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Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 2
Why A Business License Fee Study?
Ensure fees and licensing structure are compliant with Utah Code
Cover increasing costs
Account for new businesses
Equitable fee distribution
Considering assessing residential rental fees or update residential rental fees
Percent of business licensing costs recouped through business licensing fees
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 3
Utah Code 10-1-203 – General Businesses Cities may license for the purpose of
regulation and revenue any business within the limits of the municipality…
Cities may charge for disproportionate and enhanced municipal service costs The amount of a fee shall be reasonably related to the costs of the municipal services provided by the municipality All license fees and taxes shall be uniform in respect to the class upon which they are imposed
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 4
Business Licensing Costs
I. Base Administrative CostsCosts common to all types of businessesRegister, oversee, maintain records, etc.
II. Disproportionate CostsDisproportionate Regulatory CostsDisproportionate Service Call Costs
III. Enhanced CostsHigher level of service for a specific portion of the business community
Cost Categories
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 5
Information Needed
InterviewsBusiness Licensing Process
Time/People InvolvedPriorities & Concerns
Financial InformationBudgets
Salaries/Benefits
Police, Fire & EMS Call DataTwo Years of Call Data
Business Licensing Costs
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 6
Base Costs of Administering a License Commonto all Types of Businesses
Cost per Minute(each employee involved in business
licensing)
Time per Task(for each business licensing task)
Direct CostsSalary
BenefitsDepartment Overhead
Indirect Costs
Administrative Executive Legislative
Building Costs
Types of ServicesBusiness Licensing
PoliceFireCode
EnforcementPlanning &
ZoningBuilding, etc.
Base Administrative Costs
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 7
Base Administrative Costs
SERVICE TIMEMINUTES COSTPER MINUTE COSTBusiness Licensing 45 $1.00 $45.00
Compliance & Supplies $25.00
Police (Review Application) 10 $1.25 $12.50
Fire (Review Application) 10 $1.30 $13.00
Planning & Zoning (Review Application)
10 $1.10 $11.00
Fire Inspection (Base Cost) $100.00
Total Cost $206.50
Types of LicensesCommercial (New Application & Renewals)
Home Occupation (New Application & Renewals)Seasonal Businesses
SolicitorsSpecial Events
Commercial New Application
Source: Numbers are based on typical costs for cities along the Wasatch Front, 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 8
Disproportionate Service Costs
Disproportionate Regulatory Costs
Additional services required by business license administration, police and fire
departments for regulated businesses such as nursing homes, daycare facilities,
restaurants, etc.
Disproportionate Service Call Costs
Level of 911 calls to Police, Fire and EMS above the base number of calls.
~Base number of calls
Level of 911 Police, Fire and EMS calls to single family owner-occupied residences
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 9
Disproportionate Regulatory Costs
BUSINESS SERVICE TIMEMINUTES COSTPER MINUTE COSTPawn Shops Police 180 $3.12 $562
Residential Day Care
Fire Marshall 45 $2.35 $106
Residential Day Care
Business Licensing 20 $0.75 $15
Massage Police 60 $3.12 $187
Big Box Fire Crew 210 $3.35 $704
Institutions Fire Crew 60 $3.35 $201
Grocery Stores Fire Crew 30 $3.35 $101
Source: Numbers are based on typical costs for cities along the Wasatch Front, 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 10
Disproportionate Service Call Costs
Geo-Code 911 Police, Fire and EMS Service Calls
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 11
Disproportionate Service Call Costs
Business Groupings“All license fees and taxes shall be uniform in respect to the class upon
which they are imposed” UC 10-1-203(6)
1. Type of Business 2. Location
Per Employee Fees
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 12
Disproportionate Service Call Costs
Base Call Ratio
Level of 911 Police, Fire & EMS service calls to single family owner-occupied residences
Se-ries1
00.20.40.60.8
11.2
Range of Police Base Call Ratios
Source: Business license fee studies for six cities along the Wasatch Front, 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 13
Disproportionate Service Call Costs
Disproportionate Call Ratio
Average annual number of calls above the base call ratio
TYPE NUMBER OF BUSINESSES AVERAGE ANNUAL NUMBER OF POLICE CALLS POLICE CALL RATIO BASE CALL RATIO POLICE DISPROPORTIONATE CALL RATIOAutomotive 10 8 .800 0.542 0.258
Convenience Stores
5 78 15.6 0.542 15.058
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 14
Disproportionate Service Call Costs
Cost Per Call
Additional costs associated with providing a level of service above that which would be required assuming there were no calls for
service
Police EMS Fire $-
$100
$200
$300
$400
$500
$600
$700
Range of Costs Per Call
Source: Business license fee studies for nine cities along the Wasatch Front., 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 15
Disproportionate Services Cost
TYPE POLICE DISPROPORTIONATE CALL RATIO POLICE COST PER CALL POLICE COST PER BUSINESSPOLICECOST PER BUSINESSWITHOUT OUTLIERS
Automotive 1.352 $230 $311 $225
Banking/Credit Union
5.145 $230 $1,183 $850
Big Box 75.11 $230 $17,275 NA
Business & Professional
0.452 $230 $104 NA
Department Store 32.15 $230 $7,395 NA
Convenience Store/Gas
14.441 $230 $3,321 $2,875
Fast Food 6.591 $230 $1,516 $1,250
Grocery Stores 16.191 $230 $3,724 NA
Pharmacy/Drug Store
12.152 $230 $2,795 NA
Source: Numbers are based on typical costs for Cities along the Wasatch Front, 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 16
Disproportionate Service Call Costs
Autom
otiv
e
Busines
s & P
rofe
ssio
nal
Conve
nience
Sto
res
Finan
ce
Groce
ry S
tore
s
Perso
nal S
ervi
ces
Resta
urants
Retai
l
Trends Disproportionate Service Call Costs
Source: Business license fee studies for 5 cities along the Wasatch Front, 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 17
Enhanced Service Costs
Higher service levels compared to basic services
provided by the City:
LandscapingSnow removal
Additional patrolSignage
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 18
Total Business Licensing CostsTYPE BASE COST DISPROPORTIONATE REGULATORYCOST
DISPROPORTIONATE SERVICE CALLCOST TOTAL COST CURRENT FEEAutomotive $100 $60 $225 $385 $250
Banking/Credit Union
$100 $0 $850 $950 $550
Big Box $100 $704 $17,275 $18,079 $1,500
Business & Professional
$100 $0 $104 $204 $100
Department Store
$100 $160 $7,395 $7,655 $1,000
Convenience Store/Gas
$100 $101 $2,875 $3,076 $750
Fast Food $100 $0 $1,250 $1,350 $400
Grocery Stores $100 $101 $3,724 $3,824 $1,000
Pharmacy/Drug Store
$100 $0 $2,795 $2,895 $400
Source: Numbers are based on typical costs for Cities along the Wasatch Front, 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 19
Utah Code 10-1-203.5 -Residential Rentals Municipalities may license and charge a
fee to residential rentals
May charge and collect a disproportionate rental fee if….1. Municipality has performed a
municipal services study 2. Adopts a rental fee that does not
exceed the cost to provide municipal services
3. Exception - 4 or less units with one unit occupied
by the owner
Must provide a disproportionate rental fee reduction if charge a disproportionate fee
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 20
Utah Code 10-8-85.5 -Residential Rentals
Only one license per owner
May not charge a fee for the inspection of a rental dwelling
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 21
Additional Information Needed
Rental HousingSingle FamilyMulti-Family
Rental Housing Costs
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 22
Rental Housing Cost
POLICE FIRE EMSBase Call Ratio 0.512 0.010 0.040
Cost Per Call $180 $550 $325
Single Family Rentals (SF, Condos, PUD) Total
Average Annual Calls 1200 125 175
Total Number of Units 2000 2000 2000
Call Ratio 0.600 0.100 0.078
Disproportionate Call Ratio
0.088 0.053 0.038
Cost Per Unit $16 $29 $12 $57
Duplex
Average Annual Calls 350 25 80
Total Number of Units 600 600 600
Call Ratio 0.583 0.042 0.133
Disproportionate Call Ratio
0.071 0.032 0.093
Cost Per Unit $13 $18 $30 $61
Source: Numbers are based on typical costs for Cities along the Wasatch Front, 2010 - 0214
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 23
Rental Housing Cost
CALL RATIO POLICE CALL RATIO FIRE CALL RATIO EMSBase Call Ratio 0.512 0.010 0.040
Cost Per Call $180 $550 $325
3+ Units Total
Average Annual Calls 1,120 75 150
Total Number of Units 1,750 1,750 1,750
Call Ratio 0.640 0.043 0.074
Disproportionate Call Ratio
0.128 0.033 0.046
Cost Per Call $23 $18 $15 $56/unit
Source: Numbers are based on typical costs for Cities along the Wasatch Front, 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 24
“Good Landlord Program”
Program established by a municipality that provides a reduction in the disproportionate rental fee for a landlord who:
Completes a Good Landlord training program approved by the municipality
Implements measures to reduce crime in rental housing as specified in municipal ordinances
Operates and manages rental housing in accordance with applicable municipal ordinance
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 25
“Good Landlord Program”
Feasibility & Considerations Disproportionate costs Number of rentals with a
disproportionate cost Types of calls Include all rentals or just 3+ rentals? Include mobile homes? Renewal dates Participation/suspension
requirements “Buy-in” of Police Department
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 26
Total Costs
TYPE COSTHome Occupation $65,000
Commercial $325,000
Residential Rental $105,000
Total Business Licensing Cost $495,000
Current Business Licensing Revenue $225,000
Current Percent Cost Recovery 45%
Projected Business Licensing Revenue (new fee schedule)
$350,000
Projected Percent Cost Recovery 71%
Source: Numbers are based on typical costs for Cities along the Wasatch Front, 2010 - 2014
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 27
Deliverables
Interactive spreadsheet to project revenues with varying fees
Written report with clear explanation of all calculations
Power point for public hearing and interim meetings
Rates in comparable cities/counties Assistance with Good Landlord
implementation Ordinance review
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 28
State-Wide Trends
On-line renewalsOn-line renewal noticesOn-line interdepartmental
notificationFee schedule consolidationBetween 60% - 75% cost
recovery
Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 29
Review
Ensure fees and licensing structure are compliant with Utah Code
Cover increasing costs
Account for new businesses
Equitable fee distribution
Considering assessing residential rental fees or update residential rental fees
Percent of business licensing costs recouped through business licensing fees