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Ordinance No. 1092395 ORDINANCE NO. 1092 AN ORDINANCE OF THE CITY OF CYPRESS, CALIFORNIA, AMENDING CHAPTER 15C OF THE CYPRESS MUNICIPAL CODE REGULATING AND LICENSING THE CONDUCT OF BINGO WITHIN THE CITY OF CYPRESS The City Council of the City of Cypress, California, does hereby ordain as follows: SECTION 1. Chapter 15C of the Cypress Municipal Code is hereby amended, in its entirety to read as follows: CHAPTER 15C (BINGO REGULATIONS) 15C -1 Definition of bingo. 15C -2 License required. 15C -3 Organizations eligible for license to conduct bingo games. 15C -4 Application for license. 15C -5 Contents of application for license. 15C -6 Investigation of applicant. 15C -7 Contents of license. 15C -8 Annual Report. 15C -9 Summary suspension of license pending opportunity for hearing; misdemeanor to continue after suspension; revocation. 15C -10 Appeal of revocation to city council. 15C -11 Restrictions on operations of bingo games by qualified licensee. 15C -12 Violations. Sec. 15C -1. Definition of bingo. As used in this chapter, "bingo" means a game of chance in which prizes are awarded on the basis of designated numbers or symbols on a card which conform to numbers or symbols selected at random. 'Bingo" shall also include cards having numbers or symbols which are concealed and preprinted in a manner providing for distribution of prizes. The winning cards shall not be known prior to the game by any person participating in the playing or operation of the bingo game. All such preprinted cards shall bear the legend, "For sale or use only in a bingo game authorized under California law and pursuant to local ordinance." Sec. 15C -2. License required. (a) It shall be unlawful for any person, firm, organization or corporation to hold, conduct, participate in, or carry on any bingo game, without first having applied for and obtained a license from the city. A maximum of six (6) annual bingo licenses, and one (1) temporary bingo license to offer games of bingo on not more that three (3) calendar days in licensing period, may be licensed to operate games of bingo in any twelve (12) month licensing period; provided the same have been issued by the chief of police in accordance with the requirements of this chapter. In the event of the revocation or suspension of an existing bingo license, the chief of police may, but shall not be required to, issue such additional partial -year license(s) as may be necessary to bring the total number of licensees up to a maximum of six (6). 396 (b). In issuing annual licenses, the chief of police, or his or her designee, shall first determine whether any licensee(s) from the immediately previous permit year qualify(ies) for the issuance of a renewal license. In the event that a previous licensee is no longer qualified for the issuance of a license, or has been suspended from being granted a new license, the chief of police, or his or her designee, shall determine the qualification of all new license applicants. In the event that there are more qualified applicants for a new bingo license than available licenses, the chief of police, or his or her designee, shall select the applicant(s) to be awarded a new license in some selection process, as determined by the chief of police, or his or her designee, to assure the selection of new licensees by chance. Sec. 15C -3. Organizations eligible for license to conduct bingo games. Only such organizations are eligible for a license to conduct bingo games which meet all of the following qualifications: (a) At the time of application and during the proposed and actual operation of the bingo games, the applicant must be a nonprofit corporation recognized by the state of California and organized under Sections 501(c)(3) or 501(c)(6) of the Internal Revenue Code; provided, however, that the requirements of this chapter shall not apply to bingo games conducted by a mobilehome park homeowners' association or City recognized senior citizens' organization so long as no fee is charged to participants of such bingo games and so long as such bingo games are conducted either on the premises of a mobilehome park or within the City of Cypress Senior or Community Centers. (b) The applicant owns or leases property within the City of Cypress which is used by such organization for an office or for performance of the purposes for which the organization is organized. (c) The applicant is a Cypress community -based organization or a Cypress youth - based organization and is organized and established for a minimum period of seven (7) consecutive years preceding the filing of the application for a permit. As used in this chapter, "Cypress youth -based organizations" means those specifically organized and conducted solely in support of city youth programs. "Cypress community -based organizations" means those organized for civic betterment serving varied city groups and not specifically organized and conducted solely in support of city youth programs. (d) A minimum of ten percent (10 %) of the membership of a community -based organization making the application must reside within or be employed within the city or, in the case of a youth -based organization, at least ten (10) of the youth members of such organization must reside within the city, at the time of the filing of the application for a permit. Sec. 15C -4. Application for license. Eligible organizations desiring to obtain such license to conduct bingo games in the city shall file an application in writing therefore with the chief of police on a form provided by the chief of police, not later than September 30th of any calendar year. The chief of police, or his or her designee, shall issue the license or a letter of denial to the applicant within sixty (60) days of receipt of the application. If the chief of police, or his or her designee, does not issue a license or a letter of denial within sixty (60) days of receipt of the application, the applications shall be deemed to be denied. Licensees wishing to renew their licenses must file a renewal application at least sixty (60) days prior to the expiration of their current license. Renewal applications shall be approved unless there is a determination that the licensee is not in compliance with the provisions of this chapter, including, but not limited to, the annual reporting requirements of section 15C -8 of this chapter. Sec. 15C -5. Contents of application for license. Said application for a license shall contain the following: (a) The name of the applicant organization and a statement that applicant is an eligible organization under section 15C -3. (b) The name and signature of at least two (2) officers, including the presiding officer of the corporation or community chest, and the trustee of any trust. (c) The particular property within the city, including the street number, owned or leased by the applicant, used by such applicant for an office or for performance of the purposes for which the applicant is organized, on which property bingo games will be conducted, together with the occupancy capacity of such place. (d) Proposed days of week and hours of day for conduct of bingo games. (e) A statement that the applicant agrees to conduct bingo games in strict accordance with the provisions of Section 326.5 of the Penal Code and this chapter as they may be amended from time to time, and agrees that the license to conduct bingo games may be revoked by the chief of police upon violation of any of such provisions. (f) Said application shall be signed by the applicant under penalty of perjury. (g) The license fee fixed by the city council by resolution shall accompany the application. (h) The applicant shall also submit, with its application, a certificate or determination of exemption under Section 23701 of the Revenue and Taxation Code, or a letter of good standing from the exemption division of the franchise tax board showing such exemption. (i) Concurrent with the filing of the completed application, the applicant shall file a statement specifying the names and addresses of three (3) persons who shall be authorized to manage, supervise and be responsible for the conduct of all bingo games by the applicant. One person shall be designated the "Bingo Manager" and the other persons shall be designated the "Alternate Bingo Manager." Either the Bingo Manger or the Alternate Bingo Manager shall be on the premises at all times during which bingo games are being conducted. The persons designated as Bingo Manager and Alternate Bingo Manager shall furnish signed statements accepting their responsibilities. In the event any other person is designated Bingo Manager or Alternate Bingo Manager, the permittee shall file a new statement containing all of the data specified in this section. Sec. 15C -6. Investigation of applicant. Upon receipt of the completed application and the fee, the chief of police, or his or her designee, shall refer the same to interested departments of the city for investigation as to whether or not all the statements in the application are true and whether or not the property of the applicant qualifies and the extent to which it qualifies, as property on which bingo games may lawfully be conducted as to fire, occupancy and other applicable restrictions. Sec. 15C -7. Contents of license. Upon being satisfied that the applicant is fully qualified hereunder to conduct bingo games, the chief of police, or his or her designee, shall issue a license to said applicant, which shall contain the following: (a) The name and nature of the organization to whom the license is issued; 3 398 (b) The address at which bingo games are authorized to be conducted; (c) The occupancy capacity of the room at which bingo games are to be conducted; (d) The times during which bingo games may be conducted; (e) The date of the expiration of the license. The term of each license issued shall commence from and after January 1St through and including December 31St of each calendar year; and (f) Such other information as may be necessary or desirable for the enforcement of the provisions of this chapter. Sec. 15C -8. Annual Report (a) On or before September 1st of each calendar year, each licensee shall submit to the city finance department, on a form specified by the city, an accounting of: (1) all proceeds from the conduct of bingo games, including a copy of the most recent tax returns filed by the licensee, and (2) all expenditures of funds showing that the net revenue earned from the conduct of bingo games were spent in the manner required by this chapter. The city will not send reminder notices of this requirement. The failure to timely submit the accounting required by this section shall result in the automatic suspension of a license and disqualification of the licensee from the next year's bingo permit application process. (b) In the event it is determined by the chief of police, or his or her designee, that the net revenue to any licensee from the conduct of bingo games was not spent in accordance with the provisions of this chapter, such determination shall result in the suspension of a license and the licensee shall be barred from holding a license for a period of five (5) years thereafter. (c) Within seven (7) months of the submission of the accounting of proceeds to the city pursuant to subsection (a) of this section, the chief of police, or his or her designee, may direct that an audit of the books, records, and activities of any licensee be undertaken, which audit shall be conducted at the sole cost and expense of the licensee(s). When such direction is given, the licensee shall be required to provide city finance staff, or its designee(s), with complete access to the organization's financial records and books. The purpose of this audit is to allow the chief of police, or his or her designee, to verify that the organization has utilized the proceeds from the conduct of bingo games in the manner required by this chapter. Should any licensee fail to submit to an audit requested pursuant to this subsection or fail to provide all of the documentation necessary to complete the audit, such organization(s) may be suspended by the chief of police, or his or her designee, from holding a bingo license for a period of five (5) years thereafter. Should an audit determine that any licensee has not utilized the proceeds from its bingo games in the manner required by this chapter, such organization may be suspended by the chief of police, , or his or her designee from holding a license for a period of five (5) years thereafter. Sec. 15C -9. Summary suspension of license pending opportunity for hearing; misdemeanor to continue after suspension; revocation. (a) Whenever it appears to the chief of police, or his or her designee, that the licensee is conducting a bingo game in violation of any of the provisions of this chapter, the chief of police shall have the authority to summarily suspend the license and order the licensee to immediately cease and desist any further operation of any bingo game. (b) Any person who continues to conduct a bingo game after any summary suspension thereof under subsection (a) shall be deemed guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not exceeding five 399 hundred dollars ($500.00) or by imprisonment in jail for a period not exceeding six (6) months, or by both such fine and imprisonment. (c) The order issued under subsection (a) shall also notify the licensee that it shall have five (5) days from the date of such order to request a hearing to determine whether such license shall be revoked. Failure to request, in writing, such hearing before the chief of police within said five -day period, shall result in a revocation of the license. (d) Upon such request by the licensee, whose license has been suspended under subsection (a), for a hearing to determine whether such license shall be revoked, the chief of police, or his or her designee, shall provide such hearing within ten (10) days after receipt of such request at which hearing the suspended licensee may appear before the chief of police for the purpose of presenting evidence why the license should not be revoked. No license shall be revoked under this section unless notice of the time and place of such hearing shall have first been given at least five (5) days before the hearing thereof by depositing in the United States mail a notice directed to said suspended licensee at the address given in the application. The notice shall set forth a summary of the ground advanced as the basis of the suspension and revocation. Sec. 15C -10. Appeal of denial of a bingo permit or revocation of a permit to city council. (a) Any applicant for a bingo permit which has been denied, or any holder of a license whose license is revoked, under this chapter shall have the right, within ten (10) days after receiving notice in writing of the same, to file a written appeal to the city council. 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 thirty (30) days after its receipt by the city, or at a time thereafter agreed upon and shall cause the appellant to be given at least ten (10) 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 his appeal. The determination of the city council on the appeal shall be final and binding. (b) Any organization whose license is finally denied or revoked may not again apply for a license to conduct bingo games in the city for a period of one (1) year from the date of such revocation. Sec. 15C -11. Restrictions on operations of bingo games by qualified licensee. (a) Maximum amount of prize. The total value of prizes awarded during the conduct of any bingo games shall not exceed two hundred fifty dollars ($250.00) in cash or kind, or both, for each separate game which is held. Each progressive play in a series which continues to utilize and count any number symbols called and utilized in a previous part of said progression shall be deemed part of the same bingo game for purposes of this section, even though a separate prize may be awarded for each part of said progression. (b) Net Revenues to be kept in separate fund or account. For purposes of this chapter, "net revenues" shall constitute total revenues less space rent costs, utility costs, costs of prizes, personnel costs, if any, and incidental operating costs reasonably related to providing the game of bingo (such as advertising costs, gaming equipment, and gaming supplies). All net revenues 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. The licensee shall keep full and accurate records 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. All proceeds for any bingo game shall be deposited into such special fund not later than twenty -four (24) hours (or one (1) business 400 day in the event of a weekend game(s)) following conclusion of the conduct of such game. The chief of police, or his or her designee, shall have the right to examine and audit such records at any reasonable time; and licensee shall fully cooperate with the city by making such records available. (c) Disbursement of funds. All disbursements from any bingo account, including the net revenues fund or account, shall be by consecutively numbered checks signed by two (2) authorized officers of the licensee and shall be made payable to a specific individual or organization. There shall be written on each check the nature of the expenditure for which the check is drawn. No check shall be drawn to "cash" or a fictitious payee. (d) Financial interest in licensee only. No individual, corporation, partnership or other legal entity except the licensee shall hold a financial interest in the conduct of such bingo game. No licensee shall provide a profit, wage or salary from any bingo game authorized under this chapter. Security personnel employed by the licensee may be paid from revenues of bingo games, as provided in subdivisions (j) and (k) of Penal Code section 326.5. (e) Exclusive operation by licensee. A bingo game shall be operated and staffed only by members of the licensee organization. Such members shall not receive a profit, wage or salary from any bingo game. Only the licensee shall operate such game, or participate in the promotion, supervision or any other phase of such game. (f) Staff Member Identification. Any person participating in the operation, conduct, or staffing of any bingo game shall wear on his or her outside clothing, in plain view, an identification insignia or badge measuring not less than 21/ " x 3 l " in size and specifying the full name and title of such person and the name of the license organization. (g) Bingo games open to public. All bingo games shall be open to the public, not just to the members of the licensee organization. (h) Attendance limited to occupancy capacity. Notwithstanding that bingo games are open to the public; attendance at any bingo game shall be limited to the occupancy capacity of the room in which such game is conducted. Licensee shall not reserve seats or space for any person. (i) Bingo games conducted only on licensee's property. The license issued under this chapter shall authorize the holder thereof to conduct bingo games only on such property, the address of which is stated in the application. In the event the described property ceases to be used as an office and as a place for performance of the purposes for which the licensee is organized, the license shall have no further force or effect. A new license may be obtained by an eligible organization, upon application under this chapter, when it again owns or leases property used by it for an office or for performance of the purposes for which the organization is organized. (j) Minors not to participate. No person under the age of eighteen (18) years of age shall be allowed to participate in any bingo game. (k) Intoxicated persons not to participate. No person who is obviously intoxicated shall be allowed to participate in a bingo game. (1) Hours, days of operation. No licensee shall conduct bingo games on more than one day per week, nor for more than eight (8) hours per day; provided, however, that the chief of police may authorize a licensee to conduct bingo games on two (2) extra days per week (up to a maximum of twelve (12) such extra days during any calendar year), if the chief of police determines that the conducting of bingo games on such extra days will not adversely affect the health, safety and general welfare of persons residing in the vicinity of the premises on which the games will be conducted. (m) Participant must be present. No person shall be allowed to participate in a bingo game unless the person is physically present at the time and place in which the bingo game is being conducted. (n) Restrictions on Use of Proceeds. Except for those licensees meeting the criteria of Revenue & Taxation Code § 23701d, a portion of the proceeds, not to exceed 20 percent (20%) of the proceeds before deduction for prizes, or two thousand dollars ($2,000) per month, whichever is less, may be used for the rental of property and for overhead, including the purchase of bingo equipment, administrative expenses, security equipment, and security personnel. (o) Receipts in support of city youth programs. Except as otherwise expressly provided by this chapter, all proceeds from the conduct of bingo games shall be used only for charitable purposes and in support of Cypress youth programs. (p) Compliance with Penal Code. Each licensee shall comply with the requirements of Penal Code section 326.5, except those requirements that expressly conflict with the provisions of this chapter, in which case the licensee shall comply with the requirements of this chapter. (q) Regulation of Games and Equipment. The Chief of Police, or his or her designee, may prescribe such regulations with respect to the conduct of the games and the equipment and cards used by the licensee as he deems necessary to ensure the fairness and integrity of the games, and the accountability of the funds collected. No games shall be played on the premises that are not authorized by this code or previously approved in writing by the Chief of Police, or his or her designee. Any contested games or activities shall not be allowed to occur without a written opinion determining their legality from the California Legislative Council. Sec. 15C -12. Violations. (a) The City of Cypress 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. (b) Any person violating any of the provisions of this chapter or knowingly or intentionally misrepresenting to any officer or employee of the city, any material fact in procuring the license or permit provided for in this chapter shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by up to one thousand dollars or by imprisonment in the county jail for a period of not more than six months, or by both such fine and imprisonment. (c) Notwithstanding any provision of this chapter, any violation of subdivision (b) of Penal Code section 326.5 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." SECTION 2. 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 any competent jurisdiction, such decision shall 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 and phrase thereof not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 3. The City Clerk shall certify to the passage and adoption of this ordinance, and shall make a minute of the passage and adoption thereof in the records of the proceedings of the City Council at which the same is passed and adopted. This ordinance shall be in full force and effect thirty (30) days after its final passage and adoption, and within fifteen (15) full days 7 402 after its final passage, the City Clerk shall cause it to be published in a newspaper of general circulation and shall post the same at City Hall, the Police Department and the Community Center. FIRST READING at a regular meeting of the City Council of said City held on the 25th day of June 2007, and finally adopted and ordered posted at a regu . r meeting held on the 9th day of July, 2007. ATTEST: 1S6saiNzZ CITY CLERK OF THE CITY OF CYPRESS STATE OF CALIFORNIA COUNTY OF ORANGE MAYOR PRO TEM OF T = . CITY OF CYPRESS SS I, DENISE BASHAM, City Clerk of the City of Cypress, California, DO HEREBY CERTIFY that the foregoing Ordinance was duly adopted at a regular meeting of said Council held on the 9th day of July, 2007, by the following roll call vote: AYES: 4 COUNCIL MEMBERS: Bailey, Mills, Narain, and Seymore NOES: 0 COUNCIL MEMBERS: None ABSENT: 1 COUNCIL MEMBERS: Luebben CITY CLERK OF THE CITY OF CYPRESS