale, any goods, wares or merchandise in the peddler's possession.

Professional and semiprofessional occupations
Per professional or semiprofessional person .....200.00 $240.00 Support staff Aadditional per employee .....15.00 $18.00 Professional services are occupations in the service sector requiring special training in the arts or sciences. Some professional services require the practitioner to hold professional degrees or licenses and possess specific skills. Other professional services involve providing specialist business support to businesses of all sizes and in all sectors. Professional Services means the business is offering any professional, scientific, or technical service including, but not limited to legal advice and representation; accounting, bookkeeping, and payroll services; architectural, engineering, and specialized design services; computer services; consulting services; research and development services; advertising services; photographic services; translation and interpretation services; veterinary services; and other professional, scientific, and technical services. Professional or semiprofessional business or service occupations include, but are not limited to, the following:

Accountant
Advertising counsel
Appraiser
Architect
Artist
Assayer
Attorney-at-law
Auditor
Bacteriologist
Broker:, stock or bond
Chemist

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Chiropodist
Chiropractor
Dental hygienist
Dentist
Designer or decorator
Detective or investigative personnel
Draftsperson
Drugless practitioner
Electrologist
Engineer: civil, mining, electrical, construction
Engineer: structural, consulting, mechanical, hydraulic Engraver
Feed, grain and fruit broker
Geologist
Illustrator or showcard writer
Landscape architect
Lapidary
Lithographer
Licensed financial planner
Licensed investment counselor
Masseuse or masseur
Marriage therapist
Massage therapist
Nurse
Oculist, optician or optometrist
Osteopath
Physical therapist
Physician
Property management
Real estate brokers
Surgeon
Surveyor

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Taxidermist
Veterinarian
X-ray, dental or medical laboratory
Support staff include, but are not limited to the following: receptionist, office assistant, real estate agents
Service occupations .....$100.00 $120.00
Service occupations include, but are not limited to the following: appliance, home furnishing or radio and television installation, janitorial and building maintenance, landscape installation and maintenance, secretarial service, security guards, etc.

Shooting galleries .....105.00 $126.00
Solicitors (per business) .....210.00 $252.00
A solicitor is one who engages in the business of going from house to house, place to place or in or along the streets within the Town selling or taking orders for, or offering to sell or take orders for, goods, wares, merchandise, advertising or other things of value for future delivery, or for services to be performed in the future.

Taxicabs
Per business .....150.00 $180.00
Additional per taxi .....22.50 $27.00
Theaters and concert halls .....105.00 $126.00
Trucking (annual, per vehicle) .....140.00 $168.00
Persons other than peddlers who sell or deliver food or any other goods by means of a vehicle, and who have no fixed place of business in the Town. Persons who make no more than two deliveries or sales per quarter are exempt from the foregoing tax. All other motor vehicle delivery business, whether the business operates on a regular route or between fixed termini or not:

For one vehicle .....45.00 $54.00
For each additional vehicle .....22.00 $26.00
(Ord. No. 1755, §§ 1—3, 7-5-88; Ord. No. 1857, §§ I, II, 6-3-91; Ord. No. 1929, § X, 1-19-93; Ord. No. 2026, § XV, 2-18-97; Ord. No. 2320 , § III, 9-7-21) Sec. 14.20.120. Credit for businesses in Parking and Business Improvement Area. (a) Any business located and operating within a parking and business improvement area established pursuant to Streets and Highway Code section 36500 and following shall receive a credit on the annual license tax as set forth in this section if:
(1) An assessment pursuant to the parking and business improvement area district ordinance has been levied on the business by the Town for the license year; and

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(2) The business has paid its parking and business improvement area district assessment for the prior year.
(b) Each person doing any of the kinds of businesses identified as "Contractor," "Hospitals, rest homes, and the like," "Professional and semiprofessional occupations," "Service occupations," and "Trucking" in section 14.20.115 shall receive a credit equal to fifty (50) percent of the annual business license tax.
(c) Every person doing any other kind of business shall receive a credit equal to thirty-three and a third (33⅓) percent of the annual business license tax. (Ord. No. 1857, §§ I, II, 6-3-91; Ord. No. 1970, § I, 2-22-94) Sec. 14.20.125. Exemption for contractors to the town.

Any business whose income from business in the Town is not more than five hundred dollars ($500.00) during any calendar year and is derived solely from contracts with the Town is exempt from payment of the business license taxes set forth in this article for that calendar year. (Ord. No. 1983, § II, 7-5-94)
Section 2. Severability. Should any provision of this Ordinance, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable, or otherwise void, that determination shall have no effect on any other provision of this Ordinance or the application of this Ordinance to any other person or circumstance and, to that end, the provisions hereof are severable. It is hereby declared to be the intention of the electorate that they would have adopted this Ordinance had such unconstitutional, illegal, or invalid provision, sentence, clause section, or part thereof not been included herein.

Section 3. California Environmental Quality Act. This Ordinance is exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., under, including without limitation, Public Resources Code section 21065, and CEQA Guidelines sections 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment.

Section 4. Council Implementation. The Town Council of the Town of Los Gatos shall adopt any and all laws it deems necessary to implement this Ordinance.

Section 5. Council Amendments. The Town Council of the Town of Los Gatos is authorized to amend Chapter 14 of the Los Gatos Town Code in any manner that does not increase the rate of any tax or otherwise constitutes a tax increase for which voter approval is required by Article XIII C of the California Constitution, including adopting exemptions, waivers, or reductions of the tax.

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other materials and to take any other steps as needed to implement this measure and Chapter 14 and to make such interpretations of this measure and Chapter 14 as the Town Manager may consider necessary to achieve the purposes of this measure and Chapter 14. The Town Manager may delegate any authority within their discretion pursuant to this measure as they deem reasonably necessary.

Section 7. Liberal Construction. This Ordinance shall be liberally construed to effectuate its purposes.

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Resolution No. ______
Resolution of the Council of the Town of Los Gatos
Calling a Municipal Election for November 8, 2022,
Requesting that the County Consolidate the Municipal Election with the General Election on November 8, 2022 and
Submitting to the Qualified Electors of the Town at the November 8, 2022 Consolidated General Election a Measure to Amend Chapter 14 of the Los Gatos Town Code

R E C I T A L S
A. WHEREAS, the Town’s business license tax ordinance was adopted in 1968 and the amount of the tax has not increased since 1991.

B. WHEREAS, the current business license tax is regressive in that smaller businesses pay a higher effective tax rate than larger businesses.

C. WHEREAS, the Town Council desires to adjust the business license tax to both increase revenue and provide a more equitable tax structure.

D. WHEREAS, a proposed ordinance attached hereto and incorporated herein by reference as Attachment “A” (“the Ordinance”) would amend Chapter 14 of the Los Gatos Town Code to revise the license tax on businesses operating in the Town of Los Gatos.

E. WHEREAS, a statewide general election is scheduled for November 8, 2022. The Town Council wishes to call a municipal election for the Town to be held on November 8, 2022 and to request the County of Santa Clara to consolidate the municipal election with the statewide general election.

The Town Council of the Town of Los Gatos now resolves as follows:

Section 1. Findings. The Town Council finds and determines that each of the findings set forth above are true and correct.

Section 2. Calling the Election. The Council calls for a municipal election to be held on November 8, 2022 (“the Election”).

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Shall the measure to fund critical Town needs such as public safety by incorporating gross receipts reporting for all businesses at rates between $0.50 and $2.00 per $1000 after a $25.00 flat fee for the first $25,000 in gross receipts, replacing the existing regressive taxing system of flat fees and gross-receipts, raising $2.3 million yearly for general fund purposes until ended by voters, and increasing equity among small, medium and larger businesses, be adopted?
YES
NO
This question requires the approval of a majority of those casting votes.

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persons designated by them may prepare and submit rebuttal arguments not to exceed 250 words in length. Rebuttal arguments must be submitted not later than August 19, 2022, by 4:00 p.m.

Section 8. Consolidation Request. The Council of the Town of Los Gatos requests that the Board of Supervisors of Santa Clara County consolidate the municipal election and the election on this measure with the November 8, 2022 statewide general election. The Council further requests that the Board of Supervisors of Santa Clara County include on the ballots and sample ballots, all qualified measures submitted by the Town Council to be submitted to the qualified electors of the Town of Los Gatos. The Council acknowledges that the election will be held and conducted according to procedures in the Elections Code, including Section 10418.

Section 11. Placement on the Ballot.

The Town Clerk is hereby authorized and directed to take all steps necessary to place the measure on the ballot and the full text of the Measure shall not be printed in the voter pamphlet.

A statement shall be printed in the ballot pursuant to Section 9280 of the Elections Code advising voters that they may obtain a copy of this resolution and the Measure, at no cost, upon request made to the Town Clerk, as well as a link to the ballot measure materials on the Town’s website.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSENTIONS:

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ATTEST: APPROVED:
_____________________________ ______________________________ Town Clerk Mayor
______________________________
APPROVED AS TO FORM: Town Manager
_____________________________ ______________________________ Town Attorney Interim Director of Finance

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Attachment A
Ordinance No. _____
Ordinance of the Town of Los Gatos
Amending Chapter 14 of the Town Code
The People of the Town of Los Gatos ordain as follows:

Chapter 14

LICENSES AND MISCELLANEOUS BUSINESS REGULATIONS
ARTICLE I. IN GENERAL
Sec. 14.10.010. Definitions.

For the purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section:

Business means professions, trades and occupations and every kind of calling carried on for profit or livelihood, including the business of renting or leasing apartments.

Contractor means every person, firm, or corporation conducting, managing, or carrying on the business of contractor, subcontractor, or builder; or engaging in the construction or repair of any structures or infrastructure; or engaged in any engineering.

E-commerce means commercial transaction(s) conducted electronically on the Internet.

General Commerce/Retail means This category includes retailers, wholesalers, manufacturersing, jobbers, hoteliers, and restaurant businesses.

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deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor, or service costs, interest paid or payable or losses or other expenses whatsoever.

Home occupation has the same meanings as it does in the zoning ordinance.

Manufacturing means manufacturing or processing any goods, wares, merchandise, articles, or commodities.

Jobber means any business conducted solely for the purpose of selling goods, wares or merchandise in job lots to wholesale merchants for resale at wholesale to the trade by such wholesale merchants.

Professional means any professional services, as that term is ordinarily and commonly used and understood, where individuals are engaged in the business of offering to the public professional or semiprofessional services for compensation, and shall include those professions generally requiring governmental certification or a professional degree, including but not limited to, the services rendered by a person engaged in the practice or profession of law, medicine, surgery, dentistry, ophthalmology, optometry, chiropractic medicine, osteopathy, chiropody, dentistry, laboratory technology, physical therapy, mortician services, psychology, psychotherapy, counseling, speech therapy, veterinary services, financial planning, investment advising, real estate sales, management, or development, engineering, surveying, geology, appraising, architecture, accounting, income tax preparation or consulting, bookkeeping.

Quarter means a period of three (3) calendar months. The quarters begin on the first day of January, April, July and October of each year. The quarter shall include fractions thereof.

Rental Commercial & Residential means any business that leases, rents, or provides use of real property to another individual or entity for compensation.

Restaurant means an establishment where meals, prepared foods, and/or beverages are served to customers.

Real estate broker means the managing broker and/or partner of any real estate office.

Retail business means any business conducted for the purpose of selling, or offering to sell, any goods, wares or merchandise, other than as a part of a wholesale business and jobbing business.

Services means any services in which an individual or individuals are engaged in the business of offering to the public services for compensation, including but not limited to, hair salons, nail salons, gardening services, and any other service not specifically included in another definition including e-commerce.

Tax and license collector is the Finance Director or designee.

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Vehicle means any device in, upon or by which any person or property is or may be transported or drawn upon a public street or highway, except devices moved by human power or used exclusively upon stationary rails or tracks.

Wholesale means the sale of goods, wares, or merchandise for the purpose of resale in the regular course of business.

Sec. 14.10.030. Certain businesses exempt from certain requirements of chapter. (a) Nothing in this chapter shall be deemed or construed to apply to any of the following:
(1) Any person transacting and carrying on any business exempt by virtue of the constitution or applicable statutes of the United States or of the State. (2) Any institution or organization which is conducted, managed, or carried on wholly for the benefit of charitable purposes or from which profit is not derived either directly or indirectly by any person.
(3) The conducting of any entertainment, concert, exhibition, or lecture on scientific, historical, literary, religious or moral subjects within the Town whenever the receipts of any such entertainment, concert, exhibition, or lecture is to be appropriated to any church or school or veteran association, or to any religious or benevolent purpose. (4) The conducting of any entertainment, dance, concert, exhibition, or lecture by any religious, charitable, fraternal, educational, military, State, county, or municipal organization or association whenever the receipts of any such entertainment, dance, concert, exhibition, or lecture are to be appropriated for the purpose and objects for which such organization or association was formed, and from which profit is not derived either directly or indirectly by any person.
(5) Charitable nonprofit corporations recognized by the Franchise Tax Board and granted California tax exemptions as such, attributable to business activities conducted in the course of and in conjunction with community-wide events when the event has specific approval of the Town Council, or is permitted under the special event permit process, and when the proceeds of the business activity are entirely devoted to the purposes of the organization.
(b) Every person commencing, transacting and carrying on in the Town any business in a home, whose annual gross receipts from such business are two thousand five hundred dollars ($2,500.00) or less, shall be exempted from the payment of a license tax under this chapter, but shall be required to obtain and display a license and shall pay a license fee of twenty dollars ($20.00). Where the annual gross receipts from such business exceeds two thousand five hundred dollars ($2,500.00) the license tax as imposed in this chapter shall apply.

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(bc) No public utility making franchise payments to the Town shall be subject to the provisions of this chapter.
(cd) Any person claiming an exemption pursuant to this section shall file a verified statement with the Tax and License Collector stating the facts upon which such exemption is claimed, and shall furnish such other information and documentary evidence as the Tax and License Collector may require in connection with such claim for exemption. (de) The Tax and License Collector, upon a proper showing contained in the verified statement, and upon receipt of other information and documentary evidence required in connection with such claim for exemption, shall issue a license to such person claiming exemption under this section without payment to the Town of the license tax required by this chapter. (ef) The Town Council may revoke any license granted pursuant to the provisions of this section upon information that the licensee is not entitled to the exemption as provided in this section.
(fg) Nothing in this section shall be deemed to exempt any organization or association from complying with any other provisions of this Code or any other ordinance of the Town requiring a permit from the Town Council or any Commission or officer of the Town to conduct, manage, or carry on any profession, trade, calling or occupation. (Code 1968, § 15-5; Ord. No. 1929, § III, 1-19-93; Ord. No. 2026, § VII, 2-18-97) Sec. 14.10.040. Statements required—Upon application for original business license. (a) Upon a person making application for the first business license under this chapter, or for a newly established business, in all cases where the amount of business license tax to be paid is based upon gross receipts or is graduated according to some other sliding scale, such person shall furnish to the Tax and License Collector, for guidance in ascertaining the amount of business license tax to be paid by the applicant, a written statement upon a form provided by the Tax and License Collector, signed and certified under penalty of perjury to be true and correct.
(b) If the amount of the license tax to be paid by the applicant is based upon the amount of gross receipts, tThe applicant shall estimate the amount of gross receipts for the period to be covered by the business license for the purpose of determining the licensing bracket which will be applicable for the period to be covered by the license to be issued. Such estimate, if accepted by the Tax and License Collector as reasonable, shall be used in determining the amount of license tax to be paid by the applicant. The tax so determined shall be tentative only and such person shall, by not later than January 31st May fifteenth next following the period for which the license was issued, furnish the Tax and License Collector with a certified or sworn statement upon a form furnished by the Tax Collector, containing the data required to show the licensing bracket properly applicable to such person during the period of such business license, and the business license tax for such period shall be finally ascertained and paid in the manner provided in this chapter, after deducting from the payment found to be due the amount paid at the time such first business license was issued.

The Tax and License Collector shall not issue to any such person another license for the same or any other business until such person shall have furnished the written statement and paid the business license tax as required in this chapter.

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(c) If the amount of the license tax to be paid by the applicant is graduated according to some sliding scale other than gross receipts, the applicant shall furnish to the Tax and License Collector for guidance in ascertaining the amount of license tax to be paid, a certified or sworn statement upon a form provided by the Tax and License Collector setting forth such information as may be therein required and as may be necessary properly to determine the amount of license tax to be paid by the applicant and which statement shall show, among other things, the number of vehicles or tonnage thereof or the number of seats, chairs, rooms, tables or other units used or involved in such person's business as of the time of filing such application. Such person shall thereupon pay the required license tax in advance, computed in accordance with the information contained in such statement. (d) Repealed.
(Code 1968, § 15-7; Ord. No. 1929, § IV, 1-19-93; Ord. No. 2026, §§ VIII, IX, 2-18-97) Sec. 14.10.095. Term.

All licenses under this chapter shall be kept and posted in the following manner:
(1) Any licensee transacting and carrying on business at a fixed place of business in the Town shall keep the license posted in a conspicuous place upon the premises where such business is carried on.
(2) Any licensee transacting and carrying on business, but not operating at a fixed place of business in the Town, shall keep the license in possession at all times while transacting and carrying on such business, or if issued for taxicabs or trucking firms under section

14.20.115, then the license shall be displayed prominently in the vehicle. (Code 1968, § 15-19)
ARTICLE II. LICENSES
DIVISION 2. SCHEDULES
Sec. 14.20.110. Gross receipts tax.

Every person doing business in the Town, except a person whose business is taxed under the terms of section 14.20.115, shall pay an annual business license tax based on the gross receipts of the business. The tax is levied based upon gross receipts at the following rates and in the following classifications: according to one (1) or both of the following schedules. When the business activities of one (1) person, taxable under the provisions of this section, involve both retail and manufacturing, wholesaling or jobbing transactions, the total gross income is apportioned between the two (2) schedules, according to its source.

A. CLASSIFICATIONS:

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1. Category 1 – General Commerce/Retail ($0.50 per thousand of gross receipts above $25,000, plus $25.00 minimum tax rate)
This category includes retail, wholesale, manufacturing, and restaurant businesses.

2. Category 2 – Services ($1.00 per thousand of gross receipts above $25,000, plus $25.00 minimum tax rate)

3. Category 3 – Contractor ($1.00 per thousand of gross receipts above $25,000, plus $25.00 minimum tax rate)

4. Category 4 – Professional ($2.00 per thousand of gross receipts above $25,000, plus $25.00 minimum tax rate)

5. Category 5 – Rental Commercial/Residential ($2.00 per thousand of gross receipts above $25,000, plus $25.00 minimum tax rate):

B. In any case where a licensee or an applicant for a license believes that his or her individual business is not assigned to the proper classification under this section because of circumstances peculiar to it, as distinguished from other businesses of the same kind, he or she may apply to the Tax Collector for reclassification. Such application shall contain such information as the Tax Collector may deem necessary and require in order to determine whether the applicant’s individual business is properly classified. The Tax Collector shall then conduct an investigation following which he or she shall assign the applicant’s individual business to the classification shown to be proper on the basis of such investigation. The proper classification is that classification which, in the opinion of the Tax Collector, most nearly fits the applicant’s individual business. The reclassification shall not be retroactive but shall apply at the time of the next regularly ensuing calculation of the applicant’s tax. No business shall be classified more than once in one year.

C. The Tax Collector shall notify the applicant of the action taken on the application for reclassification. Such notice shall be given by serving it personally or by mail to the applicants last known address.

RETAILING
At Least But Less Than Tax
$ 0 $ 50,000 $ 75.00

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50,000 100,000 112.00
100,000 150,000 150.00
150,000 200,000 187.50
200,000 250,000 225.00
250,000 300,000 262.50
300,000 350,000 300.00
350,000 400,000 337.50
400,000 450,000 375.00
450,000 500,000 412.50
500,000 600,000 450.00
600,000 700,000 487.50
700,000 800,000 525.00
800,000 900,000 562.50
900,000 1,000,000 600.00
1,000,000 1,100,000 637.50
1,100,000 1,200,000 675.00
1,200,000 1,300,000 712.50
1,300,000 1,400,000 750.00
1,400,000 1,500,000 787.50
1,500,000 1,600,000 825.00
1,600,000 1,700,000 862.50
1,700,000 1,800,000 900.00
1,800,000 1,900,000 937.50
1,900,000 2,000,000 and above 975.00

MANUFACTURING, WHOLESALING AND JOBBING
At Least But Less Than Tax

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$ 0 $ 200,000 $ 150.00
200,000 300,000 187.50
300,000 400,000 262.50
400,000 500,000 337.50
500,000 600,000 450.00
600,000 800,000 562.50
800,000 1,000,000 675.00
1,000,000 1,200,000 787.50
1,200,000 1,400,000 900.00
1,400,000 1,600,000 1,012.50
$ 1,600,000 $ 1,800,000 $1,125.00
1,800,000 2,000,000 1,237.50
2,000,000 2,500,000 1,350.00
2,500,000 3,000,000 1,462.50
3,000,000 3,500,000 1,575.00
3,500,000 4,000,000 1,687.50
4,000,000 4,500,000 1,800.00
4,500,000 5,000,000 1,912.50
5,000,000 5,500,000 2,025.00
5,500,000 6,000,000 2,137.50
6,000,000 6,500,000 2,250.00
6,500,000 7,000,000 2,362.50
7,000,000 7,500,000 2,175.00
7,500,000 8,000,000 2,587.50
8,000,000 8,500,000 2,700.00
8,500,000 9,000,000 2,812.50
9,000,000 9,500,000 2,925.00
9,500,000 10,000,000 3,037.50

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13 ATTACHMENT 3
10,000,000 10,500,000 4,500.00
10,500,000 11,000,000 4,612.50
11,000,000 11,500,000 4,725.00
11,500,000 12,000,000 4,837.50
12,000,000 4,837.50
plus $75.00 for each
$550,000 or fraction thereof
in excess of $12,000,000
(Code 1968, § 15-27; Ord. No. 1857, §§ I, II, 6-3-91)
Sec. 14.20.115. License taxes for specified businesses.

Every person doing any of the kinds of business specified in this section shall pay the business license tax specified. The fees are annual unless otherwise specified.

Advertising signs
Signposting and painting$ 420.00
Amusements
Shows, concerts, and the like (per day)42.00
Circuses, menageries and the like:

Less than 2,000 seating capacity
First day420.00
Each succeeding day$ 52.50
More than 2,000 seating capacity
First day630.00
Each succeeding day105.00
Sideshows (per day):

Entrance fee not exceeding $0.1021.00
Entrance fee exceeding $0.1042.00
Circus procession or parade (each)210.00
Carnivals (per day)42.00
Ferris wheels, merry-go-rounds, and the like (per month)210.00 Public dances (per dance)21.00

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Apartment rental and mobile home parks (per unit)7.50
The term "apartment" includes all buildings or groups of buildings on the same premises, composed of a total of three (3) or more dwelling units Auctioneers112.50
Billiard and pool rooms (per table)52.50
Boardinghouses
Boardinghouses licensed by the state or county as boardinghouses for pensioners, and who board pensioners exclusively, are exempt from the business license tax.

For first 4 boarders21.00
For each person over 44.50
Cleaning and dyeing laundry delivery
Vehicles (annual, per vehicle)168.00
The tax applies to those who have no fixed place of business in the town.

Contractors (annual)224.00
A separate fee for each type of work activity, such as general engineering, building, plumbing, plastering, painting, masonry, termite service, installation or other specialty, in addition to any sales or jobbing license fee. Contractors with businesses not located in Los Gatos but doing a short-term work activity may pay the daily fee.

A contractor must show proof of a valid California Contractor's License or a signed Declaration of Exemption from California Contractor's License law.

Contractors (daily)105.00
Day care facilities
Day care facilities provide day care for children under eighteen (18) years of age who are unrelated to the licensee.

Small family day care home (a facility providing day care for six (6) children or less, including resident children)No fee
Large family day care home (a facility providing day care for seven (7) to twelve (12) children, including resident children)No fee
Nursery school (a facility providing day care for thirteen (13) or more children)No fee Hospitals, rest homes, and the like:

Annual, or$140.00
Per bed, if that is larger10.00
Hotels and motels (annual, per guest room)7.50
Business activities other than renting rooms, conducted in connection with a hotel, are taxed separately.

House movers

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Annual license105.00
Additional, per structure moved84.00
Itinerant photographers(annual)210.00
Itinerant vendors (daily)105.00
The words "itinerant vendor" mean any person, both principal and agent, who engages in a temporary and transient business in the Town selling goods, wares and merchandise with the intention of continuing such business in the Town for a period of not more than ninety (90) days, and who, for the purpose of carrying on such business, hires, leases or occupies any room, building or structure for the exhibition or sale of such goods, wares, or merchandise, or from which room, building or structure the sales shall be made or business solicited by means of samples or delivery from house to house. The person so engaged is not relieved from the provisions of this section by reason of associating temporarily with any local dealer, trader, merchant or auctioneer, or by conducting temporary or transient business in connection with, or as a part of, or in the name of any local dealer, trader, merchant or auctioneer. The provisions of this section do not apply to commercial travelers or selling agents selling their goods to dealers, whether selling for present or future deliveries, by sample or otherwise, nor to hawkers on the street, nor peddlers from vehicles, nor to persons selling fruit, vegetables, butter, eggs, or other fruit or ranch products.

Junk collectors (annual, per vehicle)$ 84.00
Junk collector means any person who has no fixed place of business in the Town and who engages in or carries on the business of collecting, buying or selling any old rags, sacks, bottles, cans, papers, metals or other articles of junk.

Junk dealers (annual)420.00
Junk dealer means any person who has a fixed place of business in the Town, and who engages in or carries on the business of buying or selling, either at wholesale or retail, any old rags, sacks, bottles, cans, papers, metals or other articles of junk.

Peddlers
Peddlers of wares other than food, per person, per day21.00 Peddlers of food, except lunch wagon operators:

Using a vehicle (per vehicle, annual) 210.00
Not using a vehicle, carrying wares by hand42.00
Lunch wagon operators (per vehicle, annual)210.00
Peddlers engaged in the business of selling any personal property at a sale conducted by an organization exempt from the business license tax under the provisions of section 14.10.030 of this chapter shall pay a license tax of $7.50 per day. This rule applies only when all fees, commissions or other remuneration of any kind paid by the peddler to the organization conducting, sponsoring or promoting the sale is devoted exclusively to the business license taxexempt purposes of the organization and the organization has obtained prior approval from the Town Council to conduct the sale, per day7.50

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A "peddler" is every person not having a regularly established place of business in the Town who travels from place to place, or has a stand upon any public street, alley or other public place, doorway or any building, unenclosed or vacant lot, or parcel of land, who sells, offers for sale, any goods, wares or merchandise in the peddler's possession.

Professional and semiprofessional occupations
Per professional or semiprofessional person200.00
Additional per employee15.00
Professional or semiprofessional business or service occupations include, but are not limited to, the following:

Accountant
Advertising counsel
Appraiser
Architect
Artist
Assayer
Attorney-at-law
Auditor
Bacteriologist
Broker, stock or bond
Chemist
Chiropodist
Chiropractor
Dental hygienist
Dentist
Designer or decorator
Detective or investigative personnel
Draftsperson
Drugless practitioner
Electrologist
Engineer: civil, mining, electrical, construction
Engineer: structural, consulting, mechanical, hydraulic Engraver
Feed, grain and fruit broker
Geologist

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Illustrator or showcard writer
Landscape architect
Lapidary
Lithographer
Masseuse or masseur
Nurse
Oculist, optician or optometrist
Osteopath
Physician
Real estate brokers
Surgeon
Surveyor
Taxidermist
Veterinarian
X-ray, dental or medical laboratory
Service occupations$100.00
Service occupations include, but are not limited to the following: appliance, home furnishing or radio and television installation, janitorial and building maintenance, landscape installation and maintenance, secretarial service, security guards, etc.

Shooting galleries105.00
Solicitors (per business)210.00
A solicitor is one who engages in the business of going from house to house, place to place or in or along the streets within the Town selling or taking orders for, or offering to sell or take orders for, goods, wares, merchandise, advertising or other things of value for future delivery, or for services to be performed in the future.

Taxicabs
Per business150.00
Additional per taxi22.50
Theaters and concert halls105.00
Trucking (annual, per vehicle)140.00
Persons other than peddlers who sell or deliver food or any other goods by means of a vehicle, and who have no fixed place of business in the Town. Persons who make no more than two deliveries or sales per quarter are exempt from the foregoing tax. All other motor vehicle delivery business, whether the business operates on a regular route or between fixed termini or not:

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For one vehicle45.00
For each additional vehicle22.00
(Ord. No. 1755, §§ 1—3, 7-5-88; Ord. No. 1857, §§ I, II, 6-3-91; Ord. No. 1929, § X, 1-19-93; Ord. No. 2026, § XV, 2-18-97; Ord. No. 2320 , § III, 9-7-21) Sec. 14.20.120. Credit for businesses in Parking and Business Improvement Area. (a) Any business located and operating within a parking and business improvement area established pursuant to Streets and Highway Code section 36500 and following shall receive a credit on the annual license tax as set forth in this section if:
(1) An assessment pursuant to the parking and business improvement area district ordinance has been levied on the business by the Town for the license year; and (2) The business has paid its parking and business improvement area district assessment for the prior year.
(b) Each person doing any of the kinds of businesses identified as "Contractor," "Hospitals, rest homes, and the like," "Professional and semiprofessional occupations," "Service occupations," and "Trucking" in section 14.20.115 shall receive a credit equal to fifty (50) percent of the annual business license tax.
(c) Every person doing any other kind of business shall receive a credit equal to thirty-three and a third (33⅓) percent of the annual business license tax. (Ord. No. 1857, §§ I, II, 6-3-91; Ord. No. 1970, § I, 2-22-94) Sec. 14.20.125. Exemption for contractors to the town.

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Section 4. Council Implementation. The Town Council of the Town of Los Gatos shall adopt any and all laws it deems necessary to implement this Ordinance.

Section 6. Administrative Regulations and Delegation. The Town Manager is authorized to adopt rules and regulations consistent with this measure as needed to implement this measure and Chapter 14 of the Los Gatos Town Code and to develop all related forms and other materials and to take any other steps as needed to implement this measure and Chapter 14 and to make such interpretations of this measure and Chapter 14 as the Town Manager may consider necessary to achieve the purposes of this measure and Chapter 14. The Town Manager may delegate any authority within their discretion pursuant to this measure as they deem reasonably necessary.

Section 7. Liberal Construction. This Ordinance shall be liberally construed to effectuate its purposes.

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1 ATTACHMENT 4
Resolution No. ______
Resolution of the Council of the Town of Los Gatos
Calling a Municipal Election for November 8, 2022,
Requesting that the County Consolidate the Municipal Election with the General Election on November 8, 2022 and
Submitting to the Qualified Electors of the Town at the November 8, 2022 Consolidated General Election a Measure to Amend Chapter 14 of the Los Gatos Town Code

R E C I T A L S
A. WHEREAS, the Town’s business license tax ordinance was adopted in 1968 and the amount of the tax has not increased since 1991.

B. WHEREAS, the current business license tax is regressive in that smaller businesses pay a higher effective tax rate than larger businesses.

C. WHEREAS, the Town Council desires to adjust the business license tax to both increase revenue to fund critical Town needs.

The Town Council of the Town of Los Gatos now resolves as follows:

Section 1. Findings. The Town Council finds and determines that each of the findings set forth above are true and correct.

Section 2. Calling the Election. The Council calls for a municipal election to be held on November 8, 2022 (“the Election”).

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Shall the measure to fund critical Town needs such as public safety by amending the gross receipts tax schedule for ECommerce, Manufacturing, Wholesaling, and Jobbing for businesses with gross receipts above $12,000,000 from $75 per each $550,000 in excess of $12.0 million to $300 per each $550,000 in excess of $12.0 million, raising about $1.0 million yearly for general fund purposes until ended by voters, and increasing equity, be adopted?
YES
NO
This question requires the approval of a majority of those casting votes.

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3 ATTACHMENT 4
persons designated by them may prepare and submit rebuttal arguments not to exceed 250 words in length. Rebuttal arguments must be submitted not later than August 19, 2022, by 4:00 p.m.

Section 11. Placement on the Ballot.

The Town Clerk is hereby authorized and directed to take all steps necessary to place the measure on the ballot and the full text of the Measure shall not be printed in the voter pamphlet.

A statement shall be printed in the ballot pursuant to Section 9280 of the Elections Code advising voters that they may obtain a copy of this resolution and the Measure, at no cost, upon request made to the Town Clerk as well as a link to the materials on the Town’s website.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSENTIONS:

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4 ATTACHMENT 4
ATTEST: APPROVED:
_____________________________ ______________________________ Town Clerk Mayor
______________________________
APPROVED AS TO FORM: Town Manager
_____________________________ ______________________________ Town Attorney Interim Director of Finance

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5 ATTACHMENT 4
Attachment A
Ordinance No. _____
Ordinance of the Town of Los Gatos
Amending Chapter 14 of the Town Code
The People of the Town of Los Gatos ordain as follows:

Chapter 14

LICENSES AND MISCELLANEOUS BUSINESS REGULATIONS
ARTICLE I. IN GENERAL
Sec. 14.10.010. Definitions.

For the purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section:

Business means professions, trades and occupations and every kind of calling carried on for profit or livelihood, including the business of renting or leasing apartments.

E-commerce means commercial transactions conducted electronically on the internet Internet.

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Home occupation has the same meanings as it does in the zoning ordinance.

Quarter means a period of three (3) calendar months. The quarters begin on the first day of January, April, July and October of each year. The quarter shall include fractions thereof.

Real estate broker means the managing broker and/or partner of any real estate office.

Retail business means any business conducted for the purpose of selling, or offering to sell, any goods, wares or merchandise, other than as a part of a wholesale business and jobbing business.

Tax and license collector is the Finance Director.

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7 ATTACHMENT 4
deducting from the payment found to be due the amount paid at the time such first business license was issued. The Tax and License Collector shall not issue to any such person another license for the same or any other business until such person shall have furnished the written statement and paid the business license tax as required in this chapter. (c) If the amount of the business license tax to be paid by the applicant is graduated according to some sliding scale other than gross receipts, the applicant shall furnish to the Tax and License Collector for guidance in ascertaining the amount of business license tax to be paid, a certified or sworn statement upon a form provided by the Tax and License Collector setting forth such information as may be therein required and as may be necessary properly to determine the amount of business license tax to be paid by the applicant and which statement shall show, among other things, the number of vehicles or tonnage thereof or the number of seats, chairs, rooms, tables or other units used or involved in such person's business as of the time of filing such application. Such person shall thereupon pay the required license tax in advance, computed in accordance with the information contained in such statement.
(d) Repealed.
(Code 1968, § 15-7; Ord. No. 1929, § IV, 1-19-93; Ord. No. 2026, §§ VIII, IX, 2-18-97) Sec. 14.10.095. Term.

RETAILING
At Least But Less Than Tax

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8 ATTACHMENT 4
$ 0 $ 50,000 $ 75.00
$50,000 $100,000 $112.00
$100,000 $150,000 $150.00
$150,000 $200,000 $187.50
$200,000 $250,000 $225.00
$250,000 $300,000 $262.50
$300,000 $350,000 $300.00
$350,000 $400,000 $337.50
$400,000 $450,000 $375.00
$450,000 $500,000 $412.50
$500,000 $600,000 $450.00
$600,000 $700,000 $487.50
$700,000 $800,000 $525.00
$800,000 $900,000 $562.50
$900,000 $1,000,000 $600.00
$1,000,000 $1,100,000 $637.50
$1,100,000 $1,200,000 $675.00
$1,200,000 $1,300,000 $712.50
$1,300,000 $1,400,000 $750.00
$1,400,000 $1,500,000 $787.50
$1,500,000 $1,600,000 $825.00
$1,600,000 $1,700,000 $862.50
$1,700,000 $1,800,000 $900.00
$1,800,000 $1,900,000 $937.50
$1,900,000 $2,000,000 and above $975.00

E-COMMERCE, MANUFACTURING, WHOLESALING AND JOBBING

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9 ATTACHMENT 4
At Least But Less Than Tax
$ 0 $ 200,000 $ 150.00
$200,000 $300,000 $187.50
$300,000 $400,000 $262.50
$400,000 $500,000 $337.50
$500,000 $600,000 $450.00
$600,000 $800,000 $562.50
$800,000 $1,000,000 $675.00
$1,000,000 $1,200,000 $787.50
$1,200,000 $1,400,000 $900.00
$1,400,000 $1,600,000 $1,012.50
$1,600,000 $1,800,000 $1,125.00
$1,800,000 $2,000,000 $1,237.50
$2,000,000 $2,500,000 $1,350.00
$2,500,000 $3,000,000 $1,462.50
$3,000,000 $3,500,000 $1,575.00
$3,500,000 $4,000,000 $1,687.50
$4,000,000 $4,500,000 $1,800.00
$4,500,000 $5,000,000 $1,912.50
$5,000,000 $5,500,000 $2,025.00
$5,500,000 $6,000,000 $2,137.50
$6,000,000 $6,500,000 $2,250.00
$6,500,000 $7,000,000 $2,362.50
$7,000,000 $7,500,000 $2,175475.00
$7,500,000 $8,000,000 $2,587.50
$8,000,000 $8,500,000 $2,700.00
$8,500,000 $9,000,000 $2,812.50
$9,000,000 $9,500,000 $2,925.00

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10 ATTACHMENT 4
$9,500,000 $10,000,000 $3,037.50
$10,000,000 $10,500,000 $4,500.00
$10,500,000 $11,000,000 $4,612.50
$11,000,000 $11,500,000 $4,725.00
$11,500,000 $12,000,000 $4,837.50
$12,000,000 $4,837.50
plus $75.00 $300.00 for each
$550,000 or fraction thereof
in excess of $12,000,000
(Code 1968, § 15-27; Ord. No. 1857, §§ I, II, 6-3-91)
Sec. 14.20.115. License taxes for specified businesses.

Every person doing any of the kinds of business specified in this section shall pay the business license tax specified. The fees are annual unless otherwise specified.

Advertising signs
Signposting and painting .....$420.00
Amusements
Shows, concerts, and the like (per day) .....$42.00
Circuses, menageries and the like:

Less than 2,000 seating capacity
First day .....$420.00
Each succeeding day .....$ 52.50
More than 2,000 seating capacity
First day .....$630.00
Each succeeding day .....$105.00
Sideshows (per day): .....$42.00
Entrance fee not exceeding $0.10 .....21.00
Entrance fee exceeding $0.10 .....42.00
Circus procession or parade (each) .....$210.00
Carnivals (per day) .....$42.00
Ferris wheels, merry-go-rounds, and the like (per month) .....$210.00 Public dances (per dance) .....$21.00

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11 ATTACHMENT 4
Apartment rental and mobile home parks (per unit) .....$7.50 The term "apartment" includes all buildings or groups of buildings on the same premises, composed of a total of three (3) or more dwelling units Auctioneers .....$112.50
Billiard and pool rooms (per table) .....$52.50
Boardinghouses
Boardinghouses licensed by the state or county as boardinghouses for pensioners, and who board pensioners exclusively, are exempt from the business license tax.

For first 4 boarders .....$21.00
For each person over 4 .....$4.50
Cleaning and dyeing laundry delivery
Vehicles (annual, per vehicle) .....$168.00
The tax applies to those who have no fixed place of business in the town.

Contractors (annual) .....$224.00
A separate fee for each type of work activity, such as general engineering, building, plumbing, plastering, painting, masonry, termite service, installation or other specialty, in addition to any sales or jobbing license fee. Contractors with businesses not located in Los Gatos but doing a short-term work activity may pay the daily fee when the job including inspection is completed within a day.

A contractor must show proof of a valid California Contractor's License or a signed Declaration of Exemption from California Contractor's License law.

Contractors (daily) .....$105.00
Day care facilities
Day care facilities provide day care for children under eighteen (18) years of age who are unrelated to the licensee.

Annual, or .....$140.00
Per bed, if that is larger .....$10.00
Hotels and motels (annual, per guest room) .....$7.50

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12 ATTACHMENT 4
Business activities other than renting rooms, conducted in connection with a hotel, are taxed separately.

House movers
Annual license .....$105.00
Additional, per structure moved .....$84.00
Itinerant photographers(annual) .....$210.00
Itinerant vendors (daily) .....$105.00
The words "itinerant vendor" mean any person, both principal and agent, who engages in a temporary and transient business in the Town selling goods, wares and merchandise with the intention of continuing such business in the Town for a period of not more than ninety (90) days, and who, for the purpose of carrying on such business, hires, leases or occupies any room, building or structure for the exhibition or sale of such goods, wares, or merchandise, or from which room, building or structure the sales shall be made or business solicited by means of samples or delivery from house to house. The person so engaged is not relieved from the provisions of this section by reason of associating temporarily with any local dealer, trader, merchant or auctioneer, or by conducting temporary or transient business in connection with, or as a part of, or in the name of any local dealer, trader, merchant or auctioneer. The provisions of this section do not apply to commercial travelers or selling agents selling their goods to dealers, whether selling for present or future deliveries, by sample or otherwise, nor to hawkers on the street, nor peddlers from vehicles, nor to persons selling fruit, vegetables, butter, eggs, or other fruit or ranch products.

Junk collectors (annual, per vehicle) .....$ 84.00
Junk collector means any person who has no fixed place of business in the Town and who engages in or carries on the business of collecting, buying or selling any old rags, sacks, bottles, cans, papers, metals or other articles of junk.

Junk dealers (annual) .....$420.00
Junk dealer means any person who has a fixed place of business in the Town, and who engages in or carries on the business of buying or selling, either at wholesale or retail, any old rags, sacks, bottles, cans, papers, metals or other articles of junk.

Peddlers
Peddlers of wares other than food, per person, per day .....$21.00 Peddlers of food, except lunch wagon operators:

Using a vehicle (per vehicle, annual) ..... $210.00
Not using a vehicle, carrying wares by hand .....$42.00 Lunch wagon operators (per vehicle, annual) …..$210.00
Peddlers engaged in the business of selling any personal property at a sale conducted by an organization exempt from the business license tax under the provisions

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13 ATTACHMENT 4
of section 14.10.030 of this chapter shall pay a license tax of $7.50 $9.00 per day.

This rule applies only when all fees, commissions or other remuneration of any kind paid by the peddler to the organization conducting, sponsoring or promoting the sale is devoted exclusively to the business license tax-exempt purposes of the organization and the organization has obtained prior approval from the Town Council to conduct the sale, per day ….7.50.

Professional and semiprofessional occupations
Per professional or semiprofessional person .....$200.00 Support staff Aadditional per employee .....$15.00
Professional services are occupations in the service sector requiring special training in the arts or sciences. Some professional services require the practitioner to hold professional degrees or licenses and possess specific skills. Other professional services involve providing specialist business support to businesses of all sizes and in all sectors. Professional Services means the business is offering any professional, scientific, or technical service including, but not limited to legal advice and representation; accounting, bookkeeping, and payroll services; architectural, engineering, and specialized design services; computer services; consulting services; research and development services; advertising services; photographic services; translation and interpretation services; veterinary services; and other professional, scientific, and technical services. Professional or semiprofessional business or service occupations include, but are not limited to, the following:

Accountant
Advertising counsel
Appraiser
Architect
Artist
Assayer
Attorney-at-law
Auditor
Bacteriologist
Broker:, stock or bond
Chemist
Chiropodist
Chiropractor

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14 ATTACHMENT 4
Dental hygienist
Dentist
Designer or decorator
Detective or investigative personnel
Draftsperson
Drugless practitioner
Electrologist
Engineer: civil, mining, electrical, construction
Engineer: structural, consulting, mechanical, hydraulic Engraver
Feed, grain and fruit broker
Geologist
Illustrator or showcard writer
Landscape architect
Lapidary
Lithographer
Licensed financial planner
Licensed investment counselor
Masseuse or masseur
Marriage therapist
Massage therapist
Nurse
Oculist, optician or optometrist
Osteopath
Physical therapist
Physician
Property management
Real estate brokers
Surgeon
Surveyor
Taxidermist
Veterinarian
X-ray, dental or medical laboratory

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15 ATTACHMENT 4
Support staff include, but are not limited to the following: receptionist, office assistant, real estate agents
Service occupations .....$100.00
Service occupations include, but are not limited to the following: appliance, home furnishing or radio and television installation, janitorial and building maintenance, landscape installation and maintenance, secretarial service, security guards, etc.

Shooting galleries .....$105.00
Solicitors (per business) .....$210.00
A solicitor is one who engages in the business of going from house to house, place to place or in or along the streets within the Town selling or taking orders for, or offering to sell or take orders for, goods, wares, merchandise, advertising or other things of value for future delivery, or for services to be performed in the future.

Taxicabs
Per business .....$150.00
Additional per taxi .....$22.50
Theaters and concert halls .....$105.00
Trucking (annual, per vehicle) .....$140.00
Persons other than peddlers who sell or deliver food or any other goods by means of a vehicle, and who have no fixed place of business in the Town. Persons who make no more than two deliveries or sales per quarter are exempt from the foregoing tax. All other motor vehicle delivery business, whether the business operates on a regular route or between fixed termini or not:

For one vehicle .....$45.00
For each additional vehicle .....$22.00
(Ord. No. 1755, §§ 1—3, 7-5-88; Ord. No. 1857, §§ I, II, 6-3-91; Ord. No. 1929, § X, 1-19-93; Ord. No. 2026, § XV, 2-18-97; Ord. No. 2320 , § III, 9-7-21) Sec. 14.20.120. Credit for businesses in Parking and Business Improvement Area. (a) Any business located and operating within a parking and business improvement area established pursuant to Streets and Highway Code section 36500 and following shall receive a credit on the annual license tax as set forth in this section if:
(1) An assessment pursuant to the parking and business improvement area district ordinance has been levied on the business by the Town for the license year; and (2) The business has paid its parking and business improvement area district assessment for the prior year.
(b) Each person doing any of the kinds of businesses identified as "Contractor," "Hospitals, rest homes, and the like," "Professional and semiprofessional occupations," "Service occupations," and "Trucking" in section 14.20.115 shall receive a credit equal to fifty (50) percent of the annual business license tax.

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16 ATTACHMENT 4
(c) Every person doing any other kind of business shall receive a credit equal to thirty-three and a third (33⅓) percent of the annual business license tax. (Ord. No. 1857, §§ I, II, 6-3-91; Ord. No. 1970, § I, 2-22-94) Sec. 14.20.125. Exemption for contractors to the town.

Section 4. Council Implementation. The Town Council of the Town of Los Gatos shall adopt any and all laws it deems necessary to implement this Ordinance.

Section 7. Liberal Construction. This Ordinance shall be liberally construed to effectuate its purposes.

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17 ATTACHMENT 4 Page 243
PREPARED BY: Arn Andrews Holly Young
Assistant Town Manager Town Manager Administrative Analyst Reviewed by: Town Manager, Town Attorney, and Interim Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 08/02/2022
ITEM NO: 18

DESK ITEM
DATE: August 2, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution of the Council of the Town of Los Gatos for Model 3, Calling a Municipal Election for November 8, 2022, Requesting that the County Consolidate the Municipal Election with the General Election on November 8, 2022, and Submitting to the Qualified Electors of the Town at the November 8, 2022 Consolidated General Election a Measure to Amend Chapter 14 of the Los Gatos Town Code Relating to Business License Taxes REMARKS:

The following information is provided in response to questions from Council Members, additional business feedback since the posting of the staff report, and other considerations.

Can the ballot measure acknowledge the inflation of the last 30 years? Yes, the ballot language can acknowledge the 117% inflation that has occurred in the last 30 years. This could read:

Shall the measure to fund critical Town needs such as public safety by imposing …… , raising about …… yearly for general fund purposes until ended by voters, and which have not been increased since 1991 while inflation increased 117%, be adopted?
YES
NO
Do other municipalities have inflation adjustments built in? Yes, the cities of Belmont, Union City, and Newport Beach have included inflation adjustments.

Details of their approaches are provided on the next page.

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PAGE 2 OF 4
SUBJECT: Business License Modernization
DATE: August 2, 2022
REMARKS (continued):

In addition, in the event Council opts for a Model that captures only a portion of the 117% inflation factor since 1991 (Model 1 20%), or most of the 117% inflation (Model 3 reduced or Finance Commission alternative), staff would recommend an inflation adjustment be included.

Staff would recommend using the Bay Area Consumer Price Index. This could be accomplished by adding the following language to any of the proposed ballot statements.

Shall the measure to fund critical Town needs such as public safety by imposing …… , raising about …… yearly for general fund purposes until ended by voters, and which have not been increased since 1991, and adjusted annually for inflation, be adopted?
YES
NO
Belmont
Sec. 12-28. - Annual adjustment.

The above referenced schedule of fees, including but not limited to the per employee fees, minimum tax, and license fees shall be adjusted annually pursuant to the Bay Area Consumer Price Index (BACPI) over the previous calendar year. The first such adjustment shall occur on July 1, 1991, based upon the 1990 calendar year BACPI.

Union City

5.08.100 Annual adjustment.

Annual adjustment shall be based on the Consumer Price Index. The rate of the license payable for the license period beginning January 1, 1984, and each year thereafter, shall be adjusted as follows: The Consumer Price Index published as of June 30, 1967, by the United States Department of Labor, Bureau of Labor Statistics for San Francisco, California area shall be used as the base year. The Consumer Price Index used for the computation for the succeeding year shall be the preceding June to June, all urban index, San Francisco/Oakland Index rounded off to the nearest full percentage point. Increase shall be sixty-five percent of the CPI and the increase shall be no less than three percent, nor more than ten percent of the increase in CPI for all categories not currently taxed at gross receipts or gross payroll.

Newport Beach

5.08.022 Business Tax—Commercially Based Businesses.

Every commercially based business as defined by this chapter shall pay an annual business tax as established by resolution of the City Council. The business license tax shall automatically be adjusted each year in July to reflect the percentage change, rounded to the nearest dollar, in the cost of doing business as measured by the consumer price index. The term “consumer price

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PAGE 3 OF 4
SUBJECT: Business License Modernization
DATE: August 2, 2022
REMARKS (continued):
index” shall mean the United States Department of Labor Bureau of Labor Statistics consumer price index, Los Angeles Anaheim-Riverside.

How would the Town’s business license structure and fees compare to other municipalities? Based on the HdL analysis and report, the Town has the 3rd highest Business License receipts of the comparators used in the report (pg. 8 of the report). The fact that the comparator jurisdictions have different tax structures (flat fee, per employee, gross receipts) is the primary driver of the difference in receipts. Since all the models under consideration raise additional revenues, Los Gatos will continue to be in the top tier of Business License receipts.

Additional Business Feedback
Staff concluded their third conversation with representatives of Netflix on August 1, 2022.

During the call with Netflix, representatives shared that they understand the Town’s impetus for initiating a review of the Business License program and expressed their thoughts on the three models under consideration. Netflix is neutral on Model 1, opposed to Model 2, and felt Model 3 is overly punitive as is, and if considered by Council, should be closer in line with the 117% inflation factor referenced in the staff report. Staff greatly appreciated Netflix’s engagement and will be available to respond to questions on the sequence of calls.

Other Considerations
As the Town Council considers the different models, the Council is free to consider options for any of the three models. Staff is prepared to run real-time calculations if Council would like to see the effects of different tax rates for the flat fees, retailing gross receipt rates, and/or ecommerce, manufacturing, wholesaling/jobbing gross receipt rates. Staff is also preparing a resolution and associated ordinance for the Finance Commission recommendation.

If the Council votes on a measure that is a more complex variation of one or more of the models, a special meeting prior to August 12, 2022 would be needed to provide the public and the Council an opportunity to review the associated resolution and ordinance.

Attachments Previously Recieved with the July 29, 2022 Report:

1. Public Comment

2. Model 1 Resolution with corresponding Ordinance as Attachment A

3. Model 2 Resolution with corresponding Ordinance as Attachment A

4. Model 3 Resolution with corresponding Ordinance as Attachment A

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PAGE 4 OF 4
SUBJECT: Business License Modernization
DATE: August 2, 2022
Attachment Provided with this Desk Item:

5. Correspondence received after 11:01 a.m. on July 29, 2022 and before 11:00 a.m. on August 2, 2022

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ATTACHMENT 5
Dear Los Gatos Town Council,
It’s my opinion that “Model 3” is the best model to implement as regards a BL change that would result in an increase of approximately $1,100.000 in annual town revenue.

Best,
Doc A
Dr . Thomas Antone, DC, AMD

HYPERBARIC OXYGEN THERAPY, EEG NEUROFEEDBACK, ADVANCED CHIROPRACTIC CARE "To become fully conscious, in this moment, is the true purpose of life." Eckhart Tolle

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Los Gatos City CouncilAugust 2, 2022

Los Gatos City Council
August 2, 2022