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2015/11/24 City Council Ordinance 892ORDINANCE NO. 892 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK AMENDING TITLE 9 CHAPTER 9.66 OF THE ROHNERT PARK MUNICIPAL CODE RELATING TO BINGO GAMES SECTION 1. AUTHORITY: This Ordinance is adopted pursuant to the provisions set forth in Section 19, Article IV of the California Constitution and Penal Code 326.5, and pursuant to other applicable law. SECTION 2. FINDINGS: WHEREAS, bingo games provide recreational opportunities for residents of Rohnert Park and neighboring communities; and WHEREAS, bingo games are a source of revenue for organizations furthering charitable purposes in and around Rohnert Park; and WHEREAS, Section 19, Article IV of the California Constitution and Penal Code 326.5 authorize cities to enact legislation to provide for bingo games for charitable purposes; and WHEREAS, the Legislature has amended Penal Code 326.5 several times since the City enacted its bingo ordinance; and WHEREAS, the City Council desires that the City's bingo ordinance reflect the full authority granted by the Legislature. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ROHNERT PARK DOES HEREBY ORDAIN AS FOLLOWS: SECTION 3: IMPOSITION OF ORDINANCE: In accordance with the authority provided by Section 19, Article IV of the California Constitution and Penal Code 326.5, the City Council of the City of Rohnert Park does hereby ordain that Title 9 Chapter 9.66 of the Rohnert Park Municipal Code is hereby amended and shall read as follows: CHAPTER 9.66 BINGO GAMES 9.66.0 10 —Definitions As used in this chapter, the following words and phrases shall have the following meanings: A. "Bingo" means a game of chance in which prizes are awarded on the basis of designated numbers or symbols that are marked or covered by the player on a tangible card in the player's possession and that conform to numbers or symbols, selected at random and announced by a live caller. B. "Charitable Purpose" means purposes beneficial to the community as a whole or an unascertainable and indefinite portion thereof. Charitable Purposes may include, but are not limited to relief from poverty, and advancement of education, the arts, science or religion. C. "Eligible Organization" means one of the following types of organizations: organizations exempted from the payment of the bank and corporation tax by Sections 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 237011, 23701w, and 237011 of the Revenue and Taxation Code; mobile home park associations; senior citizens organizations; charitable organizations affiliated with a school district; or organizations otherwise deemed eligible under California Penal Code Section 326.5(a). D. "Prize" means an award, either in cash or kind, stemming from participation in a Bingo game. E. "Proceeds" means income from any source, either in cash or kind, directly related to the operation of a Bingo game. F. "Overhead" expenses include bingo equipment, administrative expenses, security equipment, security personnel, and disposable supplies used in the conduct of bingo games, including but not limited to, paper forms. 9.66.020 — Permit Required. Bingo games may be conducted within the City, provided that the game is conducted by an Eligible Organization holding a permit issued in accordance with this chapter and, in addition, provided that any such game is conducted in compliance with the terms and conditions of such permit and applicable State law, including, but not limited to, California Penal Code, Section 326.5. 9.66.030 — Permit Application. Any Eligible Organization desiring to obtain a permit for the conduct of any Bingo game within the City shall submit a written application to the Department of Public Safety of the City, together with the appropriate fee as established by resolution of the City Council. 9.66.040 — Application and Renewal Fee. The City Council, by resolution, may adopt and revise, from time to time, a schedule of fees for the processing of permit applications for the conduct of Bingo games. 9.66.050 — Exemption from Fee. No application or renewal fee shall be required of any Eligible Organization stating in its application that it will use all Proceeds from the Bingo games solely for Prizes and to cover the costs of conducting the Bingo games, and not for any other purpose, including Charitable Purposes. 9.66.060 — Administrative Fee for Public Safety Costs. An administrative fee for public safety costs may be imposed to cover costs incurred by the City that are directly related to Bingo activities and shall be collected monthly by the City; however, the fee shall not exceed the actual costs incurred in providing the service. 9.66.070 — Permits Issued Only to Qualified Applicants. No permit shall be issued to any applicant unless the applicant is an Eligible Organization and its application conforms to the requirements, terms and conditions of Sections 9.66.020 through 9.66.320. 9.66.080 - Contents of Application. A. Each application for a permit to conduct Bingo games shall contain the following information: 1. The name of the applicant; 2. The business and mailing address of the applicant; 3. The name and signature of at least two officers, including the highest ranking officer of the organization's highest governing body; 4. A resolution of the governing body of such organization authorizing the conduct of any and all Bingo games proposed by the application and the purpose of the Bingo game; 5. The street number or other clear and specific identification of the location at which each Bingo games proposed in the application would be conducted and, in addition, a statement of the maximum capacity of the place in which such Bingo games would be conducted; 6. A description of the applicant's non -Bingo activities conducted at each location; 7. The name and signature of the person who will actually conduct each and every bingo game proposed by the permit; 8. A precise description of the Bingo activities to be conducted at each Bingo game; 9. Proposed date, day of week, and hours of day for the conduct of each bingo game; 10. Financial information relevant to the application, including but not limited to: (1) the proposed budget of the applicant; (2) the anticipated charitable use of the funds; (3) the estimated receipts and expenses for the year together with such other information relevant to the application as required and approved by the Public Safety chief, (4) the name and address of the custodian of the financial records of the applicant; 11. A completed Acknowledgment of Responsibilities and Restrictions form, provided by the City, enumerating the applicable requirements in Section 326.5 of the Penal Code and this chapter, as they may be amended from time to time. The applicant shall sign this Acknowledgment of Responsibilities and Restrictions form agreeing to each provision and acknowledging the permit may be revoked by the Public Safety chief upon violation of any of such provisions; 12. Evidence that the applicant is an Eligible Organization. For organizations claiming to be exempt from the payment of the bank and corporation tax, evidence shall include a certificate or determination of exemption under the Revenue and Taxation Code, or a letter of good standing from the Exemption Division of the Franchise Tax Board in Sacramento, showing exemption under a qualifying section of Revenue and Taxation Code Section 23701. If an applicant applies as a mobile home park association, senior citizens organization, or charitable organization affiliated with a school district, the Public Safety chief shall determine what evidence is necessary to establish eligibility; 13. Such other information as the Public Safety chief may require to discover the truth of the matters required to be set forth in the application. B. The contents of the application shall be affirmed and verified by the applicant under penalty of perjury. 9.66.090 — Investigation of the Application. Upon receipt of the completed application and required fee, the Department of Public Safety shall refer the application to affected City departments for verification of the statements in the application, investigation as to whether the property of the applicant qualifies and is fit for hosting Bingo games with respect to fire, occupancy, and other applicable restrictions, and for obtaining any and all recommendations as to whether the permit should be granted. Upon receipt of such verification and any recommendations and completion of any further investigation deemed necessary, the Public Safety chief shall grant, grant with conditions, or deny the permit in accordance with the criteria set forth in Penal Code Section 326.5 and this chapter. 9.66. 100 — Imposition of Conditions and Limitations on Permits. The Public Safety chief may place upon any permit issued under authority of this chapter such conditions and limitations upon the activities conducted pursuant to such permit as the Public Safety chief may determine are necessary to protect the health, safety and general welfare of any persons or property at or in the vicinity of said activity. 9.66.110 - Issuance of Permit. A. Upon a showing that the applicant is fully qualified under the law to conduct Bingo games in the City and has satisfied the requirements of this chapter, the Public Safety chief shall issue a permit to the applicant which shall contain the following information: 1. The name and address of the organization to whom the permit is issued and the grounds for the eligibility of such organization to conduct Bingo games; 2. The location or locations at which the Bingo games are authorized to be conducted; 3. The name and address of each person who has been authorized to actually conduct the Bingo games on behalf of the permit holder; 4. The maximum authorized occupancy capacity of each place at which the Bingo games are authorized to be conducted; 5. The date of the expiration of such permit; 6. Such other information, including, but not limited to, the conditions and limitations upon the conduct of Bingo games, as may be determined pursuant to Section 9.66.100. B. No permit shall be granted for a period longer than one year. C. If the permit is denied, the Public Safety chief shall state in writing to the applicant the reasons for the denial. D. During the term of the permit, the permit holder must maintain its eligibility to hold such permit. 9.66.120 — Amendment of the Permit. A. Upon the change of any of the information required in this section, the permit holder must submit an amendment to the application to the Public Safety chief within five days. B. The Public Safety chief may issue an amended permit without charge if the Public Safety chief determines that such change does not affect the eligibility of the permit holder or the terms of the permit. If the changes affect the eligibility of the permit holder or the terms of the permit and additional conditions or limitations will remedy the changes, the Public Safety chief may issue an amended permit including such conditions and limitations necessary to remedy the changes. C. Failure to report such change in information shall constitute cause for revocation of the permit. 9.66.130— Permit Renewal. A permit holder may submit an application to renew an existing permit, together with the fee for such renewal, and an audit opinion or certification as required by Section 9.66.260, to the Department of Public Safety not earlier than 45 days prior to the expiration date of the existing permit. A renewal application for an existing permit may be submitted on a short form, provided by the City, which verifies and affirms the information contained in the previously approved application and describes any changes that have occurred during the period the permit has been in existence. 9.66.140 — Permit to be Posted at Bingo Games. The permit shall be posted in a conspicuous place at the site of the Bingo games during the operation of the Bingo game. 9.66.150 — Suspension and Revocation of Permits. A. The Public Safety chief may suspend a previously issued Bingo permit for any of the following causes: 1. The permit holder is ineligible to hold the permit; 2. The permit application contains one or more false, misleading or fraudulent statements; 3. Bingo games authorized by the permit have been conducted in violation of a condition or requirement of the permit, or this chapter, or Section 326.5 of the Penal Code; 4. There has been one or more violations of Federal, State or City law committed at the location of the Bingo games in conjunction or associated with the operation of the Bingo games or the Bingo games and the accompanying activities have become detrimental to the health, safety or welfare of the residents of the City. B. If the Public Safety chief decides to suspend a Bingo permit, a written order of suspension shall promptly be sent to the permit holder. The written order shall include a summary of the grounds advanced as the basis for suspension and notify the permit holder that he or she has ten days from the date of such order to request a hearing before the Public Safety chief to determine whether such permit shall be revoked. C. Failure to request, in writing, such hearing within the ten day period shall result in a revocation of the permit. D. Upon request by the permit holder, whose permit has been suspended under subsection A, for a hearing to determine whether such permit shall be revoked, the Public Safety chief shall provide a hearing within twenty days after receipt of such request at which hearing the suspended permit holder may appear before the Public Safety chief for the purpose of presenting evidence why the permit should not be revoked. No permit shall be revoked under this section unless notice of the time and place of such hearing shall have first been given at least five days before the hearing thereof by depositing in the United States mail a notice directed to the suspended permit holder at the address given in the application. Within ten days of the hearing, the Public Safety chief shall issue and send to the permit holder via United States mail a written decision reinstating the permit, reinstating the permit with any conditions and /or limitations the Public Safety chief determines are necessary to remedy the change, or revoking the permit. E. Any person who conducts a Bingo game under a suspended or revoked permit shall be deemed guilty of a misdemeanor and shall be subject to the penalties applicable in this code. F. Any organization whose permit is revoked may not again apply for a permit to conduct Bingo games in the City for a period of one year from the date of such revocation; provided, however, that if the ground for revocation is cancellation of the exemption granted under the Revenue and Taxation Code, such organization may again apply for a permit upon proof of reinstatement of said exemption. 9.66.160 - Appeal of Revocation of Permits to City Council. Any holder of a permit whose permit is revoked under this chapter shall have the right, within ten days from the date of the notice of the revocation, to file a written appeal to the City Clerk. Such appeal shall set forth the specific ground or grounds on which it is based. The City Council shall hold a hearing on the appeal within forty five days after its receipt by the City Council, or at a time thereafter agreed upon and shall cause the appellant to be given at least ten days written notice of such hearing. At the hearing, the appellant or its authorized representative shall have the right to present evidence and a written or oral argument, or both, in support of its appeal. The determination of the City Council on the appeal shall be final. 9.66.170 - Maximum Amount of Prizes at Bingo Games. The total value of the Prize shall not exceed five hundred dollars ($500) in cash or kind, or both, for each separate game which is held. 9.66.180 — Records and Reporting Requirements for Permit holders. The permit holder shall keep full and accurate record of the income and expenses received and disbursed in connection with its operation, conduct, promotion, supervision, and any other phase of Bingo games which are authorized by this chapter. On or before the last day of each month, each permit holder shall report to the Department of Public Safety, on a form provided, an accounting of all Proceeds, Prizes paid, and expenditures for the prior month. 9.66.190 — Separate Account for Proceeds. All Proceeds derived from a Bingo game shall be kept in a special fund or account and shall not be commingled with any other fund or account. 9.66.200 — Use of proceeds. With respect to organizations exempted by Section 23701d of the Revenue and Taxation Code, the Proceeds shall only be used for Charitable Purposes. With respect to other organizations authorized to conduct Bingo games, the proceeds may be used for Charitable Purposes, and Prizes. In addition, a portion of the Proceeds, not to exceed twenty percent of the Proceeds before deduction for Prizes, or two thousand dollars ($2,000) per month whichever is less, may be used for rental of property, overhead, and administrative expenses. 9.6 6.210 — Limitations on Financial Interests. No individual, corporation, partnership, or other legal entity except the permit holder shall hold a financial interest in the conduct of such Bingo game. 9.66.220 - Exclusive Operation of Bingo Games by Permit Holder. A Bingo game shall be operated and staffed only by members of the permit holder organization. Such members shall not receive a wage or salary from any Bingo games or any other compensation, in cash or kind. Only the permit holder shall operate such game, or participate in the promotion, supervision or any other phase of such game. 9.66.230 - Bingo Games Must Be Open to Public. All Bingo games shall be open to the public, not just to the members of the permit holder organization. The permit holder shall not reserve seats or space for any person. 9.66.240 — Limitations on Participation in Bingo Games. Notwithstanding that Bingo games are open to the public, attendance at any Bingo game shall be limited to A. The occupancy capacity of the room in which such game is conducted as determined by the appropriate fire department and the building department of the City in accordance with applicable laws and regulations. B. Persons who are eighteen years of age or older. C. Persons who are not obviously intoxicated. D. Persons physically present at the time and place in which the bingo game is being conducted. 9.66.250 — Limitation on Venues for Bingo Games. A. A permit holder shall conduct a Bingo game only on property owned or leased by it, and which property is used by such organization for an office or for performance of the purposes for which the organization is organized. The property owned or leased by the organization need not be used exclusively by the organization. B. Where a property permitted to host a Bingo game ceases to comply with Subsection A, the permit shall have no further force or effect with respect to Bingo games permitted at that location. The permit holder may apply for a permit amendment to move the Bingo games to a property compliant with this Section pursuant to Section 9.66.120. 9.66.260 — Limitations on Hours of Operation for Bingo Games. No Bingo game may be conducted for a duration greater than six hours during any 24 hour period and no Bingo game may be conducted between two a.m. and 10 a.m. of any day. 9.66.270 - Violation of Chapter a Misdemeanor. A violation of any provision of this chapter is a misdemeanor. 9.66.280 — Unauthorized Receipt of Proceeds a Misdemeanor. It is a misdemeanor for any person to receive or pay a wage or salary or other compensation, in cash or kind, from any Bingo game authorized by this chapter. Receipt of such wage, salary, or compensation shall be punishable by a fine not to exceed ten thousand dollars ($10,000), which fine shall be deposited in the general fund of the City. 9.66.290 - City May Enjoin Violations of this Chapter. The City may bring an action in a court of competent jurisdiction to enjoin a violation of Section 326.5 of the Penal Code or of this chapter. 9.66.300 - Bingo Compliance Audits. A. Permit holders with gross receipts in excess of three hundred thousand dollars ($300,000) per year shall provide as a condition for re- licensing, an audit opinion from a Certified Public Accountant which affirms the permit holder's compliance with City and State Bingo laws, and that accounting books, procedures and internal controls are adequate to track and safeguard all Proceeds and assets. Audits of Bingo games shall be conducted at no public expense, with costs being borne by the permit holders. I . The city manager may authorize a permit holder to submit biennial audit opinions instead of annual audits. If a biennial audit is authorized by the city manager, the Bingo permit holder will allow City staff full access to all original accounting records to conduct an annual compliance review during non -audit years. Material findings of exceptions or system weaknesses during this review will result in a requirement that the annual audit be conducted and an audit opinion be issued by a Certified Public Accountant after adequate testing to verify compliance and internal controls for the year in question. 2. Before commencement of the audits, the auditor selected by each permit holder shall confer with the city auditor or designated City representative to ascertain the required scope and depth of the audits to be conducted. Generally speaking, Bingo audits will not require an opinion on the financial statements of the permit holders. 3. At least one game observation shall be made by the auditor, and sufficient audit testing shall be conducted as is deemed necessary by the auditor and by the City to meet its monitoring and enforcement responsibilities. 4. The audit shall verify the amount of Proceeds collected, the allocation or use of the Proceeds, and the adequacy of the accounting and control system to monitor and account for cash receipts, start-up cash, inventory and expenditures. B. For permit holders with gross receipts of less than three hundred thousand dollars ($300,000) per year, a certification from their bookkeeper, accountant or treasurer shall be presented to the City as a condition for annual relicensing, in addition to financial documents required to be submitted with their annual permit renewal application, stating that the permit holder is in compliance with all City and State laws. The certification should include a detailed description of the permit holder's current accounting system and internal controls for cash, start-up cash, inventory and expenditures. A schedule summarizing the specific charitable expenditures of all Bingo Proceeds should be attached to the certification to provide detail verification of charitable expenditures shown in the financial statement. The certification should be approved and signed by the appropriate officers and board of directors as true and correct. The City shall conduct a game observation and a brief review of accounting records to verify legal compliance and adequacy of internal control procedures. 9.66.3 10 — City's Authority to Inspect Games and Audit Records. A. City public safety and auditing staff may enter, whenever the City deems necessary, any Bingo game being operated within the City to observe and monitor game operations as well as cash and inventory control procedures. B. The City retains the right, upon reasonable notice, to examine and audit the accounting records, bank statements and original accounting source documents of any Bingo permit holder to determine compliance with this chapter. The permit holder shall fully cooperate with the City by making such records available upon request. Failure to comply with a request for an audit is grounds for revocation of the permit. SECTION 4. Environmental Review. The City Council finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15060(c)(2) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, as the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment and Section 15060(c)(3) of the CEQA Guidelines as it is not a project as defined by CEQA per Section 15378. SECTION 5. Severability. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision will not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 6. Effective Date. This ordinance shall go into effect thirty (30) days after its adoption. SECTION 7. Publication. The City Clerk is directed to cause this ordinance to be published in the manner required by law. [THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.] This ordinance was introduced by the City Council of the City of Rohnert Park at the regular meeting held on November 10, 2015, and adopted on November 24, 2015, by the following roll vote of the City Council: AYES: (5) Five Councilmembers Callinan, Mackenzie, Stafford, Belforte and Mayor Ahanotu NOES: (0) None ABSENT: (0) None ABSTAIN: (0) None Cl Y F R H RT PA 1 Amy O. A anot i, ayor ATTEST: Anne M. Buergler City Clerk City Attorney