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Currently, the PREP program continues to have four inspectors and based upon the revenue and costs projection, that is not expected to change. X. Continuation of Proactive Rental Enforcement Program is essential to the neighborhoods in Santa Ana to provide assurances that the rental housing will not be allowed to revert to the condition which led to the initial concerns for the implementation of an inspection program in 1992. Y. Recurrent poor management by rental owners has become a challenge for the Proactive Rental Enforcement Program inspectors in maintaining improvements gained in the previous areas while conducting inspections in the next neighborhood. Z. In an effort to continue monitoring the results of the program, PREP will continue for another four-year period, commencing on January 1, 2008 and will sunset on December 31, 2011, to allow for review of the program Section 2. In accordance with the California Environmental Quality Act, the recommended action is categorically exempt from further review per section 15321, Class 21, as the project involves an enforcement action by a regulatory agency to allow the continuation of an inspection program. A Categorical Exemption for Environmental Review No. 2007-123 will be filed for this project. Section 3. Section 21-120r.1 of the Santa Ana Municipal Code is hereby amended, which amendment only extends the sunset clause currently in said section from 2008 to 2011, to read in full as follows (deleted text in strikeout and added text in bold are included for tracking purposes only): Sec. 21-120r.1. Residential Rental Surcharge. (a) Except as otherwise provided in subsection (b) of this section, the business license tax for residential property rental and residential apartment rental shall consist of the amount set forth in subsections (2) and (3) of section 21-120r plus an annual surcharge of seventeen dollars and fifty cents ($17.50) per each property rental unit or each apartment rental unit. The surcharge hereby established shall be due and payable and shall be paid at the same time and in the same manner that the amount due under section 21-120r is due and payable. No business license shall be issued unless the surcharge is paid. Penalties and interest shall be assessed upon the total amount due and unpaid at the rate specified in this chapter until such time as both the amount due under section 21-120r and the surcharge due under this section are paid in full. All provisions for the enforcement, collection and recovery of unpaid business license taxes shall likewise apply to the enforcement, collection and recovery of any unpaid surcharge. Notwithstanding any provision of Ordinance No. NS- _ 4 Page 4 of 6 75A-9