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S Zions Bank Public Finance Business License Fee Studies September 18, 2015

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Zions Bank Public

Finance

Business License Fee Studies

September 18, 2015

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

Zions Bank Public Finance ■ One South Main Street , 18th Floor ■ Salt Lake City, Utah 84101 30

Questions