City staff proposes lifting business fees and permits for one year

Businesses in West Linn may be getting some breaks next year from license fees and permits.

In his first action as the city's first economic development director, Chris Kerr is trying to get a grasp of how many businesses really are in West Linn, including home-based ones.

To get at that number, he proposed a one-year amnesty from licensing fees for businesses that have not obtained a license or have lapsed on renewal. The hope is more people will step up and register their businesses.

'This program is proposed to increase the number of licensed businesses and home occupations in the city, which will assist staff in a broader review of the city's licensing procedures intended to make them more responsive to the needs of the business community,' Kerr wrote in a May 31 report to City Manager Chris Jordan.

Kerr, the city's former senior planner, was appointed to the new economic development director position March 29 and officially started June 1. He delivered his proposal to the West Linn City Council during its June 4 work session.

By removing all the penalties, Kerr hopes to encourage compliance from those businesses that are not currently in the city's system. The program would run from July 1 to June 30, 2013.

The city currently requires licenses for all for-gain businesses within city boundaries, with the exception of garage sales. Also, all home occupations need a permit and pay an annual fee to the city.

As of today, there are 1,245 licensed business in West Linn, and 423 of them are home occupations. The city expects to collect $38,000 in revenue from those businesses this year.

All businesses and home occupations must renew their licenses annually, with fees ranging based on the number of employees. Fees range from $36 to $128 a year. It is just $10 to renew a home occupation permit.

'We want to know what is operating in the city,' Kerr said, adding that staff want to use those revenues to help local businesses with ideas through brochures, a website or programs. 'That is something, frankly, the city should be doing anyway.'

The reason behind the fee holiday is that the staff thinks the licensing program is being underused as a resource to serve the business community.

'It really seemed like an untapped resource for the city,' Kerr told the councilors.

'The program needs to be streamlined and more responsive to the needs of the business community,' Kerr wrote in his memo. 'Additionally, there are few identifiable benefits to business owners for paying the licensing fee, which leads to noncompliance.'

To that end, over the course of this year, city staff will be reviewing the city's business licensing program, which includes fees and potential benefits to business owners.

The waiver, during the current economic recession, could be beneficial to smaller businesses and start-ups. It would also expand the city's inventory of businesses and help the city get a feel for what kinds of businesses are operating in West Linn.

If the council approves the program, all new home-based businesses would not have to pay their initial business license fees and home occupation permit fees, which total about $136. If the city were to waive fees for one year, the city could lose up to $41,000 in revenue - a sum city councilors were not comfortable with giving up.

However, the city staff contends the overall result would net the city additional revenue by having more businesses licensed.

'Additionally, if the staff is successful in revamping and improving the city's licensing procedures, city businesses will see direct benefits and be more successful in the future, leading to increases in future business activity and revenues,' Kerr wrote.

The proposal also waives past due fees for businesses in arrears, which would cost the city a loss of $500 but would bring those businesses back into compliance.

'I think this is a very good proposal. We have a lot of home occupations, but we have a really loose number,' Councilor Jody Carson said.

However, a couple other councilors were concerned about the loss of revenue for 2013.

'We either do without something or other taxpayers need to make up for it,' Mayor John Kovash said of the loss. He suggested granting amnesty to struggling businesses but not relieving everyone of the fees.

Councilor Jenni Tan proposed a compromise rather than a complete holiday. 'There's a lot of opportunity where we can synergize,' she said.

Carson agreed a hybrid option would be best.

The council sent Kerr back to revise his plan. He is currently looking to offer amnesty for delinquent business licenses and a one-year holiday for home occupation permit requests.

If the council supports a new version of the plan, the city will need to modify the Master Fees and Charges, which the council approved June 11. The modification would reflect zero revenue for business license fees and home occupation permits.

The council will discuss the subject again at its June 18 work session and make a decision on June 25 regular meeting.

Councilor Mike Jones recused himself from the discussion as he has a home-based business and could possibly benefit from the proposed program.

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