Benicia council backs Model B for business-license modernization, approves 3% marine-terminal tax and directs November ballot measure

The Benicia City Council gave staff direction to prepare ballot and ordinance language to modernize the city's business license tax, selecting the staff-recommended Model B package and a marine-terminal tax to be placed before voters.

City Manager Mario Giuliani said the city's current business-license code had not been updated in 22 years and produced anomalous results (for example, small businesses and multimillion-dollar industrial firms could face the same capped liability). Staff presented two models; Model B starts with a $1,500 initial gross-receipts cap and a $100,000 exemption and is structured to reduce impacts on small businesses in year one while allowing future graduated increases.

Eric (consultant with HDL) told the council Model B would reduce first-year impacts for most businesses compared with Model A and recommended the council consider how quickly to move from the initial cap to a permanent cap. Staff presented examples showing Model A (initial cap $4,000) would raise more revenue in year one, while Model B is gentler on businesses in the near term.

A separate marine-terminal business-tax option was presented as a distinct category. Using staff assumptions (roughly $34 million in gross receipts at a marine terminal), a 3% marine-terminal business tax could yield an estimated $1 million in revenue and materially offset other revenue differences between models.

Vice Mayor Muszinski moved (with a second) a package directing staff to proceed with Model B (initial cap $1,500), a $100,000 exemption, a 3% marine-terminal business tax with no separate cap, a 10% annual cap-increase trajectory, and a permanent cap of $25,000. Council discussed the rate for the terminal (some members proposed treating the terminal the same as industrial businesses at the 1'4 per-thousand rate), but the motion carried after discussion and a roll-call vote; staff will draft ballot language and return on July 21 with materials.

During public comment Gene Pedratti of ACE Hardware urged clarity and simplicity for a voter measure and said a $1,500 figure for his store would be reasonable. Staff noted a previous amnesty and data cleanup effort with HDL that improved the city's business database and said the city will provide targeted notice to businesses after the council finalizes direction.

Council recorded roll-call direction and asked staff to prepare ordinance and ballot materials for further council action and to notify affected businesses about projected liabilities once the council finalizes rates.