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Home My WebLink AboutNS-2811 - Amending Section 21-120r.1(a) of Santa Ana Municipal Code to Increase and Extend Fee Charged to Finance City's Proactive Rental Enforcement ProgramROH 12/06/10 ORDINANCE NO. NS-2811 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING SECTION 21-120r.1(a) OF THE SANTA ANA MUNICIPAL CODE TO INCREASE AND EXTEND THE FEE CHARGED TO FINANCE THE CITY'S PROACTIVE RENTAL ENFORCEMENT PROGRAM THE CITY COUNCIL OF THE CITY OF SANTA ANA HEREBY ORDAINS AS FOLLOWS: Section 1. The City Council hereby finds, determines and declares as follows: A. The City Council of the City of Santa Ana adopted the Proactive Rental Enforcement Program (PREP), to provide periodic and systematic inspections of all residential rental properties in the City of Santa Ana; and B. The PREP is intended to uncover unsanitary conditions and life safety hazards for occupants of residential rental properties, to ensure that rental properties have operable and safe water, sewage disposal, heating and electric systems, and to encourage owners or managers of residential rental properties to make repairs and conduct preventative building maintenance before deteriorated conditions upon rental property become life safety issues; and C. The 1992, City Council adopted a residential rental surcharge imposed on property owners who choose to enter into the residential property rental business, to pay the enforcement costs of the Proactive Rental Enforcement Program, including inspection and administration costs; and D. The Santa Ana Rental Housing Task Force has endorsed a proposal to immediately increase the Residential Rental Surcharge by $2.00, from $17.50 to $19.50 per unit, to partially offset the costs of enforcement of the PREP; and E. All fees assessed for the PREP amount of the fee and the actual administration, enforcement and related to the PREP. Further, tr revenue which exceeds the City's the PREP; and bear a direct correlation between the cost of the services provided, including implementation services specifically ie proposed increase will not result in estimated reasonable costs to provide Ordinance No. NS-2811 Page 1 of 5 F. A 2010 fee study reported the total projected expenditures for the PREP would amount to an estimated $675,000.00, which includes an estimated $386,856.00 for required staff and an estimated $288,144.00 in operational costs. G. On June 20, 1994, the City Council adopted Resolution No. 94-026 which approved and adopted the "Gold Seal Incentive Program" whereby particular residential properties or residential apartments may be certified as having met standards of excellence in property maintenance and as certified, would be exempted from payment of the residential rental surcharge fee for a three-year period; and H. The funding for the Gold Seal Incentive Program is $110,000.00, which currently provides for 6,285 units to receive exemptions from the existing $17.50 per unit annual fee. Based on the proposed fee increase to $19.50 per unit, up to 5,641 units can be approved to participate in the Gold Seal Incentive Program. 1. According to the 2010 fee study, records indicate an inventory of 31,227 rental units licensed for inspection. Subtracting out the 5,641 units qualified for the Gold Seal Incentive Program, 25,586 units will be accountable for the $19.50 per unit fee, thus generating annual revenue of $498,927.00. J. Even with an increase of the annual fee from $17.50 to $19.50 per unit, it is anticipated that the deficit for the PREP will be $176,073.00 a year for the remainder of the PREP term based on the estimated $675,000 in expenditures and $498,927.00 in revenues. K. Continuation of the Proactive Rental Enforcement Program is essential to the neighborhoods in Santa Ana to provide assurances that the rental housing will not be allowed to revert to the condition which led to the initial concerns for the implementation of an inspection program in 1992. Section 2. In accordance with the California Environmental Quality Act, the recommended action is categorically exempt from further review per section 15321, Class 21, as the project involves an enforcement action by a regulatory agency for an inspection program. A Categorical Exemption for Environmental Review No. ER-2010- 128 will be filed for this project. Section 3. Section 21-120r.1 of the Santa Ana Municipal Code is hereby amended to increase the residential rental surcharge and extend the sunset date. Said Section 21-120r.1 shall read in full as follows: Ordinance No. NS-2811 2 Page 2 of 5 Sec. 21-120r.1. Residential Rental Surcharge. (a) Except as otherwise provided in subsection (b) of this section, the business license tax for residential property rental and residential apartment rental shall consist of the amount set forth in subsections (2) and (3) of section 21-120r plus an annual surcharge of nineteen dollars and fifty cents ($19.50) per each property rental unit or each apartment rental unit. The surcharge hereby established shall be due and payable and shall be paid at the same time and in the same manner that the amount due under section 21-120r is due and payable. No business license shall be issued unless the surcharge is paid. Penalties and interest shall be assessed upon the total amount due and unpaid at the rate specified in this chapter until such time as both the amount due under section 21-120r and the surcharge due under this section are paid in full. All provisions for the enforcement, collection and recovery of unpaid business license taxes shall likewise apply to the enforcement, collection and recovery of any unpaid surcharge. Notwithstanding any provision of this chapter to the contrary, the amount of the surcharge shall not change except by amendment of this section. This section shall expire on, and be of no further force or effect after December 31, 2011. (b) The City Council may, by resolution, establish a program whereby particular residential properties or residential apartments, licensed pursuant to this chapter, may be certified as having met standards of excellence in property maintenance. In such event, the executive director of the planning and building agency shall be responsible for the implementation of that program. Owners of property certified pursuant to that program shall be exempt from the payment of the surcharge specified in subsection (a) of this section for the three (3) tax years next succeeding the time of such certification. The executive director of the planning and building agency shall provide the executive director of the finance and management services agency with listings of licensed properties certified under this program, which shall be periodically updated to reflect changes. The City Council may provide for such financial limitations on the exemptions to be granted from the surcharge as the city council deems appropriate. Section 4. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that anyone or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. Ordinance No. NS-2811 Page 3of5 Section 5. Neither the adoption of this ordinance nor the repeal hereby of any ordinance shall in any manner affect the prosecution for violation of ordinances, which violations were committed prior to the effective date hereof, nor be construed as affecting any of the provisions of such ordinance relating to the collection of any such license or penalty or the penal provision applicable to any violation thereof, nor to affect the validity of any bond or cash deposit in lieu thereof, required to be posted, filed or deposited pursuant to any ordinance and all rights and obligations there under appertaining shall continue in full force and effect. ADOPTED this 6th day of December, 2010. (2? 'j, C. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph,' Fletcher, City Attorney By: 0. dge ant ty Attorney YES: Councilmembers: Alvarez, Benavides, Bustamante, Tinaiero Sarmiento (5) NOES: Councilmembers: None (0) ABSTAIN: Councilmembers: None (0) NOT PRESENT: Councilmembers: Martinez, Pulido (2) Ordinance No. NS-2811 Page 4 of 5 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS-2811 to be the original ordinance adopted by the City Council of the City of Santa Ana on December 6, 2010 and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: Clerk of the Council City of Santa Ana Ordinance No. NS-2811 Page 5 of 5