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Home My WebLink AboutAgenda Packet - May 7, 1984 - CC CITY OF A • FINANCE DEPARTMENT MAY 2 , 1984 MEMORANDUM TO: HONORABLE MAYOR AND CITY COUNCILS FROM: GEOFF CRAIG, DIRECTOR OF FINANCE % ' SUBJECT: APPLICATION FEE FOR PROCESSING 0 ARCADE GAME LICENSES At its last meeting, on April 16 , 1984, the Azusa City Council received questions and comments regarding the proposed application fee for proces- sing of business licenses for arcade games. The questions centered on the appropriateness of the fee and whether the processing of such an application actually incurred costs of the magnitude of the proposed fee. The following report will consider the appropriateness of the fee. and the method by which its amount was determined. In 1979, the voters passed proposition 4, known as the Gann Initiative. This measure added Article XIII B, to the State Constitution, which calls for a limit on the level of taxes appropriated by California cities . They are now held to a limit determined by adding a yearly cost of living factor to their 1978 appropriation levels . The measure further declared that if "excess" taxes or fees are collected by cities , they must be returned to the constituents . The resulting annual analysis of city finances , taxes and fees , has been highly revealing. Several cities discovered that their fees were greater than their cost for services and thus , their rates were lowered. However, the vast majority of cities in California discovered that the costs of providing services to residents were in most cases less than the fees being charged. As an example, many cities have no fee for turning on water service or restoring it in the event that it was dis- connected for lack of payment . The minimum cost of such a callout is in the area of $25 ; therefore, the cities were subsidizing these activities through the overall payments and taxes . This rule holds true in some way in virtually every city department that charges for its services and a major goal for the city in the upcoming years should be to carefully collect costs on a project-by-project basis , so that recreation participants , water customers and those who damage public property can be adequately and appropriately charged. APPROVED 6 17 * * 213 EAST FOOTHILL BOULEVARD, AZUSA, CALIFORNIA 91702 • PHONE (213) 334-5125 Honorable Mayor and City Council Page Two May 2, 1984 the place of business, fill out the application and include the names of the officers, corporate address, and so on. He then returns to the City Hall , is processed for his fee and obtains a temporary license. Later, the information is inputted by batch into the city computer, licenses are printed and file lists are maintained. The Public Works Department, Code Enforcement section, makes routine inspections of businesses in Azusa. If a violation is discovered, special processing then insues and the businessman is back-billed for any license fees due. Roughly the same procedure would take effect in case of permits for arcade and video games: An application would be filed, an inspection would be made and a city license or sticker would be issued. For every application which is processed, these activities require a total of roughly five man hours of clerical , secretarial , data processing, code enforcement and general management employees. The cost of these is, roughly, $65 . 50 . To this should be added the cost of overhead such as building maintenance and depreciation, utilities, supplies, computer time and other related costs. The total would probably be in the area of $75 . 00 per application. Staff, however, has recommended a $50 . 00 fee for several reasons. First, the individual machines represent relatively small collections by the owners and a charge of $75 . 00 seems inordinately high. Second, one of the purposes of general property taxes, and shared taxes such as federal revenue sharing, is to pay for the overhead of City Hall and other city services. Therefore, applying a small part of this revenue to the cost of processing applications for arcade games would seem appropriate. Finally, a small survey of neighboring cities was taken to determine what other cities charge for this service. A presentation of the results is given below. From this it can be seen that the $50 . 00 rate is in keeping with what other area cities charge. CITY FEE COMMENTS Monterey Park $ 75 . 00 Licenses are $150 flat fee Monrovia $150 . 00 License is 6/10 of 1% of machine gross receipts. West Covina $ 73 . 75 Licensee has option to pay 875 + 1% gross receipts Covina $ 75 . 00 CUP required Glendora $ 45 .00 CUP required if more than 3 machines; License based on gross receipts. Honorable Mayor and City Council Page Two May 2 , 1984 The Code Enforcement section has conducted a survey of the City to determine, among other things, the number of businesses that offer arcade-type games. the list to date numbers fifty-three businesses and is attached and the expected revenue from this fee would be 2 , 650 during the first year. Approximately five to ten new arcade game locations and application amendments at current locations are expected annually, which would provide a range of $250 to $500 . If Council has any questions regarding the above information, they can be directed to the City Administrator, the Community Development- Planning Director, or the Director of Finance. RECOMMENDATION: It is recommended that Council adopt the attached resolution regarding the proposed application fee for business licenses for arcade games. /tdb ARCADE GAME LOCATIONS Name Address Alpha Beta Market 307 N. Citrus Avenue Azusa Foothill Drive-In 675 E. Foothill Boulevard Benny's Liquor 208 N. Azusa Avenue Bob's Burgers 353 E. Foothill Boulevard Brunswick Azusa Bowl 645 E. 8th Street Canyon Inn 2280 San Gabriel Canyon Road Canyon Printers 333 N. Citrus Avenue Carolyn's Inn 927 W. Foothill Boulevard Carousel Liquor 801 W. Gladstone Street Casa Blanca 347 S. Irwindale Central Market 345 N. Azusa Avenue Callahan's 200 S. Irwindale Christy's Donuts 798 E. Alosta Avenue College Farm Market 150 W. 9th Street Country Chiken-n-Robs 994 E. Alosta Avenue El Poco #1 600 E. Foothill Boulevard Foremost Azusa Liquor 1143 E. Alosta Avenue "The Frolic" 517 N. Azusa Avenue Frontier Liquor 655 E. Arrow Highway God Fathers Pizza 855 E. Alosta Avenue Italy Express 632 E. Foothill Boulevard Jack N Jills 622 E. 8th Street Jerry's Market 211 E. Newburgh Street JoAnna's Tavern 658-660 S. Azusa Avenue Jomar Liquor 484 S. Citrus Avenue Lamppost Pizza 992 E. Alosta Avenue Last Chance Saloon 832 N. Azusa Avenue La Terraza 407 W. Foothill Boulevard Look-Out-Inn 113 E. Newburgh Marie Callenders 1175 E. Alosta Avenue Oail Tree Ice Cream 615 E. Arrow Highway Oak Tree Lounge 621 E. Arrow Highway Oscar's Cornhusker 975 W. Foothill Boulevard Patty's Market 458 N. Virginia Avenue Penny Lane Arcade 457 - #A E. Arrow Highway Pizza Factory 185 E. Gladstone Street Quick Buy Market 858 - #F N. Azusa Avenue Rosemaries Varieties 548 N. Azusa Avenue Saloon Bar 636 N. Azusa Avenue Speedy Submarine 173 E. Gladstone Street Square Deal Cafe 717 N. Azusa Avenue Stage Stop 738 N. Azusa Avenue Stater Bros. Market 1145 E. Alosta Avenue Stefano's Deli 1155 E. Alosta Avenue Stop-N-Go 761 Lark Ellen Arcade Locations Page 2 Name Address Stop-N-Go 166 W. Sierra Madre Supreme Sandwhich ! 858 - #F N. Azusa Avenue Tedesco's Pizza 110 W. 9th Street Top Market 503 N. Azusa Avenue U.F.O. Arcade 616 - #A E. 8th Street 7-11 504 S. Citrus 7-11 455 E. Foothill Boulevard 7-11 705 E. 5th Street RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA ESTABLISHING FEES FOR MECHANI- CAL AND ELECTRONIC GAME PERMITS AND APPEALS TO THE CITY COUNCIL PURSUANT TO SECTION 8 . 60 . 050 OF THE AZUSA MUNICIPAL CODE THE CITY COUNCIL OF THE CITY OF AZUSA DOES RESOLVE AS FOLLOWS: SECTION 1. The application fee for the mechanical or electronic game permit required by Section 8 . 60.030 of the Azusa Municipal Code is hereby set at Fifty Dollars ($50. 00) . SECTION 2 . The fee for filing an appeal from an action of the City Administrator on a mechanical or electronic game permit is hereby set at Fifty Dollars ($50 .00) . SECTION 3 . The City Clerk shall certify the adoption of this resolution. PASSED, APPROVED AND ADOPTED this day of , 1984 . MAYOR I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council of the City of Azusa, at a regular meeting thereof held on the day of 1984 , by the following vote of the Council : AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: CITY CLERK