HomeMy WebLinkAboutFS 2007-10-01 Item 2A - Ordinance - Business License Fee Schedule
City of Tukwila
6200 Southcenter Boulevard. Tukwila, Washington 98188
Steven M. Mullet, Mayor
TO:
Mayor Mullet
Finance and Safety Committee
~
FROM:
Christy O'Flaherty, Deputy City Clerk
DATE:
September 27, 2007
SUBJECT:
BUSINESS LICENSE FEE INCREASE
ISSUE
Amendment of the City's current business license ordinance to modify the fee schedule.
BACKGROUND
The City's current business license fees were established by Ordinance #1196, passed in 1980. The
business license fees are charged annually (due January 1 of each year) and are based on the number of
employees (both full and part-time) at the Tukwila location as follows:
0-5 employees
6-100 employees
101 and above
$50.00 per year
$100.00 per year
$200.00 per year
In the 27 years since the current business license fees were adopted, the City has experienced growth
due to both annexations (in 1989-90's) and overall City-wide development. In 1988 Tukwila had 1,168
businesses with 20,565 employees; at year-end 2006, there were 2,354 businesses in the City with
44,087 employees. As the number of businesses and employees entering the City has doubled during
this time period, resources in regard to Police, Fire, and Public Works infrastructure and services have
also been increased and enhanced. Additionally, the City does not assess a Business and Occupations
Tax on companies doing business in Tukwila.
DISCUSSION
A thorough analysis of the current rate structure was undertaken to assess the most reasonable
breakpoints in employee numbers to establish a new fee structure. The results demonstrate the need for
increased fee categories beyond the three shown above to provide greater balance and equity. There
has been concern over the years that the 6 to 100 employee category, in particular, is too broad and
seemingly unbalanced; a company with 6 employees - or a small business - is paying the same fee as a
larger establishment with 100 employees.
Efforts were made to create additional categories with greater balance, while being attentive to not over-
impacting businesses by assessing significant fee increases. A new category for home occupations was
created to retain the fee of $50.00 per year currently being charged to those businesses. There are
currently 161 businesses operated from Tukwila residences with an average of one employee per
business. Home occupations have a variety of limitations, based on their zoning, and it was determined
that $50.00 was an equitable fee.
The other goal in reviewing fee breakpoints was to assure that no business in the City would be paying
more than twice their current fee. For example, if a business currently pays $100 annually for a business
license, the new fee would not be any more than $200 under the proposed fee schedule. Additionally, a
comparison of business license rates for local area cities (Attachment A) was undertaken; Tukwila's
proposed fee schedule was found to be in line with the others. Following is a synopsis of the current fee
structure, proposed changes, and percentage increase impacts.
Phone: 206-433-1800 · City Hall Fax: 206-433-1833 · www.cUukwila.wa.us
BUSINESS LICENSE FEE PROPOSAL
Based on licenses issued in 2007 (as of 8/29/07)
CURRENT
RATES # Emplovees # Businesses Current Fee Fees Paid in 2007
OT05 1311 $ 50 $ 65,550
6 TO 100 827 $100 82,700
101 AND UP 54 $200 10,800
REVENUE 2192 $159,050
PROPOSED
CATEGORIES
AND FEES # Employees # Businesses Proposed Fee Predicted Totals
Home
Occupation 161 $ 50 $ 8,050
o TO 20 1707 $100 170,700
21 TO 50 198 $150 29,700
51 TO 100 72 $200 14,400
101 AND UP 54 $300 16,200
REVENUE 2192 $239,050
Following are percentage increases for fees in each category
PROPOSED
CATEGORIES
AND FEES # Employees # Businesses Increase
Home Occupation 161 Same fee
o to 20 (from former 0 to 5 category) 1311 200%
o to 20 (from former 6 to 100 category) 396 Same fee
21 to 50 198 150%
51 to 100 72 200%
101 and UP 54 150%
TOTAL BUSINESSES 2192
The above proposal would garner approximately $80,000 in additional revenue to the City annually. This
revenue increase may create the possibility of hiring an additional staff person in the City Clerk's Office.
There have been no increases in staff in the Clerk's Office in the past 17 years, and this will be a topic
during budget discussions.
RECOMMENDATION
Forward the proposed ordinance amending the business license fee structure to the October 8. 2007
Committee of the Whole Meeting and to the October 15. 2007 Regular Meeting for possible adoption.
Attachments: Comparison of City Business License Fees
Draft Ordinance amending the business license code
Ordinance #1196 establishing the current fees
Ordinance #1788 relating to business licenses
BONNEY LAKE
(Pierce County; 15,740)
COVINGTON
(17,190)
DES MOINES
(29,090)
ISSAQUAH
(24,710
LAKE FOREST PARK
(12,777)
MERCER ISLAND
(22,380)
SEA -TAC
(25,530)
SNOQUALMIE
(8,600)
TUKWILA
(18,000)
CITY AND
POPULATION
GEN. BUSINESS
LICENSE
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
ATTACHMENT A
COMPARISON OF CITY BUSINESS LICENSE FEES
SPECIAL BUS. CITY HAS
LICENSES? BUSINESS LICENSE FEE STRUCTURE B 0 TAX?
Yes
Yes
Yes
Yes
No
Yes
Yes
No
Yes
1 to 2 employees $30
3 to 5 employees $60
6 to 12 employees $120
13 to 25 employees $300
26 to 50 employees $600
51 or more employees $900
Business license $35
Fire clearance fee $243
Total fees for business license $278
Flat fee $150
Flat fee $30
Flat fee $20
Flat fee $30
Flat fee $35
0 to 2 employees $25
3 to 10 employees $50
11 to 25 employees $115
26 to 50 employees $250
51 or more employees $500
1 to 5 employees $50
6 to 100 employees $100
101 or more employees $200
No
No
Yes
Yes
Yes
Yes
No
Yes
No
OTHER:
DRAFT
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, AMENDING ORDINANCE NO. 1788, AS CODIFIED AT
TUKWILA MUNICIPAL CODE CHAPTER 5.04, REVISING THE CITY'S
BUSINESS liCENSE FEE SCHEDULE; PROVIDING FOR SEVERABILITY; AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, the City of Tukwila's business license regulations have been established to ensure
the legal conduct of businesses; to assist in the effective administration of health, fire, building,
zoning and other codes of the City; and to provide a means for obtaining public information and
compiling statistical information on existing and new businesses within the corporate limits of the
City of Tukwila; and
WHEREAS, Ordinance 1196, passed by the Tukwila City Council on December 15, 1980,
adopted the City's business licence fee schedule currently in effect; and
WHEREAS, in the 27 years since these fees were established, the number of licensed businesses
in the City has doubled, impacting expenditure, service and staffing demands of the City; and
WHEREAS, the City Council desires to modlly the business license fee structure to provide a
greater degree of balance and equity to our business community;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, DO ORDAIN AS FOLLOWS:
Section 1. TMC 5.04.010 Amended. Ordinance No. 1788, as codified at TMC 5.04.010,
is hereby amended to add the follOwing definition:
For the purpose of this chapter, the follov,1ffig definitions shall apply:
1. "Business" means any operation performed by any person which involves the
manufacturing or processing of materials of any type, the sale of goods, wares or merchandise, the
rendition of services or the repair of goods, wares or merchandise to the general public or '! portion
thereof for any consideration at each established place of business, store, office, shop or yard within
the City limits.
2. "Person" means any individual, receiver, agent, trustee in bankruptcy, trust, estate,
firm, co-partnership, joint venture, company, joint stock company, business trust, corporation,
society, or group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit
or otherwise.
3. "Person engaged in business" means the owner or one primarily beneficially
interested in lawful business for profit and not employees.
4. "Home occufJation" means anI' business conducted in a residence within the
corporate city limits of Tukwila. such business being subiect to the reauirements set forth in TMC
18.06.430.
Section 2. TMC 5.04.020 Amended. Ordinance No. 1788, as codified at TMC 5.04.020,
is hereby amended as follows:
A. Any person desiring to establish or conduct any business enterprise or undertaking
within the corporate limits of the City shall first apply to the City Clerk for a license to conduct
such business. The application shall be upon a form furnished by the Clerk on which the applicant
shall state the company name and address; the nature of the business activity or activities in which
he desires to engage; the place where the business will be conducted; the number of employees,
whether full or part-time, on the payroll as ofJanuary 1, or, if a new business, the number to be
employed on the opening date; and other information pertaining to the business as required by the
City.
1.1adntosh HD:Users:sl:2da.:Desktop:new license fee ord.doc
BSJ'SD 9/26/2007
Page 1 of 17
B. The application must be accompanied by a check, cash or money order for the
amount of the license fee. All fees will be based on the number of employees, whether full or part-
time, as follows:
o to 20
21 to 50
51 to 100
101 and UP
Home Occupation
[pursuant to TMC 5.04.0101
$100.00
$150.00
$200.00
$300.00
$50.00
o 5
6 100
101 and 3to',"e
$ 50.00
100.00
200.00
Section 3. Severability. If any section, subsection, paragraph, sentence, clause or phrase of
this ordinance or its application to any person or situation should be held to be invalid or
unconstitutional for any reason by a court of competent jurisdiction, such invalidity or
unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this
ordinance or its application to any other person or situation.
Section 4. Effective Date. This ordinance or a summary thereof shall be published in the
official newspaper of the City, and shall take effect and be in full force five days after passage and
publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKV>lILA, WASHINGTON, at a Regular
Meeting thereof this day of , 2007.
ATTEST/AUTHENTICATED:
Steven M. Mullet, Mayor
Jane E. Cantu, CMC, City Clerk
Office of the City Attorney
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
APPROVED AS TO FORM BY:
Madntosh HD:Users:st2da:Desktop;new license fee old.aoc
BB:ksn 9/26/2007
l'<ge 2 of 17
CITY OF TUKWILA'
Ordinance No 1196
WASHINGTON
,
AN ORDINANCE OF THE CITY OF TUKIHLA, WASHINGTON,
ESTABLISHING BUSINESS LICENSE FEES AND LATE PENAl-
TIES AND REPEALING ORDINANCE NO. 537, SECTIONS 2,
3, AND 5.
NOH, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
DO ORDAIN AS FOLLOWS:
Sections 2, 3, and 5 of Ordinance No. 537 adopted on 12/17/68
are hereby repealed as follows:
Section 2. (TMC 5.04.020) - Application and Fees Required.
(a) Any person desiring to establish or conduct any business enterprise
or undertaking l'lithin the corporate 1 imits of the city shall fi rst apply to
the City Clerk for a license to conduct such business. The application shall
be upon a form furnished by the Clerk on 11hich the applicant shall state the
company name and address; the nature of the business activity in which he de-
sires to engage; the place where the business will be conducted; the number of
full time"employees on the payroll as of January 1 or, if a new business, the
number to be employed on the opening date; and other information pertaining to
the business as required by the City.
(b) The application must be accompanied by a check, cash or money order for
the amount of the license fee. All fees will be based on the number of employ-
ees as follows:
0--5 - $ 50.00
6--100 - $100.00
101 & above - $200.00
Section 3. (TMC 5.04.030) - Renewal. Upon review and approval of
the application, the City Councilor committee appointed by it shall instruct
the Clerk to issue a license to the applicant. Said license shall grant to the
applicant the privilege to conduct such business at a designated location in the
City. Such license may be renewed by payment of the year's fee prior to January 1.
Section 5. (n~C 5.04.050) - Fee Increase for Late Acquisition or
Renel'la 1 .
The license fee shall be increased for failure to acquire license l'lithin thirty
days of corrrnenci ng bus i ness opera ti ons or for fail ure to renel1 said 1 i cense
within thirty days of expiration date in the following amounts:
First 30 days, $10.00; Each 30 days thereafter, $5.00.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a regular meeting thereof this /Schday of /f?tA'./~~ , 1980.
~(.tLlj/ :LJA
'.1a or
ATTEST:
'-f//a~;/ ~~~
City C erk
AP/~~ed as to j1'm/!
L..c:J / c.vvvi~
Deputy City Attorney, Carl J. Carlson
Published Record Chronicle - December 19, 1980
City of Tukwila
Washington
Ordinance No. 1788
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWlLA, WASHINGTON, RELATING TO BUSINESS
LICENSES, AMENDING CHAPTER 5.04 OF THE TUKWlLA
MUNIClP AL CODE TO CLARIFY PROCEDURES FOR DENIAL
OR REVOCATION OF BUSINESS LICENSES; REPEALING
ORDINANCE NOS. 537, 583, 633, 1196, 1589 AND 1678;
PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN
EFFECTIVE DATE.
WHEREAS, the City Council has considered the provisions of Tukwila Municipal Code Chapter
5.04 and desires to clarify the procedures for denial or revocation of business licenses;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWlLA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
SECTION 1. Chapter 5.04 ofthe Tukwila Municipal Code is hereby amended to read as follows:
5.04.010 Definitions.
For the purpose of this chapter, the following definitions shall apply:
(1) "Business" means any operation performed by any person which involves the manufacturing
or processing of materials of any type, the sale of goods, wares or merchandise, the rendition of services or
the repair of goods, wares or merchandise to the general public or a portion thereof for any consideration
at each established place of business, store, office, shop or yard within the City limits.
(2) "Person" means any individua~ receiver, agent, trustee in bankruptcy, trust, estate, firm, co-
partnership, joint venture, company, joint stock company, business trust, corporation, society, or group of
individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit or otherwise.
(3) "Person engaged in business" means the owner or one primarily beneficially interested in
lawful business for profit and not employees.
5.04.020 Application and fees required.
(a) Any person desiring to establish or conduct any business enterprise or undertaking within the cor-
porate limits of the City shall first apply to the City Qerk for a license to conduct such business. The ap-
plication shall be upon a form furnished by the Clerk on which the applicant shall state the company
name and address; the nature of the business activity or activities in which he desires to engage; the place
where the business will be conducted; the number of employees, whether full or part-time, on the payroll
as of January 1, or, if a new business, the number to be employed on the opening date; and other informa-
tion pertaining to the business as required by the City.
(b) The application must be accompanied by a check, cash or money order for the amount of the license
fee. All fees will be based on the number of employees, whether full orpart-tlme, as follows:
0- 5..................................._....................$ 50.00
6 -100......................................................100.00
101 and above......................................200.00
5.04.030 Renewal.
Upon review and approval of the application, the City Clerk will issue a license to the applicant. The li.
cense shall grant to the applicant the privilege to conduct such business at a designated location in the
City. Such license may be renewed by payment of the year's fee prior to january 1.
BUSDENY.DOC 12/17/96
1
5.04.040 Prorating fee.
The license fee set forth in this chapter shall be for the calendar year, and each person engaged in business
must pay the full license fee either for the current year or portion thereof during which year or portion
thereof he engages in business.
5.04.050 Fee for late acquisition or renewal.
The license fee shall be increased for failure to acquire a license within 30 days of coIIlIIlencing business
operations or for failure to renew said license within 30 days of expiration date in the following amounts:
First 30 days, $20.00; each 30 days thereafter, $20.00.
5.04.060 Transferability.
The license granted in pursuance hereof shall be personal to the licensee and it shall not be assignable or
transferable to any other person.
5.04.070 Change in nature of business.
The license granted in pursuance hereof shall be used to conduct the business or type of business at the
designated address for which such license is issued. Any change in the nature of the business shall mices-
sitate a renewed application to the Council.
5.04.080 Required - Display.
It is unlawful for any person to engage in or carryon any business activity in the City without first pro-
curing a license as provided in this chapter. The license shall thereafter be prominently displayed in the
place of business of the applicant.
5.04.090 Exemption.
Nothing in this chapter shall be construed to require a license for any farmer, gardener, or other person to
sell, deliver or peddle any fruits, vegetables, berries, butter, eggs, fish, milk, poultry, meats or any farm
produce or edibles ralsed, caught, produced or manufactured by such person in any place within the State.
5.04.100 Failure to pay fee.
If any person engaged in business fails or refuses to pay the license fee for any year as herein provided, he
shall not be granted a license for the current year until such delinquent license fees as set forth in TMC
5.04.050 have been paid, in addition to the current years' required fee. Such fees may be collected by the
City by proper legal action brought for that purpose if any person engaged in business fails or refuses to
pay the license fee. This remedy is cumulative and not exclusive.
5.04.110 Denial - Revocation.
(a) The City Clerk may deny or revoke any license under this chapter for a period of up to one year,
where one or more of the following conditions exist:
(1) The license was procured by fraud or by a false or misleading representation of fact in the
application, orin any report or record required to be filed with the City Clerk;
(2) The building, structure, equipment, operation or location of the business for which the license
was issued does not comply with the requirements or standards of the Tukwila Municipal Code;
(3) The license holder, his or her employee, agent, partner, director, officer or manager has
knowingly violated any provisions of any chapter of the Tukwila Municipal Code, or has knowingly
permitted, failed to prevent, or has otherwise allowed a violation of any of the provisions of any chapter of
the Tukwila Municipal Code to occur on his or her business premises.
(b) Upon detennination that grounds for denial, suspension or revocation of a license exist, the City
Clerk shall send the license holder a Notice of Denial, Suspension or Revocation. Grounds for denial, sus-
pension or revocation include, repetition of a violation of any provision of the Tukwila Municipal Code
that has been accompanied by a warning notice of such violation or previous notice of the violation. The
Notice of Denial, Suspension or Revocation shall set forth the grounds for denial, suspension or revocation
and a statement advising that the person may appeal from the Notice of Denial, Suspension or Revocation
to the Hearing Officer, provided that the appeal is made in writing and iiled with the City Qerk within
ten days from the date of receipt of the Notice of Denial, Suspension or Revocation, and that failure to so
appeal shall constitute a waiver of all rights to any additional administrative hearing or detennination on
the matter. Upon issuance of such Notice, the license is suspended or revoked and is no longer valid and
current, unless appealed as provided in this chapter, in which case the effect of the suspension or the revo-
cation is stayed pending the outcome of the appeal.
(cl Receipt of the Notice of Denial, Suspension or Revocation. The Notice of Denial, Suspension or
Revocation shall be served upon the license holder either personally or by mailing a copy of such Notice by
certified mail, postage prepaid, return receipt requested to such license holder to his or her last known ad-
dress as provided in the license application. Alternatively, the Notice may be posted upon the premises
where such license holder conducts his or her business, which is the subject or the denied or revoked li-
cense.
BUSDENY.DOC 12/17/96
2
5.04.112 Appeal of Notice of Denial, Suspension or Revocation.
Appeals from a Notice of Denial, Suspension or Revocation under this chapter shall be conducted in the
same manner as appeals from a ''Notice and Order" under Tukwila M.unicipal Code Chapter 8.45.
5.04.114 Violations.
(a) A businesses' first violation of this chapter shall result in a license suspension for ninety (90) days.
(b) A businesses' second violation of this chapter shall result in a license suspension for one hundred
eighty (180) days.
(e) A businesses' third violation of this chapter shall result in the revocation of the license for one year.
5.04.116 Effect of Denial or Revocation.
No person or business may reapply for a business license merely by renaming the business. The denial or
revocation of a license applies to any business entity, regardless of its name, that is operating under the
same ownership and/ormanagement and engages insubstantially the same type of business enterprise as
that of a business that has been previously denied a license or has had its license revoked under this chap-
ter within a year of such application for a license.
5.04.120 Regulation adoption and publication - Failure to comply.
The City Clerk shall have the power and it shall be her duty from time to time to adopt, publish and en-
force rules and regulations not inconsistent with this chapter or with the law, for the purpose of carrying
out the provisions hereof, and it is unlawful for any person to violate or fail to comply with any such rule
orregulation.
SECTION 2. REPEALER. Ordinance Nos. 537,583, 633, 1196, 1589 and 1678 are hereby repealed.
SECTION 3. SEVERABILITY. If any section, sentence, clause or phrase of this ordinance should
be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconsti-
tutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase
of this ordinance.
SECTION 4. EFFECTIVE DATE. This ordinance or a summary thereof shall be published in the
official newspaper of the City, and shall take effect and be in full force five (5) days after passage and publi-
cation as provided by law.
PASSED BY THE CQ)IPOUNCIL OF THEE.Y OF TUKWILA, WASHINGTON, at a Regular Meet-
ing thereof this / ~ day of r1 //YU ~ ,1996.
~wlLi
Jo W.Rants, Mayor
ATTEST I AUTHENTICATED:
APPROVED AS TO FORM:
FILED WITH T CITY CLERK: /:z. - / Z - Cj ~
PASSED BY THE CITY COUNCIL: /;;2- /G. 7~
PUBLISHED: / cZ r;?o ~ 9 C:.
EFFECTIVE DATE: /,). -t?< S-- 7'h
ORDINANCE NO.: /7 ei'
BUSDENY.DOC 12/17/96
3