Tomorrow’s City Council meeting will be largely made up of financial-related conversation as there will be a public hearing and potential adoption of the Santa Monica Housing Authority draft Fiscal Year (FY) 2024-25 Annual and Administrative Plans, together with proposed changes to business license tax rates under a new Business License Modernization plan, but the controversial issue of a needle exchange program in local parks is also up for discussion again.
Attendees who make it to the final item of the agenda (if Council actually makes it that far themselves) will hear a request of Mayor Brock, Vice Mayor Negrete, and Councilmember Parra that the City Council adopt the a resolution objecting to the County of Los Angeles’ Implementation of the Clean Needle Distribution Program in the City.
A majority of council members asked staff to return with a letter of opposition at a previous meeting and that document is attached for discussion on Tuesday night. The letter states the city supports “harm reduction” programs in general but wants the needle exchange program moved away from sensitive areas.
While making it to the very end of a council agenda is questionable, more certain will be the fiscal discussions around housing and businesses.
The Santa Monica Housing Authority (SMHA) administers approximately 1,750 rental assistance vouchers to extremely low-, very low-, and low-income Santa Monica households across a number of federal housing voucher programs.
Each year, the SMHA is required to submit an Annual Plan and this year it is proposing discretionary policy changes in response to input from Resident Advisory Board members, voucher participants, the Housing Commission, the public, as well as mandatory policy changes required by the Department of Housing and Urban Development.
The proposed Annual Plan FY 2024-25 remains unchanged from the existing FY 2023-24 Annual Plan, but includes the following progress updates (summarized):
One supportive housing development of 57 residences at 1413 Michigan Avenue for people experiencing homelessness. The SMHA has allocated 57 project-based vouchers to this permanent supportive housing (PSH) development.
Development of 13 residences at 1342 Berkeley Street primarily targeting young adults at risk of homelessness or experiencing homelessness is anticipated to begin construction during 2024. The SMHA has allocated 13 project-based vouchers to this development, eight of which will be PSH residences.
Arguably the other sizable item on the agenda is the proposed changes to the business license tax rate changes. According to the staff report, the primary deficiencies of the current ordinance are (summarized):
• The structure is regressive for small businesses and the City’s exemption for small businesses is low compared to our neighboring cities
• There is a growing dependency on large taxpayers, especially where remote work is a threat
• The classifications and definitions should be updated to reflect the current business community
• The City’s auto dealers cap does not exist in comparable cities and the “corporate administrative headquarters” rate is lower than other cities
• The penalty schedule is amongst the highest when compared to the neighboring cities
The proposed solutions include, but are not limited to (summarized):
• Increase the Small Business Tax Exemption threshold from $40,000 to $100,000 and expand to out of city businesses
• Residential rental three unit or less rate reduction from $3.00/$1,000 to $1.25/$1,000
• Rate reduction from $1.25/$1,000 to $1.15/$1,000 for retailers/restaurants generating under $5 million in gross receipts annually
• 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
• Increase tax rate on corporate/administrative headquarters from $1.25/$1,000 to $2.50/$1,000
This proposal was also recently presented to the board of directors at Downtown Santa Monica, Inc. and following a considerable amount of discussion and further clarification was approved 9-3, with board members Lora Vrastil, Luke Cain and Julia Ladd abstaining.
scott.snowden@smdp.com