Mayor Pro Tem Simonoff led the Pledge of Allegiance. 

Dwight Manly expressed opposition to the Business License Tax adjustment. He spoke about an article published in the Los Angeles Times regarding high taxes in California, the Los Angeles Mansion Tax, the California Billionaire Tax Act, and California Proposition 13.

None. 

Financial Services Manager Madrazo provided a presentation and overview on the item. She reviewed the Orange County TOT rates, updates, and potential changes.

In response to questions by Council Member Marick, Financial Services Manager Madrazo clarified the current definitions of "occupancy" and "transient." She explained that the proposed updates aim to refine the language to be more inclusive and specific to the definition. She stated that voter approval is required for language updates and indicated updating the tax structure at the same time could be prudent. 

The City Council discussed the potential risks of not updating the tax structure and language, the 30-day Transient Occupancy Tax (TOT), and the number of audits conducted.

Financial Services Manager Madrazo outlined the TOT outreach and timeline.

The City Council discussed the ballot measure timeline, rules and regulations on campaigning, and TOT updates. 

Financial Services Manager Madrazo provided an overview on the Business License Tax Study and introduced Eric Meyers, Director of Professional Services for HdL Companies. 

Eric Meyers provided a presentation comparing the demographics and economic statistics with surrounding jurisdictions. He reviewed five (5) key components of a business license tax and the effects of a cap on reported gross receipts. He also reviewed two (2) different versions of tax Model 1, which removed the gross receipt cap. Additionally, he reviewed Model 4, which included the Model Evaluation, Model Structure, and three (3) options for the Model's Revenue Impact. He provided examples of the potential effects the Business License Tax would have on the average small businesses, median businesses, and large businesses.

Eric Meyers, Assistant City Manager/Community Development Director Killebrew, and Financial Services Manager Madrazo responded to questions by the Council regarding the business license tax rates, business licenses tax cap, business license tax exemptions, property rental business tax, and the number of businesses effected by the tax cap removal. 

Eric Meyers presented a tax model comparison that included estimated revenue for various business scenarios in local jurisdictions.

The City Council discussed the last time a tax study was conducted, compared local jurisdiction tax rates, discussed the property rental business tax and business license tax cap. 

Council Member Marrick expressed opposition to implementing a business license tax cap.

The City Council discussed a potential ballot measure to include a CPI adjustment.

Fiscal Services Manager Madrazo spoke about business attraction, property rental tax, business license tax exemptions, and business license requirements.

The City Council discussed the business license requirements for Accessory Dwelling Units (ADU) and Junior Accessory Dwelling Units (JADU). 

Mayor Hupp allowed for additional public comments. 

Dwight Manley spoke about HdL Companies' objectives, comparison of local jurisdiction sales taxes, business attraction, business license tax cap, and the fire paramedic tax. 

Assistant City Manager/Community Development Director Killebrew responded to questions by Council Member Vargas regarding the business license tax cap for construction businesses.

The City Council concurred to direct staff to bring the item back with a list of the top five (5) business types that would be impacted by a tax cap removal.

Council Member Marick distributed the 2026 Women & Girls of Orange County report to the City Council.

Council Member Vargas expressed concerns about the timing of the meeting and agenda packet materials. 

Mayor Hupp adjourned the meeting at 12:30 p.m.