City Council
Report
City Council Meeting: June 25, 2024
Agenda Item: 14.A
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To: Mayor and City Council
From: Oscar Santiago, Director, Finance Department, Revenue Subject: Proposed Ballot Measures for the November 5, 2024 General Municipal Election
Recommended Action
Staff recommends that the City Council:
1. Adopt a Resolution to place a measure on the November 5, 2024, General Municipal Election Ballot which modernizes the applicable sections of Article 6 Business Professions and Trades per prior Council direction (Attachment A);
2. Identify Council Members, if any, who wish to prepare arguments for or against the Business License Tax Modernization measure;
3. Adopt a Resolution to place a measure on the November 5, 2024, General Municipal Election Ballot to increase the City’s Parking Facility Tax rate by 8% and exempt City-owned lots and structures from the tax increase (Attachment B);
4. Identify Council Members, if any, who wish to prepare arguments for or against the Parking Facility Tax measure;
5. Review Council Compensation Comparison report and direct the City Attorney and City Manager to return to Council with additional information necessary for City Council to place a measure on the November 5, 2024, or future, General Municipal Election Ballot to amend the Santa Monica City Charter Section 602 to increase Council Member compensation; and
6. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
Summary
While Santa Monica’s economy continues to recover, the City also continues to navigate various challenges, ranging from economic uncertainty resulting from inflation and high interest rates, increased costs, the need to address deferred infrastructure and equipment maintenance, and contingent liabilities. This has hindered the City’s ability to expand services to levels that meet the community’s needs and expectations. It is in this 2 of 19
environment, that Council directed staff to evaluate two potential tax measures for the November 2024 ballot: Business License Tax Modernization and an increase to the Parking Facility Tax. Apart from the tax measures, Council has also raised the issue of the level of compensation provided to members of the Council, which could be addressed via a Charter Amendment on the 2024 ballot.
This report summarizes staff’s efforts to date and highlights key insights gathered from polls that were conducted to gauge sentiment around the two potential tax measures, as well as provides suggested ballot language should Council decide to place the tax measures on the ballot. Additionally, the report provides information requested by Council in consideration of placing a Charter Amendment on the ballot.
Discussion
Business License Tax Modernization
On April 9, 2024 (Attachment C), staff presented to Council a comprehensive review of the existing business license tax ordinance, the findings of that work, and a draft proposal to modernize the business license tax, including key changes intended to reduce barriers on small and local businesses while prioritizing equity and fairness in the process. Table 1 below summarizes the proposed tax changes that address deficiencies in the ordinance, including the number of businesses impacted, and the estimated revenue impact associated with the proposed changes.
Table 1 - Proposal presented to Council at its April 9, 2024 meeting Proposed Change Description # Of Businesses
Impacted
Revenue Impact
Range in Millions
Increase the Small Business Tax Exemption threshold from $40,000 to $100,000.
7,000-8,000 $(0.7) - $(0.8)
revenue decrease
Reduce Penalty Schedule maximum from 100% to 50% 200-300 $(0.2) revenue decrease
Remove the back tax calculation related to the application year on the first renewal submission
300-400 $(0.3) - $(0.4)
revenue decrease
Residential Rental 3 Unit or Less Rate Reduction from
$3.00/$1,000 to $1.25/$1,000
400-500 $(0.02)
revenue decrease
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Proposed Change Description # Of Businesses
Impacted
Revenue Impact
Range in Millions
Rate Reduction from $1.25/$1,000 to $1.15/$1,000 for
Retailers/Restaurants generating under $5 Million in gross receipts annually
1,800-1,900 $(0.1) - $(0.12)
revenue decrease
Auto Dealers will pay business license tax on their total gross receipts at a rate of $1.25/$1,000 for sales and a rate of $3.00/$1,000 for the auto repair operations with no maximum tax
13-16 $0.9 - $1.3
revenue increase
Increase tax rate on Corporate/Administrative Headquarters from $1.25/$1,000 to $2.50/$1,000
110-120 $2.1 - $3.1
revenue increase
A processing fee initially set at 100% of the BL Unit's costs.
The fee would be approximately $40
22,000-23,000 $0.8 - $0.85
revenue increase
Estimated Revenue Impact Range $2.25 - $3.93
revenue increase
Council was in support of the changes presented and directed staff to 1) move forward with drafting a modernized business license tax ordinance, 2) consider a phased approach to the business license tax rate increases while remaining fiscally prudent, 3) consider potential business license tax incentives for businesses that require their employees to return to the Santa Monica offices and 4) to conduct a statistical survey of Santa Monica voters to gauge support for business license tax rate changes, should it be placed on the November 2024 ballot.
Changes to modernize the business license tax ordinance Along with the proposed business license tax rate changes, staff proposes revisions to Article 6 of the City’s Municipal Code to modernize the ordinance language. Table 2 below provides the material administrative changes required to the ordinance. The changes would make it easier for businesses to understand and comply with the business license program and simplify administration. Additionally, the changes would also remove inconsistencies in terminology, contradictory sections, clarify and modernize key definitions, eliminate provisions that are no longer applicable, and ensure that code sections that reference other sections align throughout. If the voters approve the proposed ballot measure, the updated ordinance language and the proposed rate changes would go into effect January 1, 2025. 4 of 19
Table 2 - Revisions to Article 6 of the City’s Municipal Code Municipal Code Section Content Change
6.04.005 Purpose • New section that provides the purpose of the applicable chapters
6.04.010 Definitions • Added definitions such as administrative regulations, assessments, business license tax, business license certificate. • Updated definitions for business, engaging in business, gross receipts, independent contractor
6.04.025 Exemptions • New section that centralizes all exemptions including the Gross Receipts Exemption of $100,000 or less (not to exceed $125,000 after CPI adjustments), nonprofit business exemption, community event exemption.
• Elimination of Civic Center and Civic Center parking structure exemption
6.04.045 through 6.04.046
Administrate Regulations and
Finance Director Authority
• New section that provides authority for administrative rules and regulations, provides the Finance Director with the ability to delegate his or her authority.
6.04.185 Statute of Limitations • New section that provides statute of limitations for the collection of delinquent business license taxes, penalties, applicable assessments, and fees
6.04.250 Apportionment • Clarify the apportionment guideline process
6.04.260 Revocation,
Suspension or Denial
• Clarify the City ability to revoke, suspend or deny a business license and any applicable regulatory permits.
All revisions are reflected in Attachment A.
Phased approach to business license tax rate increases
At the direction of Council, staff proposes a three-year phased approach to ease impacts of tax increases on affected businesses, while incrementally increasing business license tax revenue sufficiently to cover the tax reductions that are being proposed and continue to protect funding that supports essential services. The changes are related to the Auto Dealer Cap Removal and Service Repair Rate and the Corporate/Administrative Headquarters Rate, as reflected in Table 3.
Table 3 – Changes to proposal presented to Council at its April 9, 2024 meeting Proposed Change Year 1 Year 2 Year 3
Auto Dealer Cap Removal
and Service Repair Rate
Remove Cap tax all
receipts at $1.25 per
$1,000
Same as 1st year Remove Cap add
service at $3.00
per $1,000
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The impact of phasing-in the tax increases would result in a revised estimated revenue range between $1.1- $2.3 million in the first year, which would be approximately $1.2 - $1.6 million less than the original proposal. The full impact of the modernization estimated at $2.25-$3.9 million, as reflected in Table 1, would not be realized until year 3.
Return to Work Incentives
Council also directed staff to consider potential incentives, as part of this effort, that could be provided to businesses that require their employees to return to the Santa Monica offices. The incentives would seek to encourage businesses to increase the number of employees working in Santa Monica with the assumption that it would stimulate economic activity. There are a number of concerns and considerations associated with incorporating such incentives into the Business License Tax program, including:
• Business license tax incentives are not sufficient to offset reduced real estate costs from smaller office footprints and other savings realized through telework. • Many companies are still evaluating hybrid and telework practices and therefore their policies may evolve.
• This would introduce an inequity in the proposed tax structure as telework does not apply to all businesses.
• Business license tax is self-reporting and there is no current mechanism to track daily employee attendance. Attempts to create a tracking system would create additional administrative and compliance burdens for the City and taxpayers.
Consequently, staff recommends that to the extent any incentive program is implemented, it be done separate and apart from the proposed Business License Modernization.
Proposed Change Year 1 Year 2 Year 3
Corporate/Administrative
Headquarters Rate Increase
Increase rate to
$2.00 per $1,000
Increase rate to
$2.25 per $1,000
Increase rate to
$2.50 per $1,000
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Moreover, the City’s Economic Development Division (EDD) continues to encourage business development and offers extensive support to local businesses, including but not limited to:
• Buy Local Santa Monica, a free marketing program to help support all Santa Monica businesses and raise awareness of the associated economic, environmental and community benefits, established in 2010 in partnership with the City, Santa Monica Chamber, Santa Monica Travel + Tourism and the Business Improvement Districts. Over 1,500 Santa Monica businesses are actively involved.
• Close partnerships with regional, State and Federal Economic Development partners to help our businesses access support and resources including grants, loans, marketing, workforce development and business advisory services. • Assistance in accessing California Competes grants and tax credits, working closely with Los Angeles County Economic Development Corporation (LAEDC) and GoBIZ which provide income tax credits to businesses that want to move, stay and expand in California. This funding has helped several of our larger SM businesses including SNAP, Headspace, GoodRX and more.
• The City has offered small business grants and fee waivers including 2.5 years of outdoor dining fee waivers during COVID, a COVID Small Business Relief Fund (utilizing Federal ARPA funds) and a new Small Business Economic Recovery Grant + Loan program that will be rolled out in FY2024/25, utilizing federal and local resources.
The City also offers a wide range of rebates and support to assist businesses with sustainability efforts and employee mobility programs including Green Business Certification and GOSAMO. Working closely with utility partners at Southern California Edison (SCE), the City helps businesses access support including SCE Savings by Design and energy efficiency programs, to help businesses reduce operating costs and achieve sustainable goals. In addition, a number of permitting and zoning changes were 7 of 19
implemented to help businesses open, expand and operate in Santa Monica. These changes have helped reduce cost and time enabling businesses to open quicker with less expenses.
Polling Results and Ballot Language
To gauge support and public sentiment of the Business License Tax Modernization for potential inclusion on the November 2024 ballot, the City conducted a statistically reliable community survey of Santa Monica voters. The survey was completed by 439 randomly selected Santa Monica voters between April 29th and May 7th and was conducted online and by phone. The survey results demonstrated that the proposed measure is viable with a solid majority in favor of the measures at 58%. Unlike bonds or special taxes, a simple majority of the electorate would be required for approval of this measure.
Staff recommends that the City continue community outreach and planning to place this measure on the November ballot. The recommended ballot language is as follows:
Santa Monica Business License Tax draft ballot language:
To fund essential city services such as 911 emergency response, public safety, and addressing homelessness, shall the measure modernizing the City of Santa Monica’s 1990 business license tax ordinance to improve tax equity and fairness, exempting small businesses from the tax, decreasing tax rates for most retailers and restaurants, raising the corporate headquarters rate to 0.25%, removing auto dealer tax exemptions, and restoring a business license processing fee, generating approximately $3,000,000 annually, until ended by voters, be adopted?
The proposed resolution (Attachment A) includes the recommended ballot language and measure language and authorizes designated City Council members to submit arguments and rebuttals concerning the measure. Finally, the resolution directs the City Clerk to transmit a copy of the measure to the City Attorney and directs the City 8 of 19
Attorney to prepare an impartial analysis of the effects of the measure on the existing law as well as on the operation of the measure.
Arguments and rebuttals shall be submitted in accordance with State Elections Code Sections 9280-9287 and Santa Monica Municipal Code Section 11.04.125. The Elections Official will set the deadline for submitting arguments as 14 days from the date the election is called on the measure and the deadline for submitting rebuttals to arguments as 10 days after the deadline for submitting arguments on the measure, or the date fixed by the City Clerk, whichever date is later.
Parking Facilities Tax
On December 19, 2023, Council directed staff to evaluate the potential to place a General Tax with an Advisory Measure on the November 2024 ballot to increase the Parking Facility Tax (PFT) with the intent to use the funds generated to reduce traffic congestion and the risk of traffic fatalities and serious injuries in Santa Monica. As a result, staff completed a review of the tax assessed by other jurisdictions, has continued to engage the Coastal Commission on parking rate increases, completed a statistical survey of Santa Monica voters to gauge support for tax rate increase, and has developed proposed ballot language should Council decide to move forward with placing the tax measure on the November 2024 ballot.
Review of tax assessed by other jurisdictions
Most neighboring cities do not have a parking tax including Culver City, West Hollywood, and Beverly Hills. While some other cities use slightly different names for their parking tax, the following cities have parking taxes:
City Name % Tax Title of Tax
Los Angeles 10% Parking Occupancy Tax
Malibu 10% Parking Occupancy Tax
Burbank 12% Transient Parking Tax
Inglewood 10% Parking Tax
San Francisco 25% Parking Tax
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Efforts to seek approval on rate increases from Coastal Commission Most City-operated parking lots and structures are within the Coastal-zone and require a coastal development permit from the Coastal Commission in order to pass any increased cost to customers. The current parking rates for City-operated parking lots and structures are inclusive of the City’s current 10% parking facilities tax. The Coastal Commission has taken the position that any further increases to the parking rates for City-operated parking lots in the Coastal-zone, including an increase resulting from a voter-approved parking facilities tax increase, will require a coastal development permit before higher City parking rates can be charged in the Coastal Zone. As such, if the proposed tax measure to increase the PFT rate is approved by the voters, staff proposes that the parking rates at all City-owned parking lots and structures remain at the existing rates via a partial exemption from the PFT increase, until the Coastal Commission approves higher overall parking rates. Additionally, the 30- and 90-minute grace periods with free parking at certain City-owned parking structures would not be affected by the parking facilities tax increase.
Staff continues to move forward with efforts to address requirements set forth by the California Coastal Commission for approval of potential future parking rate increases.
At its March 19, 2024 meeting, Council awarded a contract to Walker Parking Consultants/ Engineers to conduct a comprehensive and Citywide parking analysis to evaluate parking supply, demand, operation, management, parking rates, and best practices. In addition, the consultant will help the City with public outreach, public engagement, meeting requirements set forth by the California Coastal Commission, and all other miscellaneous tasks needed to complete the parking study. The consultant will also evaluate the impacts of the requests made by the Coastal Commission for approval of a coastal development permit. The City has not completed a comprehensive parking study in many years, and the last rate study was completed in 2012. Based on the results of the study, the City Council could decide to adjust parking rates and adjust for any approved PFT increase. As noted above, the Coastal Commission has taken the position that any increase to the parking rates in the Coastal-zone, whether related to a higher parking facilities tax rate and/or as supported by the parking study, would be 10 of 19
subject to the Coastal Commission’s approval before the higher rates can be passed on to customers.
Polling Results
To assess the feasibility of an increase of 10% to the Parking Facility Tax, the City conducted a statistically reliable community survey of Santa Monica voters. The survey was conducted in English and Spanish and completed by 507 randomly selected Santa Monica voters between March 21st and 26th and was conducted online and by phone.
The results of the March poll determined that the level of support for a 10% increase on the existing parking facilities tax was at 50% based on the ballot language tested.
Lessons learned from the poll results indicate that respondents perceive that a 10% parking facility tax increase as a hit to their wallets and that the ballot language as originally drafted, describing the potential uses of the funds generated, did not align with the areas of greatest urgency to Santa Monica voters.
Staff revised the ballot language based on lessons learned from the March 2024 poll, with the intent to conduct a second poll to gauge support before bringing the final results to Council. The ballot language was revised for the second poll, to lower the proposed tax increase to 8%, clarify that City-owned parking lots and structures (including downtown and the beach) would be exempt from the tax increase and that revenues generated from the tax would focus on areas that are most important to Santa Monica residents. Below is the revised language used in the second poll:
To maintain essential city services, including enhancing public safety, addressing homelessness, creating safe routes to schools, reducing fatal pedestrian and bike accidents, improving city streets and sidewalks, and maintaining clean and safe parks; shall the measure increasing the City of Santa Monica’s Parking Facility Tax by 8%, exempting parking at City-owned parking lots and structures (including downtown and the beach) from the tax increase, generating approximately $6,700,000 annually until ended by voters, with independent audits, be adopted?
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This time the survey was completed by 350 randomly selected Santa Monica voters between May 15th and 22nd. While the results of the second poll were not statistically different than the March poll, it reinforced that to increase its probability of passing, the measure needs to clarify that there would not be an increase to the cost of parking at City-operated parking facilities and that the use of the funds would be focused on the areas that are most important to residents.
Proposed Ballot Language
Staff estimates that an 8% tax increase would generate approximately $6.7 million in additional annual General Fund revenues. The resolution to place the measure on the November 2024 general election ballot is included in the staff report.
If Council decides to move forward with placing the item on the ballot, the recommended ballot language is as follows:
Parking Facility Tax Increase
To maintain essential city services, including enhancing public safety, creating safe routes to school to protect children, and lowering the risk of fatal traffic accidents, shall the measure increasing the City of Santa Monica Parking Facility Tax by 8% for users including visitors and tourists, causing no additional cost in City-owned lots and structures (including downtown and the beach) because of a partial City exemption, generating approximately $6,700,000 annually until ended by voters, be adopted?
The proposed resolution (Attachment B) includes the recommended ballot language and measure language and authorizes designated City Council members to submit arguments and rebuttals concerning the measure. Finally, the resolution directs the City Clerk to transmit a copy of the measure to the City Attorney and directs the City Attorney to prepare an impartial analysis of the effects of the measure on the existing law as well as on the operation of the measure.
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Arguments and rebuttals shall be submitted in accordance with State Elections Code Sections 9280-9287 and Santa Monica Municipal Code Section 11.04.125. The Elections Official will set the deadline for submitting arguments as 14 days from the date the election is called on the measure and the deadline for submitting rebuttals to arguments as 10 days after the deadline for submitting arguments on the measure, or the date fixed by the City Clerk, whichever date is later.
If the measure is approved, the increase would go into effect on January 1, 2025.
City Council Compensation Survey
In 1998, voters approved Measure J, which increased Councilmembers’ compensation to $750 per month, set the Mayor’s compensation at $900 per month, included annual cost of living adjustments, and provided medical and other benefits similar to those received by City employees. This was the last time Santa Monica voters have been asked to consider increasing the compensation for the Mayor and City Council. Today, after automatically increasing the compensation limits each year equal to the increase in CPI as prescribed in 1998’s Measure J, the Mayor receives $1,837 per month or $22,044 per year and Councilmembers now receive $1,532 per month or $18,384 per year. In addition to this compensation, all seven members of the City Council receive $400 per month vehicle allowance and $50 for each Special Meeting attended. The $50 Special meeting is not paid if the special meeting runs concurrently with the regular meeting.
At the May 28, 2024 City Council meeting, the City Council directed the City Manager to conduct a survey of cities within the Westside Cities Council of Governments and other charter cities across the state with populations comparable to Santa Monica, comparing City Council compensation and benefits. Council’s intent is to assess whether the current compensation Councilmembers receive allows residents of varying income levels to serve on the City Council. After understanding how Santa Monica compares to other cities, the Council may consider placing an amendment to the City Charter on the ballot for the November 5, 2024 General Municipal Election to allow Santa Monica voters to decide.
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Staff selected 10 cities to study that were similar to Santa Monica’s resident population or a member of the Westside Cities Council of Governments (WCCOG). All cities studied are Charter Cities, which grants each City supreme authority over their city’s “municipal affairs” as defined by Cal. Const. art. XI, § 5(a)., except for two: Beverly Hills and West Hollywood. These cities are general law cities and are bound by the state’s general law regardless of whether it is a municipal affair or not. The State of California grants general law cities the authority to set compensation for city councilmembers up to a specific limit shown in the table below but charter cities, as previously stated, have supreme authority over their municipal affairs and the voters ultimately determine the compensation.
State Imposed Limitations of Compensation for General Law Cities Up to 35,000 in population Up to and including $950/month Over 35,000 up to and including 50,000 in population Up to and including $1,275/month Over 50,000 up to and including 75,000 in population Up to and including $1,600/month Over 75,00 up to and including 150,000 in population Up to and including $1,600/month Over 150,000 up to and including 250,000 in population Up to and including $2,550/month Over 250,000 in population Up to and including $3,200/month Cal. Gov. Code § 36516 governs the compensation for general law cities.
The salary of council members may be increased beyond the amount provided in this subdivision by an ordinance or by an amendment to an ordinance, but the amount of the increase shall not exceed the greater of either of the following:
(A) An amount equal to 5 percent for each calendar year from the operative date of the last adjustment of the salary in effect when the ordinance or amendment is enacted. (B) An amount equal to inflation since January 1, 2024, based upon the California Consumer Price Index, which shall not exceed 10 percent for each calendar year. (5) No ordinance shall be enacted or amended to provide automatic future increases in salary. (b) Notwithstanding subdivision (a), at any municipal election, the question of whether city council members shall receive a salary for services, and the amount of that salary, may be submitted to the electors. If a majority of the electors voting at the election favor it, all of the council members shall receive the salary specified in the election call. The salary of council members may be increased beyond the amount provided in this section or decreased below the amount in the same manner. 14 of 19
Upon embarking on this survey, the City was provided a copy of a “City of Santa Cruz:
Council Compensation and Staffing Study” (Attachment G) which was finalized in May 2024. The City of Santa Cruz hired a local government consulting firm, Raftelis, to conduct a study and prepare a report doing a comparison of 8 cities to understand the compensation other cities were providing to their city council members and mayor. The City of Santa Monica was one of the cities they looked at in the study. In addition to the 10 cities selected, staff added the data from four cities available in the Santa Cruz report. These additional cities—Berkeley, San Luis Obispo, Santa Barbara, and Santa Cruz—are highlighted in tan in Table 2, bringing the total to 14 cities reviewed.
The populations of these cities range from about 31,000 to 347,000, with seven cities having populations between 60,000 and 119,000. Santa Monica's population falls in the middle of this range. The cities selected also share some similarities with Santa Monica, such as having seven-member councils, appointed mayors, providing services for the homeless, significant tourism, and working closely with Santa Monica on regional transportation and homelessness issues. Additional data reviewed includes each city's median income and annual budget. Not every city meets all these criteria.
As shown in the table below, each city is unique in terms of population, median income, annual budget, full-time employees, council size, and how they select their mayor.
Overview of Cities
CITY
Approx
Population
2022
Median
Household
Income FY2024 Budget
Total
FY2024
FTEs
Council
Size
Directly
Elected
Mayor
Santa Monica 89,922 $106,797 750.6 million 2,101.4 7 No Anaheim 347,111 $88,538 2.1 billion 2,091.0 7 Yes
Berkeley 118,950 $104,716 726.0 million 1,793.8 9 Yes
Beverly Hills 30,974 $116,771 626.3 million 826.0 5 No
Burbank 102,755 $91,455 849.9 million 1,487.0 5 No
Culver City 39,041 $114,429 177.1 million 757.3 5 No
Huntington Beach 192,129 $114,747 508.0 million 7 No
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Inglewood 102,991 $67,563 375.4 million >730 5 Yes
Newport Beach 82,637 $149,471 410.7 million 765.0 7 No
Pasadena 133,560 $97,818 1.24 billion 2,356.2 7 No
Redondo Beach 67,749 $134,033 153.8 million 440.0 6 Yes San Luis Obispo 48,341 $65,000 239.8 million 474.5 5 Yes Santa Barbara 86,499 $98,346 635.1 million 1,085.2 7 Yes Santa Cruz 61,501 $105,491 466.6 million 927.7 7 Yes
West Hollywood 34,349 $89,034 211.7 million 247.0 5 No
Data for Table 2 was compiled by reviewing each city’s most recently approved budget, utilizing the United States Census’s 2022 Population Estimates Program, the 2021 Five Year American Community Survey, and the City of Santa Cruz: Council Compensation and Staffing Study; Raftelis, May 2024.
The following table provides a comparison of the compensation for Mayors and Councilmembers of the reviewed cities based on data from the Raftelis report, the State Controller’s Office, and online research. All data is from October 2023 to June 2024.
Compensation includes salaries or stipends, often used interchangeably to describe regular payments to members of City Councils, Boards & Commissions, and vehicle, phone and office supply allowances. Staff did not find any cities where adding office supplies or phone allowances were necessary but those factors may have been added to data pulled from other reports. An example of this would be here in Santa Monica, the monthly compensation for Mayor is $1,837 and Councilmembers is $1,532 each, but also each receive a car allowance of $400 per month, which is reflected in Table 3 below. Not included in any of these figures are travel expense or mileage reimbursements or benefits such as health, dental, vision or even retirement credit as they vary from city to city but appear to all match benefits provided to the employees in that particular City.
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Mayor and Council Salary Comparison
(Sorted from high to low based on Council Member compensation) CITY Mayor's Annual
Compensation
Mayor Monthly
Compensation
Councilmember
Annual
Compensation
Councilmember
Monthly
Compensation
Berkeley $133,100 $11,092 $83,853 $6,988
Inglewood $111,305 $9,275 $60,660 $5,055
Santa Barbara $75,110 $6,259 $60,088 $5,007
Anaheim $27,000 $2,250 $26,400 $2,200
San Luis Obispo $32,352 $2,696 $25,068 $2,089
Santa Monica $26,844 $2,237 $23,184 $1,932
Burbank $22,800 $1,900 $22,800 $1,900
Pasadena $32,934 $2,744 $21,958 $1,830
Huntington Beach $29,675 $2,473 $21,160 $1,763
Santa Cruz $41,048 $3,421 $20,524 $1,710
Redondo Beach $20,030 $1,669 $20,030 $1,669
Newport Beach $25,368 $2,114 $19,201 $1,600
West Hollywood $18,816 $1,568 $18,816 $1,568
Beverly Hills $9,430 $786 $9,430 $786
Culver City $5,821 $485 $5,821 $485
Based on the table above, there is a wide range of annual compensation levels for Councilmembers (excluding Mayors) from as high as $83,853 down to $5,821. While further research would be necessary to determine whether this theory holds up across the state, it appears that most cities from this limited research, generally follow the state’s limits imposed on general law cities, basing compensation on the population of the city. For those cities that decide not to follow the limits on general law cities, they tend to base their compensation levels in some way to the area median income levels – some matching compensation at 100% of area median income and others assigning compensation at 80% of median income of the local area, For those cities that base their compensation levels on area median income; they often differ in whether they use a 1-person or 3-person median income household. Table 4 below shows how each city, where information was available, determined their compensation levels. 17 of 19
Table 4: Method of Increases
CITY
Mayor's
Annual
Compensation
Councilmember
Annual
Compensation
Basis for Establishing Compensation Level
Berkeley $133,100 $83,853
Based on Alameda County median income for 3-person
household (Mayor 100%; Council 63% of Mayor’s
compensation)
Inglewood $111,305 $60,660
This compensation level was put into place in 2010 and
caused controversy and legal issues but ultimately
remained in place and has not increased since. It
should be noted that Inglewood is one of but a handful
of cities with a full time Mayor & Council.
Santa Barbara $75,110 $60,088 Based on the area median income of a 1-person household (Mayor 100%; Council 80%)
Anaheim $27,000 $26,400 See Footnote*
San Luis Obispo $32,352 $25,068
Unable to determine what the amount is based on but is
determined by a Council Compensation Committee that
evaluates Council compensation every two years.
Santa Monica $26,844 $23,184
Burbank $22,800 $22,800 Increases with General Law Cities Pasadena $32,934 $21,958
Unable to determine basis for the amount but is
determined by a Council Compensation Committee that
produces a report recommending compensation. City
Council has the option to act on recommendation or not
but can increase compensation up to the recommended
level by ordinance. Any increase above the level
recommended would require approval of voters.
Huntington Beach $29,675 $21,160 See Footnote*
Santa Cruz $41,048 $20,524 See Footnote*
Redondo Beach $20,030 $20,030 See Footnote*
Newport Beach $25,368 $19,201 See Footnote*
West Hollywood $18,816 $18,816 General Law City – limit determined by population Beverly Hills $9,430 $9,430
General Law City – limit determined by population.
Despite State authorization to increase to $1,275/month, Council has not increased
Culver City $5,821 $5,821
Established by Charter based on General Law
limitations but has never increase compensation since
becoming a Charter City.
[*] Established pursuant to city charter but unknown as to original basis for determining, likely was based on limits established by state for general law cities.
Past Council Actions
Meeting Date Description
04/09/24
(Attachment C)
Business License Tax Modernization
5/25/93
(Attachment D)
Staff Report and Ordinance for Introduction and First
Reading Proposing a Parking Facility Tax
6/01/93 Staff Report and Ordinance 1683 Amending the Santa 18 of 19
Meeting Date Description
(Attachment E) Monica Municipal Code to Establish a Parking Facility Tax 2/28/95
(Attachment F)
Ordinance 1789 Modifying Due Dates for Report and Parking Facilities Tax Remittance
Environmental Review
The parking facility tax and Business License Tax modernization are exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The proposal is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” If enacted, the proposed tax measures would create revenue and promote equity for the City. Therefore, it can be seen with certainty that actions would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of recommended action. Staff will return to Council if specific budget actions are required in the future as result of approved ballot measures. If voters approve the Business License Modernization measure staff estimates an increase of approximately $1.1 to $2.3 million in FY 2025-26, in the General Fund. If voters approve the Parking Facilities Tax measure, staff estimates an increase of approximately $6.7 million annual in the General Fund.
Prepared By: Stephanie Manglaras, Assistant City Treasurer Approved Forwarded to Council
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Attachments:
A. Attachment A - Business License Tax - Ballot Resolution B. Attachment B - Parking Facility Tax - Ballot Resolution C. Attachment C - April 9, 2024 Staff Report
D. Attachment D - May 25, 1993 Staff Report for PFT Establishment E. Attachment E - June 1, 1993 Staff Report and Ordinance F. Attachment F - February 28, 1995 Ordinance Changing Reporting G. Attachment G - Santa Cruz Council Compensation Staffing Report H. Written Comments
I. PowerPoint Presentation
J. Photo