Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO: Standing Committee on City Services and Budgets
FROM: General Manager of Community Services
in consultation with the Director of Finance
SUBJECT: 1999 Business License Fees and Liveaboard Fees
 

RECOMMENDATION

GENERAL MANAGER COMMENTS

POLICY

It is Council policy that fees and charges be established on the basis of the cost of providing the associated services or at market level where the service is provided in a market environment.

It is Council policy that new or expanded service costs be fully offset by expenditure reductions or new revenues.

PURPOSE

The purpose of this report is to seek Council approval for 1999 business license fees; 1999 Live-Aboard License Fees and for the addition of a full-time licence policy analyst position in the Licence Branch.

DISCUSSION

1. 1999 Business Licence Fees

This report recommends that business licences fees for 1999 be increased by 1.25%. This increase would apply to all fee categories with the exception of the limited number of categories related to charitable or non-profit work (Appendix B). The primary reason for the increase is to keep fees consistent with City administration and enforcement costs which are anticipated to grow by 1.0% in 1999.

The proposed increase also includes a 0.25% increase to fund the use of credit cards for business licences. At present, business licence fees must be paid by cash, interact card or cheque, and extending the payment options to include credit cards not only represents an improvement in public service but extends to business licence customers a payment option that is available for a wide range of other City services. The costs associated with this service are estimated at $22,000, assuming approximately 15% of business licences are paid with credit cards.

The recommended 1.25% increase will raise the fee for a basic business licence to $89 in 1999 from the current rate of $88.
2. Licence Policy Analyst Position

Council has requested that an in depth review of business licence fees be completed as soon as possible. These reviews are long and complex, involving discussions with staff from a variety of areas within the City. It has always been a problem for the department to find resources for this kind of analysis; and in order to facilitate this process, as well as deal with other licence policy issues, it is recommended that a permanent full time Policy Analyst be approved. There are no existing policy staff positions within the Licence and Property Use Division which has resulted in many outdated regulations and By-laws. This has made it difficult to respond to changing enforcement issues in a timely manner.

This analyst, reporting to the Chief Licence Inspector, would not only deal with a multitude of issues that are currently of interest, but would also be used on an ongoing basis for policy work in the licence area. A partial list of the issues that the analyst would be examining includes the following:

… Basing fees on the size of business (Should Corner grocery pay the same fees as large destination grocery stores).
… Should certain industries (banks and financial institutions) pay a substantially larger fee.
… Should we charge a first time or application fee to cover set up costs and then use a lower renewal fee.
… Establish new fees for existing services that we do not charge for, such as fees for change of address/ownership.
… Review Liquor licences to address policing costs for problem classes of licences.
… Evaluate proposals for new categories of licences such as the recent mini-bus application or for "town car" limousines.
… Review fee categories to standardize fees and reduce multiple categories.

… Review problem types of licences such as Health Enhancement Centres and Social Escorts and develop regulations to assist in enforcement.
… Review fees associated with Vehicle for Hire, including taxi licences and associated costs for Chauffeur Permits and Driver Identification.

It is estimated that the cost of this position would be $65,000 annually, including salary and fringe benefit costs. One time costs would be in the range of $5,000. Funding for this position would be by way of a further increase in business licence fees of 0.75% which would bring the basic licence fee to $90 annually.

3. Additional Increase for Pawn Brokers and Second Hand Dealers

It is recommended that licences for pawnbrokers and second hand dealers be increased substantially from $108 to $590 per year which would bring these licences to the same fee level as a cabaret or public house. This would recognize the significant cost incurred in regulating these types of businesses including the cost of six full time officers on the anti-fencing detail. In addition, two Permits & Licences staff spend about 30% of their time monitoring and processing these licences.

In 1998, a total of 266 pawnbroker and second hand dealer licences were issued with $23,834 in revenue. The projected revenue under the proposed new fee is $157,000 which is still less than the associated costs but the proposed fee is in line with Cabarets and Pubs which also require considerable enforcement.

4. Liveaboard Licence Fees

Since 1974, the City has levied a licence fee on marina owners for each live-aboard boat moored at a marina. The purpose of this fee is to ensure that those residents who live aboard their boats contribute to the provision of public services in a manner similar to those who occupy assessable real property. The comparison with property tax is made, as it is the mechanism through which other residents pay for public services. Currently there are one hundred and three liveaboard boats registered at marinas in the City.

While liveaboard fees are not calculated on the same base as that used for calculating taxes on real property, they have historically been compared with the taxes levied on residential condominium properties. This is because the occupancies of liveaboard boats and condominiums, and the way they benefit from public services, are likely similar. Generally, the live-aboard fee has been kept at rates comparable to residential units in the area. Research indicates that a standard two bedroom condominium on the West side of Vancouver sells for approximately $255,000; and therefore pays approximately $1,500 in municipal and other property taxes annually.

In 1996, Council established that the most appropriate way of adjusting liveaboard fees would be to base the increase on the change in property taxes paid by residential taxpayers Based on this methodology, the proposal for 1999 live-aboard fees is to apply a 2.0% increase based on the 1998 increase in residential property taxes .

The current and recommended live-aboard fees are listed in Table 1:

Table 1
Current and Recommended
Liveaboard Licence Fees

CONCLUSION

Business Licence and Live-aboard licence fees are adjusted annually to ensure full cost recovery of City administration and enforcement costs. This report recommends an increase of 2.0% for 1999 to recover inflationary cost increases, the costs associated with extending credit card payment options to these fees and to recover the cost of a policy analyst position for the Licence Branch. In addition, the report recommends additional increases in the business licence fees for pawn brokers and second hand dealers to recover the growing costs of enforcing these businesses.

Appendix A

Appendix B

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cs981119.htm

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