Mayor and Council Inder Litt, Senior Business Licence Inspector Proposed Changes to the Business Licence Bylaw
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1 ,'. a. '~ Report No. PDS March 31,2014 File No: COUNCIL REPORT Executive Committee To: From: Subject: Mayor and Council Inder Litt, Senior Business Licence Inspector Proposed Changes to the Business Licence Bylaw RECOMMENDATIONS 1. THAT Bylaw No , "Business Licence Bylaw, 2006, Amendment Bylaw No. 8", be rescinded, at the next Regular meeting of Council; 2. THAT Bylaw No , "Business Licence Bylaw, 2006, Amendment Bylaw No. 8", which includes the changes as outlined in Schedule "A" of Report No. PDS , proceed for third reading, as amended, at the next Regular meeting of Council; and 3. THAT the Mayor and Corporate Officer be authorized to execute all documents related to this matter. SUMMARY OF THE ISSUE The Business Licence Bylaw has not had a significant update of categories and fees since The proposed bylaw changes are being recommended with the intent of: clarify existing wording; reflecting updated Provincial Government designation of certain businesses; updating licence fees, which were last increased in BACKGROUND Authority to issue business licences is granted to local governments under Community Charter Sections 8(6) and 15, which provide for business regulation and a system of business licencing. Additionally, the City possesses authority to charge fees for those licences under Section 194(1 )(c) of the Charter. Section 194(4) requires municipalities to make available to the public, on request, a report respecting how a fee imposed under this section was determined. Additionally, case law has established that local governments may not charge fees that are in excess of the cost of providing the related service. This report explains the rationale for proposed licence fee changes, and also provides an analysis demonstrating that fee revenue is not in excess of the costs of providing related services.
2 Report No. PDS Page 2 of 5 There have been several meetings with Council and committees over the last two years with respect to proposed changes. These are summarized below. June 11, At the Executive Committee meeting of June 11, 2012, staff recommended changes to the Business Licence Bylaw via Report No. EDP , that would clarify existing wording, reflect Provincial Government designation of certain businesses, and align the licensing fee structure with neighbouring communities, including proposed fee increases for specific categories. Council referred the report to the Audit and Finance Committee for further discussion. July 17, The Audit and Finance Committee reviewed Report No. EDP and requested that: (1) distinctions be made between large and small real estate offices and seating capacity of restaurants, (2) expanded analysis and rationale be provided regarding the proposed fee increases, and (3) the proposed fee increases be presented to both the Chamber of Commerce and the Economic Development Commission for feedback. October 15, Staff reported back to the Executive Committee of Council via Report No. EDP , with an updated Bylaw incorporating the changes requested at the July 17, 2012 meeting of the Audit and Finance Committee. Council requested that the proposed bylaw proceed for three readings at the next Regular meeting of Council. November 5, At the Executive Committee meeting of Council, members of the public questioned the rationale for some of the proposed fee increases. Council referred the matter to staff and requested a more complete report rationalizing the cost recovery aspect of the proposed fees. September 10, The Audit and Finance Committee reviewed an updated cost analysis along with proposed changes to the Business Licence Bylaw. The Committee approved the changes in principle and requested that staff further review fees for pawn shops, financial institution drive-throughs, and oil storage plants and distribution pipelines. October 7, Staff reported back to Council, via report EDP , with an updated Bylaw incorporating the review requested at the September meeting of the Audit and Finance Committee. Council deferred the report, asking that staff report back with clarification on how the proposed fees were calculated. November 12, The Audit and Finance Committee discussed the approach to setting business licence fees and recommended that fees be increased by an amount reflecting the change in the Consumer Price Index since the last fee increase, and additional increases made to a select few business types. In 2015, a further review of the Business License Bylaw will take place. The review will lead to a comprehensive Bylaw revision. DISCUSSION Several amendments are being proposed to the Business Licence Bylaw in order to update definitions and improve the clarity around the categories specified in the bylaw. In addition to a number of housekeeping updates, six new licence categories have been added.
3 Report No. PDS 012~2014 Page 3 of ~----~ A list of proposed changes, together with the related rationale, is included in Appendix A. A comparison of current and proposed fees is shown in Appendix B. Appendix C provides a comparison between Abbotsford's proposed fee and the low and high fees charged in a group of comparator cities (Vancouver, Surrey, Burnaby, Richmond, Coquitlam, Kelowna, Kamloops, Nanaimo, Langley Township, Chilliwack, and Mission). Fees for all licence categories, except for those noted in Appendix A, have been increased by 8.24%. This increase reflects the increase in the Consumer Price Index (all items) for Vancouver, between December 2007 (the last time rates were increased) and September The proposed fee increase is intended to keep fees in line with general cost increases faced by the public. Proposed fee increases that are different from this CPI adjustment are explained in Appendix A. Fees are set for business licences based on considerations of the level of resources that are required to regulate those business, whether that be for basic costs of running the licencing program, or for involvement of other resources like fire prevention, bylaw enforcement, planning, policing, or others. Appendix D provides an overview of the types of regulatory activities performed by functional area. Because of the high number of business categories and the variety and complexity of regulatory activities that are performed by the City in relation to different categories, a precise calculation of licencing-related costs by category is impossible. However, licence costs are set at levels for each category that are judged to be reasonable given the nature of the category. Additionally, the overall level of licence fees are limited such that total revenue from the program must not exceed the average annual costs associated with licencing and related regulatory activities. Appendix E provides a costing on a total program basis, that confirms that licence fee revenue is less than the maximum allowable limit (Le., the City does not collect more for the business licencing program than is legally allowable). FINANCIAL PLAN IMPLICATION The proposed fee increases will generate approximately $75,000 of additional revenue per year. Because of the timing of this increase, 2014 will see approximately 20% of the annual increase, or approximately $15,000. The business licence fee revenue budget in the current financial plan is set at $940,000. With the proposed fee increases, expected revenue in 2014 will be $955,000. Director of Finance IMPACTS ON COUNCIL POLICIES, STRATEGIC PLAN AND/OR COUNCIL DIRECTION
4 Report No. PDS Page 4 of 5 The proposed changes to the Business Licence Bylaw align with the City's Strategic goal to achieve economic balance. SUBSTANTIATION OF RECOMMENDATION The proposed housekeeping amendments will increase customer service by providing clear and concise wording and the proposed fee increases will keep fees on pace with general cost of living increases for residents. Siri Bertelsen Senior Business Licence Inspector General Manager, Planning and Development Services
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6 - "~A Appendix A Rationale SUMMARY OF BUSINESS LICENCE BYLAW AMENDMENTS SECTION AMENDMENT RATIONALE PART 5 - LICENCE REQUIREMENT Add: Housekeeping. Clarifies (New) requirement. "A licence is required for each Automated Teller Machine not affixed to a financial institution." Amend 5.2 (a) to read: Housekeeping. Location 5.2 (a) - (Amend) clarification for bylaw "an agri-food processing facility having a floor interpretation. area of less than 600m 2 on property zoned, Agricultural, as defined in the City's Zoning", PART 11 - SPECIFIC REGULATIONS/LIQUOR ESTABLISHMENTS.- Amend to read: Housekeeping. To include (Amend) standardized conditions / terms to ''The following conditions / terms apply to all all businesses licensed under the businesses licensed under the Liquor Control Liquor Control and Licensing Act. and Licensing Act of British Columbia... " r--- SCHEDULE "B" - BUSINESS LICENCE FEES 1.The fees payable for Business Licences shall be as follows: (Amend) Amend: The proposed fee increases (Appendix B) are based on Increase all fees by 8.24% increases in overall inflation from December (Except for Business Types, as noted below) September 2013 as reported by Statistics Canada, for Vancouver, all items, Consumer Price Index (CPI). (New) Add: Add to reflect distinct business type. Accessory Home Occupation
7 # ' $ ~~ Appendix A Rationale (New) Add: Automated Teller Machine Add to reflect distinct business type. (New) Add: Bingo Hall and Community Gaming Centre $ Housekeeping, to create a distinct category with a fee increase of 108%. Currently this business type is categorised as a recreational facility. (New) New: Junk Dealer /Junk Peddler/ Scrap Metal Dealer $3, Police resources are used to enforce and manage daily submissions from operators required under City of Abbotsford Secondhand Goods Regulation Bylaw. In addition Police resources are used to obtain warrants to gain access to supporting documentation not provided in the submissions. (New) Add: Oil Storage Plant/ Pipeline Distribution $3, Create a distinct category with a fee increase of 2,400%. Clarify licensing requirements and add fee specific to this business type. City incurs emergency response and long term planning expenses in relation to these facilities.
8 c.t~~ Appendix A Rationale (Amend) Amend by increasing fee: Pawn Shop $1, City incurs enforcement costs specifically associated with this type of business. Police resources are used to enforce and manage daily submissions from operators required under the City of Abbotsford Secondhand Goods Regulation Bylaw. (New) Amend "Liquor Primary" to include: Operating Bar Watch Standards $ Create a distinct category with a fee increase of 456%. The Bar Watch program standard has proven to result in reduced costs of policing. Create a distinct sub category "Operating Bar Watch Standard". The existing fee for Liquor Primary will be placed on this sub category and under the proposed 8.24% increase the fee will increase to $ from $ Not Operating Bar Watch Standards $7, Create a distinct sub category "Not Operating Bar Watch StaOndards" with a fee increase of 1,246%.
9 -. ' 00.~~ Appendix 8 Proposed Fee Increase Comparison Type of Licence Current Increase Proposed New - Accessory Home Occupation $120,00 $10,00 $ Accessory Home Occupation - Farm Equipment Repair $ $23.00 $ Amusement Facility $ $20.00 $ Apartment, Hotel, Motel, or Resort (five to 10 units) $ $14.00 $ Apartment, Hotel, Motel or Resort (more than 10 units) $ $18.00 $ Auto Recycler $ $15.00 $ New - Automated Teller Machine NA NA $ New - Bingo Hall and Community Gaming Centre $ $ $500.00, ~ Cabaret $1, $ $1, Carnival, per day $ $24.00 $ Charitable Activity (Temporary) $65.00 $5.00 $70.00 Charitable Sales and Services $75.00 $6.00 $81.00 Commercial Use or Industrial Use $ $10.00 $ (0 to 800 m 2 / 8621 sq. ft of usable area, not described elsewhere) Commercial Use or Industrial Use (801 to 1800 m 2 / ,385 sq. ft of usable area, not $ $15.00 $ described elsewhere) Commercial Use or Industrial Use (1801 m 2 / 19,386 sq. ft and over, not described elsewhere) $ $20.00 $260.00
10 ----..:~~ Appendix 8 Proposed Fee Increase -- Comparison Direct Sellers $ $18.00 $ Exhibition Complex $1, $99.00 $1, Film Production $ $21.00 $ Financial Institution $ $43.00 $ Flea Market $ $30.00 $ Food Primary (Restaurant licensed to serve liquor) $270.0 $22.00 $ Food Primary (Lounge) $ $22.00 $ Fuel Service Station with or without Convenience Store $ $10.00 $ plus plus $20.00 $2.00 $22.00 per Fuel per Fuel Dispens'e'f" Dispenser Ice Cream Vendors, Mobile $ $10.00 $ New -Junk Dealer/Junk Peddler/Scrap Metal Dealer $ $ $ Licencee Retail Store $ $22.00 $ Liquor Primary New -Operating Bar Watch Standards $ $43.00 $ New -Not operating Bar Watch Standards $ $ $7, Liquor / Food Primary $ $43.00 $ Non-Permanent Commercial Sales $80.00 $7.00 $87.00 New -Oil Storage Plant / Pipeline Distribution NA NA $3, Parks, Recreation and Culture Facilities $1, $87.00 $1, Pawn Shop $ $ $1,000 Recreational Facility $ $18.00 $238.00
11 .... ~~ Appendix 8 Proposed Fee Increase Comparison Restaurant with Drive-up Window Second Hands Goods Supportive Recovery Use Trade Show (other than in Licensed Exhibition Complex), per day All other Businesses not listed above $ $18.00 $ $ $15.00 $ $ $16.00 $ $45.00 $4.00 $49.00 $ $10.00 $ Administration fee; additional copy of an issued licences 3. Re-inspection fee $25.00 No Change $65.00 No Change
12 Appendix C o. t~~ Regional High and Low Fee Comparison Type of Licence Lowest 1 Highest' Abbotsford New - Accessory Home Occupation Accessory Home Occupation - Repair Farm Equipment Kamloops $67 Kamloops $67 Burnaby $270 Nanaimo $165 $130 $303 Amusement Facility Apartment, Hotel, Motel, or Resort (five to 10 units) Apartment, Hotel, Motel or Resort (more than 10 units) Auto Recycler Mission $148 Burnaby $90 (10 Units) Mission $148 Vancouver $129 Vancouver $4,781 Surrey $48 (Per Unit) Surrey $48(Per Unit) Surrey $912 $260 $179 $238 $200 New - Automated Teller Machine New - Bingo Hall and Community Gaming Centre Cabaret Carnival, per day Charitable Activity (Temporary) Charitable Sales and Services Commercial Use or Industrial Use (0 to 800 m 2 j 8621 sq. ft of usable area, not described elsewhere) Commercial Use or Industrial Use (801 to 1800 m 2 j ,385 sq. ft of usable area, not described elsewhere) Commercial Use or Industrial Use (1801 m 2 j 19,386 sq. ft and over, not described elsewhere) Coquitlam $23 Mission $148 Mission $148 Surrey $30 Burnaby $0 Burnaby $0 Vancouver $129 Vancouver $129 Mission $148 Surrey $183 Surrey $3,631 Surrey $3,631 Burnaby $585+$196 day Nanaimo $165 (>5 days) Nanaimo $165 Richmond $548 Richmond $969 Richmond $2,900 $130 $500 $1,689 $314 $70 $81 $130 $195 $260
13 Appendix C t~~ Regional High and Low Fee Comparison Type of Licence Lowest Highest Abbotsford Direct Sellers Kelowna Kamloops $238 $71 $438 Exhibition Complex Mission Surrey $1,299 $148 $1,200 Film Production Langley(Township) Burnaby $281 $128 $504 Financial Institution Kamloops Coquitlam $563 $124 $1,400 Flea Market Vancouver Richmond $390 $129 $609 Food Primary Mission Burnaby $292 $148 $790-$829 Food Primary (Lounge) Mission Burnaby $292 $148 $ Fuel Service Station with or without Kelowna Burnaby $130 Convenience Store $ $545 plus $22 per Fuel Dispenser Ice Cream Vendors, Mobile Kamloops Burnaby $130 $57 $323 New-Junk Dealer/Junk Peddler/Scrap Metal Kelowna Surrey $3000 Dealer $128 $3,636 Licencee Retail Store Mission Kelowna $292 $148 $ Liquor Primary Mission Burnaby N/A $148 $3000 New-Operating Bar Watch Standards N/A N/A $563 New-Not operating Bar Watch Standards N/A N/A $7,000 Liquor / Food Primary Mission Burnaby $563 $148 $829 Non-Permanent Commercial Sales Chilliwack Coquitlam $87 $25 $280 New-Oil Storage Plant / Pipeline Distribution Kamloops Burnaby $3,000 $1,234 $3,000
14 Appendix C 02 1~~ Regional High and Low Fee Comparison Parks, Recreation and Culture Facilities NA NA $1,137 Type of Licence Lowest Highest Abbotsford Pawn Shop Recreational Facility Restaurant with Drive-up Window Second Hands Goods Supportive Recovery Use Trade Show (other than in Licensed Exhibition Complex), per day All other businesses not listed above Mission $148 Kelowna $128 Mission $148 Mission $148 Kelowna $128 Vancouver $35 Kelowna $128 Coquitlam $1,000 $10,000 Burnaby $238 $985 Vancouver $ $679 Surrey $ $3,636 Burnaby $ $627 Burnaby $49.00 $426 Burnaby $ $ Data based on 2013 business licence fees for Vancouver, Surrey, Burnaby, Richmond, Coquitlam, Kelowna, Kamloops, Nanaimo, Township of Langley, Chilliwack and Mission. Data compiled by City Manager's office November 2013.
15 Appendix D Overview of Business Licencing and Regulation Activities by Function Planning and Development Services play key roles by creating and maintaining land use regulations, providing guidance and interpretation for staff and customers. Business Licencing and Bylaw Enforcement staff enforce business licence and land use regulations. Staff administer and enforce the business licence program and receive customer service, clerical and administrative support from the Building Permits and Licencing Department. The Abbotsford Fire Rescue Service Prevention and Inspection Division are involved in the initial processing of certain types of applications and ensure businesses comply with public safety code requirements. Annual/semi-annual inspections of all public buildings are conducted which include businesses as mandated under the Fire Services Act. The Abbotsford Police Department is also involved in the regulation of businesses. Their involvement includes; enforcement of the Secondhand Goods Regulation Bylaw, crime prevention activities, community safety initiatives including Bar Watch Program, Integrated Services Enforcement Team (lset), and Crime Free Multi-Housing. Police costs have not been included in the cost analysis provided in Appendix C, due to the complexity required for estimating resources used.
16 Appendix E, City of Abbotsford Business License Fee Analysis Costs associated with regulating business in Abbotsford Budget Cost Related to Recovery via Cost Recovery Net Business Other via Other Regulatory Description 2014 Budget Allocation 1 Regulation Sources (%) Sources ($) Costs Building Inspections $ 122,100 10% $ 12,200 n/a $ $ 12,200 Manager, Building Inspections 2 122,100 10% 12,200 n/a 12,200 Business Licenses 244, % 244,800 16% 39, ,600 Senior Business License Inspector 2 92, % 92,200 16% 14,800 77,400 Bylaw Officer (Business License Department) 2 75, % 75,400 16% 12, ,300 Business License Assistant 2 59, % 59,800 n/a 59,800 Services and Supplies 17, % 17,400 16% 2,800 14,600 Planning Services 3,920,000 15% 588,000 20% 117, ,400 Bylaw Enforcement 1,033,000 15% 155,000 20% 31, ,000 Fire Prevention & Inspection 596,000 70% 417,200 9% 37, ,700 General Government Overhead 3 8% 95,400 n/a 95,400 Total $ 1,512,600 $ 225,300 $ 1,287,300 Annual business license revenue based on proposed fee structure (2014 dollars): 1,015,000 Updated: March 11,2014 Excess of regulatory costs over proposed business licence revenue: $ 272,300 Notes: 1. The percentage allocated reflects estimated resources used by each area/position on regulatory functions related to businesses, desireable for recovery through licence fees. 2. Position costs reflect total employer costs (i.e., including employer costs for EI, WCB, benefits, etc.); not the annual salary of the position. 3. Includes Corporate Services-Business & Technology Solutions, Human Resources, Mayor & Council, City Clerk and Building Maintenance costs. 4. Policing costs have been excluded from this analysis due to the complexity required for estimating resources used.
17 CITY OF BUSINESS LICENCE BYLAW, 2006, AMENDMENT BYLAW NO. 8 Bylaw No Page 1 The Council of the City of Abbotsford, in open meeting assembled, ENACTS AS FOLLOWS: 1. CITATION Bylaw No may be cited as Business Licence Bylaw, 2006, Amendment Bylaw No AMENDMENTS Bylaw No , cited as Business Licence Bylaw, 2006, as amended, is further amended by: (a) deleting and replacing Section 5.2 (a), as follows: (a) an agri-food processing facility having a floor area of less than 600 m 2 on property zoned Agricultural, as defined in the City s Zoning Bylaw; ; (b) adding a new Section 5.10, as follows: 5.10 A licence is required for each Automated Teller Machine not affixed to a Financial Institution. ; (c) deleting and replacing Section preamble, as follows: The following conditions/terms apply to all businesses licenced under the Liquor Control and Licensing Act of British Columbia, including but not limited to terms and conditions in the nature of: ; and (d) deleting and replacing Schedule B with the attached Schedule B. READ A FIRST TIME this 15 th day of October, 2012 READ A SECOND TIME this 15 th day of October, 2012 READ A THIRD TIME this 15 th day of October, 2012 THIRD READING RECINDED this day of, 2013 REREAD A THIRD TIME this day of, 2013 NOTICE OF INTENTION TO ADOPT Bylaw published this day of, 2013 and day of, 2013 ADOPTED this day of, 2013 I hereby certify this to be a true copy of the original bylaw R. Bruce Banman Mayor Katie Karn Deputy City Clerk William Flitton Corporate Officer Final Draft March 18, 2014
18 CITY OF BUSINESS LICENCE BYLAW, 2006, AMENDMENT BYLAW NO. 8 Bylaw No Page 2 SCHEDULE B - BUSINESS LICENCE FEES 1. The fees payable for Business Licences are as follows: Type of Licence Licence Fee Accessory Home Occupation $ Accessory Home Occupation Farm Equipment Repair $ Amusement Facility $ Apartment, Hotel, Motel, or Resort (five to 10 units) $ Apartment, Hotel, Motel or Resort (more than 10 units) $ Auto Recycler $ Automated Teller Machine $ Bingo Hall and Community Gaming Centre $ Cabaret $1, Carnival, per day $ Charitable Activity (Temporary) $70.00 Charitable Sales and Services $81.00 Commercial Use or Industrial Use (0 to 800 m² / 8621 sq. ft of usable area, not described elsewhere) $ Commercial Use or Industrial Use (801 to 1800 m² / ,385 sq. ft of usable area, not described elsewhere) $ Commercial Use or Industrial Use (1801 m² / 19,386 sq. ft and over, not described $ elsewhere) Direct Sellers $ Exhibition Complex $1, Film Production $ Financial Institution $ Flea Market $ Food Primary (Restaurant licenced to serve Liquor) $ Food Primary (Lounge) $ Fuel Service Station with or without Convenience Store $ plus $22.00 per Fuel Dispenser Ice Cream Vendors, Mobile $ Junk Dealer/Junk Peddler/Scrap Metal Dealer $3, Final Draft March 18, 2014
19 CITY OF BUSINESS LICENCE BYLAW, 2006, AMENDMENT BYLAW NO. 8 Bylaw No Page 3 SCHEDULE B - BUSINESS LICENCE FEES (cont d) Type of Licence Licence Fee Licencee Retail Store $ Liquor Primary Operating Bar Watch Standards $ Liquor Primary Not Operating Bar Watch Standards $7, Liquor / Food Primary $ Non-Permanent Commercial Sales $87.00 Oil Storage Plant / Pipeline Distribution $3, Parks, Recreation and Culture Facilities $1, Pawn Shop $1, Recreational Facility $ Restaurant with Drive-up Window $ Second Hands Goods $ Supportive Recovery Use $ Trade Show (other than in Licensed Exhibition Complex), per day $49.00 All other Businesses not listed above $ Administration fee; additional copy of an issued licences $ Re-inspection fee $65.00 Final Draft March 18, 2014
Mayor and Council Inder Litt, Senior Business Licence Inspector Consolidated Business Licence Bylaw No Bylaw Amendment
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