4/24/2024
1 RiversideCA.gov
1 RiversideCA.gov
BUSINESS TAX DISCOVERY
PROGRAM UPDATE AND ORDINANCE
REVIEW
City Council
May 07, 2024
FINANCE DEPARTMENT
RiversideCA.gov
2 BACKGROUND
• Priority Based Budgeting Insight to generate new
revenue for the City
• September 6, 2022: Council approved Discovery
Program for Business Tax
• HdL identified 2,894 property rentals and 19,000
unregistered businesses as non-compliant
• Potential $6.1 million in revenue, including 3 years of back taxes
1 2
4/24/2024
2 RiversideCA.gov
3 • Discovery Program initiated on
November 1, 2022, starting with
property rentals (residential and
commercial) prior to being
placed on hold in March 2023
for a comprehensive review of
the RMC to be conducted. The
general business category has
not yet commenced.
• Approximately $683,000 of new
revenue has been generated
from the Discovery Program to
date.
DISCUSSION
RiversideCA.gov
4 1. Objective:
• Achieve target compliance revenue of $6.1 million in
collaboration with HdL.
• Focus on overall compliance within the City of Riverside
2. Dependency on RMC Amendments:
• The attainment of this goal is contingent upon the City's commitment to enforcing the Riverside Municipal Code (RMC) as written.
POTENTIAL REVENUE
3 4
4/24/2024
3 RiversideCA.gov
5 1. Background:
• Discovery Program prompted HdL to inquire about RMC
interpretation.
• Inconsistencies found in Chapter 5.04 impacting revenue.
2. Temporary Halt and Thorough Review:
• Discovery Program paused in March 2023 for a comprehensive RMC review.
• Aim: Formulate enhanced enforcement strategy.
3. Comprehensive Ordinance Review Initiated by HdL:
• HdL began a detailed ordinance review in March 2023 per contract terms.
• Benchmarking against industry standards.
ORDINANCE REVIEW
RiversideCA.gov
6 4. Collaborative Review and Guidance:
• Collaborative review with Business Tax team for refinement. • Consulted City Attorney’s Office for guidance.
5. Finalization and Proposed Changes:
• The changes include updating language to align with current business practices, modernizing pronoun usage, introducing clear definitions, improving clarity, and incorporating language to reference state law, where applicable.
ORDINANCE REVIEW (CONT’D)
5 6
4/24/2024
4 RiversideCA.gov
7 Strategic Priority 5: High Performing Government
Goal 5.4: Achieve and maintain financial health by
addressing gaps between revenues and expenditures and
aligning resources with strategic priorities to yield the greatest impact.
Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
RiversideCA.gov
8 That the City Council:
1.Receive and provide feedback on the status and financial impact of the City’s Business Tax Discovery program; and
2.Recommend that the City Council adopt an Ordinance to amend specific sections of Riverside Municipal Code Section
5.04 Taxes, Licenses and Regulation.
RECOMMENDATIONS
7 8