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HomeMy WebLinkAboutAGENDA REPORT 1994 0518 CC REG ITEM 11D100RPAN, CAUFORIN"A n City CounMeeting _, d M U. of 99 ACTION: z, By To: From: Date: Subject: Background AGENDA REPORT CITY OF MOORPARK The Honorable City "ouncil Barbara Coy- Buli_cz Management Analyst ITEM //- E , CjION: ANOW ey April 26, 1994 (Council Meeting: 05/04/94),,: CONSIDER THE NEED FOR AN ORDINANCE REGULATING THE PRICE OF EMERGENCY ITEMS AND SERVICES DURING A PROCLAIMED LOCAL EMERGENCY Following the Northridge earthquake on January 17, 1994, the Consumer and Environmental Protection Division of the Office of the District Attorney received numerous complaints from local citizens regarding unreasonable price increases for necessary items, including water, milk, bread, gasoline, lumber and plumbing supplies. Prices were reported to have increased substantially over those that existed before the local emergency. Even accounting for normal price increases that might be passed along by suppliers to local retailers, there appeared to be no justification for the excessive price increases that were reported. In the absence of statewide provisions outlawing these practices, local law enforcement officials were unable to stop the practice of price gouging In order to protect Ventura County citizens from excessive and unjustified increases in prices charged for goods and services vital to health and welfare, the Ventura 'ounty Board of Supervisors adopted a price gouging ordinance on January 25, 1994, to take effect immediately in the unincorporated areas of Ventura County. Additionally, the District Attorney urged each city council within Ventura County to pass a similar ordinance prohibiting price gouging (as County ordinances are not generally applicable to cities) . The cities of Thousand Oaks and Simi Valley subsequently adopted price regulating ordinances, and the issue was presented to the City's Public Works, Facilities, and Solid Waste Committee for discussion and recommendation on March 2, 1994. Discussion The City's proposed ordinance is modeled after those adopted by the cities of Los Angeles, Thousand Oaks, and Simi Valley, as well as the County of Ventura. All ordinances state that it is unlawful, upon the proclamation of a local emergency. for any person to price, sell or offer to sell any emergency :terns (-)r services for more than ten ..'t /priccrpt.;'ord;'bcbjJ 3 -14 percent (100) of the price in existence immediately prior to the proclamation of the local emergency, unless the seller can prove directly attributable cause, with the exception that the Simi Valley ordinance provides for a 25 percent (250) maximum allowable price increase for emergency items and services sold during a proclaimed disaster. As noted, the Public Works, Faciiities, and Solid Waste Committee discussed the emergency price regulating issue at its March 2, 1994 meeting and subsequently recommended that the City Council consider the introduction of an ordinance comprised of the following components: 1) The percentage of maximum allowable price increase for emergency items and services sold during a proclaimed disaster may not exceed by ten percent (106) t-he cost in existence for the same items and services immediately prior to the emergency, unless the seller can prove directly attributable cause, such as additional costs imposed by the supplier /wholesaler or an increase in the cost of labo! and /or materials used to provide an emergency service. 2) A contractor shall not be deemed in violation of the ordinance if the contractor's charges for services do not exceed by more than loo the prevailing wages for the applicable craft(s) as published by the California Department of Industry Relations next preceding the date of the local disaster proclamation. 3) Additional price increases may be allowed if the disaster or emergency lasts an unusually long time. Section 2.6.050 (b) of the proposed ordinance iPrice Regulation: Modification; Termination) states that zhe applicability of price regulation can be reduced or eliminated by provisions established within the proclamation of the loca emergency. 4) An administrative hearing conducted by the City Manager or designee may be enacted prior to the filing of a criminal complaint. The burden shall oe on -.he complainant to establish clear and convincing eviden•e =hat the accused violated the ordinance. 5) Price regulation imposed under the proposed ordinance would terminate upon the termination of the local emergency, unless terminated earlier by the City Council. While the City's proposed ordinance is similar to those adopted by Ventura County and the cities of Los Angeles and Thousand Oaks in that violators shall be guilty of a misdemeanor and punished by a fine of not less than $1,000, or by imprisonment. in the County Jail for not more than six months, or both, the City's proposed ordinance does not specifically call out the penalt-, whi,h is defined independently icerpt.;'ord!bcb;'3 -3 94 under Chapter 1 . 2 of the Moorpark Municipal Code (Enforcement and Penalty) . The burden of establishing the price of an item before and after a disaster might be difficult . While receipts may be available for food, water, gasoline, and other items purchased on a regular, if not weekly, basis, it may be difficult to substantiate pre-disaster pricing for items purchased much more infrequently, i .e. , blankets, flashlights, tools . It may be especially difficult to establish the validity of pricing for services, which necessarily varies from job to job, making pre- and post-disaster price comparisons virtually impossible . Despite probable difficulties in prosecution under an emergency price regulating ordinance, its mere presence on the books may serve as a deterrent, and the threat of prosecution might discourage potential violators from increasing the price of emergency goods and services sold during a local emergency. Conclusion Government Code Sections 8630 through 8634 discuss local emergency actions, including the proclamation of a local emergency by the governing body or an official so designated by ordinance adopted by such governing body. During a local emergency, the governing body of a city, or an official designated thereby, may promulgate orders and regulations necessary to provide for the protection of life and property. Establishing an ordinance to regulate the price of emergency items and services which impact the health, safety, and welfare of residents during a declared local emergency would fall within the intent of the Government Code . Recommendation It is therefore recommended that the City Council consider the introduction and enactment of an ordinance to provide for the regulation of the price of emergency items and services during an emergency or disaster for which a proclamation of a local emergency has been issued. Such an ordinance would serve to protect local residents from excessive and unjustified increases in the price of emergency items and services sold during a proclaimed disaster. Reference : Proposed Ordinance 3 AS/pricerpt/ord/bcb/3-3-94