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6.3.A. - Page 1 <br />REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />June 27, 2011 <br />SUBJECT <br />Subject to Voter Approval, Amend Division 6 of Article V of Chapter 32 of the Redwood <br />City Municipal Code to Increase the Tax Rate of the Business License Tax <br />RECOMMENDATION <br />1. Waive first reading and introduce Ordinance Amending Sections 32.152, 32.153, and <br />32.155 of the Redwood City Municipal Code Regarding the Business License Tax; <br />2. Adopt Resolution Submitting to the Voters at the November 8, 2011 General Election <br />on a Ballot Measure Increasing the Rate of the Business License Tax; <br />3. By motion, authorize the Mayor and Vice Mayor to select such persons as necessary <br />to sign the ballot arguments in favor of the proposed ordinance amending the Business <br />License Tax. <br />BACKGROUND <br />Technical correction to current ordinance for historical purposes. <br />The current Business License Tax ordinance needs to be modified to bring it current. In <br />1990, the City Council adopted the business license tax rates and provided for annual <br />inflation adjustment rates through Fiscal Year 1994 -1995. In 1995, the City Council <br />amended the rates to provide for ongoing annual inflation adjustments but these were <br />invalidated by Proposition 218. The rate adjustments made through Fiscal Year 1994- <br />1995 remained in effect by authority of the 1990 ordinance. While the City has been <br />correctly charging the 1990 rates as modified by inflation through Fiscal Year 1994- <br />1995, the Municipal Code does not correctly reflect those rates. Therefore, the current <br />amendment is proposed to bring the Code into compliance with law and with practice. <br />This ordinance does not go to the voters and is merely a technical correction for <br />historical purposes. (See Exhibit 1, ordinance Amending Sections 32.152, 32.153 and <br />32.155) <br />Additional amendment to ordinance to increase tax subject to voter approval. <br />On May 23, 2011, the City Council instructed staff to prepare the necessary documents <br />to place the proposed increase to the Business License Tax on the ballot for the <br />November 8, 2011 election. Two actions are required to implement an increase to the <br />Business License Tax for general purposes and the proceeds will go to increase <br />general fund revenues: (1) approval of an implementing resolution or ordinance by two- <br />