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sent, correspondingly there would be no additional penalties, retaining the current 50% maximum penalty amount. In the past several years with the current structure which assess the penalties over 10 months, Business License staff has noticed a gradual increase every year in the number of delinquent license taxes paid, with over 1,125 businesses delinquent in the first two assessed months in 2013. Staff has also noted that many of the same businesses are delinquent each year, likely given the minimal penalty amount ($1.25 for the $25.00 business category is the first 5% penalty amount), indicating the City's penalty structure is ineffective. As well, it has been challenging to incorporate the accumulation of the monthly incremental penalty assessments within business license software. The delinquent notices are generated through the software program and have been modified to clearly communicate the City's penalty structure and assessment rates as currently structured, but quite often cause confusion among business owners leading to incorrect assessments paid to the city. Through a survey of California cities conducted by California Municipal Revenue and Tax Association (CMRTA), the industry organization that serves local revenue and business license professionals, business license penalties range from 10 percent monthly to a maximum of 100 percent of the delinquent business license tax amount. In this regard, Pleasanton's 5% assessment is clearly a minimal amount that is below standards in other California cities. Specifically, the proposed change to Municipal Code section 5.24.020.A would be: 5.24.020 Delinquent taxes—Penalties A. For failure to pay a the license tax when due, the collector shall add a penalty of five 25 percent of said license tax on the first day of• - - - . . • . . • -- . February; and , . • • . • • . . . . .. . - : . . . . . . . • . - - - - : 50 percent(non-cumulative) of the ameant-ef the said license tax due•on the first day of March : : - •• • - - after the duc date. When the last first day of the month falls on a day when the City Hall is closed, payment of the license tax due may be made on the next working day of the next-month without penalty. ' - •: - • • • • • • •- . . - . - -. Any license issued pursuant to this title may be suspended by the collector upon the failure of the licensee to pay any charges imposed by this title within 60 days after such charges or reports become delinquent. No license shall be issued, nor one which has been suspended or revoked shall be reinstated or reissued, to any person, who at the time of applying therefore, is indebted to the city for any delinquent license taxes, unless such person, with the consent of the collector, enters into a written agreement with the city, through the collector, to pay such delinquent taxes, plus five percent simple annual interest upon the unpaid balance, in monthly installments, or oftener, extending over a period of not to exceed one year. Page 3 of 4