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Home My WebLink AboutOrd 1191 - Deceptive Trade Practices Ordinance No. 1191 CITY OF PALM DESERT DEPARTMENT OF COMMUNITY DEVELOPMENT STAFF REPORT REQUEST: Addition of Chapter 5.08, Deceptive Trade Practices and Going Out of Business Sales, to the Palm Desert Municipal Code. SUBMITTED BY: Lauri Aylaian, Director of Community Development APPLICANT: City of Palm Desert DATE: July 9, 2009 ��"�"�' � � L�1 C�T�@�� _ _ �, CONTENTS: Ordinance No. �191 �� E� P�1�2h�R�ita�� RECOMMENDATION: That the City Council waive further reading and pass Ordinance No. 1191 to second reading adding Chapter 5.08 Deceptive Trade Practices and Going Out of Business Sales to the Palm Desert Municipal Code. EXECUTIVE SUMMARY: Approval of the staff recommendation will begin the process to enact restrictions on Going Out of Business sales so that they are not conducted or promoted deceptively. BACKGROUND: Over the years, the City has received occasional complaints about businesses that advertise or display signs saying "Going Out of Business," "Total Liquidation," or "Store Closing" for long periods of time, without actually going out of business. Signs such as these are misleading and serve to enrich these businesses at the expense of neighboring businesses that do not employ deceptive advertising tactics. The Palm Desert Municipal Code does not currently have restrictions on sign or advertisement content that assures the veracity of the content. Therefore, a business can now advertise or display Going out of Business signage indefinitely, provided that the size, type, and location of the signage complies with 25.68 of the municipal code. The proposed ordinance would remedy this situation. Staff Report— Deceptive Trade Practices Ordinance July 9, 2009 Page 2 of 2 PROJECT DESCRIPTION: The proposed ordinance seeks to prohibit deceptive trade practices by limiting the amount of time during which Going Out of Business sales can be conducted to the 90 days immediately preceding closure of all business operations within the city. Failure to comply with this limitation will be considered an infraction, and enforcement and penalties will follow the protocol of P.D.M.C. Chapter 1.12 General Penalty. Going Out of Business sale signage is defined by the proposed ordinance to include "closing out," "shutting doors forever," or "bankruptcy sale"; the words "foreclosure" or "bankruptcy"; or similar phrases indicating that an enterprise is ceasing business. ENVIRONMENTAL REVIEW: This project is an administrative activity of a governmental body and is not a physical change to the environment and, therefore, is exempt from CEQA. The Director of Community Development has determined that no further environmental review is necessary. Submitted by: Lauri Aylaian Director of Community Development Approv • M. Wohlmuth Ci anager g:\planning\lauri aylaian\staff reports\07-09-09 going out of business sales ord-cc.doc ORDINANCE NO. 1191 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ADDING CHAPTER 5.08 REGARDING DECEPTIVE TRADE PRACTICES AND GOING OUT OF BUSINESS SALES. The City Council of the City of Palm Desert, California does hereby ordain as follows: SECTION 1. Chapter 5.08 of the Palm Desert Municipal Code is added to read as follows "Chapter 5.08 DECEPTIVE TRADE PRACTICES Section 5.08.010 Going Out of Business Sales A. Definitions 1. "Going out of business sale" means an offer to sell to the public, or the sale of, goods, wares, and merchandise, to the public, on the implied or direct representation by written or oral advertising that the sale is in anticipation of the termination of all of the operations of a business at all of its locations in the city. 2. "Person" means any person, business, firm, partnership, corporation, association, club or organization, or the like. B. Prohibited Conduct 1. A person may not conduct a sale advertised with the phrase "going out of business," "closing out," "shutting doors forever," or "bankruptcy sale"; the word "foreclosure" or "bankruptcy"; and/or a similar phrase or word indicating that an enterprise is ceasing business unless the business is closing all of its operations in the city. 2. A person may not fraudulently represent that the person is conducting a "going out of business sale." C. "Goinq Out Of Business Sale" Process and Procedure 1. A "going out of business sale" can be noticed and approved in one of two manners: ORDINANCE NO. 1191 a. If a patrolling code officer observes a "going out of business sale" and/or similar activity, or responds to a complaint regarding such an activity, he or she will stop and issue a notice and a handout/application explaining the requirements for conducting a "going out of business sale," including signage requirements. From the date the notice is issued, applicants will be authorized to conduct the sale for ninety (90) days; or b. If a business owner goes to City Hall requesting "going out of business sale" information/procedure, an official from Planning or Code will provide a handout/application explaining the requirements to conduct a "going out of business sale," including signage requirements. From the date the handout/application is given, the applicant will be authorized to conduct the sale for ninety (90) days. 2. At the time the application is filed, applicant shall grant permission to the City Manager (or his or her designee) to enter, during normal business hours, the property or premises on which the sale is to be conducted for the purpose of verifying the accuracy of the inventory statement required by this section. 3. Applicant may apply for one (1) forty-five (45) day extension, which shall be subject to the conditions imposed by the City Manager. D. Deadline for Orders A person may not sell an item at a "going out of business sale" if the person ordered the item after the beginning date of the sale. E. Disposition of Sale Items After a sale ends, a person may not sell at retail price an item offered at the sale. F. Exceptions This subchapter does not apply to: 1. A sale conducted by a public officer as part of the officer's official duties; 2. A sale for which an accounting must be made to a court of law; 3. A sale conducted pursuant to an order of a court of law; or 4. A foreclosure sale pursuant to a deed of trust or other lien. G. Penaltv and Enforcement 1. It is unlawful for any person to violate any provision or to fail to comply with any of the requirements of this chapter. In addition to other remedies provided by 2 ORDINANCE NO. 1191 law, any person violating any provision of the chapter for failing to comply with any of the requirements is deemed guilty of an infraction in accordance with Chapter 1.12 of this code. 2. Each person shall be deemed guilty of a separate offense for each and every day, or any portion thereof, during which any violation of or failure to comply with any of the provisions of this chapter is committed, continued or permitted by such person, and each instance shall be deemed punishable as provided in this chapter. 3. The provisions of this chapter shall not be construed as permitting conduct not prescribed herein and shall not affect the enforceability of any other applicable provisions of law. H. Appeal An applicant may appeal a decision by the City Manager or his or her designee to impose condition on a sale, denying a sale, or revoking approval of a sale by filing a written appeal with the City Clerk within ten (10) days after the date on the notice of the decision of the City Manager. The City Council may hear the appeal, or appoint a hearing officer to take evidence, and submit findings and recommendations. The City Council shall render its decision within thirty (30) days after the hearing or thirty (30) days after receipt of hearing officer report for final decision. The decisions of the City Council shall be final. SECTION 2. SEVERABILITY If any section, subsection, clause or phrase of this Ordinance or any part thereof is for any reason held to be invalid, unconstitutional, or unenforceable by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of the Ordinance. The City Council declares that it would have passed each section, subsection, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, sentence, clause or phrase would be declared invalid, unconstitutional or unenforceable. SECTION 3. COMPLIANCE WITH CALIFORNIA ENVIRONMENTAL QUALITY ACT This ordinance complies with the "City of Palm Desert Procedure for Implementation of California Environmental Quality Act, Resolution No. 02-60", in that pursuant to Section 3.07, the ordinance is exempt because there is no possibility that the adoption of the ordinance will have any significant negative effect on the environment. SECTION 4. PUBLICATION The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in the Desert Sun, a newspaper of general circulation, published and 3 ORDINANCE NO. 1191 circulated in the City of Palm Desert, California, and shall be in full force and effective thirty (30) days after its adoption. PASSED, APPROVED AND ADOPTED by the Palm Desert City Council this day of , 2009, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, Mayor ATTEST: RACHELLE D. KLASSEN, City Clerk City of Palm Desert, California 4