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HomeMy WebLinkAbout03 - Adding Chapter 5.98 (Acceptance of Cash by Brick-and-Mortar Businesses) to the NBMCQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report September 10, 2024 Agenda Item No. 3 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Jason AI -Imam, Finance Director/Treasurer - 949-644-3126, jalimam@newportbeachca.gov PREPARED BY: Jason AI -Imam, Finance Director/Treasurer TITLE: Ordinance No. 2024-20: Adding Chapter 5.98 (Acceptance of Cash by Brick -and -Mortar Businesses) to the Newport Beach Municipal Code /_1 16"t I:7_T91 6 At its July 23, 2024 meeting, the Newport Beach City Council voted, via a straw poll, in favor of staff returning with an ordinance requiring, in general, that brick -and -mortar businesses accept payment in cash. Ordinance No. 2024-20 proposes adding Chapter 5.98 to the Newport Beach Municipal Code, which would generally require brick -and -mortar businesses within the City to accept payment in cash, if offered, for any transaction involving the purchase of food or beverages, any consumer service, or goods, merchandise, products, clothes, shoes, or commodities, if the person seeking to engage in that transaction is physically present at the place of business. The proposed effective date for this ordinance is March 31, 2025. RECOMMENDATIONS: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Waive full reading, direct the City Clerk to read by title only, and introduce Ordinance No. 2024-20, An Ordinance of the City Council of the City of Newport Beach, California, Adding Chapter 5.98 (Acceptance of Cash by Brick -and -Mortar Businesses) to the Newport Beach Municipal Code, and pass to second reading on September 24, 2024. DISCUSSION: On July 23, 2024, pursuant to City Council Policy A-1, Mayor O'Neill requested that the City Council consider requiring, in general, that brick -and -mortar businesses accept payment in cash. The Council voted unanimously, via a straw poll, in favor of bringing an item back for its consideration at a future meeting. 3-1 Ordinance Adding Chapter 5.98 (Acceptance of Cash by Brick -and -Mortar Businesses) to the Newport Beach Municipal Code September 10, 2024 Page 2 The ordinance would generally require brick -and -mortar businesses within the City to accept payment in cash, if offered, for any transaction involving the purchase of food or beverages, any consumer service, or goods, merchandise, products, clothes, shoes, or commodities, if the person seeking to engage in that transaction is physically present at the place of business. Consumer service is defined as any service that is offered to individuals at the brick -and -mortar business premises including, but not limited to, personal services, entertainment, fitness, tanning, printing and business services, pet care, nail care, haircuts, beauty treatments, tailoring of clothes, dry cleaning, car washing, shoe repair, tutoring, and automobile maintenance and repair. Consumer services do not include services provided by doctors, dentists, physical therapists, and nurses; services provided at a person's residence, such as, construction, home repair, plumbing, cleaning, and landscaping; or professional services. A brick -and -mortar business may not charge a fee or place any other condition on its acceptance of cash except for the following: A. Suspected Counterfeit Currency. A brick -and -mortar business may refuse to accept cash that the business reasonably suspects to be counterfeit. B. Large Denominations. A brick -and -mortar business may refuse to accept cash in any denomination larger than a fifty -dollar note. C. Single Transactions above $5,000. Where a single transaction involves the purchase of one or more goods and/or services, the total price of which (including tax) exceeds $5,000, a brick -and -mortar business shall accept cash that is proffered as payment for any amount up to $5,000 but may refuse to accept cash as payment for the remainder of the amount due. D. Online, Phone and Mail Transactions. A brick -and -mortar business may refuse to accept cash if the person is not physically present and the transaction is conducted completely online, by phone, or mail. E. Pay Stations and Vending Machines. A brick -and -mortar business may refuse to accept cash for transactions for parking at a parking pay station/meter, or purchases from vending machines including, but not limited to, transactions involving pre -paid card dispensing machines. It is estimated this ordinance will affect approximately 7,000 businesses. If the ordinance is adopted, staff will develop a communication plan to ensure that affected businesses are informed of these requirements. To provide time for outreach and changes to business operations, if needed, the ordinance is proposed to become effective March 31, 2025. 3-2 Ordinance Adding Chapter 5.98 (Acceptance of Cash by Brick -and -Mortar Businesses) to the Newport Beach Municipal Code September 10, 2024 Page 3 FISCAL IMPACT: The City may incur costs related to noticing and enforcement measures. The fiscal impact associated with noticing is expected to be nominal and can be absorbed within the existing budget. The projected cost associated with enforcement measures is unknown at this time and will depend on the number of complaints received. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENT: Attachment A — Ordinance No. 2024-20 3-3 ATTACHMENT A ORDINANCE NO. 2024-20 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, ADDING CHAPTER 5.98 (ACCEPTANCE OF CASH BY BRICK -AND -MORTAR BUSINESSES) TO THE NEWPORT BEACH MUNICIPAL CODE WHEREAS, Section 200 of the City Charter, of the City of Newport Beach ("City"), vests the City Council with the authority to make and enforce all laws, rules and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the City Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers, and privileges or procedures granted or prescribed by any law of the State of California; WHEREAS, the City strives to be a welcoming, inclusive place that allows all residents and visitors to participate in the Newport Beach economy; WHEREAS, a key aspect of participation in economic life is the ability to purchase goods and services; WHEREAS, for many consumers, especially visitors to Newport Beach, the ability to engage in consumer transactions depends on the ability to pay for goods and services in cash; WHEREAS, existing federal law provides that United States coins and currency, including, but not limited to, federal reserve notes, are legal tender for all debts, public charges, taxes, and dues; WHEREAS, legitimate concerns exist concerning tracking of credit card purchases, privacy of purchases tied to electronic means, and access to banking; WHEREAS, some businesses in Newport Beach have refused to allow people to purchase goods and services with cash, thereby excluding people from participating in the City's economic life; and WHEREAS, the City Council desires to amend the Newport Beach Municipal Code to ensure that residents and visitors are not excluded from participating in the Newport Beach economy and can purchase goods and services from brick -and -mortar businesses located in the City that are open to the public. 3-4 Ordinance No. 2024- Page 2 of 6 NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: The Table of Contents for Title 5 of the Code is hereby amended in its entirety and shall read as follows: Title 5 BUSINESS LICENSES AND REGULATIONS* Chapters: 5.04 General Provisions 5.08 License Fee Categories 5.11 Special Regulations 5.12 Vehicles for Hire 5.14 Ambulance Regulations 5.15 Regulation of Newport Beach Police Official Tow Services 5.17 Taxicabs 5.20 Pawnbrokers, Secondhand Dealers and Junk Dealers 5.25 Operator License for Establishments Offering Alcoholic Beverages for On -Site Consumption in Combination With Late Hours, Entertainment, and/or Dance 5.28 Live Entertainment Establishments 5.32 Cafe Dances 5.36 Hotel Registration 5.42 Solicitation 5.43 State Video Franchises 5.44 Cable Communications Franchises 5.46 Regulation of Commercial Film Production 5.48 Direct Alarm Monitoring System 5.49 Burglary —Robbery Alarm Systems 5.50 Massage Establishments 5.60 Paramedic Service User Fees 5.70 Newspaper Racks and Stands 5.80 Retail Sale of Firearms 5.90 Escort Service 5.95 Short Term Lodging Permit 5.96 Adult Oriented Business 5.97 Sidewalk Vending Program 5.98 Acceptance of Cash by Brick -and Mortar Businesses 3-5 Ordinance No. 2024- Page 3 of 6 * Enforcement of regulations by Finance Director —See Chapter 2.12. Soliciting business in prohibited manner —See Chapter 5.42. Registration of rented or sold bicycles —See Chapter 12.56. Section 2: Chapter 5.98 is hereby added to the Newport Beach Municipal Code and shall read as follows: Chapter 5.98 ACCEPTANCE OF CASH BY BRICK -AND -MORTAR BUSINESSES Sections: 5.98.010 Definitions. 5.98.020 Brick -and -Mortar Businesses Required to Accept Cash. 5.98.030 Exceptions. 5.98.040 Enforcement and Penalties. 5.98.010 Definitions. For the purposes of this chapter, the following words and phrases shall have the meaning set forth in this section: "Brick -and -mortar business" shall mean any place of business operating at a fixed, permanent physical premises in the City, which is open to the public, that offers for sale to the public for consumption or use, on or off the premises, food or beverages, any consumer service, or goods, merchandise, products, clothes, shoes, or commodities. "Cash" shall mean United States coins and currency, including federal reserve notes. Cash does not include foreign currency, any paper instrument other than a federal reserve note, including, but not limited to, any check, bond, or promissory note, or any foreign metal coin. "Consumer service(s)" shall mean any services that are offered to individuals at the brick -and -mortar business premises including, but not limited to, personal services, entertainment, fitness, tanning, printing and business services, pet care, nail care, haircuts, beauty treatments, tailoring of clothes, dry cleaning, car washing, shoe repair, tutoring, and automobile maintenance/repair. Consumer services shall not include 3-6 Ordinance No. 2024- Page 4 of 6 services provided by doctors, dentists, physical therapist, and nurses, services provided at a person's residence, such as, construction, home repair, plumbing, cleaning, and landscaping, or professional services. "Professional service(s)" shall mean any service that requires specialized education, knowledge, labor, judgment, and skill and is predominantly mental or intellectual, such as those services provided by accountants, architects, attorneys, engineers, financial advisers, insurance agents, interior designers, management consultants, other consultants, and software developers. 5.98.020 Brick -and -Mortar Businesses Required to Accept Cash. A. Except as set forth in Section 5.98.030, every brick -and -mortar business within the City must accept payment in cash, if offered, for any transaction involving the purchase of food or beverages, any consumer service, or goods, merchandise, products, clothes, shoes, or commodities, if the person seeking to engage in that transaction is physically present at the place of business. B. Except as set forth in Section 5.98.030, a brick -and -mortar business may not charge a fee or place any other condition on its acceptance of cash as required by subsection (A). 5.98.030 Exceptions. A. Suspected Counterfeit Currency. A brick -and -mortar business may refuse to accept cash that the business reasonably suspects to be counterfeit. B. Large Denominations. A brick -and -mortar business may refuse to accept cash in any denomination larger than a fifty -dollar note but shall otherwise accept any combination of federal reserve notes and metal coins in connection with any transaction. C. Single Transactions above $5,000. Where a single transaction involves the purchase of one or more goods and/or services, the total price of which (including tax) exceeds $5,000, a brick -and -mortar business shall accept cash that is proffered as payment for any amount up to $5,000 but may refuse to accept cash as payment for the remainder of the amount due. 3-7 Ordinance No. 2024- Page 5 of 6 D. Online, Phone, and Mail Transactions. It shall not be a violation of Section 5.98.020 for a brick -and -mortar business to refuse to accept cash if the person is not physically present and the transaction is conducted completely online, by phone, or mail. E. Pay Stations and Vending Machines. It shall not be a violation of Section 5.98.020 for a brick -and -mortar business to refuse to accept cash for transactions for parking at a parking pay station/meter, or purchases from vending machines including, but not limited to, transactions involving pre -paid card dispensing machines. 5.98.40 Enforcement and Penalties. A. No Worker Liability. The owner or owner(s) of any brick -and -mortar business shall be liable for ensuring that the business and its employees and independent contractors comply with the obligations set forth in this chapter. No employee or independent contractor working at a brick -and -mortar business shall be held liable for any violation of this chapter. B. Any violation of this chapter shall be an infraction. Section 3: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 4: If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 5: The City Council finds the introduction and adoption of this ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. 3-8 Ordinance No. 2024- Page 6 of 6 Section 6: Except as expressly modified in this ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. Section 7: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance shall be effective March 31, 2025. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 10t" day of September, 2024, and adopted on the 24th day of September, 2024, by the following vote, to -wit: AYES: NAYS: ABSENT: WILL O'NEILL, MAYOR ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE C A ON C. HARP, CITY ATTORNEY 3-9