Even Non-Members Will Pay Fee : Redondo Business Tax to Subsidize Chamber
Only 585 of the city’s 10,000 business-license holders belong to the Chamber of Commerce, but all of them will be taxed to support it under a plan approved last week by the City Council.
The council agreed--subject to final approval at its meeting Monday--to levy a 6% surcharge on business-license fees to subsidize chamber activities, which include lobbying for business interests, staging community events and running an information center for tourists and businesses interested in coming to the city.
“We feel that the amount of services rendered versus the cost of the business-license increase are such that (it) should be readily accepted by the business community,” Ernie O’Dell, the chamber’s executive director, said in a letter to the mayor and council. He said most of the city’s businesses have benefited from chamber services without paying for them.
Businesses will still have to pay membership dues to be voting members of the chamber and to receive its monthly publication, he said.
The City Council approved the funding plan on a 4-1 vote, with Councilwoman Marcia Martin dissenting. Both Martin and Mayor Barbara Doerr, who does not vote on council issues, opposed the measure, arguing that most of the businesses in the city were unaware of the proposal.
“It was taxation without representation,” Doerr said in an interview later. “I think the method is unique and appropriate, but I think the business community should be involved in the process. The chamber only represents a very small group of the business community.”
On Wednesday, Doerr mailed more than 10,000 post cards to business license holders, advising them of the new funding plan and asking them to call City Hall with any suggestions or complaints. As mayor, Doerr is entitled to two citywide mailings a year. This was her first of 1985.
The council will consider the proposal for final approval Monday, once City Atty. Gordon Phillips has drafted a new contract between the city and the chamber.
“People will now have the opportunity to discuss it and debate the merits,” Doerr said. “I am not sure how anybody could have come out and opposed it because they didn’t know about it.”
The proposal came up toward the end of a council meeting that concluded about 2 a.m. Tuesday.
City Treasurer Alice DeLong also spoke against the plan, noting that 4,500 business licenses--nearly half of the total--are held by apartment owners.
“You are talking about a vast amount of people that you would be taxing unfairly,” said DeLong after the meeting. She is an apartment owner who was an unsuccessful candidate for the council in the May runoff election.
“The chamber is there to promote their business. It is entirely different from city business.”
DeLong said the average business pays about $200 a year in business-license fees, meaning the surcharge would increase fees by about $12 for such a business. The license fees vary according to the type and size of the business. All of the money currently goes to the city’s general fund.
“We oppose the surcharge,” said Jay DeMiranda, president of the Apartment Assn. of Greater Los Angeles and a Torrance property manager. “Belonging to the Chamber of Commerce traditionally is a voluntary effort and it should not be made an arm of government.”
He said he doubts that many Redondo Beach apartment owners are chamber members because “traditionally, they don’t belong to chambers of commerce.”
O’Dell acknowledged that not many apartment owners are members of the chamber.
The surcharge proposal, modeled after a 10% surcharge in Manhattan Beach, comes only three months after the city and chamber negotiated a five-year funding contract aimed at weaning the chamber from city subsidies.
Chamber executives requested the surcharge after realizing that membership dues, fund-raising activities and a $35,000 subsidy from the city’s general fund would not be enough to cover its $187,000 in estimated expenses during the 1985-86 fiscal year, O’Dell said. He said the chamber would fall about $16,000 short without more money.
Based on last year’s business-license receipts, the 6% surcharge would provide $57,600 to the chamber next year, $22,000 more than it would have gotten under the previous plan.
Although the city will act as a “collection agency,” O’Dell said the new funding plan will allow the chamber to achieve financial independence from the city by putting the burden of funding the chamber on the business community.
Under the five-year funding contract negotiated with the city in March and April, the chamber would have become economically self-sufficient in 1991. That plan, approved despite a veto by Doerr, called for a gradual reduction in city subsidies for the chamber, to be made up by increased membership dues and income from activities.
Doerr objected to the length of the contract, proposing instead that it last just one year.
O’Dell dismissed complaints by Doerr and others that the chamber was acting improperly by requesting the surcharge without notifying all members of the business community. He said the City Council, which was considering a 4% increase on the fees to make up for inflation, had not notified businesses about that proposal.
“There are just those people out there who are business dislikers or chamber dislikers,” he said. “You can’t be popular with everybody. There will aways be some people up on the soap box.”