1. Analysis of <br />Business License Fees<br />City of midvale<br /> DATE quot;
MMMM d, yyyyquot;
March 2, 2010Submitted By:Lewis Young Robertson & Burningham, Inc. DATE quot;
MMMM d, yyyyquot;
March 2, 2010Submitted By:Lewis Young Robertson & Burningham, Inc.<br />Executive Summary<br />Summary of commercial and Home Occupation businesses<br />Midvale City requires commercial and home occupation businesses to be licensed. The following table shows the base cost for obtaining a renewal and new business or home occupation license. <br />Table E.1: base cost for commercial and Home Occupation businesses<br />renewal Applications Base CostCommercial & Home Occupation$49new Applications Base CostCommercial & Home Occupation$114Solicitor$90<br />The tables below illustrate the disproportionate regulatory costs related to commercial businesses. These costs are in addition to the base cost for commercial renewals or new applications. There are no disproportionate regulatory costs for home occupation businesses.<br />Table E.2: commercial regulatory disproportionate costs<br />TypeDisproportionate Regulatory CostRenewalDisproportionate Regulatory Costnew applicationAddress Change$6N/AAlcohol & Beer$35$35Automobile Repair$103$64Bars$55$35Behavioral Health Care Provider$66$28Big Box$215$176Commercial Day Care$85$46Escort Services (Business)$777$777Escort Services (Employee)$65$65Entertainment$39$0Fireworks VendorNA$28Fireworks in Grocery Store$38$0Full Service Grocery$97$58Handyman$12$12Hazardous Materials Permit$97$59Hotel/Extended Stay$127$89Manufacturing/Industrial$97$59Massage Therapist$35$35Nursing Homes & Assisted Living$39$0Pawn Shops$35$35Restaurants$68$29Seasonal/TemporaryNA$29Taxi/Business$52$52Taxi/Employee$18$18Vending$52$52<br />Table E.3 summarizes the disproportionate police and fire service call cost for each commercial business class. Disproportionate service call costs are in addition to the base and any regulatory costs.<br /> <br /> Table E3: Disproportionate Costs by Commercial Business Class<br />Business ClassPolice Disp. Cost w/o OutliersFire Disp. Cost w/o OutliersTotal CostAdult Activity Center$548$0$548Automobile$308$60$368Bar/Lounge$11,451$1,528$12,979Big Box$34,369$8,217$42,586Car Wash$99$0$99Commercial Day Care$701$0$701Contracted Services$57$80$137Convenience Stores w/o gas$5,474$2,315$7,789Convenience Stores w/gas$3,271$1,471$4,742Distributors$5$0$5Entertainment$546$347$893Escort Service$443$0$443Financial Services$446$171$617Fish & Game$249$0$249Full Service Grocery$19,148$5,856$25,004Gas Station$281$249$530Health Center$77$0$77Health Clinics$16,826$10,972$27,798Hospital$16,632$12,152$28,784Hotel/Extended Stay$87/Room$74/Room$161/RoomMarkets/Specialty Food$238$0$238Manufacturing/Industrial$8$0$8Mobile Home Parks$22/Unit$0$22/UnitPawn Shops$2,994$85$3,079Personal Services$24$9$33Professional/Business Services$18$64$82Private Clubs$1,378$937$2,315Residential Care$120$0$120Restaurants/Fast Food$865$317$1,182Small Retail/Wholesale Sales$193$114$307Medium Retail/Wholesale Sales$2,044$828$2,872Storage Units$238$0$238Telecommunications$74$0$74Transportation$0$0$0Utility Sales/Service$56$0$56Vending$0$0$0Warehousing/Supplies$0$0$0<br />Summary of Rentals<br />Table E.4 summarizes the base cost for a renewal and new application for rental units.<br />Table E.4: rental Base Cost Summary<br />renewal & New applicationBase CostRentals$63<br />Table E.5 summarizes the disproportionate costs for rental units.<br />Table E.5: Rental Cost Analysis<br /> renewals & New ApplicationsBase Cost Disp. Service CostTotal CostBase CostCode EnforcementPolice/UnitFire/UnitSingle Family Detached Residential Rentals$63$5$44$37$149Duplex$63$5/Unit$21$74$2633+ Apartments$63$5/Unit$65$69$63 + $139/Unit<br />Analysis of Business License Fees<br />Introduction and Definitions<br />Lewis Young Robertson & Burningham Inc. (“LYRB”) was retained by Midvale City (“Midvale” or the “City”) to complete an analysis of business license fees that meets the requirements of Utah law as established by Utah Code 10-1-203. The law provides that fees charged reflect the amount necessary to reasonably regulate business activity, including the costs of disproportionate and enhanced levels of municipal services required by some business classes, geographic locations, number of business employees, etc. The framework for business license fees is based upon a reasonableness test to determine appropriate distribution of costs.<br />209804316484The analysis considers costs to businesses under three main categories as follows:<br />Basic administrative charges include the costs incurred to register, oversee and maintain records on licensed businesses within the city. Some regulatory services and accompanying costs are essential to all businesses while others (such as inspections and premises checks) are unique to certain types of business activity. In short, basic administrative costs include the standard labor for all businesses: i) business license application and registration process, ii) issuance of license, iii) collection of fees, iv) maintenance of records, v) preparation of business reports and required verifications. <br />In order to estimate the basic administrative costs of a business license, our primary source of information has been Midvale City. Costs have been evaluated based on time spent by employees, wages and benefits involved for these employees, and cost of materials and equipment used. The cost of administering a business license also accounts for the business license department’s fair share of indirect administrative costs that benefit the business license department.<br />Disproportionate services include the additional costs which some businesses generate in excess of their proportionate presence in the community. This includes the additional regulatory services that are required by some classes of businesses such as day-care and establishments selling alcohol, as well as businesses with a disproportionately high demand for municipal services (i.e. fire, police). In order to identify disproportionate service levels, LYRB has interviewed city officials and service providers and has obtained data regarding calls for service from the Midvale City Police and Fire Departments. Costs were applied based on the estimated cost of services calculated from the Fiscal Year 2009 Budget.<br />Enhanced service levels are generally those services which are increased in a particular geographic location of town, such as downtown, or the town center of a resort community. These may include services for enhanced levels of snow removal, police patrol, streetscape design, more frequent trash removal, more signage, etc. If these services are provided, appropriate fees may be charged to compensate the City for the related costs. Midvale City has indicated that, at this point in time, the City does not provide enhanced service levels to any areas of the community and has no immediate plans to do so. Therefore, no fees have been calculated for enhanced levels of service.<br />All businesses in Midvale City have been classified as either “Commercial,” “Home Occupation” or “Rentals.” Utah legislation allows cities wide latitude in defining the business classes and groupings which are most appropriate for each locality. Based on discussions with Midvale City, a review of the calls for service and a review of the distinctions used by other cities, we feel that type of business activity is the most accurate means of calculating the true costs associated with various businesses. By law, “all license fees and taxes shall be uniform in respect to the class upon which they are imposed” [Utah Code 10-1-203(6)]. Appendix A contains a list of all business classes established in Midvale City. <br />Basic Administrative Services<br />All businesses, whether home occupation, commercial, or rental must be licensed. The basic administrative costs associated with licensing a business stem from two main sources – 1) direct business license costs; and 2) administrative (“indirect” costs).<br />Direct Business License Costs<br />Direct business license costs include labor costs and department overhead required for all processes included in issuing and overseeing business licenses in the City of Midvale. The following departments are involved in business licensing: 1) Business Licensing; 2) Treasurer; 3) Planning; 4) Code Enforcement; 5) Police; and 6) Fire. A direct per minute cost was calculated for each employee involved in the business licensing process using the following method:<br />Labor Cost per Minute = (Salary + Benefits)/ Total annual minutes worked<br />Department Overhead Cost per Minute = Total department overhead applicable to business licensing /Total annual minutes worked.<br />Direct Business License Costs = Labor Cost Per Minute + Department Overhead Cost Per Minute <br /> <br />Due to salary confidentiality, this report does not include figures for City personnel labor costs per minute. However, Table 1.1 shows the total per minute direct costs for all departments involved in business licensing. All figures used in calculating direct costs were provided by Midvale City. <br /> <br />Table 1.1: Summary of Direct Business License Costs<br />Direct Business License CostsBusiness Licensing $0.48Code Enforcement$0.55Fire (Crew)$1.71Fire$0.88 Police$1.21Police (Vice Officers)$0.71Planning$0.65Treasurer$0.84Source: Midvale City<br />Indirect Costs<br />In addition to the direct costs associated with business licensing, each department must pay for its fair share of the City’s indirect costs. Indirect costs are services provided to all departments such as legislative, executive and financial services as well as non-departmental and building costs. These indirect costs of $1,886,200 are shown in Table 1.2 below. Indirect costs are divided into two separate costs: 1) fixed costs; and 2) variable costs. Fixed costs represent administrative services provided to each department regardless of size. Variable costs represent administrative services provided to each department in proportion to the number of employees in the department. Based on the City’s ratio of total fixed costs to total variable costs for each department, we have calculated fixed costs to be approximately 12 percent ($226,345), with the remaining 88 percent ($1,659,855) of administrative services assigned as variable costs. <br /> Table 1.2: Summary of Total Indirect Costs<br />Total Indirect Costs General & Administrative Services$1,054,000Legislative$175,900 Administrative Services$133,800 Government Buildings$409,500 Non-Departmental$113,000 Total Indirect Costs$1,886,200 Source: Midvale City Budget (FY 09)<br />Table 1.3 shows the variable and fixed costs allocated to each of the five City departments. <br />Table 1.3: Allocation of Indirect Costs By Department<br />Department Allocated CostsFixedVariableTotal Indirect CostsPolice$45,269$649,509$694,778Fire$45,269$514,195$559,464Public Works$45,269$279,649$324,918Judicial$45,269$81,188$126,457Community/Economic Development$45,269$135,314$180,583Total$226,345$1,659,855$1,886,200<br />The total indirect cost for each department is divided by the total minutes worked in each department to arrive at an indirect cost per minute. The indirect costs for each department are shown in table 1.4. <br /> Table 1.4: Summary of Business License Costs<br />indirect costsBusiness Licensing$0.10Code Enforcement$0.10Fire$0.08Fire (Crew)$0.24Police$0.08Planning$0.10<br />Total Per Minute costs <br />The following table shows the total cost per minute for all departments involved in the business licensing process.<br />Table 1.5: Summary of Other Per Minute Costs<br />direct costIndirect Cost Total CostBusiness Licensing$0.48$0.10$0.58Code Enforcement$0.55$0.10$0.65Fire (Crew)$1.71$0.24$1.95Police$1.21$0.08$1.29Police (Vice Officers)$0.71$0.08$0.79Planning$0.65$0.10$0.75Treasurer$0.84NA$0.84<br />Commercial, home occupation and rental <br />Business License Analysis<br />The Business Licensing, Fire Department and the Treasurer provide services for processing business license renewals. The Business Licensing department takes applications, copies documents, prepares and mails business licenses, and distributes appropriate forms to assisting personnel. Midvale City estimates that it takes roughly 25 minutes per business license renewal in order to adequately perform the previously identified tasks. The Treasurer deposits and records payment. The Fire department conducts inspections approximately every four years on all commercial businesses. However, some businesses require annual inspections. The additional costs associated with these annual inspections are included in the commercial business regulatory costs listed in table 1.11. Additionally, code enforcement costs associated with commercial businesses are divided equally among all commercial businesses. The code enforcement cost per commercial business is $6.00. <br />Also included in the costs of a renewal and new application are supply costs. Supply costs per license are shown in table 1.6.<br />Table 1.6: Total Business License Supply Costs<br />Business License SuppliesCostFee Schedules $.06 Paper/Notice$.02 Business License Renewal Envelopes$.09 Business License Renewal Postage$.44 Business License Certificate$.06 Business License Certificate Envelope$.09 Business License Certificates Postage$.44 Total Cost for Supplies per License$1.20<br />The basic costs for renewal of a commercial business are summarized in the table below. Note that the renewal time includes the direct time for processing the paperwork for renewal of a business license (previously identified at 25 minutes), plus each license’s fair share of all business license activities on an annual basis (i.e., customer service, reports, meetings, phone calls, etc.).<br /> <br />Table 1.7: Commercial Base Cost (Renewal)<br />Time AllocationCost per minuteEstimated CostBusiness License Costs (prepares forms, review returned application, prepare business license, obtain signatures, respond to phone calls, etc.)30$0.58$17.50Deposits5$0.84$4.20Supplies$1.20Code Enforcement$6.00Fire $20Commercial Renewal Base Cost$48.90<br />New commercial business license applications require additional services above and beyond those required for commercial business license renewals. First-time applications require more time than renewals due to 1) the explanation of the application procedure; and 2) the additional review required for each new application. Additional costs for first-time business licenses include an on-premise fire inspection, police and planning application review. New business license application costs for commercial businesses are shown in table 1.8 below.<br />Table 1.8: Commercial Base Cost (New Application)<br />Time AllocationCost per minuteEstimated CostBusiness License Costs (prepares forms, review returned application, prepare business license, obtain signatures, respond to phone calls, etc.)40 $0.58$23.20Deposits5$0.84$4.20Supplies$1.20Code Enforcement$6.00Planning & Zoning10$0.75$7.50Police10$1.29$12.90Fire$59Commercial New Application Base Cost $114 <br />Table 1.9 shows the cost of a renewal/ new application for a solicitor. <br />Table 1.9 Solicitors (Renewal/New Application)<br />Time AllocationCost per minuteEstimated CostBusiness License Costs (prepares forms, review returned application, prepare business license, obtain signatures, respond to phone calls, etc.)100 $0.58$58Deposits5$0.84$4.20Supplies$1.20Code Enforcement$6.00Planning & Zoning10$0.75$7.50Police10$1.29$12.90Solicitor Base Cost $89.80 <br />The basic cost for a rental renewal and new application is shown in table 1.10. One item included in the cost of a rental renewal/new application license that is not included in commercial/home occupation licenses is the cost of the Good Landlord Program. The Good Landlord program offers a reduced business license fee for landlords who actively participate in the program. This program has been proven effective in reducing illegal activities and code violations on rental properties whose landlords implement the procedures learned in the Good Landlord training seminars. The Good Landlord program cost includes the cost of the training seminars and other administrative work required to administer the Good Landlord program. Also included in the cost of a renewal/new application is the cost of the monthly crime reports the police departments runs for each rental.<br />Table 1.10: Rental Unit Base Cost (Renewal and new Application)<br />Time AllocationCost per minuteEstimated CostBusiness License Costs (prepares forms, review returned application, prepare business license, obtain signatures, respond to phone calls, etc.)30 $0.58$17.50 Deposits5$0.84$4.20Supplies$1.20Monthly Crime Reports$30Good Landlord Program$10Total Rental Renewal Base Cost $62.90 <br />Disproportionate Services<br />Disproportionate fees include additional services required for: 1) special regulations and inspections; and/or 2) calls for police and fire services that exceed the base level of services provided in the community.<br />Special Regulatory Services<br />Special regulatory costs have been considered for both commercial businesses and rentals. These costs include services provided by the business license, police, code enforcement and fire departments and are in addition to the base cost of a renewal/new application business license. Some businesses require special regulatory services from only one of the above sources, while others require services from more than one source. Therefore, the following table shows regulatory costs by business type rather than by service provider.<br />Table 1.11: Commercial Disproportionate Regulatory Costs <br />RenewalNew ApplicationAddress ChangeBusiness License$6NATotal$6NAAlcohol & BeerBusiness License$35$35Automobile RepairBusiness License$35$35Fire$68$29Total$103$64BarsBusiness License$35$35Fire$20$0Total$55$35Behavioral Health Care ProviderFire$66$28Total$66$28Big BoxFire$215$176Total$215$176Commercial Day CareBusiness License$17$17Fire$68$29Total$85$46Escort Services (Business)Business License$17$17Vice Officers$760$760Total$777$777Escort Services (Employee Charge)Vice Officers $47$47Police Card & Paperwork$18$18Total$65$65EntertainmentFire$39$0Total$39$0Fireworks VendorFireNA$28TotalNA$28Fireworks in Grocery StoreFire$38$0Total$38$0Full Service GroceryFire$97$58Total$97$58HandymanBusiness License$12$12Total$12$12Hazardous Materials PermitFire$97$59Total$97$59Hotel/Extended StayFire$97$59Police (Monthly Crime Reports)$30$30Total$127$89Manufacturing/IndustrialFire$97$59Total$97$59Massage TherapistBusiness License$35$35Total$35$35Nursing Home & Assisted LivingFire$39$0Total$39$0Pawn ShopsBusiness License$35$35TotalRestaurantsFire$68$29Total$68$29SeasonalFireNA$88Taxi/BusinessBusiness License$52$52Total$52$52Taxi/EmployeePolice (Card & Paperwork)$15$18Total$18$18VendingBusiness License$52$52Total$52$52<br />Calls for Service<br />In order to calculate disproportionate costs and fees, cities must first establish what constitutes the base level for each of the varying services they provide – such as the number of calls for service to the police department or fire department, business-related paperwork and administrative oversight, inspections, etc. According to Utah Code 10-1-203(5)(iii)(c), “Before the governing body of a municipality imposes a license fee or tax on a business that causes disproportionate costs of municipal services under Subsection (5)(a)(iii), the governing body of the municipality shall adopt an ordinance defining the purposes of the tax under Subsection (5)(a)(iii) that constitutes disproportionate costs and what amounts are reasonably related to the costs of the municipal services provided by the municipality.”<br />Calls for fire and police were obtained from the Midvale City Police and Fire Departments for the 2007 and 2008 calendar years. The data was then analyzed to calculate the average annual number of calls to owner occupied residential units. The average annual number of calls to owner-occupied residential units was then divided by the number of owner-occupied residential units to arrive at the base level of service ratio. The base level of service for police calls was determined to be an average of 0.5692 calls per unit per year. The annual base level of service for fire is estimated at 0.0590 calls for service for each single family owner-occupied residential unit. It was found that the average number of calls per business for police and fire exceeded the average number of calls per residence. Therefore, it was determined that businesses as a “class” require a higher level of police and fire services and have disproportionate calls for service when compared to owner-occupied residential calls for service. The average police and fire calls per owner-occupied residence was the base figure used for determining what constituted a disproportionate number of calls for service and further distinctions were then drawn between “types” of businesses within the overall business “class.”<br />Table 1.12: Residential Call Data – Baseline Level of service<br />2007/2008 Average Police Calls2007/2008 Average Fire CallsOwner-Occupied Single Family Residential Calls 3,041 315 Number of Owner-Occupied Single Family Residential Units 5,343 5,343 Base Level of Service Ratio0.5692 0.0590 Estimated Cost per Call$129$787<br />Disproportionate Calls for Service: Commercial and rental<br />For businesses, the calls for service were determined by matching the location of each service call to a list of business addresses. For each business type, the total number of calls was divided by the total number of businesses, resulting in an annual average number of calls for service per business type. To calculate the average calls above the base level of service, the base level of service ratio (shown in table 1.12) was subtracted from the average calls per business type. The average police calls for commercial businesses above the base level of service are shown in table 1.13. The average fire calls for commercial businesses above the base level of service are shown in table 1.14.<br /> Within a business type, there may be a few businesses with a much higher number of service calls than the majority of business establishments in that particular business type. These businesses excessively skew the average disproportionate cost per business and are referred to as statistical outliers. When calculating the business license fee, it is recommended the City consider setting the disproportionate fee to be on par with disproportionate costs per business without the statistical outliers.<br />Table 1.13: Average police disproportionate Calls for Service by Commercial Business Class<br />Business Typeaverage Police calls above baseW/ Outliersaverage Police calls above baseW/O OutlierscommentsAdult Activity Center4.254.250Automobile2.3842.384Bar/Lounge88.7688.76There are three businesses in this category. Two have a significantly higher call volume than the third business.Big Box266.4226.4There is only one business in this categoryCar Wash.7641.7641Commercial Day Care5.4305.430Contracted Services.4421.4421Convenience Stores w/o gas42.4342.43Convenience Stores w/gas43.8125.36There is one statistical outlier in this category that is responsible for nearly half of the total calls for businesses in this category.Distributors.0419.0419Entertainment4.2314.231Escort Service3.4313.431Financial Services3.4573.457Fish & Game1.9311.931Full Service Grocery148.4148.4Gas Station2.1802.180Health Center.5975.5975Health Clinics130.4130.4Health Clinics often have a high disproportionate call volume because crimes are often reported by victims at health clinics.Hospital128.9128.9Hospitals often have a high disproportionate call volume because it is where crimes are reported rather than where crimes are happening.Hotel/Extended Stay.6703.6703Markets/Specialty Food1.8471.847Manufacturing/Industrial.0623.0623Mobile Home Parks.4853.1674Of the three businesses in this category, one has a significantly higher call/unit ratio than the other two businesses.Pawn Shops23.2123.21There are nine total businesses in this category. Although none have been removed as statistical outliers, it is of interest to note that five of the nine businesses have a higher call ratio than the other four.Personal Services.1888.1888Professional/Business Services.5734.1369Of the 210 businesses in this category, four statistical outliers have been removed.Private Clubs24.4310.68Of the five businesses in this category, one has been removed as a statistical outlier.Residential Care.9308.9308Restaurants8.3866.708Two statistical outliers out of 67 businesses in this category have been removed.Small Retail/Wholesale Sales1.4931.493Medium Retail/Wholesale Sales28.9315.85One statistical outlier has been removed from this category.Storage Units1.8471.847Telecommunications2.243.5753One business has been removed as a statistical outlier.Transportation1.3060.000One statistical outlier has been removed from this category.Utility Sales/Service.4308.4308Vending0.0000.000Warehousing/Supplies3.5970.000Of the three businesses in this category, one has been removed as a statistical outlier.<br />The following table shows the disproportionate fire calls for commercial businesses with and without the statistical outliers.<br />Table 1.14: Average fire disproportionate Calls for Service by Commercial Business Class<br />Business Typeaverage fire calls above baseW/ Outliersaverage fire calls above baseW/O OutliersCommentsAdult Activity Center0.0000.000Automobile.0754.07541Bar/Lounge1.9401.940Big Box10.4410.44Car Wash0.0000.000Commercial Day Care0.0000.000Contracted Services.1012.1012Convenience Stores w/o gas2.9412.941Convenience Stores w/gas2.7541.869One statistical outlier has been removed from this categoryDistributors0.0000.000Entertainment.4441.4441Escort Service0.0000.000Financial Services.2173.2173Fish & Game0.0000.000Full Service Grocery7.4417.441Gas Station.3160.3160Health Center0.0000.000Health Clinics13.9413.94Hospital15.4415.44Hotel/Extended Stay.0934.0934Markets/Specialty Food0.0000.000Manufacturing/Industrial0.0000.000Mobile Home Parks0.0000.000Pawn Shops.1077.1077Personal Services.0115.0155Professional/Business Services.2005.0818Of the 210 businesses in this category, four have been removed as statistical outliers. Private Clubs1.4411.191One business was removed as a statistical outlier in this category.Residential Care0.0000.000Restaurants.4857.4025Two statistical outliers were removed from this category. Small Retail/Wholesale Sales.1447.1447Medium Retail/Wholesale Sales1.4141.052One statistical outlier has been removed from this category.Storage Units0.0000.000Telecommunications0.0000.000Transportation0.0000.000Utility Sales/Service0.0000.000Vending0.0000.0000.000Warehousing/Supplies0.000<br />If a business type had a higher average number of calls than the base (average call per non-rental residence), the difference was multiplied by the average cost of a service call shown in table 1.15 below. Table 1.16 summarizes the disproportionate costs for each business type identified for Midvale City. The fees shown represent the maximum disproportionate fees that can be supported by the data. The City may choose not to enact the full fee in some business categories, as a matter of policy, in order to encourage the development of certain business types. Note that fees for all businesses within a given business type must be constant. <br /> Table 1.15: Average Cost Per Call<br />policefireCost per Call$129$787<br /> <br />Table 1.16: Disproportionate Police and Fire Costs by Commercial Business Class<br />Business TypePolice Disp. Cost w/o OutliersFire Disp. Cost w/o OutliersTotal Disproportionate Service Call CostAdult Activity Center$548$0$548Automobile$308$60$368Bar/Lounge$11,451$1,528$12,979Big Box$34,369$8,217$42,586Car Wash$99$0$99Commercial Day Care$701$0$701Contracted Services$57$80$137Convenience Stores w/o gas$5,474$2,315$7,789Convenience Stores w/gas$3,271$1,471$4,742Distributors$5$0$5Entertainment$546$347$893Escort Service$443$0$443Financial Services$446$171$617Fish & Game$249$0$249Full Service Grocery$19,148$5,856$25,004Gas Station$281$249$530Health Center$77$0$77Health Clinics$16,826$10,972$27,798Hospital$16,632$12,152$28,784Hotel/Extended Stay$87/Room$74/Room$161/RoomMarkets/Specialty Food$238$0$238Manufacturing/Industrial$8$0$8Mobile Home Parks$22/Unit$0$22/UnitPawn Shops$2,994$85$3,079Personal Services$24$9$33Professional/Business Services$18$64$82Private Clubs$1,378$937$2,315Residential Care$120$0$1,182Restaurants$865$317$1,182Small Retail/Wholesale Sales$192$114$306Medium Retail/Wholesale Sales$2,044$828$2,872Storage Units$238$0$238Telecommunications$74$0$74Transportation$0$0$0Utility Sales/Service$56$0$56Vending$0$0$0Warehousing/Supplies$0$0$0<br />Disproportionate Calls for Service: Rental Units<br />The City currently has approximately 90 3+ apartment complexes, with 4,237 units. In addition, there are approximately 1,077 unlicensed rental single family homes, condos, and PUD’s, and 315 unlicensed rental duplexes. <br />All rental types including homes, condos, PUD’s, duplexes and 3+ rental units have a disproportionate level of calls for both fire and police services. The disproportionate call ratio is the average call ratio less the base call ratio for owner-occupied residential homes as summarized in table 1.12. The disproportionate call data for rentals, with estimated costs, is summarized in table 1.17.<br />Table 1.17: Disproportionate Costs by Rental Class<br />Rental TypeAverage Call RatioPer UnitDisproportionate Calls per unitDisproportionate Costs per unitTotal Disproportionate Cost per unitPoliceFire/ EMSPoliceFire/EMSPoliceFire/EMSHomes, Condos, PUD’s.9067.1058.3375.0468$44$37$81Duplex.7326.1532.1634.0942$21$74$953+ Rentals1.070.1461.5008.0871$65$69$134<br />It is important to note that the City does not currently assess a business license fee for single family detached residential rental units or rental duplexes. Due to the size of this rental class, it is anticipated that the City will experience a higher workload related to processing this new class. <br />Disproportionate Calls for Service: Home Occupation<br />There are no disproportionate calls for service for home occupation businesses. <br />Cost/fee comparison <br />The following table shows the total cost to the city for a renewal business license for commercial and home occupation businesses. These costs represent the maximum amount the City may charge for business license renewal fees. <br />Table 1.18: cost/fee comparison for renewal licenses <br /> Business TypeBase FeeTotal Base CostDisp. Service Costtotal disproportionate cost Per Unit Total Cost Existing FeeRenewal costDisp. RegulatoryPoliceFireAdult Activity Center$49$0$49$548$0$548$597$75+ Employee FeeAlcohol & Beer$35$35$0$0$0$35$80Automobile$49$0$49$308$60$368$417$75 + Employee FeeAutomobile Repair$49$103$151$308$60$368$417$75 + Employee FeeBar/Lounge$49$55$104$11,451$1,528$12,979$13,083$75 + Employee FeeBig Box$49$215$264$34,369$8,217$42,568$42,832$75 + Employee FeeCar Wash$49$0$49$99$0$99$148$75 + Employee FeeCommercial Day Care$49$85$133$701$0$701$835$75 + Employee FeeContracted Services$49$0$49$57$80$137$186$75 + Employee FeeConvenience Stores w/o gas$49$0$49$5,474$2,315$7,789$7,838$75 + Employee FeeConvenience Stores w/gas$49$0$49$3,271$1,471$4,742$4,791$75 + Employee FeeDistributors$49$0$49$5$0$5$54$75 + Employee FeeEntertainment$49$39$88$546$347$893$981$75 + Employee FeeEscort Service$49$777$826$443$0$443$1,269$240 + Employee FeeEscort Service/Employee$49$65$114$0$0$0$114$255Financial Services$49$0$49$446$171$617$666$75 + Employee FeeFish & Game$49$0$49$249$0$249$298$75 + Employee FeeFireworks Vendor$49$28$77$0$0$0$77$40Full Service Grocery$49$97$146$19,148$5,856$25,004$25,150$75 + Employee FeeFireworks in Grocery Story$49$38$87$87Gas Station$49$0$49$281$249$530$579$75 + $5 per PumpHandyman$49$12$61$57$80$137$198$75 + Employee FeeHazardous Material$49$97$146$0$0$0$146$90 Health Center$49$0$49$77$0$77$126$75 + Employee FeeHealth Clinics$49$0$49$16,826$10,972$27,798$27,847$75+ Employee FeeHome Occupation$49$0$49$0$0$0$49$40Hospital$49$0$49$16,632$12,152$28,784$28,833$75 + Employee FeeHotel/Extended Stay$49$127$176$87/Room$74/Room$161/Room$176+$161/Room$75 + .001 of Gross Sales + Employee FeeMarkets/Specialty Food$49$0$49$238$0$238$287$75 + Employee FeeManufacturing/Industrial$49$97$146$8$0$8$154$75 + Employee FeeMassage Therapist$49$35$84$24$9$33$117$75 + Employee FeeMobile Home Parks$49$0$48$22/Unit$0$22/Unit$49 + $22/Unit$75 + Employee FeePawn Shops$49$35$84$2,994$85$3,079$3,163$340Personal Services$49$0$49$24$9$33$82$75 + Employee FeeProfessional/Business Services$49$0$49$18$64$82$131$75 + Employee FeePrivate Clubs$49$0$49$1,378$937$2,315$2,364$75 + Employee FeeResidential Care$49$0$49$120$0$120$169$75 + Employee FeeRestaurants$49$68$117$865$317$1,182$1,299$75 + Employee FeeSmall Retail/Wholesale Sales$49$0$49$192$114$338$387$75 + Employee FeeMedium Retail/Wholesale Sales$49$0$49$2,044$828$2,872$2,921$75 + Employee FeeSolicitor$90$0$90$0$0$0$90$140Storage Units$49$0$49$238$0$238$287$75 + Employee FeeTaxi/Business$49$52$101$0$0$0$101$75 + $35/VehicleTaxi/Employee$49$18$67$0$0$0$67Telecommunications$49$0$49$74$0$0$123$75 + Employee FeeTransportation$49$0$49$0$0$0$49$75 + Employee FeeUtility Sales/Service$49$0$49$56$0$56$105$75 + Employee FeeVending$49$52$101$0$0$0$101$90Warehousing/Supplies$49$0$49$0$0$0$49$75 + Employee Fee<br />The following table shows the total cost to the city for new application business license for commercial and home occupation businesses. These costs represent the maximum amount the City may charge for business license new application fees. <br />Table 1.19 Cost/fee comparison for new application licenses <br /> Business TypeBase FeeTotal Base CostDisp. Service Costtotal disproportionate cost Per Unit Total Cost Existing FeeRenewal costDisp. RegulatoryPoliceFireAdult Activity Center$114$0$114$548$0$548$596$90+ Employee FeeAlcohol & Beer$114$35$0$0$0$80Automobile$114$0$114$308$60$368$482$90 + Employee FeeAutomobile Repair$114$64$178$308$60$368$546$90 + Employee FeeBar/Lounge$114$35$149$11,451$1,528$12,979$13,128$90 + Employee FeeBig Box$114$176$290$34,369$8,217$42,568$42,858$90 + Employee FeeCar Wash$114$0$114$99$0$99$213$90 + Employee FeeCommercial Day Care$114$46$160$701$0$701$861$90 + Employee FeeContracted Services$114$0$114$57$80$137$251$90 + Employee FeeConvenience Stores w/o gas$114$0$114$5,474$2,315$7,789$7,903$90 + Employee FeeConvenience Stores w/gas$114$0$114$3,271$1,471$4,742$4,856$90 + Employee FeeDistributors$114$0$114$5$0$0$114$90 + Employee FeeEntertainment$114$0$114$546$347$893$1,007$90 + Employee FeeEscort Service$114$777$891$443$0$443$1,334$225 + Employee FeeEscort Service/Employee$114$65$179$0$0$0$179$240Financial Services$114$0$114$446$171$617$731$90 + Employee FeeFish & Game$114$0$114$249$0$249$363$90 + Employee FeeFireworks Vendor$114$28$142$0$0$0$142$90 Fireworks in Grocery Store$114$0$114$0$0$0$114$90Full Service Grocery$114$58$172$19,148$5,856$25,004$25,176$90 + Employee FeeGas Station$114$0$114$249$530$779$893$90 + $5 per PumpHandyman$114$12$126$57$80$137$263$90 + Employee FeeHazardous Material$114$59$173$0$0$0$173$90 Health Center$114$0$114$77$0$77$191$90 + Employee FeeHealth Clinics$114$0$114$16,826$10,972$27,798$27,912$90 + Employee FeeHome Occupation$114$0$114$0$0$0$114$40Hospital$114$0$114$16,632$12,152$28,784$28,898$90 + Employee FeeHotel/Extended Stay$114$89$203$87/Room$74/Room$161/Room$203 + $161/Room$90 + .001 of Gross SalesMarkets/Specialty Food$114$0$114$238$0$238$352$90 + Employee FeeManufacturing/Industrial$114$59$173$8$0$8$181$90 + Employee FeeMassage Therapist$114$35$149$24$9$33$182$90 + Employee FeeMobile Home Parks$114$0$114$22/Unit$0$22/Unit$114 + $22/Unit$90 + Employee FeePawn Shops$114$35$149$2,294$85$2,379$2,528$325Personal Services$114$0$114$24$9$33$147$90 + Employee FeeProfessional/Business Services$114$0$114$18$64$82$196$90 + Employee FeePrivate Clubs$114$0$114$1,378$937$2,315$2,429$90 + Employee FeeResidential Care$114$0$114$120$0$120$234$90 + Employee FeeRestaurants$114$29$143$865$317$1,182$1,325$90 + Employee FeeSeasonal$114$29$202$0$0$0$202$40Small Retail/Wholesale Sales$114$0$114$192$114$338$452$90 + Employee FeeMedium Retail/Wholesale Sales$114$0$114$2,044$828$2,872$2,986$90 + Employee FeeSolicitor$90$0$90$0$0$0$90$125Storage Units$114$0$114$238$0$238$352$90 + Employee FeeTaxi/Business$114$52$166$0$0$0$218$90 + $35/VehicleTaxi/Employee$114$18$132$0$0$0$132Telecommunications$114$0$114$74$0$74$188$90 + Employee FeeTransportation$114$0$114$0$0$0$144$90 + Employee FeeUtility Sales/Service$114$0$114$56$0$56$170$90 + Employee FeeVending$114$52$166$0$0$0$166$90Warehousing/Supplies$114$0$114$0$0$0$114$90 + Employee Fee<br />Good Landlord Program<br />According to current legislation, a municipality may collect a disproportionate rental fee if the municipality: 1) adopts an applicable ordinance; 2) conducts a municipal services study (contained herein); 3) provides any updates to the municipal services study; and, 4) establishes a Good Landlord program.<br />The Good Landlord program is designed to provide a reduction in the disproportionate rental fee for landlords who complete the following requirements: <br />Good landlord training program approved by the City;<br />Implement measures to reduce crime in rental housing as specified in municipal ordinances; and<br />Operate and manage rental housing in accordance with municipal ordinances.<br />The Good Landlord program provides an incentive for landlords to improve the overall quality of each rental unit, reduce crime and reduce non-compliance with municipal ordinances. Given the high disproportionate cost to the City for Hotel/Extended Stay facilities, the City may want to consider a “Good Landlord” fee reduction program for these types of businesses.<br />The following table shows the maximum fees the City may charge to rental units.<br />Table 1.20: Total cost for Rental units<br /> Rental TypeBase FeeTotal Base CostDisp. Service Costtotal disproportionate cost Per UnitTotal Cost Existing FeeRenewal costCompliance cost per UnitPoliceFireHomes, Condos, PUD’s$63$5/Unit$68 $44$37$81$149N/ADuplexes$63$5/Unit$63 + $5/Unit$21$74$95$63 + $100/UnitN/A3+Units$63$5/Unit$63 + $5/Unit$65$69$134$63 + $139/Unit$75 + $7/Unit<br />Enhanced Service Levels<br />Enhanced service levels reflect a higher level of service that is desired by a specific portion of the business community (whether it is a business class, business location, etc.). In comparison, disproportionate service levels reflect higher levels of services that are required by a distinct portion of the business community. Examples of enhanced service levels include more landscaping, hanging baskets, more or higher quality signage, increased police patrols (a visible police presence), more frequent snow removal, etc. Generally, these types of services are increased in a particular geographic location of town, such as downtown, or the town center of a resort community but they may also be specific to a particular type of business activity, the number of employees in a company, etc. <br />Midvale City currently does not have any geographic areas or business classes for which the City provides enhanced service levels. <br />Per Employee Charge<br />Midvale City has decided not to charge disproportionate fees based on the number of employees per business and therefore a per employee charge analysis in not included in this report. <br />Reliance on City Data<br />LYRB, Inc. has relied on information provided by city staff, including time estimates for tasks performed as part of the business license process and the costs associated with providing city services. LYRB, Inc. assumes no responsibility for the accuracy of information provided by Midvale City.<br />Appendix A<br />BUSINESS CLASSBUSINESS TYPEAdult Activity CenterAutomobileCar SalesCar Paint/RepairCar RentalRecreations Vehicle SalesTowingBar/ LoungeBig BoxCar WashCommercial Day CareContracted ServicesHVAC ContractorsElectrical ContractorsPlumbing ContractorsMechanical ContractorsConstruction Related BusinessesConcreteKitchen & BathCabinetryLawn Care/MaintenancePoolsPest ControlArt RestorationWindowsLearning CenterSignage CompaniesConvenience Stores w/o GasConvenience Stores w/GasDistributorsEntertainmentMovie TheatersBowlingAmusement CentersGolf/Mini-GolfEscort ServiceFinancial ServicesBanksMortgage CentersCheck CashingPay-Day LoansFish & GameFull Service GroceryGas StationHealth CenterGeneral NutritionSkin CareHome Health CareHealth ClinicHospitalHotel/Extended StayMarkets/Specialty FoodIce Cream ParlorsBagelsSmall Specialty MarketsManufacturing/IndustrialManufacturing & SalesClothing Manufacturing & SalesAssemblyMachine ShopsTesting LabsDrillingMobile Home ParksPawn ShopsPersonal ServicesBeauty SalonsBarber ShopsDry Cleaners/LaundromatPrintingPhotographyNailsCateringDance /Gymnastics StudioFitness CentersAnimal ServicesAlterationsTattoo ParlorsTanning SalonsAcupunctureMortuaryRecording StudiosMartial ArtsEducational TrainingArtistProfessional/Business ServicesDoctorsDentistsAccountantsEngineersAttorneysDraftingOrthodontistsConsultantsTherapistsOffice ServicesReal Estate ServicesManagement ServicesComputer Related ServicesAdvertisingDermatologyTitle CompaniesPrivate ClubsResidential Care FacilityRestaurantsRetail/Wholesale SalesSmall Retail/One line of productsMedium RetailMedium Retail/One or more line of productsStorage UnitsTelecommunicationsTelephone SystemsTelecommunicationSatellite CommunicationsCellular ServicesTransportationTaxisTruckingUtility Sales/ServiceWarehousing/Supplies<br />