SAN BRUNO CITY COUNCIL REGULAR MEETING
April 23, 2024
Public Comment
1 Lupita Huerta
From: Dennis Revell < >
Sent: Tuesday, April 23, 2024 2:24 PM
To: Rico Medina; Michael Salazar; Sandy Alvarez; Tom Hamilton; Marty Medina Cc: Lupita Huerta; City Manager; Ryan Johansen; Ari Delay; Lupita Huerta; City Manager; Ryan Johansen; Ari Delay; CityAttorney; Nick Pegueros; Milton Broussard ( ); John Castilone
Subject:
City Council Meeting / April 23, 2024 /Public Hearings / Fireworks Attachments: San Bruno's Application for Fireworks Stand Permit.pdf Importance: High
April 23, 2024
The Honorable Mayor Rico E. Medina and
Members of the San Bruno City Council
City of San Bruno
567 El Camino Real
San Bruno , CA 94066
Re: City Council Meeting
Date: Tuesday, April 23, 2024 Time: 7:00 pm
Agenda Item: PUBLIC HEARINGS
ITEM NO: 7(a)
Hold Public Hearing and Adopt a Resolution Approving an Update to the User Fee Sched ule for Fiscal Year 202425
Our Client: American Promotional Events, Inc. (dba TNT Fireworks)
2 Dear Mayor Medina and Councilmembers,
In an effort to be both constructive and transparent, I thought it would be prudent to share with you my email correspondence with the City Attorney dated April 22, 2024.
I am sharing this with you on the heels of an informative phone conversation I had with San Bruno City Chief Financial Officer Nick Pegueros and City Attorney Trisha Ortiz. I applaud Mr. Pegueros for the apparent improvements he is attempting to institute in the City’s fireworks cost recovery process. The San Bruno nonprofits and our client look forward to working with him to resolve our remaining issues and concerns.
I will be participating via Zoom in this evening’s City Council meeting should you have any questions.
Sincerely,
Dennis C. Revell
President/CEO
Revell Communications
Office
Cell
From: Dennis Revell
Sent: Monday, April 22, 2024 9:39 PM
To: '[email protected]' <[email protected]> Cc: John Castilone < >; Milton Broussard ( )
>
Subject: City Council Meeting / April 23, 2024 /Public Hearings / Fireworks Importance: High
3 Ms. Trisha Ortiz
City Attorney
City of San Bruno
567 El Camino Real
San Bruno , CA 94066
Re: City Council Meeting
Date: Tuesday, April 23, 2024 Time: 7:00 pm
Agenda Item: PUBLIC HEARINGS
ITEM NO: 7(a)
Hold Public Hearing and Adopt a Resolution Approving an Update to the User Fee Sched ule for Fiscal Year 202425
Our Client: American Promotional Events, Inc. (dba TNT Fireworks)
Good Evening Ms. Ortiz:
As you may know, since 1989 Revell Communications has served as the public relations/public affairs representative for American Promotional Events, Inc. (TNT Fireworks), the state’s leading wholesale distributor of State Fire Marshal-Approved Fireworks. We assist TNT Fireworks with its community liaison activities as well as with the development and implementation of both local and statewide Fireworks Safety & Education Programs that it coordinates and/or underwrites in conjunction with local and state fire departments and law enforcement agencies. We also assist our client as well as the State of California and many local communities with the collection, tabulation and analysis of local fire and injury data as it relates to illegal, state- approved and
unknown fireworks and act as a resource library for those same entities on emerging enforcement and public education techniques throughout the country as we all battle with the growing menacing problem of illegal fireworks. (For further general information please see the attached “If You Are Not Part of the Solution, You Are Part of the Problem!!”).
As I explained to Ashlee during a phone call with her late this afternoon, I’m reaching out to you for clarification on a matter that heretofore, while our client has provided information when requested by the City, has been exclusively conducted between our client’s San Bruno nonprofit retail partners and the City. More specifically, I was struck by the below chart in the staff report (page 26 of 76) which upon first glance appears to suggest the City will be asking the nonprofits to pay an Application Fee ($95), a “Fireworks Stand Safety Clearance” fee and a pro rata share of their gross profits to cover “Actual Costs” incurred by the City without any cap or qualification as to reasonableness or legality.
4 I’m not sure if I’m misreading this and was hoping you could add some clarity to the situation rather than me having to raise it during the public hearing.
Under the provisions of Proposition 26 and the decision in the Sinclair Paint case, a jurisdiction must be able to demonstrate, through a preponderance of the evidence, that a charge is reasonable. A charge is reasonable if it does not exceed the necessary
cost of the governmental activity and if the cost allocated to the payer bears a fair or reasonable relationship to the payer’s burden or benefits. The simplest primary test I always suggest a jurisdiction should apply is, “If State Fire Marshal-Approved, Safe and Sane Fireworks were not allowed tomorrow in your jurisdiction, would you still incur the expense you want to pass onto the nonprofits?” If the jurisdiction would still incur it, then, at a minimum, it’s highly questionable as to whether you can pass it on to the nonprofits. Assuming it clears this primary test hurdle, then the question becomes, “Is the expense reasonable?”, i.e., you can’t go out and pay an expensive Hollywood celebrity to appear in a fireworks public service announcement (PSA) and then pass that actor’s fees, production costs, and air time costs for that PSA onto the nonprofits.
As I shared with Ashlee in our phone call, by virtue of AB 1403 which I helped draft and was signed into law effective January 1, 2024, the limitations imposed by Proposition 26 and the Sinclair Paint case have been further codified in a new Section 12635.5 of the California Health and Safety Code:
SECTION 12635.5.
(a) A charter city, city, county, fire protection district, or city and county that adopts an ordinance or resolution pursuant to Section 12599 may, through adoption of an ordinance or resolution by the governing body, require each applicant receiving a permit to pay a fee to the charter city, city, county, fire protection district, or city and county of a pro rata portion of the actual and reasonable costs the charter city, city, county, fire protection district, or city and county incurs that is related to any of the following:
(1) Processing and issuing permits.
(2) Inspection of fireworks stands.
(3) Public education and awareness campaign s regarding the safe and responsible use of safe and sane fireworks, and the dangers and risks posed by the use of illegal fireworks. (4) Enforcing the provisions of the code of the charter city, city, county, fire protection district, or city and county with respect to the sale and use of safe and sane fireworks, including extra personnel time and cleanup of the fireworks trash and debris. “Extra personnel time” means employee or contracted employee time that the charter city, city, county, fire protection district, or city and county would not otherwise incur but for the sale and use of safe and sane fireworks. (5) Fire operation and suppression efforts that are directly related to safe and sane fireworks. (b) The pro rata share of the costs shall be specified in the ordinance or resolution and calculated using gross sales as shown on each permittee’s sales and use tax return for the applicable period. The pro rata share of costs shall not exceed 7 percent of th e gross sales of the fireworks sold in the charter city, city, 5 county, fire protection district, or city and county during the applicable period. A cost recovery ordinance or resolution in effect on or before January 1, 2024, may supersede this subdivision.
Just as before the enactment of AB 1403, a jurisdiction now levying all their costs, or an amount equal to a flat 7 percent of the nonprofits’ gross sales, without a “cost bill” that details out costs that meet both the “reasonable” and “legally levied” st andards, would not be sustained by a court and indeed may be ruled as an attempt to impose a “tax” on the nonprofits without an affirmative approval of said tax by the voters of that jurisdiction.
On Friday, April 12, 2024, the United States Supreme Court, in a unanimous 9-0 decision in the Sheetz v.
County of El Dorado case (https://www.supremecourt.gov/opinions/23pdf/22-1074_bqmd.pdf), ruled against exorbitant government fees in a case that centered on one California retiree forced to pay a flat-rate $23,000 “traffic impact fee” for the construction of a single small home to raise his grandson in. This ruling combined earlier rulings on government permitting fees, which must both have “essential nexus” — related to the government interest for having the fee — and be “roughly proportional” to the impact for the action the fee is targeting, with the addition that fees created by legislatures are not exempt from these requirements.
The Supreme Court posted guardrails on those impact fees just as Proposition 26, the Sinclair Paint case and AB 1403 have placed guardrails on the fees that a jurisdiction can levy on its nonprofit organizations selling State Fire Marshal-Approved, Safe and Sane Fireworks. The Sheetz v. County of El Dorado decision establishes legal principles or standards regarding the reasonableness of government fees and the burden of proof required to justify such fees. The decision emphasizes the importance of clear documentation and evidence to substantiate fees. The court in Sheetz v. County of El Dorado places a high burden on the government to demonstrate the reasonableness and legality of the fees. The decision emphasizes the need for fees to be directly related to the services provided or the costs incurred by the government.
I share all of the above with you in the hopes of gaining some clarity on what is really taking place. As you can see from the attached “Application for Fireworks Stand Permit” it would appear that last year, what in the staff report is now being called a “Fireworks Stand Safety Clearance” fee (without a definition as to what that fee covers or means), was previously called the “Application Fee”. The nonprofits that partner with our client have said that over the last 5 years, they have paid the City additional surcharge sums from a low of $37,620 to a high of $52,725 per year without a “cost bill” detailing what specific services it covered and whether it met the reasonable and legal standards outlined above.
Obviously under the new Section 12635.5 of the California Health and Safety Code, the “Application Fee” and the “Fireworks Stand Safety Clearance” fee must be included in the 7% cap, and any attempt to levy a fee equal to a flat 7% of the nonprofits’ gross sales, without a “cost bill” that details out costs that meet both the “reasonable” and “legally levied” standards, would not be sustained by a court and indeed may be ruled as an attempt to impose a “tax” on the nonprofits without an affirmative approval of said tax by the voters of the City of San Bruno.
I hope and trust that the above is not the case and you can allay my concerns.
Sincerely,
Dennis C. Revell
President/CEO
Revell Communications
6 ---Office
---Cell
CITY CLERK’S OFFICE
2023 APPLICATION FOR FIREWORKS STAND PERMIT
Completed applications must be received by the Clerk’s Office by 5:00 p.m., Friday May 5, 2023 Name of Group/Organization: __________________________________________________________________ Contact Person: _____________________________________ Email: _________________________________ Mailing Address: ____________________________________________Phone: _________________________ Statement of Tax-Exempt Status: (Tax I.D. number or document verifying your organization is a non-profit) _________________________________________________________________________________________ Stand Location: (Provide address or description of site)_____________________________________________ Property Owner: ________________________________________Phone Number: ______________________ Describe the activities/events of your organization?
_________________________________________________________________________________________ _________________________________________________________________________________________ _________________________________________________________________________________________ Percentage of your organizations activities/events that take place in San Bruno? _________________________ Percentage of San Bruno residents who are members of your organization? _____________________________ Percentage of San Bruno residents who are served by your organization? ______________________________ How does your organization provide a benefit to the San Bruno Community? ____________________________ _________________________________________________________________________________________ _________________________________________________________________________________________ How will the money from the sale of fireworks will be used? __________________________________________ _________________________________________________________________________________________ _________________________________________________________________________________________ Your organizations principal officers:
Name____________________________Title_____________________Address_________________________
Name____________________________Title_____________________Address_________________________ Name____________________________Title_____________________Address_________________________ Name____________________________Title_____________________Address_________________________ You’re almost done!
Please attach……….
• Written authorization from property owner or agent of stand location granting permission. • Your organization’s roster including name and address of each member. • Application Fee check for $1,427.00 made payable to: The City of San Bruno.
Reminder - Following the July 4th holiday an additional fee will be assessed on a prorated basis among all permit holders. It will cover the City’s costs for education, enforcement, and clean up.
Applicant understands and acknowledges that each approved stand permit holder will be required to submit proof of insurance and endorsements to the City Clerk by Friday, June 3nd.
The applicant’s organization hereby indemnifies, defends, and holds harmless, the City of San Bruno, its officers, officials, agents and employees from and against any and all liability, loss, damage, expense, cost (including without limitation costs and fees of litigation) of every nature arising out of or in connection with the sale of fireworks by the applicant organization or its failure to comply with any of its obligations set forth in the City Resolution Nos. 2008-67, 2009-46 and Ordinance Nos. 1700 and 1840 or otherwise required by the City, except such loss or damage caused by the sole negligence, or willful misconduct of City.
I hereby certify under penalty of perjury that the information provided is complete and accurate.
Sign______________________________________ Date: ______________ Print Name_________________________________
Title_______________________________________
Received Resolutions and Ordinances_____ (Please Initial)