City council opens hearing on business fee

Council will weigh input from businesses on proposal that was previously tabled

A fourth proposal to implement a business license surcharge has been presented to Vancouver’s city council. This ordinance comes just two months after the council killed the previous proposal and speculation that subsequent recommendations would not resemble past proposals. Ironically, the ordinance the council voted to move forward for a public hearing and possible vote next Monday is essentially a resurrection of a previously rejected proposal.

Like the proposal presented in February, the most recent ordinance calls for businesses to pay a $275 business license surcharge plus $15 for each full-time equivalent employee annually. The surcharge and fee would be in addition to the $125 business license fee, which would be charged to each business location. No business would pay more than $10,000.

The surcharge would raise a little more than $3 million dedicated to new-capacity transportation projects.

Celinda Rupert, president of Vancouver’s Downtown Association and owner of Main Street salon Iduhair and Co., has provided input to the city regarding previous proposals. As a small business owner, Rupert supports the proposal.

"I support our monies to be used for transportation," she said. "I have to be accountable."

Her business is responsible for bringing traffic into downtown, she said, and her customers rely on the roads to get there.

A business with one owner and no employees would pay $290, a business with five employees would pay $350 and a business with 100 employees would pay $1,775.

Businesses would reach the cap at about $9,995 with 648 employees, which would include about seven businesses in the city.

Exemptions include businesses with gross annual income of $12,000 or less and governmental and non-profit entities.

The council has been split while attempting to honor its open for business motto and commitment to fund transportation.

This proposal was crafted with input from business organizations and leaders throughout the city. The Greater Vancouver Chamber of Commerce pulled support for the proposal presented in April because it was created without feedback from the business community, the chamber said.

The council was also criticized for not taking action when they had the chance.

"Whatever the council does will be criticized," said GVCC President John McKibbin. "They have to make the hard vote."

Lloyd Tyler, city financial director, said the present ordinance was returned for council consideration "out of the respect for the work and commitment the broader business community provided in bringing this proposal forward."

Councilmember Larry Smith echoed McKibbin’s sentiments at Monday’s council meeting.

"There’s a responsibility that rests with the council to find some solution for transportation," he said.

Smith said it was the council’s decision to phase out the city’s business and occupation tax beginning in 1992, and now it must find a substitute for those funds. While he doesn’t think the business license surcharge is the perfect funding mechanism, he is committed to finding the necessary revenue.

Despite continued concerns some council members have on the impact of the surcharge, particularly to small businesses, the proposal was unanimously voted forward to solicit feedback from businesses in a public hearing.

"This is not a good long-term solution," said council member Jeanne Stewart at the meeting. "What we need to do now is to hear from the business community."

Tyler said the surcharge has always been seen as a temporary fix, and the ordinance includes elements that would allow the fees to be removed if more appropriate, long-term options surfaced, such as through a county-wide gas tax or state funding.

"This does not meet the overall goal for ongoing transportation needs," said City Manager Pat McDonnell on Monday.

The city would actively pursue alternatives and report back to council annually.

The city has outlined road construction projects with a total cost of $55.7 million the surcharge would help fund. The size of the project would require bonding, and the surcharge would have to remain in place to pay down the bonds until alternative revenue sources are identified. This eliminates the ability to include a sunset clause, which some council members had hoped for.

If approved, the surcharge would take affect Sept. 1. Businesses would be assessed the additional fees as they renew their business licenses.

Business Fee Ordinance

What: Vancouver City Council Public Hearing
When: Monday, June 12
Where: Council chambers on first floor of City Hall at 210 E. 13th St.